Communication from the Commission - Community policies in support of employment
Date: 1997-11-12
Institutions: European Commission
Subjects: EU policy, employment policy, job creation, labour market, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  12.11.1997 
COM(97) 611  final 

COMMUNICATION  FROM THE COMMISSION 

COMMUNITY  POLICIES IN SUPPORT  OF EMPLOYMENT 

AM OVERALL STRATEGY 

for 

most 

years. 

This  problem  has been at the core of 
individual 
European,  national  and 
The 
concerns 
Commission's 
recent 
projections  anticipate  thaï  even  with 
appreciably  higher  growth  between 
now  and  1999,  the  unemployment 
rate  in  the  European  Union  will  still 
be 9.7%  in  1999  if its policies  remain 
unchanged. 

What  should  we  do?  There  is  no 
magic  solution.  Only  an  overall 
strategy  can  produce  a  job-creating 
dynamic. 

of 

this 

We have already progressed towards 
this  overall strategy: the White  Paper 
on  growth,  competitiveness  and 
coordination 
employment, 
the 
the 
strategy  defined  at  Essen, 
an 
incorporation 
into 
through 
integrated  approach 
the 
for  Employment 
Confidence  Pact 
approved  in Florence, and finally, the 
consolidation  of  this  strategy  in  the 
new  Treaty.  Step  by  step, 
the 
European  Union  has  thus  gradually-
acquired  a  common  framework  of 
reference,  the  coherence  of  which 
rests on three factors: 

i.  It is  an integrated  strategy. 

Employment  policy cannot be divided 
up  into  isolated  components.  It  must 
incorporate  side  by  side  the  three 
elements  necessary  for  success:  a 
framework, 
sound  macroeconornic 
the 
the  effective 

realisation  of 

potential  of 
the  single  market, 
ambitious reforms of labour markets. 

on 

the 

Of  these  three  elements,  the  labour 
market aspect has until now been the 
least  developed  at  European  level. 
Agreement 
guidelines 
proposed by the Commission and the 
implementation  of  national  action 
plans  should  give  it  renewed  vigour. 
What  this  document  does  is  look  at 
how Community  policies contribute to 
It  is  thus  a 
the  overall  strategy. 
response 
Amsterdam 
the 
European  Council's wish to  receive a 
report  on  Community  action,  noting 
the 
already 
calling,  where 
undertaken 
necessary, for new impetus. 

initiatives 

principal 

and 

to 

2,  The  strategy  covers 

the  short, 

medium  and long  term. 

fact 

in  the 

strategic 
The  usefulness  of  a 
approach 
it 
that 
lies 
enables  action  on  the  part  of  all 
participants  to  extend  over  the  long 
term.  The  accelerating  pace  of 
change  that  we  can  all  see  today 
requires that we do more to  reconcile 
urgent  needs  in  the  short  term  with 
preparation  for  the  medium  term. 
for 
This 
demographic  change:  by  promoting 
an 
rates 
today,  we  are  preparing  the  ground 
for  contending  with  ageing  society 
tomorrow 
the 
thoroughgoing 
social 
protection. 

in  employment 

reform  of 

facilitating 

increase 

clearly 

case 

and 

the 

is 

The 
level  of  unemployment 
remains  worrylngjy  high,  at 
10,8%  m  rnid-1997,  in  1996. 
more  than  $%  of  the  Union's 
labour  force  had  been  out  of 
work for at least a year, 

Some  600  000  new jobs were 
created  m  1998,  The  service 
sector  has  created  1 
to 
15 million jobs annually (except 
the  more 
in  1993),  while 
traditional  sectors  (agriculture 
and  industry)  have  been  In 
constant decline. 
Over  the  last  ten  years»  job 
losses have been concentrated 
in sectors employing less than a 
quarter of the entire labour force 
of the Union. 
Since  1993,  micro-enterprises 
with  less  than  10  employees 
have  been  recruiting  twice  as 
fast as major firms* 
Virtually  the entire net increase 
m  employment  since  1990  Is 
accounted for  by the  growth  in 
part-time working. 
The  average  unemployment 
rate among young people in the 
Union 
is  still  over  20%. 
However,  there  has  been  ai 
slight drop  recently, in line with 
demographic  trends  and  as  a 
result  of  more  young  people 
staying on m education. 
Unemployment  among  women 
remains  about  $ percentage 
points  higher  than  among  men 
(12.7%  as  compared  with 
9.4%). 

tmiàl  nil 

liBïiilÉliiH lirtrtiWiHMIWH 

It is also true for the increasing speed 
of  technological  change,  intensified 
by  globalisation:  this  change  is the 
source  of  new  wealth,  but  it  is not 
distributed  evenly.  The faster  pace 

entails 

change 

of 
a 
also 
reorganisation  of  structures  and 
social costs that can only be reduced 
employment 
by 
far-sighted 
facilitate 
management  which  will 
geographical 
occupational 
mobility.  This 
for 
true 
enlargement  of  the  Union,  which  is 
seen  by  many  as  a  constraint, 
whereas  it  already  today  and  even 
more so in the medium  term  actually 
renewed 
offers  opportunities 
growth. 

and 
is  also 

for 

We  must  react to the  unemployment 
problem  quickiy,  and  actually  do 
something  rather  than  just  talk.  We 
must  also  anticipate 
tomorrow's 
challenges  by  finding  solutions  to 
them  today.  Otherwise,  the  problem 
of  unemployment  will  remain  one of 
necessary  adaptation  rather than one 
of forward-looking  dynamism. We are 
all  aware  of the major  trends  we are 
living  through.  But the responses we 
need to make are often  postponed to 
a distant future. The European way is 
to  allow  initiative  to  create  new jobs 
and  also to provide  benchmarks and 
references  to  help  everybody  plan 
for  the  future  in  so  far  as  it  is 
foreseeable. 

3.  Success 
depends 
parties. 

the 
of 
on  mobilising 

strategy 
all 

to  all  of 

Because  this  strategy  embraces  the 
it  must 
whole 
range  of  policies, 
appeal 
the  parties 
concerned.  More  than  ever  before, 
modernising  initiatives  come  today 
from  every  quarter.  The challenge is 
to  break  down  dividing  barriers  and 
integrate  the different  initiatives  in a 
common framework of reference. The 
actors 
field 
operate at very different  levels. There 
are  institutional  actors  at  European, 
national  and  local  level.  Then  of 

the  employment 

in 

-2 

measures,  as  in  the  case  of  the 
Structural Funds. 

I  Bumne as an economic entity 
The  European  economy  m  an 
inoreasittgly 
integrated  economic 
entity.  As  the  single market  moves 
towards  completion,  cross-border 
movements  of  goods  and  services 
to  domestic 
become  no  different 
movements.  Corporate  investment 
strategies  and,  hence,  employment 
and  growth  policies  must  be 
increasingly  conceived  in  terms  of 
Europe  as  a whole.  The volume of j 
the  Union's  external  trade  with  the! 
rest of the world remains at a steady i 
level of 8% of Its Q'AF,  au* 'his xmcu? < 
inoraaslr^iy  active  > 
constitutes  an 
sttalani 
Th3 J 
io  comp&fïEsn. 
dynamism o; Europe  tfs^nds  on  i bl 
ability* to face global cotr^etîiion and  ] 
,j 
develop its competitive strs-itniha. 

The lorag*V&rm increase In tte growth ti 
jrste  of  ins  Ewop®-^  ocofiowy &\\u 
ifS^uire  u  sîgnfôcar;; înc*e$3$  in  ins* 
>ate  of  crpftai  inveafcnont,  ^u'rontfy 
tending  at  around  13%  (compared 
with  24%  at  the  begtehg  of  the 
1970s).  O v a r ii  long run,  n<arj5$a 
i n f r ^ A ' o U i ^, ' 
investmt^; 
technote^c&f 
&)&hcbt 
innov&îioa,  &r*d  human  resource 
"he 
iinves&noté  ~  o p t i ng 
the 
&atw$en 
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i r ^ r o ^ o n o my 
the 
and 
jr\!:#>«c&rt&my * %f® Hey &l®msmv$ m| 

aiid 

at 

course  there  are  the  social  partners, 
who  are  in  the  front  line  when  it 
comes  to  maintaining  and  creating 
jobs. 
there  are 
associations and individuals. 

finally 

And 

applies 

This  mobilisation 
to 
Community  policies  themselves.  The 
purpose  of  this  document  is to  show 
how  Community 
serve 
employment  in  the  context  of  this 
overall strategy. 

policies 

Action  by the  Union  is  not  parallel  to 
ti^ai  of  the  Member  States  simply 
because  it  is  external  to  it.  On  the 
contrary,  the  two  are  interwoven  in 
two respects: 

compatibility 

-  EU  action  creates  the  frame  of 
reference  which  can  guarantee 
the 
of  Member 
States'  action  and  thus  rsieass  its 
full  potential.  The  creation  of  a 
sound  macroeconomic  framework, 
the  single 
the  completion  of 
market, 
tax 
provisions,  the  state  aids  code, 
measures  to  simplify  the  business 
market 
environment, 
of 
reforms, 
sustainable  development  are  all 
important factors here; 

scrutiny  of 

prospect 

labour 

the 

the 

by 

the 

Member 

-  Union  action  complements  and 
the 
action 
supports 
Member States.  The 
instruments 
specific  to  the  Union  dovetail  with 
the  measures  already  undertaken 
by 
States, 
complementing  them  and  thereby 
demonstrating  the  value  added  by 
the  Community.  This  is  true  of 
research  and 
the 
funding  of  small  businesses,  the 
and 
information 
trans-European  networks.  Union 
action  may  also  support  steps  by 
the  Member  States  by  following 
directly  in  the  wake  of  national 

innovation, 

society 

-3 

COMMUNITY POLICES IN SUPPORT OF 
EMPLOYMENT: ENABLING, 
COMPLEMENTING AND SUPPORTING 

I.  Union 

action 

creating 

an 

essential framework 

THE MACROECONOMIC FRAMEWORK 

by 

the 

The  coherence  of  the  employment 
first  and 
is  guaranteed 
strategy 
foremost 
European 
macroeconomic  framework.  A  sound 
macroeconomic  approach  geared 
is  a  necessary 
towards  stability 
condition  but  in  itself  it  does  not 
guarantee a  high  level of growth and 
and 
If 
employment. 
monetary  union 
function 
smoothly, 
it  will  be  even  more 
essential  for  macroeconomic  stability 
to complement structural reforms. But 
economic  and  monetary  union  will 
itself 
the  growth  and 
support 
employment dynamic. 

economic 
to 
is 

This  convergence  strategy,  backed 
by  structural  actions, 
is  already 
fruit.  The  Commission's 
bearing 
macroeconomic  forecasts  have  been 
revised  upwards  and 
latest 
projections  suggest  a  return  to  a 
growth  in  employment  of  about  1% 
per year for the two years ahead. 

the 

term, 

the  medium 

In 
the 
arrangements  for  the  changeover  to 
the  single  currency  are  going  to 
remove  some  of  the  macroeconomic 
obstacles 
that  have 
to  growth 
regularly  had  a  debilitating  effect  on 
European performance. There will no 
longer  be  any  risk  of  exchange  rate 
the 
crises 
currencies 
countries 
participating.  At  the  same  time,  the 
tension between monetary  policy and 
policies  will 
national  budgetary 
diminish  as  a  consequence  of  the 

occurring 

between 

the 

of 

discipline  demanded  by  the  Treaty 
provisions  and  by  the  Stability  and 
Growth  Pact.  This 
framework  of 
stability  will  make  it  easier  for  the 
to  negotiate  pay 
social  partners 
agreements.  There  will  be  more 
chance  of  striking  the  balance  of 
is  most 
economic  policies 
favourable 
and 
employment.  The  transformation  of 
the  current  economic  upswing  into 
lasting  growth  in the  medium  term  is 
the 
the 
challenge 
macroeconomic  framework  bolstered 
by EMU and the euro. 

that 
growth 

real 

for 

to 

+  With the expected introduction of 
the  euro  on  1 January  1999 and 
the  growth  prospects  which  are 
confirmed  by  the  convergence 
process, the European Council in 
Luxembourg  could  restate  the 
to 
importance 
economic coordination and in this 
context  underline the  importance 
of  the  joint  declaration  by  the 
in 
European  social  partners 
the  medium-term 
support  of 
macroeconomic 
convergence 
and growth strategy. 

attaches 

it 

THE $INQLE MARKEI 

to 

1987 

The  Commission's  initial  assessment 
of the impact and effectiveness of the 
single  market  showed that the  closer 
integration  of  markets  and  keener 
additional 
competition  generated 
growth  of  1  to  1.5%  in  the  period 
from 
creating 
considerably  more  jobs  than  would 
have  been  the  case  had  the  single 
market  not  existed. The  assessment 
also  showed,  however,  that  there 
large  number  of 
were  still  a 
shortcomings  which  prevented  the 
single  market 
functioning 
perfectly. 

1993, 

from 

Buoyed 
the 
its 
Commission  presented  an  Action 

findings, 

by 

. 4. 

Plan that adopts a clear and strategic 
approach to the action  needing to be 
taken to  improve the workings  of the 
single  market  in  the  years  ahead. 
the 
This  plan  was  endorsed  by 
Amsterdam  European  Council.  It  is 
now  incumbent  on  all those  involved 
to  demonstrate  a  strong  political  will 
rapid 
towards 
to  work 
implementation  of the  priority  actions 
listed  in  the  plan.  The  Commission 
will  keep  a  watchful  eye  on  the 
achievement  of  these  priorities,  in 
particular  by  regularly  publishing  the 
"Single Market Scoreboard." 

the 

Council 

+  The  impetus  provided  by  the 
European 
on 
employment  will  focus  attention 
the  strict  and  effective 
on 
implementation  of 
the  single 
market  rules.  For  example,  the 
provisions governing the opening 
the  telecommunications 
up  of 
market,  where 
there  is  great 
potential 
for  job  creation,  will 
have  to  be  applied  within  the 
deadlines set. 

Restoring an employment-friendly 
tax system 

effects 

far-reaching 

There  can  be  no  doubt  that  the 
taxation  system  is  one  of  the  areas 
where  structural  action  can  have  the 
most 
on 
employment.  In  this  connection  the 
Amsterdam  European  Council  and 
the  latest  broad  policy guidelines  call 
for an overall reduction of the general 
level of taxation.  However,  European 
it 
economic 
increasingly  difficult 
to  embark  at 
national  level on tax  reforms that  are 
inspired 
about 
employment. 

integration  makes 

concern 

by 

This  is why  the  Commission  regards 
it  as  essential  that  agreement  be 
reached  on  guidelines  aimed  at 
fiscal 
guaranteeing 

greater 

coherence 
three areas: 

throughout  Europe 

in 

• 

the 

Implementation  of  a  balanced 
tax  package  along 
lines 
the 
the  Commission 
proposed  by 
following  up  the  work  of  the  Tax 
Policy  Group,  including  a code  of 
field  of 
in 
good  conduct 
company tax, common  principles 
regarding  the  taxation  of  savings 
and the elimination  of  withholding 
royalty 
taxes  on 
payments  between  companies. 
The  Ecofin  Council will  shortly  be 
called  on  to  give  its  opinion  on 
to 
this  package.  The  aim 
combat  harmful  competition  with 
regard  to  taxation, with  a  view  to 
reversing  current  tendencies  that 
lead 
statutory 
increased 
charges  on  labour,  especially  on 
the low-skilled and least mobile. 

interest  and 

to 

is 

•  The  adoption  of  a  Community 
framework  for  the  taxation  of 
energy  products  (excise  duties, 
broadening  the  tax  base  to  cover 
all energy  products)  leaving  room 
for  manoeuvre  to  reduce  indirect 
labour costs. 

•  Targeted reduction in VAT rates 
for  labour-intensive  services,  so 
as  to  boost  demand  for  such 
services and reduce moonlighting. 
The Commission recently adopted 
a  communication  on  this  subject, 
temporary 
that  a 
suggesting 
experiment  could  be  tried  with 
services 
by 
competition. 
cross-border 
Member  States  which  so  wished 
would  be  authorised  to  apply  the 
reduced 
the 
standard  rate.  This  could  play  a 
supporting 
the 
measures  stipulated  in  the  first 
two  points,  which  would  be  most 

role  alongside 

affected 

rather 

than 

rate 

not 

5-

for 
decisive 
labour costs. 

reducing 

indirect 

+  The special European Council on 
employment  could  call  on  the 
Council  of  Ministers  to  reach 
agreement by the end of  1997 on 
proposed 
the  Commission's 
overall  package  for  combating 
harmful  tax  competition  and  to 
take a positive line on taxation of 
targeted 
energy 
reduction in VAT. 

and 

the 

Redirecting and reducing state aid 

Strict  control over  state aid to  ensure 
compatibility  with  Community  rules  is 
the  only  way 
fair 
competition  and  to  avoid jobs  in  one 
place being created  at the cost of job 
losses elsewhere. 

to  establish 

Here  the  Member  States  have  a 
shared  interest  in  coordinating  their 
systems  of  state  aid  to  reduce  the 
overall  sums  involved  which  come to 
around ECU 100 billion a year.  Much 
national  aid  still  gives  rise  to  mutual 
outbidding 
of 
a 
distortion 
the  cohesion 
competition  affecting 
countries.  The  Commission  plans  to 
hold  consultations  with  the  Member 
States on this issue. 

or 

+  The  Commission  also  intends  in 
due  course  to  review  the criteria 
for  approving  aid  in  order  to 
foster  schemes  that  genuinely 
promote  economic efficiency and 
employment, including continuing 
training,  the  creation  of  lasting 
jobs  and the smooth operation of 
the labour market  In conjunction 
with  the  Member  States  it  will 
devise a system of benchmarking 
to  evaluate  the  effectiveness  of 
the different national schemes in 
terms of employment. 

Simplifying 
environment, 
smaller businesses 

the 
especially 

business 
for 

The  BEST  Task  Force  on  small 
businesses  was  set  up  following  the 
Amsterdam  European  Council.  It  is 
made  up  of  15 leading  figures  with 
experience  of the  problems  faced  by 
small  and  medium-sized  businesses. 
Its  job  is  to  provide  an  independent 
that 
assessment  of  the  measures 
the 
should  be 
to  simplify 
taken 
administrative 
and 
regulations that apply to businesses. 

requirements 

In  addition  to  legislation  proper,  the 
Task  Force  is  also  to  examine  other 
that  could  help  encourage 
areas 
entrepreneurship, for example: 

- 

the  basic 
the  availability  of 
services  needed 
run  a 
to 
financial 
business,  such  as 
management,  bookkeeping  and 
personnel  management; 

-  easier  access 

to 

services 
provided  by  the  often  unduly 
complicated  public  authorities 
responsible  for  job  centres  and 
training 
social 
schemes, 
security  regulations  and  iocai 
and  national  rules  concerning 
standards and the environment; 

- 

businesses, 
and 
qualifications 

training  opportunities  for  people 
running 
their 
co-workers, 
spouses 
including 
in 
traditional  occupations  (crafts, 
tourism,  trading)  where  there  is 
good employment potential. 

-6 

p. 

European  and  national 
legislation  will  be required  to  give 
effect to these  recommendations. 

#  7"/7e  BE SIT  Task  Force  is to 
produce  an interim report  for the 
European 
on 
employment 
finalisation 
ahead  of the  Cardiff  European 
Council. 

Council 
for 

&  Before 

the  Luxembourg 

illifclllliiii  % 

ll|lll!liililllllllPiil|if!ilill|y 
lllliiiiillllllllllilllliiiiiiliii^:! 

p i H i l l ^ H H ^ l i i l i i i i i i Si 
BBB^^PBlililiÉliiilisliliil 
Hli^BÏBlilBSHI^HiliÉlIll 

European Council in  December 
the Commission  will be  reporting 
on  all simplification  measures 
under way  or  planned: "Better 
lawmaking". 

STRUCTURAL  REFORMS OF THE LABOUR 

MARKET 

acopted 

'  Ooîube* 
OIL 
. .' 

Medium  and  long-term  structura! 
reforms  form  the core  of the draft 
'eport  and  guidelines  on 
'•ml 
by  *he 
-rr'loymeni 
ro»f 
Co  nisï.'or  o^ 
'don1  M* 
...t.-»» 
-*rofiC 
L t i s „ . ! i î/ 
e  ' U i p f t<  Ct.iv!  tp 
adaptability  and  ?qua«  jpponunf.es 
Focusing  on these  pncn*:e?  should 
hitherto 
help  expand  on 
underdeveloped 
aspect  of  the 
integrated  approach.  Only  if these 
structural  reforms  are a success  will 
a  genuine  increase  in  the  volume  of 
job-creation be possible. 

this 

!t is clear that this is primarily  an area 
for  national  action.  However, the 
Community  framework  is needed for 
exchanging  good  practices  and 
setting  shared  objectives 
through 
guidelines.  It  will  then  be for ïne 
Member  States  to  act  en 
these 
guidelines  in sine  with  the particular 
features of their  own labour market. 

have 

agreements 

Two 
been 
negotiated  under Articles 3 and 4  of 
the  Soefo!  Policy  Protocol.  The  first 
concern  parental  leave  and  the 
second  pgrMime  work.  These 
agreements  have  been  submitted  to 
tN? Council to be implemented in the! 
| 
form of a direstive. 

Oocrpation-specific  discussions  aref 
twenty  or  so  different 
held  with 
I sectors  and the  social partners  have' 
j issued  more 
I declarations* 
recent initiatives ?nctude: 

nm 
''is  most 

importer 

140 

r< 

*  a 

for 

framework 

agreament 

cr.y 
nationakevei j 
apiculture 
negotiations 
reconcile { 
to 
reductions  in  working  time  with8 
working time flexibility; 

«  several  charters  and codes  of 
good  practice  concerning,  for 
example,  child 
the 
commercial,  footwear,  textiles  ^6 
clothing sectors; 

labour 

in 

| 

*  memorandums  on  expanding! 

in  the  cleaning 

employment 
industry  and  in  the distrib-jtivj  j 
trades, 

I 

play 

The  social  partners  have a vital  role 
to 
negotiated 
here.  A 
understanding on the need to strike a 
fundamental  balance  between  labour 
market  flexibility  and  job  security for 

is  at 

the  heart  of 

the 
workers 
European  model.  The  agreement 
reached  on  part-time  working  is  an 
important  step  along  that  path.  The 
on 
dialogue 
social 
further 
13 November  should  bring 
progress, 
stronger 
commitment  from  the  social  partners 
to  play  their  full  role  and  to  assume 
the^r responsibilities  in this process. 

summit 

with 

a 

in 

Similarly  social  dialogue  should  be 
stepped  up 
individual  sectors,, 
endeavouring to emulate the success 
achieved  in  the  agricultural  sector. 
Across-the-board  progress  involving 
all  sectors  should  be  built  on  with 
agreements  which  supplement  them 
to  particular 
and/or  are  specific 
sectors. 

*& By way of advance application of 
the  Treaty  of  Amsterdam,  the 
European  Council will call on the 
first 
Council 
to  adopt 
guidelines 
national 
to  be 
employment  policies 
applied  by  the  Member  States 
through 
their  national  action 
plans. 

the 

on 

+  By  laying  the  foundations  for  an 
outline agreement the negotiating 
partners  at  multi-sector  level  in 
Europe  should  give  a  European 
lead on resolving the problems of 
non-standard work and informing 
and consulting workers. 

EMPLOYMENT 

AND 

SUSTAINABLE 

The  Member  States  have  already 
started  taking  steps  to  encourage 
environmental  activities which  have a 
positive  impact  on employment,  such 
as 
conservation,  waste 
coiiection  and  processing  and  urban 
renewal.  If this  is to  go further,  there 
must  be  better  safeguards  for  the 

nature 

sustainability  of  actual  production 
and consumption. 

Oreen technology which creates or 
maJriMojmks 

1} 

In 1994, added value in the sector 
producing environmental 
technology and services came to 
ECU 90 bilfêerL providing work for 
more than 15  TfiKtcn people. 
These figures tV; not inertia 
technologies îo promote 
ener^y-sav'ng and the production 
of renewable .arms of energy. 

2) 

by 

introducing 

(n  the  United  Kingdom  a  survey 
was  done  of  11  firms  in  various I 
branches  of  industry  which  hadf 
reducing 
applied  a  strategy  of 
waste 
green 
technology*  These  firms  saw  their 
profits  rise  by  some  £4  million 
within four y*are  In 70% of ca?es, 
the  investment 
in  energy-saving 
measures  showed  a  positive 
return in Jess than a y<sar. 

launched 
programme 

?3)The  management  of  a  tannery  m 
t 
the  Netherlands 
of 
target-oriented 
investment 
tntroductr/j  clean 
In 
technology.  Vhi$  fed  to  t& rise  in 
reduced 
profit* 
environmental 
cf 
turnover)  and  sales  of  naw  f/pes 
of by-products. 

to 
costs 

thanks 

(2% 

This  is  a  long-term  exercise  which 
will eventually  lead to  new jobs  being 
created,  and  dictate  whether  existing 
jobs will continue to be viable  into the 
future.  But  it  calls  for  an  overall 
the  whole 
sustained  strategy 
European  Union,  if  we  are  to  cope 
with  the  costs  of  the  switchover, 
which for  certain types  of firms  (small 
businesses)  and  certain  regions  may 
be high. 

for 

+  Before  the  employment  summit 

the Commission  will be  adopting 
a 
the 
communication  on 
environment  and  employment 
which  defines  such  a strategy 
and suggests the first steps to be 
taken 
it: 
in  embarking  on 
identifying promising areas  for 
investment  in  sustainable  forms 
of  technology,  coherent use of 
the  various  awareness-raising 
instruments,  and  regulatory  and 
fiscal  incentives. Proposals  for 
five  key  measures  will  be  put 
forward. 

II. Action 

by 
complements 
action by the Member States 

Union 
supports 

and 

the 

RESEARCH AND INNOVATION 

new 

findings 

research 

The  Union  currently  devotes  a  much 
smaller  proportion  of 
its  gross 
domestic  product  to  R&D  than  the 
United  States  or  Japan.  It  is  also 
some  way  behind  in  its  capacity  to 
to  good 
turn 
account  quickly,  with  a  view 
to 
and 
launching 
services.  Extra efforts  will  have to  be 
in,  both  as  regards  steering 
put 
right  directions, 
research 
particularly  towards  making  the  best 
use  of  human  resources,  and  in 
terms 
new 
developments  through  exchanges  of 
know-how 
linking 
together companies and regions. 

disseminating 

networks 

products 

the 

via 

of 

in 

These  are the  concerns which  are at 
the  heart  of  the  scientific  guidelines 
proposed  by  the  Fifth  framework 
Community 
for 
programme 
research,  of  which 
the  six  main 
subject-specific  or  across-the-board 
lines  develop  out  of  Member  States' 
own endeavours  in a multidisciplinary 
approach, 
the  European 
effort  around  nine  basic  criteria,  one 

targeting 

The 
of  them  being  employment. 
same  concerns  are  to  be  seen  at 
work 
the  action  plan  on 
innovation  presented  in  November 
1996. 

in 

+  The new  framework  programme 

be 

adopted 

in 
Its  specific 

In  the same 
first  network  of 

should 
February 1998. 
programmes should be  approved 
by  summer 1998. 
the 
year, 
Innovation  Training  Centres  and 
Educational  Resource  Centres  is 
to be  set up (based on an idea 
put forward  in the Ciampi  Group 
report),  the object being  to  make 
technology  transfer  to  small 
businesses easier. 

+  In response to the brief given to it 
by  the  Amsterdam European 
Council,  the  Commission  has 
tabled a  proposal  for  using  the 
interest  (some  40 MECUs  per 
year)  yielded  by  the  ECSC 
assets  to  continue 
financing 
research  in  sectors  associated 
with  the coal and steel industries 
after 2002. 

INCREASED FINANCIAL RESOURCES  FOR 
SMALL BUSINESSES 

action 

The  Board  of  Governors  of  the  EIB 
has  approved  the  broad  lines  of  a 
special 
programme 
determined  at Amsterdam  in  support 
of  employment  policies.  A  start  has 
been  made  on  extending  the  Bank's 
activities  to  education,  health,  the 
urban  environment  and  protection  of 
the environment;  many  projects  have 
already  been  presented  for  approval 
the 
the  Board.  To  build 
by 
trans-European  networks,  the  Bank 
is 
the  possibility  of 
granting  very  long-term  loans  and 
raising  the  ceiling  on  financing  to 
75%  of the  project  cost. The  Bank  is 

looking 

into 

9-

proposing that  up to a billion ecus be 
allocated  to  support  instruments  for 
small  businesses,  especially  in  the 
field of technological  innovation. 

Sustainable  job  creation  by  small 
businesses  could  also  be  promoted 
by  Parliament's  plan  to  devote  up to 
ECU 450 million  in  the  budget  over 
to  employment  and 
three  years 
innovation. 
of 
Three 
complementary  instruments  covering 
the  development  phases  of  small 
businesses,  from  launch  to  maturity, 
would be introduced: 

types 

- a risk capital window, focusing on 
certain stages in the life of a small 
business, to back up the European 
technological facility financed by 
the EIB and managed by the EIF; 
- a Community instrument offering 

assistance for the creation of Joint 
European Ventures; 

- a special guarantee mechanism 
for small businesses set up with 
the EIF to increase the risk-taking 
capacity of institutions financing 
small businesses. 

in 

Ths, SMQnd, ntaffcftt M the 
United States; NASRAQ 
5 600 companies  are  quoted, 
the  small 
including  1341 
business section. 
The 
volume  of  NASDAQ^ 
transactions  exceeds  that  of  the 
New York stock exchange, 
NASDAQ  market  capitalisation: 
the  quoted  value  is  greater than 
;*~ 
France 
W 1  8DD billion). 
NASDAQ was behind  18% of the 
new jofos (600 000) created in the 
United States  between  1890  and 
V3S4.  H  is  also  estimated  that 
'?  rt.iliicr» j^bs  are associated with 
r-u; fisnfe quoted on NASDAQ, 

GDP 

of 

'j-jtfvreJ.  a-WiSJesMr 

American 

The  establishment  of  a  specialised 
capital  market  at  European  ievel  by 
2000 is a priority for the Commission. 
The 
experience 
demonstrates  that  such  a  market, 
with  its  panoply  of  additional  private 
instruments,  has  multiple  beneficial 
spin-off  effects  for  the  development 
of small businesses with great growth 
potential,  especially 
in  high-tech 
sectors.  Two  initiatives  along  these 
lines  were  launched  in  Europe  in 
1996:  EASDAQ  and  Euro-NM.  A 
specialised  market 
integrated  at 
European  level  will  supplement  and 
reinforce 
national 
existing 
experiments,  providing  them with the 
necessary  critical  mass. 
It  will 
operate  via  an  electronic  network 
between  national  stock  exchanges, 
which  will  require  harmonisation  at 
rules  of 
European 
business management (bookkeeping, 
European Company Statute), and the 
development  of  a  reserve  of  skills 
needed  to  instruct  and  support  new 
firms. 

level  of 

the 

+  The  launching  of 

on 

the  special 
EIB action  programme  and  the 
the 
agreement 
complementary 
instruments 
the  Community 
financed  by 
budget will be a major highlight of 
the  European  Council 
on 
employment. 

PROMOTION  OF  A „ SOCIETY  WHERE 

has  a 

technology 
communications 
The 
industries  and  services 
represent  a 
fast-growing  sector  (about  10%  per 
year).  Europe 
twofold 
opportunity  in  this  area,  first,  it  can 
use  of 
make  optimum 
these 
technologies 
become  more 
to 
competitive  in  every  sector  of  the 
economy,  and  second, 
it  can 
reinforce European supply in. the fast-

10 

the 

the 
to 

the  market 
growing  segments  of 
information  society, 
linked 
to 
By 
Internet. 
especially 
the  dynamics  of 
responding 
demand,  and  by  anticipating 
the 
future  needs  of  users  in  Europe  and 
worldwide,  Europe  can  build  up  the 
reputation  and  competitiveness  of  its 
producers. 

the 

Electronic  commerce  illustrates  this 
intensity  and 
situation  where 
diversity  of  demand  offer  Europe 
tremendous  opportunities 
to  make 
the  most  of 
its  know-how.  The 
European  dimension  lends  itself  to 
innovation  and  new 
forms  of 
commerce  between  businesses  and 
A 
between  sellers  and  buyers. 
Community  initiative was  launched  in 
April  this  year  to  stimulate  electronic 
commerce. 
in 
It  was 
initiative 
1997  by  an 
October 
designed  to  develop  digital  signature 
and  cryptographic  services,  which 
are  an  essential  condition  for  the 
development of electronic commerce. 

followed 

factor 

is  enormous  potential 

The expansion  of  open  networks  is 
for  growth  and 
a  new 
for  all  businesses  and 
innovation 
involved.  Here  again, 
individuals 
there 
for 
activities  and  jobs  created  indirectly 
by  services  and  software,  which 
could  meet  new  needs  created  by 
communication 
information 
technologies,  hence 
crucial 
importance  of  the  liberalisation  of 
telecommunications 
infrastructures 
and services in the single market. 

and 

the 

Th» Internet: a potential source of 
&&& 

is 

to 

The  internet  shouid  have  a  major 
it 
impact  on  employment  as 
develops,  In  1B98  It  was  estimated 
that  the  Internet  was  responsible, 
directly  or  indirectly,  tor  the  creation 
of  a  million  new  jobs  worldwide.  At 
the  start  of  1097,  around  70 million 
people  were  using  the  Net.  This 
reach 
expected 
figure 
200 million  by  the  year  2000,  The 
range  of  services  available  on  the 
Internet  continues  to  expand  ~  from 
200  Web  sites  in  1992  to  260 000 
commercial  sites 
today,  Revenue 
from  electronic  commerce  on  the 
Internet  looks  set  to  reach  around 
ECU 200 billion by the  year 2000.  If 
the  potential  of  the  Internet  Is to  be 
used to  the  full,  certain  obstacles  to 
the  creation  m^S  expansion  of 
innovative 
to  be 
removed> 

firms  still  have 

to 

The growth  in demand  is also closely 
linked 
the  general  public's 
increasing familiarity with  new on-line 
technologies. 
and  multimedia 
In 
addition 
awareness-raising 
campaigns,  education  and  training 
fundamental 
also  play  a  role  of 
importance. 

to 

+  The  Commission  will  report  by 
the  end  of  1998  on  electronic 
commerce,  the  development  of 
open  networks  and  the  use  of 
multimedia  tools  for  educational 
purposes. 
report  will 
The 
examine  how  these  things  are 
being used and to what effect. 

i l-

PARTNERSHirs  FOR  FINANCING  THE 
TRANS-EUROPEAN  NETWORK 

of 

boosting 

Setting  up  an  integrated  and  well 
transport  network  at 
thought-out 
European  level  continues  to  be,  in 
the  first  instance,  one  of  the  best 
Europe's 
ways 
hence 
competitiveness 
is  also  an 
employment 
too. 
essential  adjunct 
single 
market.  What  is  more,  the  networks 
the 
will  also  have  an 
labour  market  by  generating  new 
temporary  jobs  while  they  are  being 
built.  Progress will be ali the quicker  if 
steps  are taken to: 

and 
It 
to 

impact  on 

the 

-  develop  innovatory  approaches 
as  soon  as  possible,  with 
partnerships  between  public 
and  private  bodies,  to  speed  up 
implementation 
priority 
projects; 

of 

-  extend  the  scope  of  the  EIB 
instruments  in  accordance  with 
the  provisions  agreed  on  at 
Amsterdam, 
in  order  to  meet 
long-term  project  requirements 
at  the  same  time  as  reducing 
the  degree  of  dependence  on 
guarantees  with  regard  to  third 
parties; 

- 

and 

identified 

timetable 

to  ensure  that,  for  each  of  the 
priority  projects 
in 
Essen, 
the  Member  States 
concerned,  in  cooperation  with 
the  Commission,  produce  a 
clear 
a 
financing  plan  as  a  sign  of 
their  political  commitment,  as 
commitment  will  certainly  be 
required 
the 
momentum  required  for  decisive 
to  make  people 
action,  and 
aware  of 
to  be 
gained from the  networks. 

the  benefits 

build 

up 

to 

4-  The 

Luxembourg 

European 
Council  on  employment  should 
see  the  launching  of  the  special 
EIB  action  plan  for  adapting  the 
for 
instruments 
financing 
long-term  TEN  projects. 

4> The 

financing 
timetables  and 
for  priority  projects  could 
the  Cardiff 

plans 
be  discussed 
at 
European  Council. 

EROMOTINQ  EMPLOYMENT  AND 
DEVELOPMENT^.  THROUGH 
THE 
STRUCTURAL FUNDS 

the 

The  Union's  structural  policies  are  an 
expression  of  solidarity  with 
the 
countries  or  regions  engaged  in  the 
most  difficult  modernisation  efforts 
and  with 
groups 
experiencing  the  greatest  difficulties 
in finding  work.  The  Structural  Funds 
are  therefore  an  essential  instrument 
both  for  the  Union's  economic  and 
social cohesion  and for the  promotion 
of development  and  employment. 

social 

competitiveness 

With 
the  promotion  of  an  overall 
strategy,  from  the  White  Paper  on 
and 
growth, 
employment  to  the  Confidence  Pact 
for  Employment,  more  and  more  has 
been  done  to  focus  the  Structural 
Funds  on  the  shared  priorities  of 
competitiveness  and  employment. 
The  structural  policies 
contribute 
through two  complementary  channels 
to attaining these  priority  aims: 

-  By  improving  infrastructures  and 
boosting  productive  investment  in 
regions  suffering  from  structural 
handicaps, 
increase 
they 
demand  in  these  regions  and  in 
them  more 
particular  make 
attractive, 
sustaining 
employment. 

thereby 

12 

-  By  applying  a  wide  variety  of 
instruments adapted to the needs 
of  all  categories  of  the  working 
population  in order to ensure that 
human  resources  are  used  to 
maximum  effect, 
the  structural 
policies  provide  direct  support for 
national  or  regional  employment 
and social inclusion policies. 

of 

new 

provisions 

The 
the 
Amsterdam Treaty, in particular those 
in  the  employment  chapter,  ought  to 
gear 
the  structural  policies  more 
closely  to  the  priorities  of  fighting 
unemployment  and creating iobs. 

This  was  the  thinking  behind  the 
Commission's 
in 
Agenda 2000 for a new generation of 
programmes covering: 

proposal 

and 

regionalised 

taken  of 
by 

two 
objectives: 
helping  less  developed  regions  to 
(1)  and  promoting 
catch  up 
economic 
sociai 
conversion (2),  with  due  account 
the  difficulties 
being 
structurai 
caused 
the 
underdevelopment  and  of 
by 
problems 
industrial  areas  in  decline,  rural 
areas, derelict  inner-city  areas and 
coastal  regions  affected  by  the 
fishing 
of 
modernisation 
industry; 

encountered 

the 

-  one 

general 

objective 

(3) 
concerned  with  the  development 
of  human  resources,  which  will 
thus  become  a  major  component 
of  Structurai  Fund  operations 
throughout  the  European  Union, 
capable  of  providing  significant 
the  action  plans 
support 
introduced  in  each  country  to  give 
effect 
employment 
the 
guidelines  agreed  at  European 
level. 

for 

to 

in 

for 

up 

There 

particular 

for  n»w requirements r*ew j g f t sI 
Demographic  shifts  and  changing 
lifestyles, 
equal 
opportunities and the increase in the 
number  of  women  in  employment, 
bring  with  them  new  requirements: 
satisfying 
these  requirements  can 
generate  a  large  increase  in  new 
employment  especially  in  the  areas 
of personal services such as childcare 
and aid for the  elderly,  quality  of the 
environment  and  living  conditions. 
is 
leisure  and  culture. 
enormous potential for employment in 
the  arts  in  the  years  to  come; 
the 
audiovisual  market, 
instance, 
should  grow  by  70%  in  Europe  by 
2005. 
Throughout  the  European  Union,  in 
the areas where there  is a wealth of 
and 
development 
local 
smpioymant 
tc 
initiatives, 
19 areas  of  high employment  growth 
potential  have  been  identified  which 
could represent  the  equivalent  of  zn 
annual  average  of  0.25 percentage 
points of net job creation. 
Freeing  rhis  potential  is  often  the 
result  of  $  local  move,  of  which  the 
mml 
:^wtopmerii  boom  of  the 
1380s wg$ a forerunner.  This move 
urban 
to 
now 
réhabilitation 
job-creation 
and 
strategic?» which involve the resources 
of 
associations, 
cooperatives  and  the  like  closely; 
interwovfcr. Into the economic fabric. 
The  removal  of  obstacles  to  the1 
creation of these new jobs requires an 
framework  based  on 
approbate 
administrative 
decentralisation, 
openness  of  the  public  authorities  to 
partnership  with  the  private  sector, 
clear references  on the  environment, 
energy,  and 
the 
récognition  of  new  qualificatrons  and 
skills. 

transport  and 

ths  many 

sxtends 

new 

13-

the 

those 

Union's 

promoting 

reinforced. 

Mirroring 
overall 
employment  strategy,  integration  of 
the  Structural  Funds  in  the  areas 
together 
where 
they  are  applied 
should  be 
Greater 
areas, 
on 
concentration 
simplified  procedures  for  paying over 
funds  accompanied  by tighter  control 
and  evaluation  should  enhance  the 
effectiveness  of the structural policies 
in 
and 
business. 
Targeting  Community 
resources on practices and measures 
with a large job-creating  potential can 
In  this  connection  the 
also  help. 
the  Territorial 
implementation  of 
Pacts  for  Employment  is  a  perfect 
opportunity  for  the  Structural  Funds 
to  demonstrate  coordinated  support 
innovative  approach  of 
for 
partnership,  local  development  and 
decentralisation 
employment 
policies. 

employment 

the 

of 

+  The  Commission  will 

be 
presenting  the  draft  regulations 
the  new  generation  of 
for 
structural policies in spring 1998. 

CONCLUSION 

fight  against 
the 
Employment, 
unemployment  and  the  creation  of 
new  business  should  continue  to  be 
the Union's priority. Neither the  Union 
nor  the  Member  States  can  ignore 
the structural reforms that this  priority 
will  require. 
Joint  action  will  be 
needed  if the  reforms  are  to  be  truly 
successful. 

thinking 

Sceptics  will  be 
that 
statements  like this  proclaiming  good 
intentions have been made before, to 
no  avail. The  first  response  must  be 
to  point to  the  window  of  opportunity 
the 
now 
more 
macroeconomic 

climate, 

thanks 

open 

to 

favourable  now  than  at  any  time  in 
the  last  six years. They  must  also  be 
made  aware  of  the  advantages  and 
opportunities  that  exist  in  European 
:  changing  demographic 
societies 
structures and the related new values 
and  new  needs;  the  considerable, 
underestimated, 
and 
the  euro  and 
spin-off  effects  of 
enlargement.  Lastly, 
is  a 
comprehensive  European  strategy, 
the  coherence  of  which  can  be  seen 
and 
the  way  Community 
from 
national measures  complement  each 
other. 

probably 

there 

force 

Council 

European 

the  Treaty 

on 
The 
employment will be the opportunity  to 
transform  intentions  into  action,  by 
demonstrating  the  Member  States' 
resolve  to  work  together  to  promote 
employment.  This  will  take  the  form 
of the  application,  ahead  of the  entry 
of 
of 
into 
Amsterdam,  of 
jointly  agreed 
the 
guidelines  for  national  policies.  The 
unqualified  support  of  each  country 
for  the  overall  strategy  will  rule  out 
any  risk  of  breaking  of  ranks  and 
acting 
the 
European  dimension  is  fully  realised 
will the necessary confidence  be  built 
up:  confidence of Europeans  m each 
determination, 
Member 
confidence 
in 
themselves. 

isolation.  Only 

State's 
of 

Europeans 

in 

if 

14-

ISSN 0254-1475 

COM(97)611  final 

DOCUMENTS 

EN 

04  05  06 

Catalogue number  :  CB-CO-97-622-EN-C 

ISBN  92-78-27638-3 

Office  for Official  Publications of the European  Communities 

L-2985  Luxembourg