European communities: Spring Council discusses labour market progress
Ministers gathered in Brussels on 25 and 26 March 2004 for the annual spring economic, social and environmental Council, at which the EU's progress towards achieving the employment targets set at Lisbon in 2000 was discussed. It was concluded that the pace of labour market reform needs to be increased if the EU is to meet these targets. The Council was preceded by a tripartite social summit, at which the social partners presented reports on the implementation of their framework agreement on lifelong learning and competence development, and on the involvement of the national social partners in the implementation of the EU's employment guidelines.
Spring Council
The annual spring Council was held on 25 and 26 March 2004 to discuss the Lisbon strategy and the economic, social and environmental situation in the European Union. The Lisbon strategy was devised in March 2000 (EIRR 316), setting concrete targets in the area of employment policy, to be achieved by 2010. The Stockholm Council of March 2001 (EIRR 328) complemented this by setting intermediate targets, to be reached by 2005. For an overview of the main targets, see the box below .
The general message from this year's Council is that the 2000 targets are "ambitious", and that the current picture is mixed. Overall, considerable progress towards achieving these targets has been made, but the pace of reform in the EU needs to be significantly stepped up if the 2010 targets are to be achieved. This was also the message of the Council and the Commission's joint employment report for 2003 and 2004 (EU in danger of missing key employment targets ).
In general, this year's Council focused on two issues:
sustainable growth; and
more and better jobs.
Sustainable growth
The Council states that the main economic challenge facing the EU is how to realise its growth potential. It maintains that the EU must build on the economic growth momentum experienced in the second half of 2003 and accelerate its internal reform process. It also maintains that structural reforms are "necessary and beneficial" in the context of an increasingly globalised economy. They will contribute significantly to increasing growth and employment.
Competitiveness, innovation and the promotion of an entrepreneurial culture are emphasised by the Council as being essential for the whole economy, and particularly for small and medium-sized enterprises (SMEs). It also notes that the potential of the internal market is not yet fully realised and that efforts must continue to achieve a smoother functioning of products, services, capital and labour markets. In particular, more competition is required in the services sector to improve efficiency, increase output and employment and benefit consumers.
Research and development is highlighted as an area of particular focus, with the Council stating that progress must be accelerated towards creating a European area of knowledge. In particular, business investment in research and development should be encouraged. It calls on member states to improve the general conditions for research and development investment and to consider targeted support and incentives to encourage greater investment on the part of businesses. It notes further that human resources are critical for research and development, and priority must be given to training, retention and mobility of researchers.
Finally, the Council states that a high level of social cohesion is central to achieving the Lisbon aims. Therefore, strategies that make a decisive impact on social exclusion and on the eradication of poverty must be reinforced. Modernising social protection systems - in particular pension and healthcare systems - and mainstreaming the social inclusion agenda also play a key role in this. Additionally, it states that gender equality policies are instruments of social cohesion as well as of growth.
More and better jobs
Creating more and better jobs is highlighted as the most urgent issue to be addressed over the coming year. In particular, the Council states that "it is imperative that the EU reduce its current unacceptably high overall unemployment rate." Member states should renew their commitment to achieving the Lisbon employment goals and follow-up action should be taken to implement the recommendations made by the Wim Kok Employment Task Force (EU in danger of missing key employment targets ).
The Council highlights four key structural challenges that EU member states should work towards meeting. These are:
adaptability. This includes the reduction of non-wage labour costs, where appropriate, ensuring that wages better reflect productivity and promoting flexible forms of work while ensuring that workers have adequate security;
attracting more people into the labour market. This includes ensuring that the interaction between taxes and benefits is such that working brings a clear financial reward. Specific strategies should also be developed to increase the employment rates of women and older workers;
improving the quality of employment; and
investing in human capital. This is critical to growth and productivity and to the promotion of social integration and inclusion. Investment in education and training is vital in this regard and the Council underlines the need for reform and investment in key areas. It also recognises that lifelong learning has positive effects on productivity and labour supply, and supports the adoption of an integrated EU programme in this area during 2005, as well as the implementation of national strategies in all member states by 2006.
A review of progress in achieving the goal of creating more and better jobs will be made over the coming year. The spring 2005 Council will undertake this review, paying particular attention to the extent to which national actions have boosted progress towards the Lisbon goals.
The enhancement of the free movement of workers is seen as central to the development of the EU. The Council therefore encourages progress in areas that will promote mobility. These include the development of the European health insurance card, which will come into force in June 2004. Further, the Directive on the mutual recognition of professional qualifications should be the subject of political agreement in June 2004. Finally, the reform of Regulation 1408/71, which simplifies and modernises the provisions protecting the social security rights of workers moving within the Union, is characterised as a significant step. This is expected to be finalised "within the lifetime of the current European Parliament", ie by June 2004.
The Council also calls on member states to build "reform partnerships", involving the social partners, civil society and the public authorities. These should promote complementary strategies for change, which should be taken into account by governments in the course of preparing national contributions to the mid-term review of the Lisbon agenda (see below).
Mid-term review of the Lisbon agenda in 2005
Next year will mark the half-way point of the Lisbon agenda and will be the occasion of an in-depth review of progress towards achieving its goals. This review should also consider how the Lisbon targets can best be met, particularly in the light of EU enlargement. The review should include an assessment of:
the progress made towards achieving agreed sectoral targets as well as the range of structural indicators and benchmarks used to measure the level and dynamism of member states' performance;
the measurement of European performance in the global context;
measures necessary in the new economic and geopolitical climate to increase the level of growth;
governance and other measures and instruments available both to member states and the EU to attain the Lisbon goals. These include internal and external drivers of growth, competitiveness and employment;
mechanisms for communicating the objectives of the Lisbon strategy and best practices among member states to consumers, citizens and key stakeholders; and
possible ways of improving the method.
The Council invites the Commission to establish a high-level group, headed by Wim Kok, to undertake an independent review to contribute to this exercise. The group should comprise a limited number of highly qualified individuals able to reflect the views of all stakeholders. The report will be submitted to the Commission by 1 November 2004. The Commission and the member states will then consider its content in preparation for the spring 2005 Council.
Tripartite social summit
A tripartite social summit was held on 25 March, the eve of the spring Council. At this summit, representatives of the European Trade Union Confederation (ETUC), UNICE/UEAPME (representing private sector employers, including small and medium-sized enterprises) and CEEP (representing public sector firms), met with the president of the European Council (currently the Irish prime minister Bertie Ahern) and the president of the European Commission, Romano Prodi, to take stock of the implementation of the Lisbon strategy. They also presented their contributions to the spring Council. These were:
the second annual report on the implementation of the social partners' agreement on a framework of action to promote the lifelong development of competences and qualifications; and
a first report on social partner initiatives in member states that are relevant for implementation of the European employment guidelines.
Second annual report on the lifelong development of competences and qualifications
The EU-level cross-sector social partners - ETUC, UNICE/UEAPME and CEEP - concluded an agreement on a framework of actions for the lifelong development of competences and qualifications in February 2002 (EC: Barcelona Council adds to Lisbon and Stockholm goals ). This framework identified four areas for priority actions. These are:
to identify and anticipate competences and qualifications needs;
to recognise and validate competences and qualifications;
to inform, support and provide guidance; and
to mobilise resources.
As part of this agreement, the social partners decided to draw up each year a report on the national actions that have been undertaken to address these four priority action areas. The first annual report was issued in March 2003. This report found that the social partners in all member states had intensively debated these issues.
Main trends
This year's annual report found that the lifelong development of competences and qualifications had featured prominently in debate in all member states. The form of the debate varied between member states, reflecting the different national practices and traditions of dialogue. Tripartite activities took place in several countries, in the form of social partner involvement in the design of public bodies on education and training, their participation in advisory bodies and inclusion in the drawing-up of legislation in this area.
Bipartite activities in member states in 2003 were less concerned than they were in 2002 with dissemination of the framework of actions and more focused on developing new avenues for competence development at all levels. The means used to effect this included collective agreements, joint projects, the establishment of discussion fora and/or foundations, the development and promotion of concrete tools to help companies develop their learning activities for their employees, and to encourage and enable employees to take part.
The report identifies common elements in the activities of the social partners in this area during 2003:
ensuring a better match between companies' and individuals' needs and learning supply. Businesses need to adapt rapidly, so as to remain competitive in a globalising market. Employees also need to improve their employability and career prospects. Against this background of rapid change, the social partners are anxious to take into account the varying demands for competences in their work. Several national reports describe efforts to anticipate and identify the key competences that will be needed in the short, medium and longer term;
mobilising resources for competence development. The social partners in many member states are using a variety of instruments to mobilise resources to promote efficient investment in lifelong competence development. Some of these are being put into place in cooperation with public authorities, either European or national authorities, whereas others are more specifically geared towards an individual resourcing of competence development, such as individual learning accounts or co-investment schemes;
motivating individuals and companies. The social partners believe that they have a special role to play in informing, supporting and advising employees and companies (particularly SMEs) in the context of developing a lifelong learning culture. Activities in this area mainly aim to support employees in their attempts to develop their competences and to guide companies in the assessment of their competence needs. Young people, low-skilled people and those who are unemployed are a particular focus; and
facilitating learning in companies and bridging formal and non-formal learning. A significant number of actions have aimed to promote the validation of competences, support the development of qualification standards and build bridges between formal and non-formal training systems. Social partners are especially active in the design of training modules and training plans for individuals, companies and sectors. One important focus is the promotion of multiskilling, so as to enhance the adaptability of employees. The social partners also report specific activities in sectors where there are shortages of qualified employees and of specific categories of workers.
The report then gives a detailed overview of specific actions carried out in each of the EU member states during 2003, at all levels. It also gives examples of good practice. The full report can be obtained from the websites of any of the signatory parties.
After three annual reports, the social partners will evaluate the impact on companies and workers, leading to a possible updating of the priorities.
Report on social partner actions to implement employment guidelines
The tripartite summit was also presented with a report on the actions that were undertaken by the social partners during 2003 to implement the EU employment guidelines in individual member states.
The report notes that the social partners have contributed actively at EU and national levels to the definition and implementation of the European employment strategy (EES). In their joint work programme for 2003-2005 (EC: Social partners set out three-year work programme ), they agreed to report on social partner actions in member states that are relevant for implementation of the European employment guidelines. This report has been drawn up in the context of this commitment.
The report briefly describes how the national social partners were involved in preparation of the 2003 national action plans (NAPs) for employment in each member state. These plans are a central element of the EES. It also provides an overview of the main joint and unilateral initiatives of the social partners in the context of implementing the European employment guidelines.
The introduction notes that the report has to be read against the background of worrying trends, in particular an increase in unemployment and a decrease in employment. However, the social partners believe that the Lisbon objectives remain a priority, and that there is an urgent need to create the conditions for achieving better economic growth and more jobs.
Social partner involvement
The report notes that the social partners were usually consulted by member state governments during the preparation of the NAPs. In most countries, employers and trade union organisations submitted separate comments (Italy, Portugal, Spain, Netherlands and the UK), whereas in others (Belgium, Denmark and Sweden), joint social partner contributions were included as an integral part of the NAP. In Germany, Greece and Portugal, the involvement of social partners improved in comparison with previous years.
The report goes on to state that, in terms of quality, the consultation was seen as "too superficial" in many cases. In Austria, the social partners criticised the absence of discussions with government, in Denmark, they criticised the lack of in-depth discussions on policy content, and in Belgium, Finland and the Netherlands, they criticised the fact that there was insufficient time for consultation.
The issue of governance and partnership in implementation of the guidelines was addressed in the reports of four countries - Spain, Denmark, Sweden and Italy. In Spain, this related to management of employment policy at territorial level, in Denmark it related to social partner involvement in regional and local bodies dealing with labour market policy, in Sweden it related to strengthening local partnerships in implementing the European employment guidelines, and in Italy it related to stronger involvement of the regions.
Key initiatives
The social partners then described the initiatives taken at national, local, sectoral and company levels that contributed to the implementation of the European employment guidelines. Most of these were taken jointly by employers and unions. However, tripartite actions and unilateral initiatives by employers or trade unions were also included in the report.
Some guidelines tackle issues that traditionally belong to the social partners' area of responsibility at various levels in member states. These areas have, therefore, given rise to the majority of the actions reported. However, even for the guidelines that are exclusively addressed to governments - such as those on active and preventive measures for unemployed and inactive people, on job creation and entrepreneurship, on making work pay and on transforming undeclared work into regular employment - initiatives by social partners were also reported.
General measures for employment
Bilateral and tripartite initiatives aimed at supporting employment and economic development through a comprehensive set of measures were reported at national or regional level in six countries.
In the case of bilateral initiatives at national level, a collective agreement was signed in Finland (EIRR 348) and in Belgium (EIRR 349) and a "pact for development" was concluded in Italy (EIRR 357). In Belgium, a tripartite agreement, including measures to create more jobs, was prepared at national level, and bilateral or tripartite pacts for employment were prepared at regional level.
In Spain, the social partners signed an Interconfederal Agreement for Collective Bargaining, providing a framework for collective bargaining at national, provincial, regional and company levels on a wide range of labour market-related issues (EIRR 350).
In the Netherlands, the social partners and the Dutch government reached an agreement on measures to support economic recovery and increase employment (EIRR 359).
Discussions for a tripartite social pact for competitiveness and employment were reported to be at an early stage in Portugal.
The report then goes on to list specific actions taken under the 10 areas on which the European employment guidelines are based, before examining in more detail actions in each member state.
The social partners will issue their next report in 2005, which will provide an overall picture of social partner actions to implement the European employment guidelines in 2004. Following enlargement of the EU on 1 May 2004, this next report will include national reports by the social partners in the 10 new member states. The 2005 report will also seek to give an insight into social partner initiatives that are relevant for the recommendations specifically addressed to their country.
