prop · GX0334en · 2009-10-21 00:00:00 — To secure economic stability for sustainable growth, 1. in line with the Stability and Growth Pact, Member States should respect their mediumterm budgetary objectives. As long as this objective has not yet been achieved, they should take all the necessary corrective measures to achieve it. Member States should avoid pro-cyclical fiscal policies. Furthermore, it is necessary that those Member States having an excessive deficit take effective action in order to ensure a prompt correction of excessive deficits. Member States posting current account deficits that risk being unsustainable should work towards correcting them by implementing structural reforms, boosting external competitiveness and, where appropriate, contributing to their correction via fiscal policies. To safeguard economic and fiscal sustainability as a basis for increased employment, Member States should, in view of the projected costs of ageing populations, 1. undertake a satisfactory pace of government debt reduction to strengthen public finances, 2. reform and re-enforce pension, social insurance and health care systems to ensure that they are financially viable, socially adequate and accessible, and 3. take measures to increase labour market participation and labour supply especially amongst women, young and older workers, and promote a lifecycle approach to work in order to increase hours worked in the economy. To promote a growth, employment orientated and efficient allocation of resources Member States should, without prejudice to guidelines on economic stability and sustainability, re-direct the composition of public expenditure towards growth-enhancing categories in line with the strategy, adapt tax structures to strengthen growth potential, ensure that mechanisms are in place to assess the relationship between public spending and the achievement of policy objectives and ensure the overall Appendix 1 coherence of reform packages. To ensure that wage developments contribute to macroeconomic stability and growth and to increase adaptability Member States should encourage the right framework conditions for wage-bargaining systems, while fully respecting the role of the social partners, with a view to promote nominal wage and labour cost developments consistent with price stability and the trend in productivity over the medium term, taking into account differences across skills and local labour market conditions. To promote greater coherence between macroeconomic, structural and employment policies, Member States should pursue labour and product markets reforms that at the same time increases the growth potential and support the macroeconomic framework by increasing flexibility, factor mobility and adjustment capacity in labour and product markets in response to globalisation, technological advances, demand shift, and cyclical changes. In particular, Member States should renew impetus in tax and benefit reforms to improve incentives and to make work pay; increase adaptability of labour markets combining employment flexibility and security; and improve employability by investing in human capital. To contribute to a dynamic and well-functioning EMU, euro area Member States need to ensure better co-ordination of their economic and budgetary policies, in particular 1. pay particular attention to fiscal sustainability of their public finances in full compliance with the Stability and Growth Pact; 2. contribute to a policy mix that supports economic recovery and is compatible with price stability, and thereby enhances confidence among business and consumers in the short run, while being compatible with long term sustainable growth; 3. press forward with structural reforms that will increase euro area long-term potential growth and will improve its productivity, competitiveness and economic adjustment to asymmetric shocks, paying particular attention to employment policies; and 4. ensure that the euro areas influence in the global economic system is commensurate with its economic weight. Microeconomic reforms to raise Europes growth potential To increase and improve investment in R&D, in particular by private business, the overall objective for 2010 of of GDP is confirmed with an adequate split between private and public investment, Member States will define specific intermediate levels. Member States should further develop a mix of measures appropriate to , in particular business R&D, through: 1. improved framework conditions and ensuring that companies operate in a sufficiently competitive and attractive environment; 2. more effective and efficient public expenditure on R&D and developing PPPs; 3. developing and strengthening centres of excellence of educational and research institutions in Member States, as well as creating new ones where appropriate, and improving the cooperation and transfer of technologies between public research institute and private enterprises; 4. developing and making better use of incentives to leverage private R&D; 5. modernising the management of research institutions and universities; 6. ensuring a sufficient supply of qualified researchers by attracting more students into scientific, technical and disciplines and enhancing the career development and , international as well as inter-sectoral mobility of researchers and development personnel. To facilitate all forms of innovation, Member States should focus on: 1. improvements in innovation support services, in particular for dissemination and technology transfer; 2. the creation and development of innovation poles, networks and incubators bringing together universities, research institution and enterprises, including at regional and local level, helping to the technology gap between regions; 3. the encouragement of cross-border knowledge transfer, including from foreign direct investment; 4. encouraging public procurement of innovative products and services; 5. better access to domestic and international finance, and 6. efficient and affordable means to enforce intellectual property rights. To facilitate the spread and effective use of ICT and build a fully inclusive information society, Member States should: 1. encourage the widespread use of ICT in public services, SMEs and households; 2. fix the necessary framework for the related changes in the organisation of work in the economy; 3. promote a strong European industrial presence in the key segments of ICT; 4. encourage the development of strong ICT and content industries, and well functioning markets; 5. ensure the security of networks and information, as well as convergence and interoperability in order to establish an information area without Appendix 1 frontiers; 6. encourage the deployment of broad band networks, including for the poorly served regions, in order to develop the knowledge economy. To strengthen the competitive advantages of its industrial base, Europe needs a solid industrial fabric throughout its territory. The necessary pursuit of a modern and industrial policy means strengthening the competitive advantages of the industrial base, including by contributing to attractive framework conditions for both manufacturing and services, while ensuring the complementarity of the action at national, transnational and European level. Member States should: 1. start by identifying the added value and competitiveness factors in key industrial sectors, and addressing the challenges of globalisation. 2. also focus on the development of new technologies and markets. a) This implies in particular commitment to promote new technological initiatives based on public-private partnerships and cooperation between Member States, that help tackle genuine market failures. b) This also implies the creation and development of networks of regional or local clusters across the EU with greater involvement of SMEs. To encourage the sustainable use of resources and strengthen the synergies between environmental protection and growth, Member States should: 1. give priority to energy efficiency and co-generation, the development of sustainable, including renewable, energies and the rapid spread of environmentally friendly and eco-efficient technologies a) inside the internal market on the one hand particularly in transport and energy, inter alia in order to reduce the vulnerability of economy to oil price variations, b) towards the rest of the world on the other hand as a sector with a considerable export potential; 2. promote the development of means of internalisation of external environmental costs and decoupling of economic growth from environmental degradations. The implementation of these priorities should be in line with existing Community legislation and with the actions and instruments proposed in the Action Plan (ETAP), inter through a) the b) risk funds production and consumption patterns including the greening of public procurement, d) paying a particular attention to SMEs and e) a reform of subsidies that have considerable negative effects on the environment and are incompatible with sustainable development, with a view to eliminating them gradually. 3. pursue the objective of halting the loss of biological diversity between now and 2010, in particular by incorporating this requirement into other policies, given the importance of biodiversity for certain economic sectors. 4. continue to fight against climate change, while implementing the Kyoto targets in a cost-effective Appendix 1 way, particularly in regard to SMEs. deepen the Internal Market, Member States 1. speed up the transposition of Internal Market directives; priority to stricter and better enforcement of Internal Market legislation; 3. eliminate remaining obstacles to cross-border activity; 4. apply EU public procurement rules effectively; 5. promote a fully operational internal market of services, while preserving social model; 6. accelerate financial market integration by a consistent and coherent implementation and enforcement of the Action Plan. To ensure open and competitive markets inside and outside Europe, reap the benefits of globalisation, Member States should give priority to: 1. the removal of regulatory, trade and other barriers that unduly hinder competition; 2. a more effective enforcement of competition policy; 3. selective screening of markets and regulations by competition and regulatory authorities in order to identify and remove obstacles to competition and market entry; 4. a reduction in State aid that distorts competition; 5. in line with the upcoming Community Framework, a redeployment of aid in favour of support for certain horizontal objectives such as research, innovation and the optimisation of human capital and for well-identified market failures; 6. the promotion of external openness, also in a multilateral context; 7. full implementation of the agreed measures to open up the network industries to competition in order to ensure effective competition in European wide integrated markets. At the same time, the delivery, at affordable prices, of effective services of general economic interest has an important role to play in a competitive and dynamic economy. To create a more competitive business environment and encourage private initiative through better regulation, Member States should: 1. reduce the administrative burden that bears upon enterprises, particularly on SMEs and start-ups; 2. improve the quality of existing and new regulations, while preserving their objectives, through a systematic and rigorous assessment of their economic, social (including health) and environmental impacts, while considering and making progress in measurement of the administrative burden associated with regulation, as well as the impact on competitiveness, including in relation to enforcement; 3. encourage enterprises in developing their corporate social responsibility. Guideline n°15 Appendix 1 To promote a more entrepreneurial culture and create a supportive environment for SMEs, Member States should: 1. improve access to finance, in order to favour their creation and growth, in particular microloans and other forms of risk capital; 2. strengthen economic incentives, including by simplifying tax systems and reducing non-wage labour costs; 3. strengthen the innovative potential of SMEs, and 4. provide relevant support services, like the creation of one-stop contact points and the stimulation of national support networks for enterprises, in order to favour their creation and growth in line with Small firms Charter. In addition, Member States should reinforce entrepreneurship education and training for SMEs. They should also facilitate the transfer of ownership, modernise where necessary their bankruptcy laws, and improve their rescue and restructuring proceedings. To expand, improve and link up European infrastructure and complete priority cross-border projects with the particular aim of achieving a greater integration of national markets within the enlarged EU. Member States should: 1. develop adequate conditions for resourceefficient transport, energy and ICT infrastructures in priority, those included in the TEN networks by complementing Community mechanisms, notably including in cross-border sections and peripherical regions, as an essential condition to achieve a successful opening up of the network industries to competition; 2. consider the development of public-private partnerships; 3. consider the case for appropriate infrastructure pricing systems to ensure the efficient use of infrastructures and the development of a sustainable modal balance, emphasizing technology shift and innovation and taking due account of environmental costs and the impact on growth. Implement employment policies aiming at achieving full employment, improving quality and productivity at work, and strengthening social and territorial cohesion. Policies should contribute to achieving an average employment rate for Union (EU) of overall, of at least for women and of for older workers (55 to 64) by 2010, and to reduce unemployment and inactivity. Member States should consider setting national employment rate targets. Promote a lifecycle approach to work through: a renewed endeavour to build employment pathways for young people and reduce youth unemployment as called for in the Youth Pact; resolute action to increase female participation and reduce gender gaps in employment, unemployment and pay; better reconciliation of work and private life and the provision of accessible and affordable childcare facilities and care for other dependants; support to ageing, including appropriate working conditions, improved (occupational) health status and adequate incentives to work and discourage early retirement; modern social protection systems, including pensions and healthcare, ensuring their social adequacy, financial sustainability and responsiveness to changing needs, so as to support participation and better retention in employment and longer working lives. Ensure inclusive labour markets, enhance work attractiveness, and make work pay for job-seekers, including disadvantaged people, and the inactive through: and preventive labour market measures including early identification of needs, job search assistance, guidance and training as part of personalised action plans, provision of necessary social services to support the inclusion of those furthest away from the labour market and contribute to the eradication of poverty; continual review of the incentives and disincentives resulting from the tax and benefit systems, including the management and conditionality of benefits and a significant reduction of high marginal effective tax rates, notably those with low incomes, whilst ensuring adequate levels of social protection; development of new sources of jobs in services to individuals and businesses, notably at local level. Improve matching of labour market needs through: the modernisation and strengthening of labour market institutions, notably employment services, also with a view to ensuring greater transparency of employment and training opportunities at national and European level; removing obstacles to mobility across Europe within the framework of the EU Treaties; better anticipation of skill needs, labour market shortages and bottlenecks; appropriate management of economic Promote flexibility combined with employment security and reduce labour market segmentation, having due regard to the role of the social partners, through: the adaptation of employment legislation, reviewing where necessary the different contractual and working arrangements; addressing the issue of undeclared work; better Appendix 1 anticipation and positive management of change, including economic restructuring, notably changes linked to trade opening, so as to minimise their social costs and facilitate adaptation; the promotion and dissemination of innovative and adaptable forms of work organisation, with a view to improving quality and productivity at work, including health and safety; support for transitions in occupational status, including training, self-employment, business creation and geographic mobility; Ensure employment-friendly labour cost developments and wage-setting mechanisms by: encouraging social partners within their own responsibilities to set the right framework for wage bargaining in order to reflect productivity and labour market challenges at all relevant levels and to avoid gender pay gaps; reviewing the impact on employment of non-wage labour costs and where appropriate adjust their structure and level, especially to reduce the tax burden on the low-paid Expand and improve investment in human capital through: inclusive education and training policies and action to facilitate significantly access to initial vocational, secondary and higher education, including apprenticeships and entrepreneurship training; reducing significantly the number of early school leavers; efficient lifelong learning strategies open to all in schools, businesses, public authorities and households according to European agreements, including appropriate incentives and costsharing mechanisms, with a view to enhancing participation in continuous and workplace training throughout the life-cycle, especially for the low-skilled and older workers. Adapt education and training systems in response to new competence requirements through: raising and ensuring the attractiveness, openness and quality standards of education and training, broadening the supply of education and training opportunities and ensuring flexible learning pathways and enlarging possibilities for mobility for students and trainees; easing and diversifying access for all to education and training and to knowledge by means of working time organisation, family support services, vocational guidance and, if appropriate, new forms of costsharing; responding to new occupational needs, key competences and future skill requirements by improving the definition and transparency of qualifications, their effective recognition and the validation of nonformal and informal learning. Appendix 2 Structural indicators for compared to other EU Member States year 2008 Energy intensity of the Volume of freight transport relative to GDP 13 1GDP per capita in purchasing power standards (PPS). 2GDP in PPS per person employed. 3Aged 15-64 percentage of the labour force. 4Aged 55-64 percentage of the labour force. 5Unemployed 12 months or more as a percentage of the labour force. 6Coefficient of variation of employment rates (aged 15-64) on NUTS 2 level. 7The share of persons with an equivalised disposable income below the risk-of-poverty threshold, which is set at of the national median equivalised disposable income (after social transfers). 8Defined as the percentage of young people aged 20-24 years having attained at least upper secondary education attainment level. 9In percentage of GDP. 10Percentage of GDP. For EU15 and EU27 estimates. 11Actual base year (1990) =100 in CO2 equivalents. 12Gross inland consumption of energy divided by GDP. 13Defined as the ratio between tonne-kilometres (inland modes) and GDP. Indexed on 2000. Source: web site, Structural indicators . Appendix 3 Indicators to monitor the employment List of indicators for monitoring14 17.M1 Employment rate, Structural indicator Persons in employment as a proportion of total population in the same age group, per cent. Employment rate by age group Source: Labour Force Survey, . 17.M2 Employment growth, Structural indicator Annual percentage change in employed population, overall and by main sector. Source: Labour Force Survey and National Accounts, . 17.M3 Unemployment rate, Structural indicator Unemployed persons as a share of the population in the same age group, per cent. Unemployment rate by age group Note: Harmonized unemployment series. Source: Labour Force Survey, . 14 If nothing else is stated all figures are yearly averages for 2008. The indicator 21.M1 is not included due to non-applicable data. Share of employed and unemployed as a proportion of total population in the same age group, per cent. Activity rate by age group Source: Labour Force Survey, . 17.M5 Growth in labour productivity Growth in GDP per person employed and per hour worked, per cent. Source: 95, DG ECFIN. 17.M6 Regional disparities underperforming regions 1.Share of underperforming regions in terms of employment and unemployment (in relation to all regions and to the working age population/labour force, NUTS II). 2.Differential between average employment/unemployment of the underperforming regions and the national average in relation to the national average of employment/unemployment, NUTS II. Thresholds to be applied: 90 per cent and 150 per cent of the national average rate for employment and unemployment, respectively. Regional disparities underperforming regions (2007) Share of workforce living in underperforming regions, % Source: Labour Force Survey, . 18.M1 Youth unemployment ratio Total unemployed young people (1524 years) as a share of total population in the same age group, per cent. Source: Labour Force Survey, . 18.M2 Gender pay gap, Structural indicator Womens salary as a percentage of mens salary. Gender pay gap (2007) Source: Mediation Office and Statistics . 18.M2 Gender pay gap Gender pay gap by age group and educational attainment (difference between mens and womens average gross hourly earnings as percentage of mens average gross hourly earnings for paid employees at work 15+ hours), per cent. Gender pay gap (2001) Source: European Community Household Panel, . 2Differences between men and women in age, education, working hours, sector and occupational group are taken into consideration. 3Low = less than upper secondary education; Medium = upper secondary education completed; High = upper tertiary eduation completed. 18.M3 Childcare Appendix 3 Children cared for (by formal arrangements4 other than by the family) less than 30 hours a usual week/30 hours or more a usual week as a proportion of all children of same age group. Breakdown by children aged under 3 (02 years), children aged between 3 years and admission age for compulsory school and age for compulsory school and 12 years, per cent. Childcare (2007) 3 years to compulsory school age Compulsory school age 12 years Source: Statistics on Income and Living Conditions, . Childcare (2005) Number of months of maternity/paternity/parental leave with benefits replacing at least 2/3 of salary Admission age for compulsory education Source: Statistics on Income and Living Conditions, . 18.M4 Average exit age from the labour force, Structural indicator The average age of withdrawal from the labour market, based on a probability model considering the relative changes of activity rates from one year to another at a specific age. Average exit age from the labour force (2007) Source: Labour Force Survey, .