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COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, xxx
COM(2005) yyy final
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS
European values in the globalised world
Contribution of the Commission to the October Meeting of Heads of State and
Government
EN
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Table of Contents
1.
Introduction .................................................................................................................. 3
2.
Unity and diversity in shaping economic and social policies ...................................... 4
3.
3.1.
3.2.
3.3.
Completing the transformation – today’s performance, today’s and tomorrow’s
challenges. .................................................................................................................... 5
Current policies have not delivered social justice for everyone .................................. 5
Globalisation ................................................................................................................ 6
Ageing .......................................................................................................................... 9
4.
4.1.
4.2.
4.2.1.
4.2.2.
4.2.3.
Responding to the Challenge ..................................................................................... 10
Who should do what? The role of Europe ................................................................. 11
Ideas for change ......................................................................................................... 12
The EU level .............................................................................................................. 13
The national level ....................................................................................................... 13
The new partnership of the EU and member states.................................................... 14
5.
Conclusion.................................................................................................................. 15
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1.
I
NTRODUCTION
Europe must reform and modernise its policies to preserve its values. Modernisation is
essential to continue keep Europe’s historically high levels of prosperity, social cohesion,
environmental protection and quality of life.
Today, the Europe of dynamism, innovation and openness, of 3G mobile communications or
the World Wide Web, sits side by side with the Europe of 19 million unemployed, child
poverty and stagnant growth, where too many are excluded from opportunity and prosperity.
This is an uncomfortable duality which undermines the many achievements of the European
Union and its Member States after a half century of peace and improved living standards.
For several decades after the creation of the European Community, the existing structures
helped to deliver outcomes which matched the ambitions of the Community as it was. But this
is increasingly no longer the case.
Growth is slowing, structural unemployment remains high, inequalities are rising. Unless we
are able to change, the forces of global competition, the impact of new technologies and our
ageing population will increase the gap between the two Europes, and between Europe and
the world. Our economic success and the financial viability of our social systems – pensions,
welfare, health – is called into question.
This is not simply a matter of economics or public finances; this is first and foremost a
question of social justice. This is about the kind of Europe we want our children to live in –
and how we pay for it.
The status quo is not an option. With growth, and more Europeans in more productive jobs,
we can achieve the outcomes which meet Europeans’ expectations and values. By acting in
the areas that matter most, we can advance European integration. Growth and jobs is a truly
European agenda.
The need for change is widely recognised; for example in the reform process launched in
Lisbon in March 2000. But this analysis has not yet been fully translated into action. Europe
can no longer afford to wait; because what is different five years on is the added sense of
urgency
1
. Global competition, particularly from Asia, has intensified. Cutting-edge
knowledge is no longer confined to Europe or North America. Indian universities are turning
out more than a quarter of million engineers every year. Research spending in China is set to
catch that in the EU by 2010.
The good news is that we are not starting from scratch. Important reforms have already been
launched in many Member States. These build on the stability offered by the euro and
economic and monetary union. All have committed themselves to going further and faster.
And we have the new Lisbon strategy for growth and jobs, launched this year. Furthermore,
the European Union is uniquely well placed to help this transformation. Economic and
monetary union and the euro offer a backdrop of stability and low inflation. Now Europe can
use its scale, as the biggest trading block in the world, to help deliver ambitious and balanced
solutions to international problems from climate change to trade. EU funding and programmes
1
Jobs, Jobs, Jobs, Creating more employment in Europe,
High Level Employment Task Force,
November 2003 and
Facing the Challenge,
High Level Task Force, November 2004.
3
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can play a significant role in supporting national action, which makes the need for an
agreement on the future financial perspectives before the end of the year all the more
important. Our external instruments, from enlargement to development policy, can spread
prosperity and security beyond Europe’s existing borders.
There can be no partial solutions. No single country can meet these challenges alone. Acting
together at a European and national level, we can give Europe a future. We can have a strong
voice, projecting European vision and European values among our partners around the world
2.
U
NITY AND DIVERSITY IN SHAPING ECONOMIC AND SOCIAL POLICIES
Common European values underpin each of our social models. They are the foundations of
our specific European approach to economic and social policies.
The EU’s Member States have developed its own approach reflecting its history and
collective choices. Each has blended together common elements such as public pensions,
health and long-term care, social protection, education, labour market regulation and
redistribution through tax policies. Member States are responsible for shaping and delivering
these different services.
The variations within the EU are considerable. For example, Lithuania, Latvia and Ireland
spend 14 to 15% of GDP on social protection systems, the UK and Belgium 27% and France
and Sweden 30%. The level of public pensions under such systems varies considerably in the
EU from between 31 and 37% of average earnings in Ireland, the UK and Belgium to over
70% in Austria, Finland, Hungary, Italy, Luxembourg, Portugal and Spain.
This report does not attempt to single out particular “models”, but rather recognises (i) that no
country has yet found all the answers and (ii) that each system has distinctly European
characteristics on which we should build:
–
First, national
economic and social policies are built on shared values
such as
solidarity and cohesion, equal opportunities and the fight against all forms of
discrimination, adequate health and safety in the workplace, universal access to
education and healthcare, quality of life and quality in work, sustainable
development and the involvement of civil society. These values represent a European
choice in favour of a
social market economy.
They are reflected in the EU treaties,
its action and legislation, as well as in the European Convention of Human Rights
and our Charter of fundamental rights.
Second, European citizens have greater expectations of the state than their
equivalents in the Asia or America. The
public sector tends to play a big role,
either through regulation or government spending, in the organisation and
financing of national systems.
In addition, all Member States have a played a strong
role in the delivery of
high quality services of general interest
which have been a
key feature of economic and social development. On average, the 25 EU Member
States devote 27% of GDP to public spending on social protection, compared to 15%
in the United States and 17% in Japan.
Third,
a strong
“European
dimension” reinforces national systems.
In contrast to
other regions of the world, national systems here are reinforced by European level
policies (such as the stability offered by macro-economic policy, the dynamism
–
–
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created by the internal market and the social agenda, and the cohesion promoted by
EU Structural Funding ).
–
Fourth, there is a
strong tradition of social dialogue and partnership
between
governments, industry and trade unions – even if the detailed mechanisms vary
considerably between Member States. At a European level, this has been reflected in
the EU Treaties and, for example, the regular Tripartite Social Summits.
But do the existing approaches provide answers to current challenges?
3.
C
OMPLETING THE TRANSFORMATION
–
TOMORROW
’
S CHALLENGES
.
TODAY
’
S PERFORMANCE
,
TODAY
’
S AND
Today’s policies are challenged by new technologies, ageing and globalisation. Ageing offers
longer lives in better health, globalisation creates opportunities for both consumers and
businesses. Yet ageing challenges the financial sustainability of current systems, and
globalisation challenges our ability to compete. Is Europe ready to change?
3.1.
Current policies have not delivered social justice for everyone
Even without new challenges, poor economic performance is already today making it difficult
for governments to meet people’s expectations.
–
19 million unemployed is unacceptable.
The combination of low employment rates
and unacceptably high and persistent levels of unemployment in many Member
States is the number one social problem we face. Young people, women, migrants
and older workers (between 55-64) are the hardest hit – the employment rate for
women, for example, is on average 13% lower than the rate for men. Despite reforms
of pension systems and early retirement schemes, in 2003 only 40.2% of older
workers (aged 55-64) were still in employment; the rate was 60% in the US and 62%
in Japan.
Graph 1: Duration of unemployment in 19 OECD countries (2003)
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
% of unemployed
<1 month
> 1 year
US
SE
DK
UK
FI
LU
NL
PT
IE
ES
HU
FR
BE
PL
CZ
DE
HE
IT
SK
Faster re-employment
Source: OECD (2004). Labour Force statistics 1983-2003
Slower re-employment
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–
Weakness in education, research, innovation and productivity are holding back
labour markets and economic performance
in some Member States. People do not
have the skills that business need. Knowledge and technology matter; yet although
we have boosted the numbers of maths and science graduates, too few of them
choose to pursue scientific careers and those that do often move to the US to do so.
Two thirds of differences in standards of living between the US and the EU result
from poor productivity performance here. Research investment in China is growing
by 20% per year.
The barriers to entry and exit on the job market are too high.
Employment regulation
and social institutions must help give those outside the job market and those on the
first rung of employment more opportunity to progress to better, more secure
employment.
The gap between the rich and the poor in the EU is considerable, both within
Member States and between them.
Over 25% of EU citizens live in regions whose
output is below 75% of the EU average. For Europe as a whole, the gap between the
richest fifth and the poorest fifth of the population is growing. One in five children
live at risk of poverty and the risks are higher for the children of lone mothers and
households where parents are unemployed.
Globalisation
–
–
3.2.
Globalisation is not new. But the speed at which it is now happening is extraordinary. We feel
every day the impact of the emergence of new economic giants such as China, India and other
nations. And the EU is not closing the gap with the United States.
–
World trade has grown by more than 8% annually in the decade from 1992 and new
trading giants have emerged.
Twenty years ago just 10 per cent of manufactured
goods came from developing and emerging countries. By 2020 China’s and India
share alone could be 50% . The share of China and India in world trade in goods has
increased. The date shows that in 2004, China’s share of global merchandise trade
surpassed that of Japan.,
Graph 2:
Shares of world trade in Goods (excl. intra EU-25 trade)
25,0%
20,0%
15,0%
10,0%
5,0%
EU-25 (excl. intra)
US
Japan
China
India
1995
2004
1995
19,1%
16,5%
9,5%
3,4%
0,8%
2004
18,5%
17,1%
7,4%
8,4%
1,2%
0,0%
EU-25
US
Japan
China+India (China upper part, India striped segment)
Source: WTO statistical database and IMF (DOTS).
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–
China and India are attracting research investment and rapidly shedding their image
as “low cost, low value” economies.
While China has relied heavily on the strength
of its manufacturing exports as a key driver for growth, India’s success has been
more visible in services. In both cases, the key export sector records an increasing
technological content as shown by the share of high tech goods and services of China
and India in their total exports.
Graph 4: Share of ICT related services exports
(% of country's commercial service exports)
Graph 3: Share of high-tech exports
(% of country's manufactured exports)
80
70
25
20
60
50
40
30
20
10
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
5
0
15
10
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
China
India
World
China
India
World
Source: WB Global Development Indicators
Note: ICT commercial services exports include computer, information, communication services and services other than
transport, travel, insurance and financial.
–
The performance gap with the US has not narrowed. This applies
not only in terms
of living standards, growth and employment, but also in key areas – like investment
in R&D and new technologies, the numbers of patents issued and the percentage of
the population with a tertiary education. Europe is also lagging in the take up of new
technologies important for improving productivity.
Financial markets have led the way in globalisation.
Trade and investment have
gone hand in hand, spurring financial market integration along the way. Foreign
direct investment rose from 5% of global GDP in 1985 to over 15% in the late 1990s.
China, who as recently as 1990 received little - around 1.4% of FDI, was the largest
recipient in 2003, followed by France and the US. As a further sign of
internationalisation, the world’s 100 biggest international companies employ almost
half of their workforce outside their home country.
Technology and market opening both in Europe and globally has helped fuel this
rapid growth.
More trade, drawing on cheaper communication costs and transport,
has made it easier for businesses to source goods and services from other parts of the
world – opening opportunities for exporters here, but also presenting new
competitive pressures. The broadband revolution, (as well as language and
technology skills in places like India), have allowed an increasingly wide range of
services to be traded – encouraging outsourcing of a range of service activities by EU
businesses, but also attracting additional trade and investment into the EU.
7
–
–
2002
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–
Marked differences in labour costs are one factor in the success of new economic
players. Such
stark differences reflect to a large extent very diverse labour
productivity levels. This means that Europe cannot expect to compete on costs alone
– but rather must increase productivity and quality drawing on its technological
strengths and ability to compete in products and services with a higher knowledge
content.
Graph 5: Total labour costs (2002)
US$
30.0
25.0
20.0
15.0
10.0
5.0
0.0
In
di
a
C
hi
na
Br
az
il
C
ze Me
xi
ch
co
R
ep
ub
l
Po i c
rtu
ga
Si
l
ng
ap
N
ew
or
Ze e
al
an
d
Ko
re
a
Average hourly compensations in US dollars- evaluated at market exchange rates for production workers in manufacturing in 2002.
Source: OECD (2005), which quotes the following sources: OECD STAN database and U.S> Department of Labor, Bureau of Labor
Statistics, Foreign Labor Statistics, November 2004, except that wage data for India are estimates based on 2001 and 2003 data from Oxford
Economic forecasting.
–
Global demand for energy is growing while supply remains very tight.
Oil and gas
prices have increased two fold compared to their level five years ago. Growth in
China and India has boosted global energy use there at the same time that US
consumption has increased. Within twenty five years, the EU is likely to import up to
90% of its oil and gas needs. The combination of high prices and reliance on external
supply risks slowing even further prospects for future growth.
There is a disconnect between our perception of globalisation and our behaviour. It is a source
of anxiety, particularly in those EU countries with high unemployment, but most jobs are
created and lost within a country’s economy, not as a result of shifting production to another
part of the world. we must remember that globalisation is driven by a very human desire – the
desire of billions of people to create a better life for themselves and their families.
Globalisation is being led by all of us, by the choices we make and the opportunities it offers
us to experience new things. And globalisation does not mean that if others get richer, we
must get poorer. Prosperity is a dynamic concept. Globalisation is the chance to increase the
size of the whole cake, so that everybody gets a slice.
At the same time, the anxieties about globalisation are real and must be addressed, not
ignored. And globalisation shines a spotlight on existing weaknesses. It confirms the need for
well-functioning markets and policies that mitigate the negative impacts that global
competitive pressures bring. It highlights as well the need for structural reforms to ensure that
O
EC
D
Au
st
ra
li a
C
an
ad
a
U
Fr
ni
an
te
c
d
Ki e
ng
do
m
Ja
Lu
pa
xe
n
m
bo
ur
Sw g
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Au
U
st
ni
ria
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St
at
N
et
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rl a
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Be s
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Sw
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i tz
er
la
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a
D ny
en
m
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N
or
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ay
Ita
ly
Ire
la
nd
Is
ra
el
Sp
ai
n
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the EU can remain an attractive place to invest, particularly for research and innovation
activities in high value products and services, where our businesses excel.
3.3.
Ageing
Under current trends the population of the current European Union will be both smaller and
older in 2050, partly due to low birth rates. At the same time, the upward trend in life
expectancy at birth will continue; by 2050 life expectancy will have risen to 81 for men and
86 for women. While migration to the Union has been significant in recent years, it does not,
however, on its own provide a long-term solution to falling birth rates and our ageing
population.
–
Europeans will get older.
By 2050 there may be 48 million fewer 15-64 year olds
and 58 million more people over 65. Over the coming decade, Europe will change
from having four people of working-age for every elderly citizen in 2004 to a ratio of
2 to 1. Fertility rates are declining in most member states and without more family
friendly policies any turnaround in this trend is likely to be slow.
A smaller workforce will drag down growth.
From 2015 a shrinking workforce will
act as a brake on potential growth in the Union, reducing it from 2 to 2.5% today to
just 1.25% by 2040. The impact will be even more marked in the ten Member States
that have recently joined the EU.
Lower growth will come at a time just when the costs of an ageing population start to
peak.
Under current policies, projections suggest spending, for example, for age
related spending on pensions, health and long-term care will increase by between 4
and 8 % of GDP in coming decades. Some EU countries may face even higher
increases. More than half of all EU Member States, the majority of which are in the
euro area, face significant risks to the sustainability of their public finances. For the
EU as a whole, this suggests unsustainable increases in public debt or unacceptable
increases in taxation and/or cuts in the services or benefits provided.
–
–
Graph 6: Impact of ageing on potential growth rates
%
3,5
3
2,5
2
1,5
1
0,5
0
2000
2010
2020
2030
2040
2050
JAPAN
EU15
USA
Source: European Commission
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Member States and the EU institutions have been taking steps to respond to the ageing
challenge. At national level, important reforms of pension systems and of early retirement
arrangements have been launched in several Member States. At EU level, macro-economic
policies offer a path towards stability and sound public finances which should put Member
States in a better position to meet future spending increases. Delivery of agreed reforms
(within the Lisbon agenda) should improve long-term economic performance, while an
important debate is also underway on the right policies, for governments and for the Social
Partners, to support “active ageing” and better reconcile work and private lives.
4.
R
ESPONDING TO THE
C
HALLENGE
Before considering ways to respond to the challenges described above, it is essential to accept
that they can only be tackled if improved economic performance and effective social systems
support each other. There are many examples of these mutually reinforcing links:
–
Ageing populations.
We want more people to work, productively for longer. But to
do that they need the skills to enable them to take full advantage of new
technologies. And we must both create the jobs and give people the chance to take
them. This is particularly true for those who cannot work without affordable child
care, but it also means, for example, reviewing tax and benefit systems to make sure
that it pays people to work.
Globalisation and change.
Our firms benefit from more open markets and
technological innovation, inside and outside the EU. But we also need to help
individuals, by getting the right policies to support people whose jobs disappear;
helping them to find new jobs, quickly. That is especially important for people who
have missed out on school and need new skills later in life.
Mobility.
In a globalised world with an ageing population, greater mobility within the
European Union (both within and between Member States) will be essential, not least
to improve people’s chances of finding work and learning and using new skills. The
same is true for non EU workers as well. That means breaking down barriers to
opportunity. But that must be accompanied by measures to eliminate discrimination
and promote integration.
–
–
The bottom line is that we will only meet the new challenge if people have a new attitude
to work and our social systems have a new attitude towards people. This can be achieved
when modernisation of social systems accompanies economic reform.
The long-term sustainability of our social systems
The European Council of 22 and 23 March 2005 requested the Commission "to reflect on the
issues arising about how to ensure sustainable funding of our social model".
Member States finance social systems through different combinations of direct taxes, indirect
taxation, and social security contributions. Responsibility for determining most aspects of
taxation policy and setting tax rates remains firmly with Member States. How can they adapt
to the new circumstances?
They could increase taxes. However, given the size of the budgetary challenges that national
systems will be facing, this does not always offer a viable solution for the future and their
freedom to adjust rates on their own may be constrained by globalisation. Cutting
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expenditure is an option, but in other cases could undermine our commitment to investment
in knowledge, networks and people.
Whatever combination of solutions is chosen, there is a need to look closely at making
current tax systems perform better across the EU. A more co-ordinated approach at the EU
level and more effective administrative co-operation between Member States could
significantly improve the performance of tax systems. This could help to keep economic
activity and “mobile” assets (capital, companies) in the EU, while avoiding the risk of
concentrating tax on less mobile bases like labour. Work has already been launched with the
Member States on a common consolidated corporate tax base, simpler and more uniform tax
rules for cross-border activity and a better system to exchange information.
The mix of taxes chosen by Member States may also impact the sustainable financing of our
social systems. During the period 1970-1999, effective taxation on labour has increased
while taxes on both capital and consumption have remained broadly stable. This heavier
taxation on labour appears to have been a disincentive to the creation of additional jobs,
especially low skilled jobs; but broadening the tax base by getting more people in work is still
the most effective way for governments to raise revenues without raising tax rates. A shift of
taxation from labour to consumption and/or pollution taxes could also help as part of a
broader strategy to increase employment levels.
4.1.
Who should do what? The role of Europe
Today we have a more or less clear division of responsibilities. Member States are primarily
responsible for designing and delivering their social systems. The Union has broad
responsibilities for the internal market, but also in contributing to a wider set of goals from
employment and cohesion to research and innovation; policies that influence the success of
national systems. Economic policies and the welfare state cannot live without the other, but
not all decisions need to be made at the same level.
We should not underestimate the
potential for the European Union to help the process of
modernisation.
In shaping the international response to globalisation the impact of individual Member States
acting alone is minimal. But Europe – 25 countries with shared values and strong institutions
acting together – has a real chance to shape globalisation, in areas like trade, international
labour rules or tackling global health or security threats. Europe has much to offer – the
world’s biggest trading block, the most important aid donor giving leverage in terms of social
justice and human rights around the world, and the leading proponent of multi-lateral
solutions to environmental and the other challenges of sustainable development. No other
country or region has this tremendous advantage.
The Union provides a crucial intermediate level – between the national action and
international rules. It is a successful example of “globalisation” on a regional scale. It offers
the right space for effective regulation and solidarity in which the benefits of regional
integration give a better chance to benefit from globalisation. Our single market of 450
million people offer new opportunities for growth, jobs and investment, while flanking
policies means that we can help Member States to cushion the impacts of change.
Enlargement reinforces the effectiveness of our international action, just as it strengthens the
case for more – not less – integration across the Union. It has made a decisive contribution to
the economies of the acceding countries and opened the door to new opportunities for growth,
investment and employment.
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Moreover the European Union has a unique set of instruments at its disposal.
–
Legislation,
both to drive economic change, for example by making the single
market a reality, and to ensure that it is accompanied by the establishment of
standards safeguarding our values and quality of life.
Executive powers,
for example to enable the EU to make its weight felt in the trade
talks in a way which no Member State on its own could do; and the
enforcement
powers and judicial system
necessaryto ensure that our legislative objectives are
turned into reality, for the benefit of all Europeans.
Competition and state aid powers,
which have further improved as a result of
recent reforms under this Commission, ensure a level playing field between
European businesses, small and large, helping to improve their competitiveness,
stimulate innovation and growth, and guarantee consumers a wide choice of goods
and services at affordable prices.
A budget,
essential to support European economic, social and territorial cohesion,
European IT, energy and transport networks, education and European research and
innovative industrial projects such as the GALILEO satellite system.
An
area of freedom security and justice,
which contributes to creating the
conditions for competitiveness in Europe, for example, through the better
management of legal migration at EU level in order to unleash the full potential of
European economies.
External instruments
from enlargement and the European Neighbourhood Policy to
development policy, which enable us to stimulate growth and project our values
beyond our borders. The economic benefits of recent enlargements have been felt by
new and existing member states alike.
EU level surveillance and co-ordinating powers within our economic and
monetary union,
which ensure that in macro-economic policies all Member States
move in the same direction, even if at different speeds.
A role, with the Commission at the centre, as a
catalyst
for new ideas and reform,
working in partnership with member states to encourage new approaches to change.
Ideas for change
–
–
–
–
–
–
–
4.2.
So what can we do, both at national and European level? Economic, labour market and social
modernisation is both challenging and necessary, but the starting point for action must be
greater coherence and coordination both between the different decision makers and between
economic and social policies. On policies, it is essential to recognise that the pursuit of
economic or labour market reforms is the pursuit of social justice; they are two sides of the
same coin. On decision makers, many decisions are and should be taken and implemented at a
national or sub-national level, whilst some are clearly for the EU, respecting the powers set
out in the European Treaties. What follows focuses on what needs to be done and at what
level.
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4.2.1.
–
The EU level
Complete the internal market, including for services, telecoms, energy, and
financial services.
The internal market adds greater dynamism and choice to the
European economy. The challenge today is to extend its many benefits to the
services sector in order to inject greater competition and to continue to improve our
strong tradition of affordable and high quality services of general interest. Progress
must also be made on the Community patent.
Deliver more open and fairer markets
within the EU through the continued
implementation of competition and state aid rules.
Encourage enterprise,
through conditions which allow European businesses,
particularly small and medium-sized businesses, to be set up and thrive.
Improve the regulatory environment at the EU level,
as well as at the national
level, to free businesses and citizens from unnecessary costs and red tape, focusing
EU legislation where it can be most effective and adds value.
Open third country markets for European producers,
in particular through the
completion of an ambitious and balanced agreement in the Doha round. We must
promote free and fair trade which will benefit not just Europe but the poorest
countries as well.
Agree the Financial Perspectives by the end of the year,
to secure, for example,
multi-annual programmes for cohesion, rural development, education, research,
innovation, mobility and security; and to agree a
new Globalisation Adjustment
Fund
which can complement the structural funds, and notably the European Social
Fund, by providing a swift response, focused on people, to urgent problems which
result from globalisation.
Assure the proper functioning of EMU as a key precondition to creating growth
and jobs.
Improve European economic governance and strengthen the co-ordination of
economic and social policies.
For example, by strengthening instruments like the
EU’s integrated guidelines for growth and jobs and reinforcing their interaction with
more effective EU level co-ordination in the area of social protection. The aim must
be to be in better position to monitor progress in Member States and offer support
where it is needed.
The national level
Implement the agreed structural reforms and policies within the renewed
Lisbon Strategy for growth and jobs.
Raise employment rates and reduce unemployment,
particularly though active
labour market policies and promoting flexibility and adaptability designed to protect
people rather than jobs; we must think as much about the jobholder as about the job.
Adapting pension, health and long-term care to meet changing needs
and offer
adequate protection and universal access to quality care and updating the way risks
and responsibilities are shared between the State and its citizens. National protection
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4.2.2.
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systems should deal with new realities such as single parenthood and relationship
breakdown. They should also offer family friendly policies which address the low
birth rates in the EU and offer
affordable care for children,
to increase the
possibility for women and single parents to enter and stay in the labour market.
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Offering innovative solutions for the low paid,
for example: to “top up” the
earnings to a living wage; increase workers’ productive potential so that they can
earn more – this means giving the State an even more active responsibility to
promote employability and bring down both long-term and youth unemployment.
The new partnership of the EU and member states
4.2.3.
It is clear that neither the EU nor member states can deliver change on their own. What
follows are specific suggestions for a more coordinated approach between the national and
supranational level, in new areas for action both for economic and social policy. The
Commission is open to exploring the development of new partnerships to enhance European
action in these areas. These are
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Create an environment that champions innovation.
Knowledge, research, skills
and education will be the currency of success in the face of globalisation. They are
also at the core of efforts to help people adapt to a changing world throughout their
lives. We must look at how to develop effective European projects in this area,
building on the success and experience of Airbus or the Galileo. These should be
assisted by
support for excellence in our universities, and a closer relationship
between universities and business.
Spell out a long-term and coherent energy policy.
A new policy approach which
considers the issue as a whole, in terms of both use of energy and the security and
diversity of supply; linking energy to other policies such as research, agriculture and
the environment, for example, bio-energy. This is an essential component of ensuring
environmentally sustainable economic growth.
Direct more resources (both public and private) to education, training and
skills;
new approaches to job “security” which focus on giving people the skills they
need to remain adaptable throughout their working life, rather than protecting
particular jobs.
Promote a
renewal of the social dialogue
at all levels. It should be play a full role in
mobilising broad support and a common understanding of the challenges we face and
the solutions proposed. Given the close linkage between action at EU and national
level, the Social Partners should better articulate what they do at each level.
Support efforts to deal with the social consequences of economic restructuring.
Internal market reforms, the modernisation of labour markets and the adaptation of
social systems are all essential elements in managing globalisation and creating
growth and jobs. The full range of EU policies and programmes need to support
national efforts, to make the case for change and mobilise support, for example,
through Social Dialogue.
Increase cooperation between Member States
to strengthen the efficiency and
sustainability of tax systems helping to ensure more revenue is collected, simplifying
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life for taxpayers and improve the performance of economy. This means modernising
and simplifying current systems.
All this must be done within a context of maintaining sound macro-economic policies offering
stability, sound public finances and low inflation. Such policies create the right conditions for
growth, jobs and investment; by keeping inflation under control they help social cohesion and
by lowering the overall level of government debt over time, they leave Member States in a
better position to meet the future costs of ageing.
5.
C
ONCLUSION
The need for reform and modernisation is clear. All Member States will face increased
demand for social services and challenges in financing them. We must modernise to ensure
continued high quality education and health care, satisfactory jobs for all and adequate
pensions. Modernisation will give us the confidence to reap the benefits of globalisation.
Europe has a central role to play and the Commission will ensure that this will be the case. It
will take the initiative, not least within its “Plan D” for dialogue with citizens, to explain why
Europe is more relevant than ever in providing solutions to the challenges we face. The
Commission stands ready to work with the Member States and other actors to construct a road
map which describes the path to a modern Europe which delivers economic prosperity and
social justice. Through modernisation, we will preserve our values.
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