Annual spring summit reviews employment progress

The annual spring European Council meeting on economic, social and environmental issues was held in Brussels in March 2003, and reviewed the progress of EU policy in these areas. Although the Council set no new employment targets, it decided to establish a European employment taskforce

Since 2000, EU heads of state and government have held a European Council summit each spring to discuss economic, social and environmental matters. The Lisbon Council of March 2000 (EU0004241F) agreed a 10-year strategy to make Europe the most competitive and dynamic knowledge-based economy in the world and set concrete targets in the area of employment levels, to be reached by 2010; the Stockholm Council of March 2001 (EU0104208F) added to these targets and set a number of intermediate employment targets; and the Barcelona Council of March 2002 (EU0203205F) added a number of further targets. The fourth spring summit was held in Brussels on 20–21 March 2003.

The 2003 spring Council did not set any additional concrete targets, focusing instead on how to work towards achieving the targets already set. It established a number of priority objectives and set out specific measures to achieve these objectives.

Main objectives in the area of employment

In its conclusions, the European Council notes that significant progress has been made in achieving the objectives set by the Lisbon agenda. A total of 5 million new jobs have been created since 1997, of which 500,000 were created in 2002, despite a deteriorating economic climate. However, it also notes that more needs to be done. In particular, the EU faces specific challenges in the form of an ageing population and enlargement of the Union. The Council identifies the following priorities:

• raising employment and social cohesion. Far-reaching structural reform will be necessary in order to achieve full employment, higher productivity and better quality in work. Labour markets need to become more inclusive and Member States must increase labour market participation by introducing more reforms to tax and benefits;

• giving priority to innovation and entrepreneurship. More needs to be done to turn ideas into concrete developments. Research and development must be boosted so that the EU can meet its target of research and development investment of almost 3% of GDP;

• strengthening the internal market. European markets need to be opened up and integrated, in tandem with improvements to the regulatory framework. The integration of, and greater 'connectivity' in, industries such as energy, transport and telecommunications must also be pursued; and

• environmental protection. Fulfilling economic potential must go hand in hand with improvements in the environment and the quality of life, a factor which can also contribute to increasing employment.

Actions

In order to address the priorities set out above, the European Council lists a number of actions which it intends to take over the next 12 months.

Economic reforms to increase growth potential

The Council urges Member States to participate in actions at EU level and to develop national initiatives to foster entrepreneurship through the education system. It also calls on Member States to involve small businesses in the policy-making process and to simplify the set-up procedures for new businesses.

The Council calls on Member States to make an effort to transpose EU internal market legislation by July 2003. It also urges Member States to take concrete action to promote increased business investment in research and development. It highlights electronic communications as a powerful engine for growth, competitiveness and jobs, and calls for implementation of a new regulatory framework for electronic communications in the EU by July 2003.

Modernising the European social model

The Council maintains that improving the employment situation lies at the heart of the Lisbon strategy. The new, streamlined European employment strategy (EU0212204F) will, it hopes, make it more effective.

The Council states that the annual Employment Guidelines, issued by the European Commission and Council of Ministers to the Member States, should address the following issues:

• active and preventive measures for unemployed and economically inactive people;

• making work pay;

• increasing labour supply and labour participation;

• entrepreneurship, change and adaptability;

• lifelong learning;

• gender equality;

• integration and non-discrimination in the labour market; and

• regional employment disparities.

Action by Member States

The Council states that the following areas are a priority for Member States, in relation to improving the 'European social model':

• introducing reforms in tax and benefit systems and the way they interact, in order to encourage labour market participation, tackle poverty and unemployment traps and increase labour demand;

• improving wage formation systems so that they take into account the relationship between wages, price stability, productivity, training levels and labour market conditions. Employment legislation should also be modernised, with care taken to achieve a balance between flexibility and security, while at the same time respecting the roles of the social partners in the national context;

• improving the effectiveness of active labour market programmes by means of better follow-up and monitoring. There should also be more labour mobility across occupations, sectors, regions and borders; and

• increasing labour market supply, particularly among older people, women, immigrants and young people.

European employment taskforce

The Council extended an invitation to the Commission to set up a 'European employment taskforce'. This will be headed by Wim Kok, the former Dutch Prime Minister, and will be composed of a limited number of 'highly qualified experts' who are able to reflect the views of all social partners. These are:

• Anna Ekström, head of the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO).

• Anette Roux, chief executive officer of the Bénéteau company;

• Federico Duran Lopez, labour market specialist and professor of employment and social security at the University of Cordoba, Spain;

• Carlo Dell’Aringa, professor at the Institute for Microeconomics and Labour at the University of Milano Sacro Cuore;

• Christopher Pissarides, director of the research programme on technology and growth at the Centre for Economic Performance at the London School of Economics;

• Maria João Rodrigues, president of the Advisory Group to the EC for Social Sciences, professor at theLisbon University, Higher Institute for Business and Labour Studies, Portugal; and

• Günther Schmid, director of employment, social structure and welfare state at the Social Science Research Centre in Berlin, and a former member of the German Hartz Commission (DE0209205F).

The taskforce is briefed to carry out an independent, in-depth examination of employment-related policy challenges. The taskforce will report to the Commission in time for the Council/Commission joint employment report to be submitted to the 2004 spring European Council.

Commentary

This latest annual spring Council continues the momentum of the European employment strategy and progress towards achieving the goals and targets set out at the Lisbon, Stockholm and Barcelona Councils of the past few years. Review of progress and fine-tuning of policy are important elements in the process of transforming Europe’s economy and labour markets, and the newly-created European employment taskforce will be instrumental in this process over the coming year. The Council made it clear that great strides have been made over the past five years, despite recent adverse economic conditions. However, it has also highlighted the fact that much more remains to be done and that each Member State must continue to work towards eliminating the weaknesses that remain in a range of areas. (Andrea Broughton, IRS)