This paper first provides a brief overview of the history and current usage of the concept of competence in academic research, and then undertakes a critical discussion of how the term is currently used in educational policy. The running example used throughout the paper is competence in foreign language learning. The PISA study is discussed to demonstrate how the concept of competence has come to prominence in the international discourse on education in recent years. Following this, particular attention is given to the situation in Germany where there has been a shift towards competence as an aim of teaching in recent years, coupled with an increased focus on standards and accountability. The relationship between competence and standards is examined critically, since some authors appear to use the two interchangeably whether or not this is justified. Finally, the Common European Framework for Languages (CEFR) and a German curriculum document are examined critically with regard to their use of the concept of competence.