European Union: Lisbon strategy relaunched
March 2005 saw the mid-term review of the EU's 10-year Lisbon strategy, aimed at revitalising the European economy and labour market. Acknowledging that the strategy has not performed as well as had been hoped, ministers met at their annual spring summit to discuss how to give it more impetus.
None of the concrete employment targets have been changed, even though it is doubtful whether they will be attained. Instead, the focus is on streamlining the strategy, refocusing it on specific priorities and urging member states to improve its implementation.
EU ministers and heads of state met in Brussels on 22 and 23 March 2005 for their annual spring summit on growth and jobs. One of the main focuses of the meeting was the mid-term review of the 10-year Lisbon strategy, which was launched in 2000 and aims to make the European economy the most dynamic and knowledge-based in the world by 2010 (EIRR 316 p.23). The strategy contains concrete targets in areas such as overall employment levels, female employment and the employment of older workers. When the strategy was launched, the EU was experiencing good economic growth and, at that time, the prospects of being able to harness this growth to stimulate employment appeared to be good.
However, five years since the launch, it is clear that, although some progress has been made, it is unlikely that the targets in the areas of employment will be met. For an overview of progress towards the main targets, see box. The report on employment, delivered by the high-level group set up to renew the strategy and headed by the former Dutch premier Wim Kok in November 2004 (see European Commission: Social policy state of play), offered strong criticism of the strategy, stating, among other things, that there needs to be more political will to implement the strategy. It stressed that: "Time is running out and there can be no room for complacency. Better implementation is needed now to make up for lost time."
The European Commission submitted its own communication on the mid-term review of the Lisbon strategy, in which it sets out the main areas in which the strategy could be relaunched. For details, see box.
Tripartite social summit
The spring council was preceded on 22 March by a tripartite social summit, as has been the case for the past few years. Participants representing the main social partner organisations discussed the approach to the mid-term review of the Lisbon strategy. A joint declaration was then forwarded to heads of state and governments who were meeting at the spring council. The declaration was signed by representatives of UNICE/UEAPME, CEEP and ETUC and states their support for the Lisbon strategy: "Faced with the challenges of globalisation, technological progress and demographic ageing, the Lisbon strategy remains as valid and necessary as it was in 2000. Europe's weakness in terms of growth and employment needs to be addressed." The parties urge the spring council to use the mid-term review of the Lisbon strategy to focus on policies that will create the conditions for average 3% growth per year by 2010.
The signatory parties also express their support for the commission's proposals to realign and streamline the delivery process of the Lisbon strategy. They also stress the importance of involving the social partners at national level when developing national Lisbon programmes, and at European level when assessing the implementation and results of the strategy.
The social partners also presented four reports to the spring summit:
- a new framework of actions on gender equality;
- their third annual report on the follow-up to their framework of actions on the lifelong development of competences and qualifications;
- their second joint report on national social partner actions to implement the European employment guidelines; and
- a joint contribution to the EU youth initiative.
The social partners also state that they are thinking about the content of their next autonomous work programme. The current three-year programme covers 2003, 2004 and 2005.
Spring summit
At the spring summit, ministers agreed that the results of the Lisbon strategy are mixed and that, although there has been "undeniable progress", there are "shortcomings and delays" and they therefore call for urgent action to be taken. Ministers identified the main strands of the relaunch as follows:
- encouraging knowledge and innovation;
- making the EU an attractive area in which to invest and work; and
- encouraging greater social cohesion through growth and employment.
Knowledge and innovation
This has been a key area of focus for the Lisbon strategy since its launch. Ministers believe that if research, education and innovation is developed, this will contribute to creating more and better jobs. Here, ministers urge those directly involved in the knowledge-based society to conduct a "genuine dialogue" on this theme, in both the public and private sectors. The Lisbon objective of investing 3% of GDP in research and development is maintained, with a split between private and public investment, and ministers state that intermediate levels need to be set out at national level.
Other areas include increasing the attraction of the EU for researchers by improving the conditions under which they move and practice their profession. Further, member states are encouraged to develop their own innovation policies, focusing particularly on supporting small and medium-sized enterprises (SMEs), promoting joint research between undertakings and universities, improving access to risk capital, focusing public procurement on innovative products and services and developing partnerships for innovation.
Increasing the attractiveness of Europe
Ministers state that the EU must complete its internal market and make its regulatory environment "more business-friendly", while business must develop its sense of social responsibility. They stress the need for an efficient infrastructure to ensure sustainable consumption and production and a high quality of life. The council therefore urges member states to transpose all relevant directives in these areas.
In terms of the internal market, the council identifies the importance of making the internal market for fully operational services. The directive aimed at achieving this, proposed in January 2004, has stirred up much controversy among trade unions, which fear that it will lead to "social dumping" as a result of firms being allowed to be based in and covered by the regulations of one country but to operate in another. The council states that: "The internal market of services has to be fully operational while preserving the European social model. In the light of this ongoing debate, which shows that the directive as it is currently drafted does not fully meet these requirements, the European Council requests all efforts to be undertaken within the legislative process in order to secure a broad consensus that meets all these objectives." It would therefore seem clear that the directive, which is due a first reading in the European parliament in June 2005, will subsequently undergo significant revision.
The council also stresses the need to improve the EU's regulatory environment and notes that SMEs in particular would benefit from this.
Social cohesion, growth and employment
The council welcomes the commission's recent communication on the social agenda for the coming five years, in which it outlines a variety of policies in the employment and social field (see EC: Commissioner Spidla sets out social policy vision). It states its belief that raising employment levels and extending working life, coupled with reform of social protection systems, is the best way of maintaining the present level of social protection. The goals of the Lisbon strategy in the field of employment will be maintained, as will the general goal of full employment, quality of work, labour productivity and social cohesion.
The council states that more people must be attracted into the labour market, using measures such as an active employment policy, making work pay, reconciling work and family life, equal opportunities, active ageing, encouraging social integration and converting undeclared work into lawful employment. New forms of work organisation and a greater diversity of contractual arrangements for workers and employers will also contribute to adaptability. Further, emphasis should be placed on better anticipation and management of economic change.
Education and training is a key tool for encouraging social cohesion and the council stresses that member states should work to raise their general standard of education and to reduce the number of early school leavers. Member states should also focus on lifelong learning, particularly in the case of low-skilled workers and those working for SMEs.
Reactions
The EU-level private sector employers' organisation UNICE has welcomed the fact that the council has focused on how to "dynamise" the EU, believing that "Europe needs to shake itself out of its lethargy and increase its growth potential". However, it states that it is disappointed that the council has not taken the opportunity to strongly relaunch the Lisbon strategy. Nevertheless, it hopes that, as member states will play a key role in re-energising the strategy, the 2005-08 national action plans to be drawn up by member states will "help identify priority actions for reform".
UNICE supports the liberalisation of the internal market for services, which it terms "a centrepiece of the EU economy and employment picture". It characterises the services Directive as an essential element to enhance growth and jobs. While agreeing that the Directive must not undermine existing legislation on the posting of workers (the EU's posted workers Directive), it believes that the EU "urgently needs a functioning internal market for services".
Philippe de Buck, UNICE secretary general, stated: "A growth and jobs strategy is what Europe needs. It will allow companies, regardless of their size, to create employment in all member states. It is now up to European and national political leaders to translate words into action."
ETUC general secretary John Monks stated that reforms have been put into place in the EU, but that macro-economic policies are need to ensure that these are successful: "Internal market, the single currency, liberalisation of networks industries, reform of the labour market. You name it, Europe has done it. But where are the results of these reforms? The problem is not a lack of structural reform, it is neglect of growth-supporting macro-economic policies." The ETUC believes that more and better jobs can only be delivered if: active demand policies are deployed; policies are put into place to strengthen the European social model as a force for productivity, rather than policies that deregulate the welfare state; and these reform policies are implemented in close agreement with the social partners.
It is clear that, while some progress has been made in improving both the level and the quality of employment in the EU over the past five years, there remains much to be done. All member states are now working to reform their policies in areas such as early retirement, active ageing, the interface between social benefits and incentives to find work, competence development and improving and updating the skills levels of workers, all of which will bear fruit in the years to come. Whether this will be enough to reach the targets set by the Lisbon strategy by 2010 is a moot point - there appears to be a consensus that reaching the targets is unlikely if the EU's labour market performance remains the same. While this mid-term review and overhaul of the strategy does not revoke any of the original targets, it aims to address some of the acknowledged weaker points of the strategy, namely its governance and its delivery by individual member states. The commission has therefore streamlined the process to make it more readily understandable and transparent in the future. It is now largely up to the individual member states to work towards better implementation.
