Recommendation for a Council Recommendation on the implementation of Member States'employment policies
Date: 2000-09-06
Institutions: European Commission
Subjects: EU Member State, employment policy, fight against unemployment

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 6,9,2000
COM(2000) 549 final

Recommendation for a

COUNCIL RECOMMENDATION

ON THE IMPLEMENTATION OF MEMBER STATES' EMPLOYMENT POLICIES

..

(presented by the Commission)

EXPLANATORY MEMORANDUM

the Council adopted the first

In February 2000,
recommendations on the
implementation of Member States' employment policies, in accordance with Article 128§4.
The purpose was to focus policy action on priority areas and provide Member States with
support and guidance in implementing the Employment Guidelines.

set of

The National Action Plans, submitted by Member States in May, give a clear picture of how
this first set of recommendations has been put into practice. This year’s experience shows that
the recommendations have played a useful role in focusing Member States' efforts on those
aspects of the labour market where performance was acknowledged as being below the level
achieved elsewhere in the Union.

This recommendation draws on the findings from the Commission’s examination of the
National Action Plans. It is part of a package including both the draft Joint Employment
Report for 2000, which sets out the Commission’s findings in detail, and the proposal for a
Council decision on the Employment Guidelines for 2001. The Commission has been careful
to ensure the coherence of these employment recommendations with those of the Broad
Economic Policy Guidelines.

The recommendation identifies the key labour market challenges facing each Member State,
and recommends appropriate lines of action to assist Member States in addressing those
challenges as effectively as possible, in the framework of the European Employment Strategy.

This year’s recommendations differ from last years in a number of respects, to reflect:

• first, the extent to which individual Member States have responded to recommendations, in

the light of their particular labour market conditions;

• second, the development of the Luxembourg process, particularly in the light of the
conclusions of the Lisbon and Feira European Councils, which emphasised the role of an
active employment policy in establishing a knowledge-based economy.

The Member States' response to the recommendations was generally positive, albeit
somewhat uneven, reflecting different stages of implementation and compliance with the
Employment Guidelines. Such differences were given careful consideration when the
individual recommendations were reviewed. The Commission has to decide between three
course of action:

(1)

(2)

The recommendation should be maintained because the measures taken by the
Member State to address it are clearly insufficient.

The recommendation should be amended to take account of progress made by the
Member State, with a call to pursue efforts or to monitor further progress and assess
impact. This is the appropriate response where measures taken by the Member State
is needed, or where a
only partly address the recommendation and more effort
comprehensive plan has been laid down, but results will be visible only in the
medium-to-long term.

(3)

The recommendation should be dropped, because the steps undertaken by the country
are sufficient.

2

Most of the 52 existing recommendations have been kept either in their entirety or in an
amended form, since their implementation exceeds the timeframe of a single year and requires
progress monitoring and impact assessment over
the medium and long term. Eight
recommendations were dropped because the initiatives taken by Member States and the
evidence in the National Action Plans for Employment provided an adequate response, and
clear progress was achieved. This concerned the recommendations on:

• the service sector and its job creation potential for Belgium, Germany, Ireland and Italy;

• the need to reduce the administrative burden on companies in Spain;

• the development of the statistical monitoring system in Germany and the United Kingdom;

• the promotion of social partnership in France.

Moreover, new recommendations were included to address two issues which deserve
increasing policy attention given the current context of social and economic change and the
increasingly clear impact of the emerging knowledge society:

• The strategic approach to the pillars. Despite considerable efforts to put the employment
guidelines into practice, some Member States still lack a comprehensive approach to
developing and implementing the Employment Strategy. This is reflected in the uneven
treatment given to the four pillars of the employment guidelines in the National Action
Plans. Therefore, some Member States are encouraged to take a more strategic approach to
framing their NAPs and to consider explicitly how they might improve their policy mix in
order to achieve maximum impact.

• Lifelong learning. Whereas

lifelong learning plays an important

role in
employment policies, as highlighted by the conclusions of the Lisbon Summit,
policy action by Member States has remained quite modest. Most still lack a
comprehensive policy framework for lifelong learning, supported by appropriate
introduced in 1999 to address the
targets called for by the new guideline,
challenges of the knowledge-based society. The Commission felt
therefore
necessary to follow up progress. Recommendations in this area should help
Member States to address skills gaps and bring education and training systems
into line with the needs of the labour market.

it

• Other emerging labour market issues could be covered by the present recommendation.
One example is the widening regional disparities in employment which have been
witnessed in some Member States. While this issue has been considered in the Joint
Employment Report of 2000 and in the revised employment guidelines for 2001, its
inclusion in the recommendations on employment policy will be considered in the future.

3

Comparison of Council recommendations in 1999 and 2000

Number of Council recommendations:

Adopted
in 1999

Proposed
in 2000

Maintained
in 2000

Modified in 2000

Dropped in
2000

Newly
adopted in
2000

Annex 1

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

The
Netherlands

Austria

Portugal

Finland

Sweden

United
Kingdom

4

2

5

6

4

4

3

5

2

2

3

3

3

2

4

5

3

5

6

5

5

2

5

3

2

3

4

3

3

4

Total

52

58

0

0

1

1

0

0

0

0

0

0

0

0

0

0

0

2

1

0

2

0

1

1

1

1

0

0

0

0

0

0

1

8

2

0

2

1

3

2

0

2

2

0

0

1

0

1

2

18

3

1999

(one
2
recommendation
has been split into
two)

2

5 (2 merged into
one)

3 (merged into two
recommendations)

3

2

4 (two merged into
one)

2 (merged into one
recommendation)

2

3

3

3

2

1999

3
(two
recommendations
are merged
one)

into

42

4

Annex 2

List of dropped recommendations

Belgium

Adopt and implement coherent strategies, encompassing regulatory, fiscal and labour market
measures, to exploit more fully the job creation potential of the services sector.

Germany

Adopt and implement a coherent strategy to exploit the employment potential of the services
sector, encompassing regulatory, fiscal and other measures to reduce the burden for setting up
new undertakings;

Take appropriate measures to improve and adapt its statistical system so as to provide data
compatible with the common policy indicators by 2000. Germany should consider introducing
a quarterly Labour Force Survey in the light of the Council Regulation (EC) No 577/98.

Spain

Adopt and implement coherent strategies, encompassing regulatory,
fiscal and other
measures, designed to reduce the administrative burden on companies, in order to stimulate
entrepreneurship and exploit the potential for more and stable employment in the service
sector.

France

Strengthen social partnership with a view to developing a comprehensive approach to
modernising work organisation.

Ireland

Pursue recently implemented policies, encompassing regulatory, educational and fiscal
measures, in order to further exploit the potential for job growth in the service sector.

Italy

Pursue particularly in the South efforts to alleviate the administrative burden on companies
and exploit the job creation potential of the service sector.

United Kingdom

Upgrade the statistical monitoring system, so that policy indicators on prevention and
activation will be provided by 2000 in accordance with agreed definitions and methods.

5

Recommendation for a

COUNCIL RECOMMENDATION

ON THE IMPLEMENTATION OF MEMBER STATES' EMPLOYMENT POLICIES

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular to
Article 128(4) thereof,

Having regard to the 15 implementation reports for 2000 received from the Member States,
comprising the implementation of
the 1999 National Employment Action Plans and
describing the adjustments made to the National Employment Action Plans to take account of
the changes introduced by the 2000 guidelines,

Having regard to the Council recommendation of 14 February 2000 on the implementation of
Member States' employment policies.

Having regard to the recommendation made by the Commission on 6 September 2000,

Having regard to the opinion of the Economic Policy Committee of 4 October 2000 on this
recommendation,

Having regard to the opinion of the Employment Committee of 5 October 2000 on this
recommendation.

Whereas:

(1)

(2)

(3)

(4)

The Council adopted the employment guidelines for 1998, 1999 and 2000, by the
Council Resolution of 15 December 1997 and 22 February 1999, and by the Council
decision of 13 March 2000.1

The Lisbon European Council on 23 and 24 March 2000 agreed on a comprehensive
strategy towards employment, economic reform and social cohesion as part of the
knowledge-based society, made a commitment to creating the conditions for full
employment and stressed the importance of lifelong learning;

The Feira European Council on 19 and 20 June 2000 highlighted the prominent role
social partners are called to play in modernising work organisation, promoting lifelong
learning and increasing the employment rate, particularly amongst women;

The Council adopted the recommendation on the Broad Economic Guidelines on 19
June 2000, and European Council of 17 June 1997 agreed on a Resolution on a
Stability and Growth Pact setting commitments by Member States;

1

OJ L 72,21.3.2000, p. 15.

6

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

(15)

(16)

The 2000 Joint Employment Report, prepared jointly with the Commission, describes
the employment situation in the Community and examines the action taken by the
Member States in implementing their employment policy in line with the guidelines,

the
The Council considers it appropriate,
implementation
to make
States'
of
recommendations ; they should be used sparingly, should concentrate on priority
issues and should be based on sound and accurate analysis;

the examination of

in the light of

the Member

employment

policies,

In complementing action undertaken by the Member States with a view to contributing
towards the achievement of full employment, the competences of the Member States
should be respected;

The Council acknowledges the significant efforts already undertaken by Member
States with a view to implementing the Employment Guidelines and the Council
Recommendation of 14 February 20002; in the assessment of the impact of these
policies, the multi-annual perspective of the Employment Guidelines should be taken
into account;

In addressing the employment guidelines, an overall strategic approach to the
development and implementation of the employment policies in the Member States is
called for;

The development and implementation of lifelong learning is key to the development of
a competitive and dynamic knowledge-based society and requires action from public
authorities, enterprises and social partners;

To tackle youth unemployment, which is a long-standing problem in most European
Union countries, all young people should have the opportunity to gain entry to the
world of work before they have been unemployed for six months;

the
To prevent adult
unemployed in the European Union, all the adult unemployed should be offered a new
start before they have been unemployed for twelve months;

long-term unemployment, which affects roughly half of

It is important to reduce disincentives to employment embodied in the tax or benefit
systems in order to ensure higher participation rates amongst women and older
workers;

Improvements of the business environment and a better equipment of individuals for
taking up entrepreneurial activities are needed to stimulate job creation by more and
more dynamic enterprises;

Framework conditions need to be developed to tap the potential for employment
growth in the services sector;

Sustained job creation calls for more employment-friendly taxation systems in which
the currently high burden on labour is shifted to alternative sources of fiscal revenue,
such as energy and the environment;

2

OJ C […],[…], p. […]

7

(17)

(18)

Local action for employment significantly contributes to the achievement of the
objectives of the European Employment Strategy;

The establishment of partnerships at all appropriate levels is key for the modernisation
of the organisation of work and the promotion of the adaptability of undertakings and
their employees;

(19) Gender gaps in the labour market, particularly affecting employment, unemployment
and pay, as well as gender segregation across sectors and occupations, require
comprehensive mainstreaming strategies and measures to reconcile work and family
life better;

Hereby Makes to the individual Member States the recommandations set out in the Annex.

Done at Brussels,

For the Council
The President

8

ANNEX

I.

BELGIUM

Problems in employment performance

The Belgian labour market
improved in 1999 with a particularly strong increase in the
employment rate and a fall in the unemployment rate to below the EU average. However,
employment growth slowed down and was below the EU average and long-standing
challenges are only gradually being met.

–

–

–

–

Inflows into long-term unemployment are high, as are stocks of
unemployed people, who accounted for 5.0% of the labour force in 1999.

long-term

Participation in employment is low amongst older people (12 points below EU
average) particularly those over 55, whose employment rate (24.7%) is still the
lowest in the Union.

The average tax burden on labour remains one of the highest in the EU.

Labour and skills shortages are emerging while regional disparities in unemployment
remain considerable.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: implementation of a preventive policy; revision
of the tax-benefit system; better co-operation between labour market authorities; reduction of
the tax burden on labour and the development of lifelong learning.

Belgium should therefore:

(1)

(2)

(3)

(4)

(5)

intensify its efforts to implement
the new individual approach towards all
unemployed young people, which aims to reach them before they have been
unemployed for 6 months; take decisive steps to design, and start implementing, an
appropriate early-intervention system for unemployed adults;

continue to examine disincentives to labour market participation within the tax and
benefit system, particularly those affecting older workers. Belgium should,
in
particular, closely monitor measures aiming at preventing the early withdrawal of
workers from work and consider strengthening disincentive measures in that field.

continue efforts to reinforce co-operation between the different
labour market
authorities in order to integrate and ensure co-ordination between multiple active
measures.

pursue further and closely monitor measures to reduce the tax burden on labour so as
to encourage employees to take up a job and employers to recruit, and closely
monitor the impact of the reduction of social security contributions;

develop and implement a comprehensive lifelong learning strategy to prevent skills
shortages and build a more solid foundation for the knowledge-based economy and
society.

9

II.

DENMARK

Problems in employment performance

The labour market situation remains very favourable with the highest employment rates in the
EU, both for men and women and one of the lowest unemployment rates. The key challenges
for Denmark still lie in the need:

–

–

to expand the current labour force, notably by encouraging employees to remain
active members of the workforce for longer and by reducing the number of people of
working age on social benefits.

to achieve a greater balance between women and men across occupations.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning:
the tax-burden on labour;
encouragement for employees to remain active members of the work force for longer;
integration of unemployed women and lessening the degree of gender segregation.

reduction of

Denmark should therefore:

(1)

(2)

(3)

pursue further and closely monitor implementation of on-going reforms to reduce the
overall fiscal pressure on labour, in particular, the tax burden on low incomes;

increase incentives to take up or remain in employment and continue to closely
monitor reform of early retirement and leave schemes in the light of the need to
increase labour supply.

continue efforts to develop a more substantial mainstreaming approach and a
levels of occupational gender
comprehensive strategy for reducing the current
segregation in the labour market.

10

III.

GERMANY

Problems in employment performance

As the German economy continues to recover, the reversal in employment trends is becoming
clearer, and unemployment has fallen further as the consequences of German unification
continue to feed through. Amongst the key challenges still facing Germany's labour market
are:

–

–

–

–

slow absorption of the job losses registered throughout most of the nineties (-
1.2 percentage points per year from 1991 to 1998); and large regional differences in
unemployment rates, the new Länder being particularly badly affected;

persistently high long-term unemployment, accounting for 4.4% of the labour force;

despite recent reforms, one of the highest overall tax burdens on labour in the EU;

the low proportion of people between 50 and 64 still in employment (about 37%),
which points to an additional unused employment potential, and the need for a more
vigorous comprehensive lifelong learning policy to boost the employability of the
labour force.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: the tax burden on labour; preventive policies;
the tax/benefit system,
lifelong learning and equal
opportunities.

for older workers;

in particular

Germany should therefore:

1.

2.

3.

4.

pursue further and closely monitor efforts to continue the reduction of the fiscal
pressure on labour, by reducing taxes and social security contributions. In particular,
labour costs should be reduced further at the lowest end of the wage scale, while
respecting the need for fiscal consolidation;

push ahead with full implementation of a preventative approach, focused on early
individual needs and prevent people from becoming long-term
action to meet
targets should be closely
unemployed. Progress towards common and national
monitored.

continue with a more detailed examination of obstacles and disincentives liable to
discourage labour market participation amongst all groups, especially older workers.
Changes in labour market participation rates amongst older workers should be
monitored, and further measures adopted to improve the employability of this group;

in the labour market,

tackle skills gaps
in
arrangements for continuous training in partnership with the social partners, and
through quantitative targets for lifelong learning. In this context, modern job profiles
for apprenticeship training must be developed, and measures are needed in schools to
ensure a better transition into modern jobs in the workplace.

through further

improvements

11

5.

pursue and strengthen the double-pronged approach coupling gender mainstreaming
and specific measures for equal opportunities, paying particular attention to the
impact of the tax and benefit system on women's employment, and taking action to
reduce the gender pay gap.

12

IV.

GREECE

Problems in employment performance

Greece has one of the lowest employment rates (55.5%) in the EU. Despite good employment
performance recently, unemployment has increased in the last few years largely as a result of
the growing labour force (women and immigrants) and it is still above the EU average. Long-
term unemployment has also increased. This situation illustrates the structural problems in the
labour market.

–

–

–

–

–

Youth, female and long-term unemployment rates remain high, above the EU
average.

There is a wide gender gap both in employment and unemployment.

Educational reforms include steps to develop lifelong learning, but there is no clear
overall strategy, while the quality of education and vocational training needs further
improvement.

High administrative burdens hinder business growth, particularly in start-up phase,
and employment in services is still low, despite improvements in certain areas.

Limited use of new technologies and delays in the modernisation of work
organisation, which hold back productivity growth, continue to be a matter for
concern.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning: the overall policy approach; prevention and
activation; gender mainstreaming and increased female participation; education and training;
the reduction of the administrative burden and the modernisation of work organisation.

Greece should therefore:

1.

4.

develop a strategic framework and a set of well structured policies for
implementation of the employment guidelines across the four pillars; 2.
decisive and coherent action to prevent young and adult unemployed people from
in compliance with guidelines 1 and 2,
drifting into long-term unemployment,
through swift reform of public employment services; the statistical system must be
upgraded, so that policy indicators on prevention and activation are available in good
time and progress can be effectively monitored;3. examine
detail
disincentives within the tax and benefit system liable to discourage labour market
participation, particularly amongst women, with a view to progressively raising
employment rates amongst women and reinforcing gender mainstreaming;

greater

take

the

in

adopt a comprehensive strategy on lifelong learning, including the setting of targets,
and further improve the quality of education and vocational training in order to
enhance the skills of the labour force; and give more support for continuous training,
in particular by involving social partners more actively;

13

5.

6.

adopt and implement a coherent strategy aimed at significantly reducing the
administrative burden involved in setting up a new business, in order to stimulate
entrepreneurship and fully exploit the job creation potential of the service sector;

encourage a partnership approach and promote concrete commitments by the social
partners at all appropriate levels on the modernisation of work organisation, with the
aim of making undertakings more productive and competitive while achieving the
required balance between flexibility and security.

14

V.

SPAIN

Problems in employment performance

Spain has been experiencing positive economic and employment growth over recent years,
but serious challenges remain.

–

–

–

–

–

rate,

though on the rise,

the employment
in Europe.
Unemployment is still high at 15.9% despite a significant decline since 1996. Long-
term unemployment has also declined but women and older workers remain
particularly badly affected by unemployment.

is among the lowest

The percentage of temporary employment is high; most of these temporary jobs are
of short duration and tend to be done predominantly by women and young people.

Regional disparities are wide, while geographical mobility is very low.

Although the female employment rate has been increasing, it is still the lowest in
Europe (37.6%). At 30.3%, the employment gender gap is the widest in Europe.
Unemployment amongst women is running at 23.1%.

Less than 35% of the population aged 25-64 have completed upper-secondary level
education. Early school-leaving is widespread and participation in education and
training during adulthood is particularly low. There is no comprehensive approach to
lifelong learning.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: prevention and activation policies; improvement
of the statistical monitoring system; gender mainstreaming; lifelong learning; adaptability and
tax and benefit systems.

Spain should therefore:

1.

2.

3.

4.

continue with modernisation of the Public Employment Services to improve its
efficiency, and step up implementation of the preventative approach so as to cover all
potential beneficiaries. Such efforts should include the completion of the statistical
monitoring system by early 2001;

do more to support mainstreaming of equal opportunities in order to push the female
employment rate up towards the EU average, in a timeframe that adequately reflects
the urgency of such measures;

develop and implement a coherent strategy on lifelong learning which includes
targets and encompasses initial and continuing education and training so as to
increase the levels of educational attainment and participation of adults in education
and training activities. Special attention should be given to the problem of early
school leavers;

pursue efforts, in partnership with the social partners, to adapt employment relations,
including labour regulations, and to develop new forms of work organisation, by

15

ensuring an appropriate balance between flexibility and security for the whole labour
force;

5.

examine the incentives/disincentives emerging from the tax and benefit systems with
a view to increase participation in the labour market and stable employment.

16

VI.

FRANCE

Problems in employment performance

The employment situation continues to improve. However, major structural problems remain.

–

–

–

Participation amongst the 55-64 age group remains well below the EU average
(28.3% against 35.9%) and 1999 saw no change in the downward trend.

The fall in unemployment was modest and, at 11.3%, the unemployment rate is still
above the EU average of 10.8%.

Taxes on labour are high.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning: older workers in active life; the reduction of
fiscal pressure on labour; prevention and lifelong learning.

France should therefore:

(1)

(2)

(3)

(4)

(5)

strengthen efforts to curb older workers' early withdrawal from working life by
developing a more comprehensive approach involving the social partners.

pursue and evaluate policy measures designed to reduce the fiscal pressure on labour,
particularly measures with an effect on unskilled and low-paid workers;

continue with implementation of individualised and early intervention schemes for
the unemployed, and make greater use of such schemes to prevent both youth and
adult unemployment;

pursue efforts to modernise work organisation and monitor closely the net effects of
the implementation of the 35-hour week legislation; take steps to increase the
efficiency of the continuous training system and to promote a comprehensive lifelong
learning strategy;

pursue the implementation of coherent strategies, encompassing regulatory, fiscal
and other measures, designed to reduce the administrative burden on companies, and
evaluate the impact of on-going efforts to create new job opportunities for young
people.

17

VII.

IRELAND

Problems in employment performance

Ireland’s economic and employment performance has been exceptional.
the
employment rate overtook the European Union average. Furthermore, the unemployment rate
has continued to fall for all groups. These developments indicate a further tightening of the
labour market. Some structural problems still exist however.

In 1999,

–

–

–

As is the case for some other Member States, avoiding labour market shortages and
associated wage inflation pressures is a core problem for Ireland.

The participation rate for women remains low and the employment gender gap has
only slightly improved between 1998 and 1999.

As a result of the growing labour market shortages it is important for Ireland to
invest in education and training for the unemployed and employed alike. It is one of
the few countries which saw an increase in the percentage of unemployed people
taking part in training. At the same time, the number of employed in training remains
one of the lowest in the Union.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning: the participation of women in the labour market
and the development of a strategy in relation to in-company training and lifelong learning.

Ireland should therefore:

(1)

(2)

push ahead with its comprehensive strategy aimed at increasing the proportion of
women in employment, removing tax barriers and increasing child care places; and
take action to reduce the gender pay gap;

pursue and strengthen efforts to sustain productivity growth and upgrade skills and
qualifications in the workforce, through increased emphasis on in-company training
and the further development of lifelong learning, including the setting of targets.

18

VIII.

ITALY

Problems in employment performance

Employment increased during 1999, principally due to the adoption of fiscal incentives and
flexible working arrangements. However, these improvements leave the structural problems
of the Italian labour market virtually untackled.

–

–

–

–

–

–

The low employment rate of 52.5% is some 10 percentage points below the EU
average. The employment rate for older people is particularly low at 27.5%.

The female employment rate rose more sharply than the male rate, but, at 38.1 %, it
is among the lowest in the EU.

Unemployment fell to 11.3% but remains 2 percentage points above the EU average.
At 12.4% the unemployment rate amongst 15-24 year-olds was almost 4 percentage
points higher than the EU average. Long-term unemployment
improved only
marginally from 7.1% of the labour force in 1998 to 6.9% in 1999, but has increased
as a proportion of total unemployment.

Wide gender gaps are characteristic of the labour market – roughly 30 percentage
is almost double the male
points – and female unemployment, at 15.6%,
unemployment rate of 8.7%.

Regional disparities remain significant with an unemployment rate of about 6.5% in
the Centre-North and 22% in the South.

43.2% of the workforce has completed upper secondary level education, compared
with the EU average of 42.5%, but only 6.1% of adults were involved in education or
training, compared to an EU average of 8.7%.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: the policy mix across the four pillars; taxand
benefit systems; activation and prevention; gender mainstreaming and gender gaps and
lifelong learning.

Italy should therefore:

1.

2.

3.

address the imbalance in the policy mix across the four pillars, by effectively
implementing employability policies, pursuing the modernisation of work
organisation, including the regulatory framework and developing a comprehensive
strategy for equal opportunities;

continue the implementation of the reform of pension and other benefit systems in
order to reduce the outflow from the labour market into pensions and other schemes;
and pursue efforts to reduce the tax burden, especially on low-paid workers.

take effective action to prevent young and adult unemployed people from drifting
into long-term unemployment: full implementation of the PES reform across the
country and of the Employment Information System should be speeded up to avoid

19

further delays; and efforts to upgrade the statistical monitoring system should be
continued, so that policy and output indicators are available in good time.

4.

5.

pursue efforts to provide women with more and better employment opportunities, so
as to narrow the wide gender gaps in employment and unemployment. Gender
mainstreaming should continue.

adopt and implement a coherent strategy on lifelong learning, including national
targets; social partners should be mobilised to provide more training opportunities for
the work force.

20

IX.

LUXEMBOURG

Problems in employment performance

Luxembourg enjoyed good labour market conditions in 1999, supported by strong economic
growth and the highest rise in the employment rate in the EU (4.8 percentage points). The
in the EU (2.3%). Some
unemployment rate continued to fall and remains the lowest
structural problems can be identified though.

–

–

–

–

The overall national employment rate is very low despite a very good employment
situation with a large number of cross-border workers. The rates are especially low
for workers over 55 (26.3%) and for women (48.5%), although both figures have
risen since 1998;

The employment gender gap is one of the widest in the EU, at 25.9 percentage
points;

The domestic supply of qualified people is insufficient;

The proportion of the adult working population taking part in continuous education
and training is still low (5.3%).

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning:
the social dialogue, participation of older
workers and women in the labour market and life long learning.

Luxembourg should therefore:

1.

2.

3.

encourage the social partners to foster a constructive dialogue, as this
is
indispensable for the success of the employment policies outlined in the National
Action Plan;

increasing labour-market
pursue efforts and implement measures aimed at
participation rates amongst older workers and women, including a review of tax and
benefit systems; and take action to promote gender mainstreaming;

continue with implementation of the framework law on continuous vocational
training and work on policy development and implementation, including the setting
of targets, so as to increase the participation rates in education and training.

21

X.

THE NETHERLANDS

Problems in employment performance

The Netherlands enjoyed healthy employment growth in 1999 and employment rates are
clearly above the EU average. The unemployment rate continued to fall in 1999, to 3.3%,
below the EU average. There are still some structural problems however.

–

–

Although long-term unemployment is falling, there are persistent problems with
specific groups, especially low-skilled workers, older workers and ethnic minorities.

Large numbers of working-age people are kept out of the labour market by disability
and other welfare benefits.

Labour market shortages and associated wage inflation pressures are emerging. After due
analysis, it appears that further efforts are required in response to the employment guidelines
and recommendations concerning: the tax and benefit systems and the statistical monitoring
system.

The Netherlands should therefore:

(1)

(2)

continue to co-operate with the social partners, to reduce disincentives in the benefit
system liable to discourage people from participating in the open labour market, in
particular people receiving disability benefits, and generate poverty traps;

continue to upgrade the statistical system so that policy and output indicators are
available early enough to be used for monitoring and evaluating on-going
implementation of the preventive approach.

22

XI.

AUSTRIA

Problems in employment performance

The Austrian labour market’s performance improved last year, when the overall employment
rate reached 68.2% (59.7% for women). That figure is close to the 70% target established by
the Lisbon European Council and above the EU average. Unemployment was reduced to
3.7% in 1999, with youth and long-term unemployment among the lowest in the EU. Despite
the overall good performance, structural problems remain in the labour market.

–

–

–

The overall tax burden is above average and fiscal pressure on labour increased in
the period from 1994 to 1998. The forecast reduction in non-wage labour costs of
around 0.4 percentage points of GDP by 2003 is only a modest step forward.

There is still a significant gender gap in both employment and unemployment,
despite the fact that the employment rate for women is higher than the EU average.

The employment
Unemployment amongst the over-50s remains high, at double the average rate.

rate for older workers is below the EU average figure,

After due analysis, it appears that more efforts are required in response to the employment
employability, gender
guidelines
mainstreaming and taxation on labour.

concerning: older workers'

and recommendations

Austria should therefore:

1.

2.

3.

pursue efforts to meet its commitment to reforming early retirement schemes and
other measures for older people to stay in work longer so as to achieve a significant
rise in the employment rate of older workers;

pursue a comprehensive strategy to narrow the still significant gender gap in
employment, for instance through measures that help reduce the pay gap and
facilitate the reconciliation of work and family life;

do more to significantly reduce the heavy tax burden on labour, in particular by
focusing on groups who face problems in the labour market.

23

XII.

PORTUGAL

Problems in employment performance

The employment situation further improved in 1999, confirming the previous year's positive
trend. Unemployment is among the lowest in the EU, and long-term unemployment has fallen
fast. However, the labour market suffers from structural weaknesses which require action:

–

–

–

–

The average skill level in the work force is low. Only 21.2% have completed at least
upper-secondary education compared to the EU average of around 60%. At 3.6%,
participation in education and training is also below the EU average of 8.7% and
45% of young people aged 18-24 left school early.

The potential for creating jobs in services is considerable, as can be seen from the
service-sector employment rate of 36,2%, but no coherent strategy has been
developed to foster entrepreneurship.

A strong input from the social partners is needed to address the main challenges
facing the Portuguese labour market,
the
modernisation of work organisation and employment relations.

the low skill

in particular

level,

Gender segregation increased from 1997, and is one of the highest in terms of
sectors.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: education and training; reduction of the
administrative burden on companies; the partnership approach; gender segregation and access
to childcare.

Portugal should therefore:

1.

2.

3.

4.

develop and implement a comprehensive lifelong learning strategy which also
addresses the problems of early school leaving, sets clear objectives and devises
appropriate means. Particular attention should be devoted to the quality of education
and training in order to avoid skill shortages;

pursue efforts to reduce the administrative burden on companies, to exploit the job
creation potential of the service sector and to promote the creation of medium and
highly skilled jobs in the services sector;

pursue efforts to implement a partnership approach and promote concrete
commitments from social partners, in particular in the areas of modernisation of
work organisation, adaptation of employment relations, including labour regulations
and continuous training.

pursue efforts to reconcile family and working life by extending childcare facilities,
and examine ways to tackle sectoral gender segregation.

24

XIII.

FINLAND

Problems in employment performance

While Finland has maintained strong economic growth over the past five years some major
structural problems remain.

–

–

–

–

The overall unemployment rate is still high at 10.2%, being predominantly structural.
Youth unemployment and long-term unemployment for those over 50 years old
remain a major concern.

Through recent initiatives, Finland has made progress in lightening the tax burden on
labour. However it remains heavier than the EU-average.

Finland faces skills shortages in several sectors (both in high and low-skilled jobs)
and there is a general need to mobilise the labour force by focusing on quality active
labour market policies;

Regional disparities in employment remain considerable.

After due analysis, it appears further efforts are required in response to the employment
guidelines and recommendations concerning: tax and benefit schemes, the tax burden on
labour and occupational and sectoral segregation in the labour market.

Finland should therefore:

1.

2.

3.

continue to review existing tax and benefit schemes, in order to increase incentives to
work and to recruit workers, and focus life long learning policies on older people, to
retain them as active members of the workforce for longer.

pursue further recent policy initiatives aimed at reducing the tax burden on labour,
with due consideration for prevailing economic and employment conditions in
Finland.

monitor and assess, in the context of a gender mainstreaming approach, the current
levels of occupational and sectoral segregation in the labour market.

25

XIV.

SWEDEN

Problems in employment performance

Sweden has one of the highest employment rates in the EU. It has recently improved its job
creation performance, reducing unemployment to 7.2% in 1999. However, a number of
structural problems remain in the labour market.

–

–

–

–

The tax burden on labour is still very heavy, especially for the relatively unskilled
and low paid. Sweden continues to have the highest tax rates on employed labour in
the EU – 52.7% in 1998 compared to the EU average of 39.2%.

A large number of working age people are dependant on benefits.

Skill shortages, particularly at regional level, have become a major factor hampering
economic growth and regional development.

The current level of occupational and sectoral segregation between men and women
remains an issue of concern, despite well developed equal opportunity policies.

After due analysis, it appears that further efforts are required in response to the employment
the tax burden on labour, and gender
guidelines and recommendations concerning:
mainstreaming.

Sweden should therefore:

1.

2.

3.

do more, including the setting of a national target, to reduce significantly the high tax
burden on labour, in particular for those with a low take-home pay from work.

pursue further policy initiatives to further adapt the benefit and assistance schemes,
so as to provide adequate incentives to take up jobs.

monitor and assess current levels of occupational and sectoral segregation in the
labour market, as part of the gender mainstreaming reforms begun in 1999.

26

XV.

UNITED KINGDOM

Problems in employment performance

The UK enjoyed healthy employment growth in 1999 and the employment rates for men and
women are clearly above the EU average. The unemployment rate continued to fall in 1999,
to 6.1%, below the EU average. Yet, important structural problems persist:

–

–

–

–

–

Inflows into long term unemployment amongst young people and adults (17% and
11% respectively) still exceed those of the best performing Member States.

Although long-term unemployment
is falling, there are still persistent problems
concentrated in specific groups, especially within households with no-one in work,
amongst disadvantaged groups, and in a number of geographical areas. Inactivity
among lone parents is still a problem.

Some sectors, particularly information technology, suffer from a skills gap. The low
level of basic skills is a generalised problem in the UK.

Though diminishing, the gender pay gap remains high compared to the EU average.
The gender gap in employment attributable to the impact of parenthood is also the
highest in the EU, suggesting a need for sufficient and affordable childcare.

The current levels of occupational and sectoral segregation between men and women
are higher than the EU average.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning: adaptability, the gender pay gap, childcare
provision, a preventive strategy for the unemployed and lifelong learning.

The United Kingdom should therefore:

(1)

(2)

(3)

(4)

improve the balance of policy implementation of the Guidelines, so as to strengthen
and make more visible efforts to modernise work organisation, in particular by
fostering social partnership at all appropriate levels.

pursue efforts to reduce the gender pay gap and take action to improve childcare
provision, with a view to making it easier for men and women with parental
responsibilities to take employment. Special attention should be given to the needs of
lone parents.

reinforce active labour market policies for the adult unemployed before the 12 month
point so as to increase the number of people benefiting from active measures, and
supplement the support provided by the Jobseekers' Allowance Regime.

intensify efforts to implement initiatives on life long learning, particularly those
aimed at increasing the general level of basic skills, demonstrating how access will
be ensured for those groups traditionally reluctant to take up the opportunity, or
unable to find suitable provision.

27