COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - SCOREBOARD ON IMPLEMENTING THE SOCIAL POLICY AGENDA

1. Introduction

This is the third scoreboard the Commission presents to report on the implementation of the social policy agenda [1]. This edition focuses essentially on the main achievements of the year 2002 [2].

[1] COM(2000) 379 of 28/06/2000; EP resolution A5-291/2000 of 25/10/2000; Nice European Council: Conclusions.

[2] Although the relationship with work undertaken in the past years and future initiatives is made throughout the document to present an overview as clear as is possible in such a synthetic report.

The presentation of an annual scoreboard responds to the invitation made both by the European Parliament and the European Council to keep track of the achievements and to verify the commitment and contributions from the different actors in executing this agenda. Its objective is not to provide any ranking of Member States' performance, but rather to monitor how the agenda is transformed into policy measures and concrete action. The Scoreboard complements the annual synthesis report to the Spring European Council with regards to the actions which are part of the Social Policy Agenda.

The point of reference against which to measure progress is the Commission Communication of June 2000 and the political orientations endorsed at the Nice European Council in December 2000.

The social policy agenda is the EU's roadmap for modernising and improving the European social model by investing in people and building an active welfare state. It should contribute to achieving the strategic objective defined at the Lisbon European Council in March 2000.

Its objective is to respond to the common challenges the EU is facing and to ensure at the same time that it can take full advantage of the new opportunities. Transposing the Lisbon objective - refined at subsequent European Council meetings - by establishing a dynamic and mutually reinforcing interaction between economic, employment and social policy is at the heart of this agenda.

The agenda should strengthen social policy as a productive factor as well as solidarity and social fairness. The promotion of 'quality' is a major driving force behind this agenda.

2. The economic, employment and social situation

On the economic situation

The European economy created in 2001 about 2 million new jobs. As a result, the employment rate [3] continued to increase from 63.4% in 2000 to 64.1% in 2001. The employment rate for women went up from 54.1% to 55%. During the same period, the unemployment rate decreased from 7.8% to 7.4% . Also long-term unemployment continued to decline - from 3.5% in 2000 to 3.1% in 2001. The improvement in employment performance took place in a deteriorating economic environment.

[3] Data for employment rates and long-term unemployment as revised and made available on 16 December 2002.

From 2000 to 2001, GDP growth fell from 3.4% to 1.5% and the Commission Autumn 2002 Economic Forecasts [4] project that recovery is slower than originally expected. The average growth rate for 2002 is estimated to be 1% in 2002 and 2% in 2003. It is anticipated now that economic growth will start gaining momentum again from the second half of 2003. Whereas employment creation is expected to continue with about 1 million new jobs in the period 2002-2003, the unemployment rate is projected to increase slowly at the same time - up to 7.6% in 2002 and 7.7% in 2003. The unemployment rate is expected to start falling again to the 2001 level of 7.4% in 2004. At the same time, inflation is estimated not to fall below 2% in 2003 and government deficit is expected to widen to 1.9% of GDP in the EU (and 2.3% in the Euro area).

[4] European Commission: European Economy n°5/2002.

On the employment situation

Despite the recent economic slowdown, EU labour markets continued to improve performance in that new additional jobs were created and that job-friendly policies have been pursued. However, in the short run, the other side of the resilient labour market is that productivity gains are anticipated to remain low [5].

[5] Improving the relationship between more jobs and productivity is at the heart of the measures to support quality in work (see further).

Since 1997, more than 10 million jobs have been created - 6 million of these jobs have been taken up by women - and there are 4 million less unemployed. In the review and evaluation of the European employment strategy, it was concluded that during the five years of the implementation of the strategy, structural improvements in the EU labour market have matured and that the improvements in job creation cannot be solely attributed to the business cycle.

That improvements have a structural nature is illustrated by a reduced structural component of unemployment, a pattern of economic growth which is increasingly employment intensive, and a more rapid response, from the side of the labour market, to economic and social change. However, significant structural improvements are still to be made to increase the economy's capacity to react to shocks through product, capital and labour market reform.

Despite the observed improvements, pervasive weaknesses remain and need to be urgently addressed. These include:

- the continuing high levels of unemployment and long term unemployment;

- the still low employment rates for women;

- the unequal distribution of the employment rates according to age levels, where particularly the older workers, but also the young are confronted with significant problems to find a job or to remain in employment

- immigrants, people from ethnic minorities and other disadvantaged groups are still confronted with significant obstacles to the labour market;

- the regional differences in several Member States which affect Europe's social cohesion;

- the persistence of regional labour market bottlenecks and skill shortages.

In order to reach the Lisbon targets by 2010, another 15 million additional jobs are to be created. [6] The challenges are well known - the promising path of labour market reform facilitated through the European employment strategy should be further pursued, with more vigour and determination, particularly in a less attractive economic climate. The risk of hasty measures that would hamper sustainable employment performance improvements over the medium and longer term should be avoided at all costs.

[6] COM(2002) 9 and Council agreement on 8 March 2002 - Increasing labour force participation and promoting active ageing.

On the social situation

The structural weaknesses identified in the labour market are to a large extent responsible for the persistence of poverty and social exclusion as one of the most intractable problems in the Union. However, other drivers are to be considered such as ill health and disability, family break-ups, or the lack of basic skills. On the other hand, a job may not be sufficient to afford jobholders the necessary means to escape poverty and social exclusion, particularly when it is associated to low wages, poor task quality, job precarity or insufficient training. For these reasons, the improvement in the employment situation across the Union, while a very positive development, may not be sufficient by itself to make a significant impact on the eradication of poverty and social exclusion.

The latest available income data (referring to 1999) [7] shows that 15% of the population, or about 56 million people, were at risk of poverty living as they do below a threshold of 60% of the national median equivalised income. Especially striking is the fact that 9 % of the EU population are at a persistent risk of poverty (i.e. they were at risk of poverty in at least 2 of the preceding 3 years). Social security is crucial to reducing the risk of poverty. Without welfare transfers the risk of poverty would have been 24 % (if pensions are excluded from the definition of welfare transfers) or 40 % (if they are included). This shows at the same time the role and the limits of income redistribution.

[7] Cf. Last wave of ECHP (1999) as became available in December 2002. The December 2002 version of the ECHP user database incorporates important data revisions for certain countries and methodological improvements to avoid extreme weights and adjust for within-household non-response. For these reasons, indicators for 1998 and earlier years derived from the December 2001 database cannot be considered to be comparable with indicators for those same years derived from the new database.

There is significant variation in the extent of the problem between Member States. While low income and insufficient access to basic goods and services are endemic and still affect large sections of the population in some Member States, in others comprehensive social security schemes and generalised access to public services in vital fields (education, health, long term care for the elderly, housing) have concentrated the problem into well defined groups of the population.

However, statistical data can only give an approximate picture of the extent of social exclusion, as many of the hardest-hit social groups remain largely "invisible" in terms of social statistics, at least as far as EU comparable data are concerned. That is particularly the case of the homeless and people living in institutions.

The 2001 Eurobarometer survey on social precarity and social integration reveals that a high proportion of people consider themselves as poor (subjective poverty), especially in Southern Europe.

As far as income distribution is concerned, the latest available data from the Structural Indicators highlights significant and persistent inequalities in the distribution of income. The ratio for the highest-earning 20% of the income distribution to the lowest-earning 20% is 4.6 for the EU overall, a figure disguising big differences between Member States.

3. The implementation of the social policy agenda

The implementation of the social policy agenda is well on track. Initiatives and measures were launched as announced.

3.1. More and better jobs

An absolute top priority of the Social Policy Agenda is to work towards the goal of full employment, defined in the Lisbon strategy as raising the employment rate to as close as possible to 70% by 2010 and increasing the number of women in work to more than 60% in 2010.

The Spring European Council of Stockholm in 2001 complemented the Lisbon targets by adding the intermediate targets of reaching 67% for the overall employment rate and 57% for the employment rate for women by 2005. It also introduced the target of 50% as the employment rate for older persons (55-64) to be reached in 2010. At the Barcelona Spring European Council in 2002, the quantified objectives were still further refined, in that a progressive increase of about 5 years in the effective average age at which people stop working in the European Union should be sought by 2010. In this context, it should be noted that the Commission and the Council adopted a joint report on increasing labour force participation and promoting active ageing.

A benchmark on child-care provision was introduced by the Barcelona Spring European Council of March 2002: by 2010 at least 33% of children under 3 years of age and at least 90% of children between 3 years old and the mandatory school age should have access to childcare. Reaching this objective should directly contribute to attracting more women into paid work. It should also help both men and women to better reconcile working and family life.

However, whereas there is an increasing call to set European targets, there is no widespread commitment by Member States in the form of national targets. Such approach undermines the potential of the EU to reach the overall objective the political leaders of each Member State are committed to.

Key measure

- Joint Report on increasing labour force participation and promoting active ageing [8]

[8] COM(2002) 9 of 24/01/02 and adoption in Council in March 2002.

Strengthen and continue the co-ordinated strategy for employment

The Employment Guidelines for 2002 were the last ones of the five year cycle agreed at the extraordinary Luxembourg European Council on employment in November 1997. They were presented by the Commission in September 2001 and formally adopted by the Council in February 2002, following an opinion by the European Parliament. While consistent with the Broad Economic Policy Guidelines [9], the Employment Guidelines focus essentially on employment policy reforms.

[9] COM(2002) 93 of 21/02/2002 on the implementation of the 2001 Broad Economic Policy Guidelines; COM(2002) 191 of 24/04/2002 on the Commission proposal for a Recommendation for the 2002 Broad Guidelines of the Economic Policies of the Member States and the Community; Formal adoption by Council in June 2002 (OJ L 182 of 11/07/2002, p. 1).

The Commission proposed the streamlining of the annual economic and employment policy co-ordination cycles as of 2003. The synchronisation of the respective timetables introduces a policy implementation review phase leading to an implementation package, presented to the Spring European Council, and a policy formation phase after the Spring European Council leading to formal adoption of the Employment Guidelines and the BEPGs.

As a transition measure to the synchronisation of policy co-ordination, the Commission presented only the draft Joint Employment report 2002 to the Council in November, and delayed its proposal for Employment Guidelines and Recommendations until after the 2003 Spring European Council. The draft Joint Employment report, which is part of the implementation package, gives a detailed account and evaluation of the measures and initiatives implemented by Member States in response to the 2002 European Employment Guidelines and the country specific employment recommendations.

The streamlining is particularly timely, in particular as a new phase for the European employment strategy is being prepared for 2003. A major input into the framework for this new phase is the evaluation of the co-ordination of national employment policies since the extraordinary Luxembourg European Council on employment in 1997. The evaluation was a joint exercise by the Commission and the Member States. The Communication on taking stock of five years of the European employment strategy provides an extensive summary of the evaluation and concludes positively on the impact of the strategy as such, as well as of the individual guidelines and policy measures. The evaluation and subsequent discussions and contributions will lead the Commission to adopt a further Communication on the future of the European Employment Strategy in early 2003.

In 2002, the Council and the European Parliament agreed, following conciliation, an action programme on Community incentive measures in the field of employment, which the Commission had proposed in July 2000. This programme contributes to exchange of good practice, networking, and in depth analysis of the labour market situation.

Key measures:

- Guidelines for Member States' employment policies for the year 2002 [10]

[10] COM(2001) 511 of 12/09/2001; EP Resolution B5/2001/739 of 29/11/2001; Political agreement in Council in December 2001; Formal adoption by Council in February 2002 (OJ L 60 of 01/03/2002, p. 60) .

- Recommendation on the implementation of Member States' Employment Policies [11]

[11] COM(2001) 512 of 12/09/2001; Political agreement in Council in December 2001; Formal adoption by Council in February 2002 (OJ L 60 of 01/03/2002, p. 70).

- Taking stock of five years of the European employment strategy [12]

[12] COM(2002) 416 of 17/07/2002; EP Resolution A5/2002/301 of 25/09/2002; Discussions in Council of October 2002.

- Streamlining the annual economic and employment policy co-ordination cycles [13]

[13] COM(2002) 487 of 03/09/2002.

- Draft Joint Employment Report 2002 [14]

[14] COM(2002) 621 of 13/11/2002.

- Incentive measures in the field of employment [15]

[15] Decision by the European Parliament (approval in April 2002) and the Council (approval in May 2002).

Quality in work

The Lisbon European Council introduced the twin objective of more and better jobs, underlining the strong interdependency between quantity and quality. The goal of full employment - both for men and women - is facilitated by an increase in quality in work, as quality in work can be improved thanks to an increase in the number of jobs. This was a strategic choice made at the highest political level: Europe's future and the competitive position of European enterprises rests on producing high quality goods and services, which is only sustainable with a well qualified, healthy, committed and productive workforce.

This approach was at the heart of the Social Policy Agenda and was further elaborated in a Commission Communication on investing in quality [16]. The European Council of Laeken endorsed indicators to monitor progress. The priority to be given to this dimension is illustrated by evidence, presented in the Employment in Europe 2002 report [17].

[16] COM(2001) 313 of 20/06/2001.

[17] European Commission (2002): Employment in Europe 2002. Recent trends and prospects. Luxembourg: Office for official publications of the European Communities.

A clear positive link between the employment rate and quality in work can be empirically observed, as well as a positive quality-productivity link. Simulations of possible future scenarios show that quality improvements in European labour markets are a precondition for further reductions in the various age, gender and skill-related gaps that continue to be among the main obstacles to improved employment performance in the EU, as well as for tackling the regional employment performance gap. However, the patterns of labour market dynamics currently observed in the European labour markets do not yet reflect the quality dynamics necessary to meet the ambitious objectives set at the Councils in Lisbon, Stockholm and Barcelona. Thus, without further quality improvements, employment creation will remain well below its potential, underlining the economic costs of not having quality social policies. In view of the piecemeal approach to quality in work reflected in the National Action Plans for 2002, the Commission has emphasised in the draft Joint Employment Report 2002 the need for Member States to better reflect quality in work improvements in their National Action Plans for employment.

In addition to targeted public policy, in particular through the European employment strategy, social partnership is crucial to achieving the objective of 'more and better jobs'.

The local and regional dimensions of the employment strategy

The regional gap in employment performance remains high: both for unemployment levels and employment rates. Analysis to examine the underlying reasons for the divergence and the exchange of information are identified as instruments to help bridge the gap between regions. The Structural Funds contribute to strengthening convergence and cohesion.

For policy-making in the employment field, the active involvement and participation of local and regional authorities in the definition and execution of the national action plans for employment is a pre-condition. The involvement of regional and local authorities is also a major component of the open method of co-ordination and better governance.

Training and lifelong learning

Investment in education, training and lifelong learning is pivotal to reach the Lisbon objective of full employment with quality jobs. The main trend in the demand for labour is one of rising skills.

Evidence suggests that the EU suffers from under-investment in human capital. Such under-investment as a result of not having social policies, provides a cost to the economy. It is an impediment to matching demand and supply, creates bottle necks, drives up the cost of labour, as seen for instance in the ICT sector, and restrains the output potential of the European economy. An effective policy response will require to define a framework, provide for quality standards and design incentives for employers and individuals to enhance the volume and quality of private investment in human capital. It will also entail the revision of public spending with a view to redirecting it towards human capital accumulation, including research and development [18].

[18] This is identified as 'high quality' public spending in the Commission Communication on public finances in EMU-2002 (COM(2002) 209 of 14/05/2002).

The memorandum on lifelong education and training [19] triggered off a large debate across Europe involving all interested parties and actors. In its Resolution [20], the European Parliament called upon the Member States to co-operate by using the open method of co-ordination and to focus on defining concrete objectives for participation in education and training measures and guaranteeing the right to educational access to vocational and continuing training for all. Drawing from this public debate, the Commission presented a follow-up Communication outlining future possible action to make a European area of lifelong learning a reality.

[19] SEC (2000) 1832 of 30/10/2000.

[20] EP resolution A5/2001/322 of 23/10/2001.

The European employment strategy as such reflects this top priority well with its emphasis on employability, in particular through preventing workers becoming trapped in long-term unemployment as well as through the active labour market policies. The Community resources provided through the European Social Fund are of strategic importance.

However, increased efforts are needed. To be noted is the agreement drawn up by Social Partners at interprofessional level with regards to the development of skills and competencies. The Social partners committed themselves to monitor developments at all levels and to undertake an evaluation in Spring 2006 [21].

[21] Agreement of 28/02/2002.

Key measure

- Making a European area of lifelong learning a reality [22]

[22] COM(2001) 678 of 21/11/2001; EP resolution A5/2002/62 of 14/03/2002; Council resolution of June 2002 (OJ C 163 of 09/07/2002, p. 1).

Employment and social dimension of the information society

Skills development is also at the centre of the employment and social dimension of the information society. Specific attention was given in 2002 to examining and exploiting the information society' contribution to managing change and enhancing quality in employment. It underlines the crucial role information society jobs have in facilitating change and transforming the European economy.

E-learning has been identified as a major asset in making such change happen gradually. To monitor trends, the Commission has published an interim report on the state of the art of e-learning.

Key measures

- Information Society Jobs - quality for change [23]

[23] SEC(2002) 372 of 03/04/2002.

- E-learning: designing tomorrow's education [24]

[24] SEC(2002) 236 of 28/02/2002.

Mobility

Following the report of the High level task force on skills and mobility, the Commission adopted an action plan for skills and mobility in 2002. The action plan should help in improving skills and the adaptability of the European labour force. It envisages measures to overcome inadequate occupational mobility, low geographical mobility, the fragmentation of information on mobility and the lack of transparency of job opportunities. The measures announced, including the European health insurance card and the creation of a one-stop European job mobility information site, are designed to make European labour markets more open and more accessible. Specific measures tailored to the needs of researchers have been launched. They include the researchers' Mobility Portal and the Pan-European Network of Mobility Centres for researchers.

One aspect identified in the action plan concerns improving cross-border recognition of qualifications on which the Commission presented a proposal for a directive of the European Parliament and of the Council. Reference should also be made to the social partners agreement on the development of skills and competencies. The Commission adopted end December 2002 a Decision to renew and update the EURES network (based on Regulation 1612/68), aimed at upgrading the responsibility of the public employment services for delivering and managing EURES services, including at crossborder level, and streamlining the network in readiness for enlargement. The Commission Decision is complemented by a EURES Charter, outlining the main operational aspects of the network.

Another aspect here concerns the modernisation of the existing rules on free movement of persons, called for by the Nice European Council and to be completed in 2003. The Commission adopted a proposal for a directive on the right of residence and free movement of workers, which is now being negotiated in the European Parliament and the Council.

Along similar line, the Nice European Council had also encouraged the adaptation and extension of the rules with regards to social security rights in cross-border situations. Progress has been made on the modernisation of Regulation 1408/71 and a proposal was made to extend the regulation to nationals of third countries; this proposal was adopted by the Council in December 2002. The same Council also agreed the orientations of several chapters to reform the co-ordination of social security systems. Particularly relevant is the chapter on health care underlining the progress being made towards the introduction of a European Health Insurance Card on which the Commission will present a Communication in 2003.

Finally, specific reference should be made to the consultation of the social partners on the portability of pensions.

Key measures:

- Action Plan for skills and mobility [25]

[25] COM(2002) 72 of 13/02/2002; Council resolution of may 2002; EP resolution A5/2002/313 of 10/10/2002.

- Proposal for a directive of the European Parliament and of the Council on the recognition of professional qualifications [26]

[26] COM(2002) 119 of 07/03/2002.

- Proposal for a European Parliament and Council directive on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States [27]

[27] COM(2001) 257 of 23/05/2001.

- Agreement of a Council Regulation extending the provisions of Regulation 1408/71 to nationals of third countries [28]

[28] COM(2002) 59 of 06/02/2002.

- Consultation of the social partners on the portability of pensions [29]

[29] SEC(2002) 597 - adopted by Commission on 03/06/2002.

Employment, internal market and competition policy

The Commission adopted in 2002 a regulation on state aid for employment. This regulation exempts certain types of state aid from notification and determines the ceilings for exemption. The objective is to preserve an appropriate balance between the need to provide incentives to employment and the risk of dead-weight and substitution effects. The regulation underlines the importance of implementing the European employment strategy and bringing about the necessary labour market changes necessary to increase the employment rate in a sustainable way.

In its Communication on Corporate Social Responsibility [30], the Commission stated that the EU public procurement rules are of an essentially economic nature but have also to be seen in the light of the sustainability requirement of Art. 2 of the EC Treaty. The interpretative communications of the Commission on the Community law applicable to public procurement and the possibilities for integrating social [31] and environmental [32] considerations into public procurement have clarified how Community law offers numerous possibilities to public purchasers who wish to integrate social and environmental considerations into public procurement procedures, whilst at the same time ensuring respect for the principle of value for money for taxpayers and equal access for all EU suppliers. [33]

[30] COM(2002) 347 of 02/07/2002.

[31] COM(2001) 566 final of 15/10/2001.

[32] COM(2001) 274 final of 04/07.2001.

[33] In addition, non-compliance with relevant legislation i.e. in the social or environmental field may be taken into account by the purchaser in order to exclude a contractor from participating in a contract.

Key measure:

- Commission Regulation on the application of articles 87 and 88 of the EC Treaty to State aid on employment [34]

[34] OJ L 337 of 13/12/2002.

3.2 Anticipating and managing change

The strategic view taken within the European Union is that change should be embraced. It is at the core of economic dynamism as it rejuvenates the economy. It contributes to innovation, increases productivity, including as a result of the modernisation of the organisation of work, and raises profitability. This view was reinforced in the Lisbon strategy.

The choice made in Europe is based on a positive approach to change. Therefore, change should be encouraged and facilitated. Standstill in terms of economic developments would lead to shrinking living standards. Managing change underpins sustainable improvement of living conditions and quality of life, and therefore helps to create more and better jobs.

Any strategy to reap the benefits of change should be based on a pro-active and positive approach. However, managing change requires solid partnerships and commitments. It is built on dialogue in particular between the social partners, and a common understanding of the challenges and the opportunities change brings.

Involving workers more in managing change

As a top priority for 2002, the Commission initiated a consultation of the social partners on anticipating and managing change and establishing a dynamic approach to the social aspects of corporate restructuring. The issue of managing change has now also been taken up in the social partners' multi-annual work programme.

Following the political agreement in late 2001, the European Parliament and Council formally adopted the directive laying down a general framework for informing and consulting employees in the European Community early 2002. This directive establishes minimum requirements for the right to information and consultation of employees in undertakings [35] and establishments [36] within the Community. It is the responsibility of each Member State to make a choice determining whether the directive will apply to undertakings employing at least 50 employees in any one Member State or establishments employing at least 20 employees in any one Member State. The deadline for transposition of the directive by the Member States is 23 March 2005 [37].

[35] Undertaking is defined as "a public or private undertaking carrying out an economic activity, whether or not operating for gain, which is located within the territory of the Member States".

[36] Establishment is defined as a "unit of business defined in accordance with national law and practice and located within the territory of a Member State, where an economic activity is carried out on an ongoing basis with human and material resources".

[37] However, there are transitional provisions extending transposition beyond this date for Member States in which there is no general system of employee representation at the workplace.

Since the final breakthrough in 2001 on the European Company Statute and the involvement of workers in such companies, the negotiations for a European Parliament and Council regulation on the statute for a European co-operative structure have been intensified in the Council, together with the debates on a European Parliament and Council directive supplementing the draft regulation with regards to involvement of employees.

Key measures:

- Consultation of the social partners: 'Anticipating and managing change: a dynamic approach to the social aspect of corporate restructuring [38]

[38] SEC(2002) 22/5 of 15/01/2002.

- Formal adoption of a European Parliament and Council directive establishing a general framework for informing and consulting employees in the European Community [39]

[39] OJ L 80 of 23/03/2002, p. 29.

- Negotiations increased on a European Parliament and Council Regulation on the statute for a European co-operative society [40] and the accompanying directive [41] on the involvement of employees

[40] COM(1991) 273 -3 of 18/12/1991; legal base changed since Amsterdam Treaty - since then 1st reading in EP (27/10/1999) and discussions in Council (21/05/2002 and 03/06/2002).

[41] COM(1991) 273/4 of 18/12/1991; legal base changed since Amsterdam Treaty - since then 1st reading in EP (27/10/1999) and discussions in Council (21/05/2002 and 03/06/2002).

Health and safety at work

In 2002, the Commission proposed a new Community strategy on health and safety at work to cover the period 2002-2006. It builds on the knowledge that the absence of high quality occupational health and safety policy generates a significant economic cost [42].

[42] See also COM(2002) 89; Furthermore the theme of 'cost of non-social policy' is well documented by the European agency for safety and health at work - see http:// agency.osha.eu.int

In the past, the European Union has managed to build up a positive record, exemplified in the falling number of occupational accidents. Nonetheless, the absolute figures remain high and since 1999 a rising scale of accidents, in certain Member States and in certain sectors, has been observed again. Therefore, working towards a healthier occupational environment has to be addressed as part of the general trend in economic activities (more service-oriented), forms of employment (more diversified), the active population (more women, and an older working population) and society in general (more diverse, but more marked by social exclusion).

Moreover, the candidate countries have an average frequency of occupational accidents which is well above the average for the EU, mainly because of their higher degree of specialisation in sectors which are traditionally regarded as high-risk.

The new situation called for a more global approach to health and safety at work. This also implies a more diversified use of instruments, involving not only legislation establishing minimum standards but also the promotion of progressive approaches, whether they be performance rating, based on transparent and reliable data and indicators, action on the part of the social partners (at sectoral or multisectoral level), or voluntary company schemes.

The new strategy addresses the key themes outlined in the European Parliament Resolution of October 2000 and the Nice political orientations on the social policy agenda: to consolidate and simplify the acquis communautaire; to respond to new risks (e.g. stress); to promote the application of legislation to SMEs; to facilitate exchange of good practice.

Against this background, the Commission proposed a draft Council Decision in September 2002 to set up an advisory Committee on safety, hygiene and health protection at work.

In addition, the Commission presented a draft recommendation with regards health and safety provisions for self-employed persons, which was adopted by Council in December 2002

In terms of legislation, the European Parliament and Council formally adopted the directive on vibrations (physical agents) in mid 2002, establishing common standards with regards to vibration throughout the European Union. Also the draft noise directive has been negotiated in conciliation between the European Parliament and the Council in September and October 2002.

Finally, the Council adopted a common position on amending the current directive on asbestos following the opinion in first reading by the European Parliament.

Key measures:

- A new Community strategy on health and safety at work 2002-2006 [43]

[43] COM(2002) 118 of 11/03/2002; EP resolution A5/2002/310 of 23/10/2002; Council resolution OJ C 161 of 05/07/2002; p. 1.

- Proposal for a Council Decision setting up an advisory committee on safety, hygiene and health protection at work [44]

[44] COM(2002) 486 of 04/09/2002.

- Proposal for a Council recommendation concerning the application of legislation governing health and safety at work to self-employed workers [45]

[45] COM(2002) 116 of 03/04/2002; EP opinion A5/2002/326; political agreement in Council in December 2002.

- European Parliament and Council directive on vibrations (physical agents) [46]

[46] OJ L 177 of 06/07/2002, p. 13.

- Agreement in conciliation for a European Parliament and Council directive on noise (physical agents) [47]

[47] COM(1992) 560 of 23/12/1992, agreement in conciliation on 23/10/2002.

- First reading in EP and common position by Council on a proposal for a European Parliament and Council directive amending Council directive 83/477/EEC on the protection of workers from the risks related to exposure to asbestos at work [48]

[48] COM(2001) 417 of 20/07/2001; EP first reading A5/2002/91 of 11/04/2002 and Council common position CS/2002/9635/1 of 23/09/2002.

Working environment and working relations

Modernising the working environment and working relations are at the centre of gravity for connecting economic and societal trends within a context of growing interdependence of European economies. For instance, it should address the introduction and spread of ICT and how the work organisation can be improved to take full benefits for both the company and the workers. It is also at the heart of the debate on flexibility and security.

The modernisation and improvement of working relations is an area in which many actors are involved as policy makers and in which in particular the social partners at all levels - interprofessional and sectoral as well as European, national, and regional - have an important responsibility.

The year 2002 has seen important developments in this domain.

First of all, the High Level Group on industrial relations submitted its report early 2002. Taking account of the recommendations made in this report, the Commission presented a Communication on the social dialogue in which it documented the role that could be played by social partners to support innovation and change. The Communication also addresses how social dialogue can contribute to a better European governance through increased consultation, a better articulation between the different levels, and an increased transparency of the dialogue.

Against this background, the Commission also proposed a Council Decision to establish a Tripartite Social Summit for Growth and Employment. Such Summit should ensure that the social partners' initiatives and actions are fully taken into account into the policy-making process at European level.

Furthermore, the social partners agreed in November 2002, for the first time, a work programme for autonomous social dialogue covering the period 2003-2005, hereby following up on their joint declaration to the Laeken European Council in December 2001. The priorities in the work programme are employment, mobility and enlargement and the specific measures planned are aimed to facilitate the transformation of the economy, by striving for increased competitiveness, improving the working environment, promoting equal access to the labour market and strengthening equal treatment at work (gender, age, disability, anti-racism etc).

The agreement on the joint work programme is an important step for strengthening the input by the social partners at European level and underlines the importance given to the autonomy of the social partners and their responsibility to take decisions affecting interests of both sides of industry.

With regards to achievements in 2002, the European social partners signed a framework agreement on telework in June. It is a direct consequence of the intention they announced in the second phase consultation on modernising and improving employment relations to negotiate a voluntary agreement to establish a framework at the European level to be implemented by the members of the signatory parties.

The Commission also launched the second phase consultation of social partners on the protection of workers' personal data. The first phase consultation of social partners was launched on stress.

At sectoral level, special reference should be made of the establishment of a social dialogue committee in the mining sector. Also voluntary guidelines on supporting age diversity in commerce were agreed by EuroCommerce and UniEuropa Commerce. In the agricultural sector, a European agreement was made on vocational training [49]. Social partners of the telecommunication sector concluded the first review of the implementation of their telework agreement of February 2001.

[49] Agreement of 05/12/2002.

The Commission proposed in March 2002 a draft European Parliament and Council directive on temporary work. This legislative initiative was called for particularly by the European Parliament, following the failure by social partners to come to an agreement on this issue. The aim of the draft Directive for the Commission is to establish a suitable framework for the use of temporary work to contribute to creating jobs and the smooth functioning of the labour market while at the same time improving the quality of temporary work by ensuring that the principle of non-discrimination is applied to temporary workers.

In terms of legislation, the European Parliament and the Council reached an agreement on amending the insolvency directive. The amended directive revises the former directive in order to adapt it and bring it in line with Community case law and the changing world of work. Also final agreement was reached by the European Parliament and the Council on provisions with regards to working time for the road transport sector. The Commission also proposed a draft European Parliament and Council directive concerning the organisation of working time. The purpose of this proposal is to codify rules that have frequently be amended in order to simplify Community law and make it clear and transparent.

Following the working paper of 2001 on financial participation, the Commission presented in 2002 a Communication on a framework for the promotion of employee financial participation. This is an aspect of motivating workers to take initiative and contribute dynamically to the performance of the company while also letting them share in the benefits of the company's achievement.

The Commission also formally established the Group of Directors-General for Industrial Relations, which should support a close co-operation between the respective national administrations and the European Commission. The group should facilitate exchange of information with regards to the situation in the Member States, the implementation of the legal acquis as well as its revision and simplification.

Key measures:

- Report by the High Level Group on Industrial Relations [50]

[50] See http://europa.eu.int/comm/ employment_social/soc-dial

- Commission Communication on the European social dialogue, a force for innovation and change [51]

[51] COM(2002) 341/1 of 26/06/2002.

- Proposal for a Council decision establishing a Tripartite Social Summit for Growth and Employment [52]

[52] COM(2002) 341/2 of 26/06/2002.

- Framework agreement on telework concluded by social partners [53]

[53] Signed on 16/06/02.

- Second stage consultation of the social partners on the protection of workers' personal data [54]

[54] C 2002/4084 - adopted by Commission on 29/10/2002.

- First stage consultation of the social partners on stress

- Proposal for Directive of the European Parliament and the Council on working conditions for temporary workers [55]

[55] COM(2002) 149 of 20/03/2002; EP amendments in first reading A5/2002/356; discussed in Council on 03/12/2002.

- European Parliament and Council directive amending Council directive 80/987/EEC on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer [56]

[56] OJ L 270 of 08/10/2002, p. 10.

- European Parliament and Council Directive concerning working time for mobile workers (road transport and self-employed drivers) [57]

[57] OJ L 80 of 23/03/2002, p. 35.

- Commission proposal for a European Parliament and Council Directive concerning certain aspects of the organisation of working time [58]

[58] COM(2002) 336 of 24/06/2002.

- Commission Communication on a framework for the promotion of employee financial participation [59]

[59] COM(2002) 364 of 26/07/2001.

- Commission decision concerning the creation of a Group of Directors-General for Industrial Relations [60]

[60] C 2002/1140 - adoption by Commission on 27/03/2002.

- Autonomous action by social partners:

- Framework of actions for the lifelong development of competencies and qualifications [61]

[61] ETUC, UNICE, CEEP of 28/02/2002.

- Multi-annual Work programme of the European social partners [62]

[62] As adopted by the Social Dialogue Summit on 28/11/2002.

Corporate social responsibility

Following the Green Paper in 2001, the Commission presented in July 2002 a Communication on Corporate Social Responsibility (CSR), taking into account the opinions expressed in the consultation by stakeholders as well as the views of the European Parliament, The Council, the Economic and Social Committee and the Committee of the Regions. [63]

[63] See website http://europa.eu.int/comm/dgs/ employment_social/index_en.htm ; EP resolution A5/2002/159 of 30/05/2002; Council resolution of 03/12/2002; ESC opinion CES/2002/355 of 20/03/2002 and COR opinion CDR/2001/345 of 14/03/2002.

Corporate Social Responsibility is identified as an approach whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Through CSR, enterprises can contribute significantly to sustainable development.

This initiative is particularly important, with regards to more and better jobs, improving governance, better regulation, improved competitiveness and sustainable development. The Commission aims at promoting the business case for corporate social responsibility as well as external evaluation and benchmarking of companies' social and environmental performance. The Commission also proposed setting up a Multi-Stakeholder Forum on CSR, which was launched on 16 October 2002, bringing together European representative organisations of employers, trade unions and civil society, as well as other business organisations with the aim to promote transparency and convergence of CSR practices and instruments.

Key measure

- Commission Communication concerning Corporate Social Responsibility [64]

[64] COM(2002) 347 of 02/07/2002.

- Establishment of the European Multi-Stakeholder Forum

3.3 Promoting social inclusion and fighting discrimination

Social inclusion strategy - the open method of co-ordination

The Lisbon European Council had called for steps to be taken to make a decisive impact on the eradication of poverty by 2010. Accordingly the European Council of Nice in December 2000 agreed objectives and working methods to implement the Open Method of Co-ordination in this domain. During 2001 Member States produced National Action Plans for social inclusion covering the period mid 2001 to mid 2003 and a Joint Inclusion Report analysing these plans was endorsed by the Laeken European Council. Laeken also approved a set of commonly agreed indicators in this field with a view to monitoring progress towards the Lisbon objective, to improve understanding of the issues and to support exchange.

A main development during 2002 was the formal agreement on the objectives and working methods for the second round of NAPS inclusion, to cover the period after Mid-2003. A series of discussions and consultations were undertaken during the second half of 2002 [65]. A Round Table to consult NGOs, social partners and other actors was held in October.

[65] The slightly revised set of common objectives were formally adopted by the Council in December 2002.

For the most part the new common objectives did not depart from those agreed at Nice. The most significant change was to incorporate the conclusion of the Barcelona European Council that Member States should build into the NAPs inclusion targets for the reduction of poverty and social exclusion by 2010. In addition, the gender dimension and links between immigration and social exclusion should be dealt with more fully.

The Community Action Programme to Combat Social Exclusion came into effect in January 2002 [66]. This programme also supports partnerships, in particular of organisations managing social services, NGOs, social partners and regional and local authorities.

[66] OJ L 10 of 12/01/2002, p. 1.

Key measures

- Implementation of National Action Plans

- Council agreement on common objectives [67]

[67] December 2002.

The digital divide

Preventing that the transition to the knowledge based economy would automatically result in a digital divide and increased divergence is a major part of the Lisbon strategy. The choice made is therefore one of embracing the new possibilities offered by new information and communication technologies. The ongoing e-Europe initiatives are particularly pertinent in this context. An update of the Benchmarking report was published in 2002.

Special reference should be made of the action on improving disabled people's access to the knowledge based society.

Key measures

- Benchmarking Report eEurope 2002 [68]

[68] COM(2002) 62 of 05/02/2002.

- Delivering eAccessibility - improving disabled people's access to the Knowledge Based Society [69]

[69] SEC(2002) 1039 of 26/09/2002.

- Council Resolution on e-Accessibility for the Disabled [70]

[70] Adopted by Council in December 2002.

Equal treatment for third country nationals

The proposal to extend Regulation 1408/71 on the co-ordination of social security schemes to third country nationals was agreed by Council in December 2002 [71]. The same Council meeting also reached political agreement on the orientation to reform the chapter on sickness, accidents at work, and industrial diseases and death grants. Of particular importance is the progress made related to introducing a European Health Insurance Card.

[71] COM(2000) 186 of 28/04/2000.

Key measure

- Agreement by Council of the extension of regulation 1408/71 to third country nationals - December 2002

Combating discrimination

Work in this field in 2002 was concentrated on the implementation of the Community action programme to combat discrimination 2001-2006 and preparations for the transposition into national law in 2003, of the two European Directives prohibiting discrimination on the grounds of race or ethnic origin, religion or belief, disability, age and sexual orientation.

Integration of disabled people [72]

[72] See also the section on the digital divide and e-accessibility for people with a disability.

The year 2003 will be particularly important to increase awareness about the rights of people with disabilities in the context of the European Year of People with Disabilities. Both at Community level as well as in the Member States - at national, regional and local level - the preparatory measures for a wide range of actions throughout Europe are well advanced. An intense debate is expected to take place throughout the year which will help shape new ideas for action in this area.

3.4 Modernising social protection

The approach outlined in the Social Policy Agenda builds further on the communication of July 1999 on "A Concerted Strategy for Modernising Social Protection" in which the Commission proposed that there should be policy exchange between the Member States and the Commission based on four core topics: to make work pay and provide a secure income; to make pensions safe and pension systems sustainable; to promote social inclusion and to ensure high quality and sustainable health care.

In June 2000 the Council formally established the Social Protection Committee as the forum for advancing work on these issues.

There was progress in each of these domains during 2002; work on the promotion of social inclusion is described in Section 3.3

Whereas social protection systems are an essential feature of the European Social Model, they remain the responsibility of each Member State. The EU level can contribute to the necessary modernisation of Social Protection Systems by streamlining the current actions linked to social inclusion and pensions and, in time, co-operation in relation to health care and 'making work pay' into a single open method of co-ordination. This will considerably strengthen the social dimension of the Lisbon Strategy.

Adequate and sustainable pensions

The Lisbon European Council requested a co-operative exchange regarding the future sustainability of social protection systems, in particular pensions. The Laeken European Council of December 2001 endorsed proposals to apply the Open Method of Co-ordination in this domain. In order to ensure that both the social and financial dimensions are fully reflected in this work, the process is jointly organised by the Social Protection Committee and the Economic Policy Committee. Member States submitted national strategy reports on their pensions policies in September 2002, on the basis of which a Joint Council/Commission Pensions Report will be presented to the Spring 2003 European Council.

Key measures

- Commission Communication on supporting national strategies for safe and sustainable pensions [73]

[73] COM(2001) 362 of 03/07/2001; EP resolution A5/2002/71 of 11/04/2002.

- Draft joint report on pensions adopted by the Commission in December 2002 [74]

[74] 17 December 2002.

High quality and sustainable health care

The Gothenburg European Council of June 2001, in its consideration of what is needed to meet the challenges of an ageing society, asked the Social Protection and Economic Policy Committees to prepare an initial report on the challenges of providing health and long-term care for the elderly in the context of an ageing society. This was seen as an addition to the work on pensions described above.

On the basis of a Communication from the Commission of December 2001, a report was sent to the Barcelona European Council of March 2002. This proposed three broad headings - access for all; a high level of quality of care; and the financial sustainability of systems - as a basis for a co-operative exchange in this field. Following endorsement of the approach by the European Council, a questionnaire was sent to the Member States as a basis for examining policies by reference to these headings more thoroughly. Member States responded in Autumn 2002. The Commission is drafting a Joint Council/Commission report to be submitted to the Spring 2003 European Council.

Key measure

- Commission Communication on the future of health care and care for the elderly: guaranteeing accessibility, quality and financial viability [75]

[75] COM(2001) 723 of 05/12/2001.

3.5 Promoting gender equality

The Social Policy agenda defines two major approaches to promote gender equality: specific initiatives and mainstreaming.

Mainstreaming gender equality

Mainstreaming stands for integrating gender equality into all relevant policy areas, including through gender impact assessments of proposed policies. Within the better regulation package presented by the Commission in June 2002, gender impact assessments have become now an integral part of the impact assessments the Commission will carry out systematically on draft proposals for legislation and policy initiatives. [76] The Commission reports annually on the progress made. It also puts forward each year a strategy on gender equality in the policies and practices of the European Commission.

[76] COM(2002) 276 of 05/06/2002.

Within the areas of employment and social policy, the gender dimension has been assessed in the European Employment Strategy, gender mainstreaming has been strengthened in the objectives for the preparation of the next round of the National Action Plans on social inclusion, and the gender dimension has been introduced in the common objectives on pensions. Finally, mainstreaming of gender in the Structural Funds is being addressed.

The Commission introduced, in its Communication on structural indicators, gender breakdown of indicators as a general principle.

Special reference should be made to the conclusions drawn up by the Council on incorporating the gender perspective in Environment, Employment and Social Affairs, and Agriculture. Following the conclusions at the May Agriculture Council gender equality in rural areas is set to become a major point on the rural development agenda.

Specific measures

The European Parliament and Council formally adopted in 2002, following conciliation, the directive amending directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions.

With regards to equal participation and access to decision-making, the European Parliament agreed an own initiative report on the representation of women among the social partners of the European Union.

The theme of violence against women has been addressed within the Council, emphasising that its eradication requires an unstinting effort by governments and society as a whole. In the context of the annual follow-up of the implementation of the Beijing Platform for Action, the Council agreed on indicators on domestic violence against women.

It should also be noted that the Commission has been attentive to incorporate gender in its work and policy contributions on external relations, as for instance exemplified in the Commission's input into the World Summit on Sustainable Development in Johannesburg. [77]

[77] See for example COM(2002) 82 of 13/02/2002.

A feasibility study on the creation of a European institute for gender issues has been completed in January 2002 [78]. This study is now at the basis of future reflection on this theme.

[78] January 2002; carried out by PLS RAMBOLL Management; see

Finally, reference should also be made to the Barcelona Spring European Council and the benchmarks for childcare in order to better reconcile work and family life [79].

[79] This point is covered in detail in the section on more and better jobs.

Key measures

- Annual report on equal opportunities for women and men (2001) [80]

[80] COM(2002) 258 of 28/05/2002.

- Framework strategy on gender equality work programme for 2002 [81]

[81] COM(2001) 773 of 17/12/2001.

- Council conclusions on incorporating the gender perspective into the agriculture Council [82] and gender mainstreaming in EU policies [83]

[82] May 2002.

[83] June 2002 meeting of the Employment and Social Affairs Council.

- Formal adoption by European Parliament and Council of the Directive amending directive 76/207/EEC [84]

[84] OJ L 269 of 05/10/2002, p. 15.

- EP report on the representation of women among the social partners of the European Union [85]

[85] A5/2002/279 of 25/09/2002.

- Mainstreaming of gender in the Structural Funds

3.6 Strengthening the social policy aspects of enlargement and the European union's external policies

Enlargement

Also in 2002 significant attention was given to facilitating and monitoring compliance with the acquis communautaire in the employment and social field. Decisions have been taken so as to ensure that Candidate Countries can participate in the action programmes on equal opportunities between women and men, anti-discrimination, the fight against social exclusion, and the incentive measures for employment. This step is particularly important as these programmes support exchange of information and networking and provide financial resources including for actors at local and regional level, whether public or private [86], to actively participate in these exercises.

[86] Including social partners and NGOs.

Both through bilateral contact and through conferences, the Commission has intensified the debate with policy makers and actors in the Candidate Countries. Two major conferences took place in 2002 with a view to review the implementation of the acquis, including the open method of co-ordination in the field of employment and social policy [87]. A series of seminars and round tables were organised by the European social partners, notably at sectoral level, together with the social partners of the Candidate Countries to prepare for enlargement and to future participation in social dialogue committees.

[87] February and December 2002.

Whereas the Candidate Countries are gradually all starting to mirror the employment strategy, as illustrated in the Joint Assessment Papers on employment policy priorities, a similar activity has been developed throughout 2002 to prepare Joint Inclusion Memoranda. Such memoranda would reflect per country the measures needed to shadow the social inclusion process and provide policy orientations in the field of fighting poverty and promoting social inclusion.

Key measures

- Facilitating and monitoring implementation of acquis communautaire

- opening up of the four action programmes in the field of employment and social affairs to Candidate Countries [88]

[88] C 2002/2035 adopted by Commission on 06/06/2002 (fight against social exclusion); C 2002/2036 adopted by Commission on 06/06/2002 (equal opportunities); C 2002/2037 adopted by Commission on 06/06/2002 (anti-discrimination); C 2002/3964-1 and C 2002/3964-2 adopted by Commission on 23/10/2002 (incentive measures for employment).

- Joint Assessment Papers on Employment Policy Priorities [89]

[89] Signed with virtually all Candidate Countries; signature of Joint Assessment with Latvia early 2003 and review process with Turkey launched.

- Preparation of Joint Inclusion memorandum with Candidate Countries

International co-operation and external relations

The Commission co-operates intensively with international organisations on the themes of employment and social policy. The co-operation with the OECD and the ILO is particularly important. The Commission has intensified co-operation with the latter organisation on the promotion of core labour standards, social governance and decent work promotion in the context of globalisation. This also includes setting up common statistical data collections in pilot areas. The European Commission will contribute to the work of the World Commission on the social dimension of globalisation established by ILO by organising early February 2003 a high level seminar.

Also the co-operation with the UN and within the G-8 is important. Employment and social policy was at the centre of international debate at the World Assembly on Ageing in Madrid and at the G-8 in Montreal in April 2002.

Furthermore, there are bilateral co-operation programmes in the social field with the USA and Japan.

Employment and social affairs, in particular with regards to poverty reduction, gender equality and quality in work, are integrated into the Commission's external policies. In particular, development co-operation is based on integrated strategies that incorporate economic, social, cultural, environmental and institutional elements that must be locally owned.

The main tool of the EC development assistance is the Programming. This is centred on Country/regional Strategy Papers, which set out a 'strategic framework' for the EC's central priorities in a given country or region.

The Millennium Development Goals are at the core of development policy. They highlight the importance of social and human development to achieve development and poverty reduction.

The integrated approach fostering economic, social and environmental development is at the heart of the EU's sustainable development strategy, as exemplified in the contribution to and follow-up of the Johannesburg World Summit.

Key measures

- Contribution to the achievement of the Millennium Development Goals by 2015

- Contribution to the 2nd World Assembly on ageing [90]

[90] COM(2002) 143 of 18/03/2002; EP resolution A5/2002/184 of 11/04/2002.

- Contribution to the Johannesburg World Summit [91]

[91] See for instance COM(2002) 82 of 13/02/2002.

4. Conclusion and future outlook

4.1. Public support for employment and social policy

An overwhelming majority of EU citizens support active public intervention to guarantee fair social and economic standards for everyone [92]. Almost 90% of the population state that the fight against unemployment and against poverty and social exclusion should be priorities for policy action in the EU. Moreover, half this group considers that current policies and efforts fall short of meeting the objective of fairness.

[92] Eurobarometer - May 2002.

The opinion poll of those of 15-24 illustrate that the demand for social policy is not expected to wane in coming decades [93]. In the contribution of youth to the Convention, the fight against unemployment, social exclusion and poverty are identified as being of the highest priority.

[93] Eurobarometer - July 2002.

4.2. Mid-term review of the social policy agenda

However, strengthening actions in the employment and social domain should be shaped within the overall policy orientation defined in the Lisbon strategy. This means that policies should be geared towards maximising the positive interaction between economic, employment and social policies. This is why the role of social policy as a productive factor is crucial in the formulation of policies and why the costs of not having quality social policies will feature strongly in the mid-term review of the social policy agenda that will take place in 2003.

In order to ensure that all actors and stakeholders, including the European Parliament, the Member States, the Economic and Social Committee, the Committee of the Regions, the social partners, NGOs, local and regional authorities, international organisations and scientific experts, can provide an input in assessing the implementation of the agenda so far and debate the priorities for the remaining period of the agenda [94], the Commission organises a conference in march 2003. The mid-term review itself will be adopted by the Commission in May 2003 and presented subsequently to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions.

[94] Until end 2005.

A starting point for the debate on the costs of non-social policy at the mid-term review conference will therefore be that the labour market does not deal with goods and abstract production factors but with people and social relations. It therefore needs a built-in dimension to motivate people to perform well [95]. Social partnership and social dialogue play a crucial role here by reducing actors' uncertainty about the behaviour of others. In this sense they contribute to social capital [96].

[95] This is the essence of promoting quality in work.

[96] Social capital refers to the role of 'intangible' assets as institutions and social relationships and the role of good governance (implying increased participation) and social cohesion.

Social capital shapes the relationships and social structures between groups and increases the potential of the development of human capital in a dynamic environment.

Embodied in networks, norms and trust it allows the relevant actors and institutions to be more effective in achieving common objectives. Social dialogue, as a component of social capital, contributes to as large as possible a number of workers sharing in skills development as well as in productivity gains.

Social partnership is essential to re-define the flexibility-security nexus, including through the modernisation of work organisation. In an increasingly knowledge based economy social partnership becomes a collective resource for innovation. After all workers rather than 'jobs' are the bearers of skills.

However, for social partnership to contribute to dynamism and innovation collective action, in particular by employees, may not be locked in the past.

This understanding, albeit not universal, can already be observed in many agreements drawn up with the involvement of social partners. The bipartite (and tripartite) concertation policies at interprofessional level in most EU Member States provide for regulation of the labour market aimed at employment growth and competitiveness [97].

[97] The pacts for employment and competitiveness in several countries confirm this trend.

The proposal for a tripartite social summit should facilitate to make a similar forward-looking approach by social partners at European level. The multi-annual work programme for an autonomous social dialogue testifies now of such a comprehensive approach by European social partners to focus on objectives beneficial to both sides of industry.

This approach supports the view that the relationship between economic and social performance is such that more of the one does not necessarily reflect less of the other.

Also with regards to social protection is the observation made that it can be positive or negative to economic performance, as well as that not having social policy can have economic benefits or costs. An underlying view in the modernisation of social policy is that it should be designed, where appropriate, as an investment that promotes market efficiency rather than correcting inefficiencies. Although the ultimate aim of social protection is not to improve economic growth, it can play an unmistakably positive role in the economy.

The Commission approach outlined in the June 2002 Communication on impact assessments will contribute to articulating better the benefits/costs of (non) social policy by installing a new culture in which the economic, environmental and social consequences of new legislation and major policy initiatives should be fully reflected.

4.3. Major initiatives for 2003

As to the year 2003, a number of important initiatives will be launched by the Commission. [98]

[98] See also the Commission's legislative and work programme for 2003 (COM(2002) 590), where employment and social policy is presented within the framework of the Commission's strategic priorities.

* Mid-term review of the Social Policy Agenda

- On the employment front, key initiatives will concern:

* Communication outlining the approach for the revision of the European Employment Strategy

* Proposal for a Council decision on Guidelines for Member States' employment policies for the year 2003

* Recommendation for a Council recommendation on the implementation of Member States' employment policies for the year 2003

* Commission report on the exit age from the labour market

* Communication on the interaction between immigration, employment and social policies in the EU

* Mid-term review of the ESF in the context of the Structural Funds Review

* Communication from the Commission to Member States revising the Guidelines for the Community initiative EQUAL concerning transnational co-operation to promote new means of combating all forms of discrimination and inequalities in connection with the labour market

- On change and the working environment

* Follow-up of social partners consultation on processing of personal data and the protection of privacy in the employment context

* Consultation of the social partners on the opportunity to revise Directive 94/45/EC on the establishment of a European Works Council on a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees, taking into account the new work programme of the social partners, notably concerning the issue of restructuring

* Commission Communication on the review of the Directive 96/71/EC concerning the posting of workers in the framework of the provision of services

* Communication from the Commission on the review of Directive 93/104/EC on the organisation of working time

* Commission Directive establishing a second list of indicative occupational limit values in implementation of Council Directive 98/24/EC on the protection of the health and safety of workers from the risks related to chemical agents at work

* Commission Communication on the effective implementation of health and safety legislation (Directive 89/391 and 6 others)

- On promoting social inclusion and fighting discrimination

* Draft Joint Report on Social Inclusion 2003

* Communication of the Commission on the follow up of the European Year of People with Disabilities 2003

* Commission Communication on an evaluation of the progress made by the European Monitoring Centre on Racism and Xenophobia, including proposals for the amendment of Regulation EC 1035/97 establishing the Centre

* Communication from the Commission to the Council on the UN Convention on Human Rights of people with disabilities

* First European report on equality and discrimination

- On social protection

* Communication to the Council, European Parliament, the Economic and Social Committee and the Committee of the Regions on next steps for policy co-operation in the area of health and long-term care

* Enhancing EU co-operation to promote work incentives within social protection systems (make work pay)

* Communication on the introduction of the European Health Insurance Card

* Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Council Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71

* Measures to improve the portability of occupation pension rights (second stage consultation of social partners)

- On equal opportunities

* Recasting of Gender Equality directives

* Annual Report on Equal Opportunities in the EU

* Gender Mainstreaming Report

* Work programme on gender equality

* Mainstreaming of gender in Structural Funds

- On enlargement

* Pursue preparation for enlargement

* Signature Joint Inclusion Memoranda

* JAPs progress report

* Launch an initiative with NGOs to develop civil society in the Candidate Countries