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The European Employment Strategy

within the new Lisbon agenda

Boosting Growth and Jobs in Europe


Safeguarding the European social model

Guido Vanderseypen
Employment Strategy Unit, DG Employment, Social
Affairs & Equal Opportunities, European Commission
CICERO FOUNDATION PARIS 24 FEBRUARY 2006

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European social model under debate

EU provides a platform of fundamental rights and


common values
Key features of European Social Model(s) :
solidarity principle => high public expenditure
national diversity => legislation, social dialogue, OMC
Financial sustainability threatened by demographic
trends, global competitive pressure => need for
stronger financial basis (growth and jobs)
Need for labour market reforms

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The need for reform
increasingly recognised
Unemployment at a socially unacceptable
level
EU lagging behind in terms of GDP per capita,
employment and productivity
Industrial restructuring gathering pace
Low innovation record and job creation
Workforce will decline (~ 2015)

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EU performance 1999-2004 (US=100)

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R&D expenditure as % of GDP
(US:2.8%; target : 3%)

4,5
Target 2010 (CY, LV 2008; IE 2013; UK 2014) - NL, PL aim at a 'top 5' position 2004 (ES, IT, LU, PT, UK 2003)

4,0

3,5

>3%
3,0

2,5

2,0

1,5

1,0

0,5

0,0
BE CZ DK DE EE GR ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK EU-
25
Source: Eurostat, Structural Indicators, Innovation & Research - OECD

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The case for EU policy
coordination
Single market / EMU
synergy between growth and employment (GSP)
EU financing (ESF 2000-2006 6.3 bln)
However :
Treaty limitations (limited regulatory power)
Subsidiarity and diversity of social systems
=> Europe is only part of the solution

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Lisbon Agenda
Lisbon objective (2000) : to become the most
competitive and dynamic knowledge-based
conomy in the world capable of sustainable
economic growth with more and better jobs and
greater social cohesion

=> Several new OMCs since 2000

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The European Employment Strategy
The European Employment Strategy (EES) has coordinated
Member States' employment policies since 1997 through:

common European guidelines and recommendations


annual national action plans for employment
monitoring, evaluation at EU level
mutual learning / peer review
A policy coordination ramework which complements EU
action in the field of employment (cf. legislation, social
dialogue and the European Social Fund) see
http://europa.eu.int/comm/employment_social/index_en.htm

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Overview of employment
performances (1997-2002)
Lower structural rates of unemployment, long-term
unemployment and spells of unemployment

Growth in employment creation (+6 million jobs 1997-


2002) and employment rates (esp. women)

increased resilience of employment (even after 2001)

Clear shifts in taxation on labour, gender equality


New paradigms (quality in work, lifelong learning,
segmentation)
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Over-arching objectives of the EES
since 2003
increasing employment rates by 2010
overall employment rate : 70%
female employment rate : 60%
employment rate 55+ : 50%
increasing productivity and quality of jobs
social inclusion and territorial cohesion

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Does the EES work ? (recent evidence > 2002)

Continued improvement in female employment

Decline in employment of 55+ curbed

Proved effectiveness of ALMPs under conditions

Reversal of unemployment and inactivity traps

Visible improvement in LLL performance

Widening of productivity gap halted

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Employment rates EU

Pace of progress
since 1997
Low Close to average High
Rates
in 2004 (%)

> 70 DK, SE, UK, NL

65-70 AT CY, DE, PT, FI, SI IE

CZ, EE, LT, BE, EL, HU, FR, LU,


< 65 ES, IT
MT, PL, SK LV

Explanation: Pace of progress is defined as the percentage point change in the employment rate between 1997 and 2004:
a) Low progress: the employment rate increased below the EU25 average minus half of the (un-weighted) standard deviation
b) Close to average: the employment rate increased inside a band of one standard deviation centred on the EU25 average
c) High progress: the employment rate increased above the EU25 average plus half of the (un-weighted) standard deviation

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Weaknesses of original Lisbon
Strategy (LISBON I)
ca. 10 parallel OMC's with parallel reporting ("burocracy")
Too many priorities and targets, sometimes conflicting or
overlapping
Lack of national ownership (EU level targets) and
communication about the benefits of reforms

Need to establish a new partnership with MS based on a


simpler reporting system and greater ownership

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The renewed Lisbon Strategy
(LISBON II)
aimed at better implementation (national and EU partnership)
focus on growth and jobs => integration of Treaty based
processes (BEPGs and EGs)
3 year stability
single reporting (National Reform Programmes) reviewed annually
Community Lisbon Programme (20 July 2005), setting out action
at EU level (Financial Framework 2007-'013, Innovation Action Plan,
better regulation e.g. state aid -, Services directive)
http://europa.eu.int/growthandjobs/index_fr.htm

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Broad Economic Policy Guidelines (2005-'08)
16 Guidelines covering inter alia
sound public finances (Growth Stab. Pact)
sustainable pension and public health services
public finances reoriented to employment
wages in line with macro economic stability
increase R&D investment to 3% of GDP
facilitate innovation, and use of ICT
reduced administrative burden
promotion of entrepreneurship
European infrastructure (Internal Market)

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The new Employment Guidelines (2005-2008)
(17) To implement employment policies aimed at achieving full employment, improving
quality and productivity at work, and strengthening social and territorial cohesion

ATTRACT AND RETAIN MORE PEOPLE IN EMPLOYMENT, INCREASE LABOUR SUPPLY AND
MODERNISE SOCIAL PROTECTION SYSTEMS

(18) To promote a lifecycle approach to work


(19) To ensure inclusive labour markets for job-seekers and disadvantaged people
(1) To improve matching of labour market needs

IMPROVE ADAPTABILITY OF WORKERS AND ENTERPRISES

(21) To promote flexibility combined with employment security and reduce labour market
segmentation
(22) To ensure employment-friendly wage and other labour cost developments

INCREASE INVESTMENT IN HUMAN CAPITAL THROUGH BETTER EDUCATION AND SKILLS

(23) To expand and improve investment in human capital


(24) To adapt education and training systems in response to new competence requirements

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The EES and Lisbon II
Lisbon
Sustainable
Development
Macro-economic policy coordination
stability and growth pact, monetary policy Strategy

Micro-economic reforms
industrial policy, innovation and R&D, reforms
in product, service and financial markets

Employment policy coordination


attracting more people, adaptability of workers Coordination on
and enterprises, investment in human capital social protection
& social inclusion
EES

The Lisbon Strategy initiated a comprehensive set of


structural reforms. The EES is the employment pillar.
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Lisbon Strategy governance
National Reform Programmes (NRP) first
presented in Autumn 2005
Annual Progress Report to Spring European
Council (23 March 2006)
ongoing Open Methods of Coordination
feeding in (social protection, education)
European Structural Funds programming
(2006)
NRP updates in Autumn 2006

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Results of the first Lisbon "round"
Member States have drawn up NRPs with
clear priorities and synergies
Focus on employment participation and LLL
Weaknesses: lack of interest for adaptability
Mixed : partnership and budget provision
Significant progress on the Community Lisbon
programme (financial perspectives, services
directive, REACH)

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Follow up actions (1) Hampton Court
increased investment in higher education
(from 1.28% of GDP to 2% in 2010)
all MS to set up "one-stop shops" to assist
entrepreneurs and efforts to cut red tape
by 2007
new energy initiative
delivering jobs in the face of globalisation
and ageing

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Follow up actions (2) delivering jobs
every young person to be offered a job,
apprenticeship or training within 100 days
by 2010
greater effort to meet childcare targets
concentrate on training for people over 45
a new agenda on flexicurity (extraordinary
social summit)

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