Recommendation for a Council Recommendation on the Implementation of Member States' Employment Policies
Date: 2001-09-12
Institutions: European Commission
Subjects: EU Member State, employment policy, fight against unemployment

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.9.2001
COM(2001) 512 final

Recommendation for a

COUNCIL RECOMMENDATION

ON THE IMPLEMENTATION OF MEMBER STATES' EMPLOYMENT POLICIES

(presented by the Commission)

EXPLANATORY MEMORANDUM

This recommendation from the Commission to the Council, drawn up in accordance with
Article 128§4 of the Treaty, is part of a package also including the draft Joint Employment
Report for 2001 and the proposal for a Council decision on the Employment Guidelines for
2002. Once adopted by the Council as a recommendation on the implementation of Member
States' employment policies, it will focus policy action on priority areas and provide Member
States with support and guidance in implementing the Employment Guidelines.

The response to the 2001 recommendations

the employment package of 1999. The last

Recommendations on Member States' employment policies were adopted for the first time on
set of
14 February 2000 as part of
recommendations was adopted by the Council on 19 January 2001,
together with the
Employment Guidelines for 2001. Whereas the majority of the 2001 recommendations were
updates of the 52 recommendations of the previous year, others put stronger emphasis on the
need for Member States to develop lifelong learning strategies and to improve their policy
mix under the four pillars of the Employment Guidelines, which led to an increase in the
number of recommendations to 58.

The National Action Plans, submitted by Member States in May 2001 and assessed in the
draft Joint Employment Report for 2001, give a picture of how these recommendations, as
well as the Employment Guidelines, have been put into practice. Although Member States'
responses to the recommendations have generally been constructive, they reflect different
stages of
implementation and compliance with the Employment Guidelines. Overall,
important weaknesses have still to be addressed and structural reforms of European labour
markets need to be further pursued, especially in the light of the less favourable economic
prospects.

The recommendations for 2002

The proposed recommendations, which Member States should implement after adoption by
the Council and report upon in their National Action Plans for 2002, draw on the findings
from the Commission's examination of the National Action Plans, as described in the draft
Joint Employment Report for 2001. Altogether the examination of the National Action Plans
led to 57 proposed recommendations, a number similar to last year's both in total number and
by Member State1 :

–

–

–

1

2

the majority of the recommendations (48) have been updated on the basis of progress
made;

nine recommendations are entirely new2;

in only four cases were there grounds for withdrawing the recommendations3 made
last year.

Denmark would have one recommendation less (on gender mainstreaming), as well as Portugal (due to
the merging of two recommendations of 2001) ; Ireland would receive an additional recommendation
on regional disparity.
The ones in the field of regional disparities and on the effectiveness of active labour market policy –see
below-; gender mainstreaming in Greece, and lifelong learning in Austria

2

The order of presentation of the new recommendations for each Member State does not reflect
any order of priority. Since the majority of recommendations are updates of last year's, these
are presented in the same order (which is also the order in which they were assessed in the
draft Joint Employment Report) ; the new recommendations are normally to be found at the
end of the list.

As required by Article 126 of the Treaty,
the Commission has taken care to ensure
consistency with the Broad Economic Policy Guidelines in drawing up the proposed
recommendations.

Although comparisons from year to year are difficult because of the gradual change in
substance of some recommendations, some thematic trends emerge clearly:

–

–

–

–

–

–

3

4

5

6

7

8

recommendations in the field of the policy mix have been made more specific to help
address country-specific weaknesses, such as the low employment rates (compared to
the Lisbon and Stockholm targets)4;

recommendations focused on taxation and benefits, which previously aimed at
increasing the participation of particular groups such as older workers, now generally
address a broader set of target groups including older workers, women and
immigrants in order to contribute to an overall increase in labour supply5;

the recommendations on lifelong learning have been reviewed by focusing on
specific problems such as the skills gap and the absence of a comprehensive and
coherent approach in several Member States;

gender-related recommendations have been made more specific by focusing on
particular problems, notably the provision of care facilities6

several new recommendations focus on the problem of regional disparities, often in
the context of bottlenecks which were the subject of a new Guideline in 20017;

a number of recommendations put stronger emphasis on increasing the effectiveness
of active labour market policies8.

This is the case for the recommendations on gender mainstreaming in Denmark; social partnership in
Luxembourg; statistical monitoring in the Netherlands; and fiscal pressure in Finland (where tax
reductions have been decided upon for 2002)
see Italy and Greece
e.g. Belgium, Denmark, Ireland, Luxembourg, Netherlands, Sweden
e.g. Germany, Greece, Spain, Ireland, Italy, Austria, Portugal,
Belgium, Spain, Ireland, and Finland (see also Germany and Italy)
Germany, Finland, Sweden

3

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
Article 128(4) thereof,

Having regard to the Commission recommendation of 12 September 2001,

Having regard to the joint opinion of the Employment Committee and the Economic Policy
Committee9

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

9

10

The Council adopted the employment guidelines for 2001 by the Decision of 19
January 200110.

The Lisbon European Council on 23 and 24 March 2000 agreed on a comprehensive
strategy towards employment, economic reform and social cohesion and made a
commitment to creating the conditions for full employment ; targets for employment
rates to be reached by 2010 were accordingly set and further complemented by the
Stockholm European Council on 23 and 24 March with intermediate targets for 2005
and a new target for increasing the employment rate among older women and men by
2010.

The Nice European Council on 7, 8 and 9 December approved the European Social
Agenda, which states that the return to full employment involves ambitious policies in
terms of increasing employment rates, reducing regional gaps, reducing inequality and
improving job quality.

The Council adopted the recommendation on the Broad Economic Policy Guidelines
on 15 June 2001, and the Amsterdam European Council of 16 and 17 June 1997
agreed on a Resolution on a Stability and Growth Pact setting commitments by
Member States.

Member States should implement this recommendation in a way which is consistent
with the Broad Economic Policy Guidelines, and in particular the labour market part
thereof.

The 2001 Joint Employment Report, prepared jointly with the Commission, describes
the employment situation in the Community and examines the action taken by

(Joint nature of the opinion to be confirmed)
OJ L 22 of 24.1.2001, p. 18

4

(7)

(8)

(9)

Member States in implementing their employment policy in line with the Employment
Guidelines and the Council Recommendation of 19 January 2001 on the
implementation of Member States' employment policies 11.

the
The Council considers it appropriate,
implementation
to make
States'
of
recommendations. They should be used sparingly, concentrate on priority issues and
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
Recommendation of 19 January 2001. In the assessment of the impact of these
policies, the multi-annual perspective of the Employment Guidelines should be taken
into account.

(10) Member States should articulate their response to the Guidelines under the four pillars
in a coherent overall strategy aiming at full employment, recognising Member States'
different starting positions, the development and implementation of comprehensive
and coherent strategies for lifelong learning and a comprehensive partnership with the
social partners; due consideration should be given to gender mainstreaming and the
need to reduce regional disparities and evaluate progress under all four pillars on the
basis of indicators.

(11)

In order to influence the trend in youth and long-term unemployment, all young people
should have the opportunity to gain entry to the world of work before they have been
unemployed for six months and all the adult unemployed should be offered a new start
before they have been unemployed for twelve months.

(12) Member States should pursue the modernisation of their Public Employment Services;

(13)

(14)

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.

initial, secondary and tertiary education,

The development and implementation of lifelong learning, covering the development
of systems for
further education and
vocational training and the setting of national targets, is crucial to the development of
a competitive and dynamic knowledge-based society and requires the active
commitment of all actors concerned, including public authorities, the social partners
and individuals, with a relevant contribution from civil society.

(15) A coherent set of policies which promote social inclusion by supporting the integration
of disadvantaged groups and individuals into the world of work, and combat
discrimination in access to, and on the labour market is called for.

11

OJ L 22, 24.1.2001, p. 27.

5

(16)

(17)

(18)

(19)

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.

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

the
The establishment of partnerships at all appropriate levels is crucial
modernisation of the organisation of work and the promotion of the adaptability of
undertakings and their employees.

for

(20) 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 better reconcile work and
family life.

HEREBY ISSUES to the individual Member States the recommendations set out in the
Annex.

Done at Brussels,

For the Council
The President

6

ANNEX

I. BELGIUM

Problems in employment performance

The Belgian labour market improved in 2000 with an increase in the employment rate to
60.5%, still markedly below the Lisbon target of 70%. A further drop in the unemployment
rate to 7% (below the EU average of 8.2 %) was recorded and employment growth picked up
to match the EU average (1.8%). However, long-standing challenges are only gradually being
met.

–

–

–

–

–

–

Inflows into long-term unemployment are high and, despite a further decrease, the
stock of long-term unemployed people - 3.8% of the labour force in 2000 –is greater
than the EU average.

Participation in employment amongst older workers is still the lowest in the EU (at
26.3%, 11.4 points below the EU average), while the rate amongst women, at 51.5%,
remains below the EU average.

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

Work organisation needs to be further modernised with the involvement of the social
partners.

Labour and skills shortages are apparent and a fully coherent and comprehensive
lifelong learning strategy is not yet in place.

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, notably
for adults; increasing the employment rate amongst older workers and women; reduction of
the tax burden on labour; the development of lifelong learning; and increasing labour mobility
between regions.

Belgium should therefore:

1.

2.

3.

reduce inflows into long-term unemployment by taking decisive steps to implement
an appropriate early intervention system for unemployed adults; examine the impact
of the new personalised approach towards all unemployed young people;

take stronger action with a view to increasing the overall employment rate, notably
for women and older workers. Belgium should, in particular, examine the impact of
recent measures and consider further measures aimed at preventing the early
withdrawal of workers from work, as well as incentives enhancing the capacity of
older workers to remain at work;

pursue further measures to reduce the tax burden on labour so as to encourage
employees to take up work and employers to create new jobs, and closely monitor
the impact of measures already taken, including those related to the reduction of
social security contributions;
intensify efforts with the social partners to better
combine security with greater labour market flexibility;

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4.

5.

in cooperation with all actors concerned,

reinforce,
the development and
implementation of a comprehensive lifelong learning strategy to prevent skills
shortages, to raise the attractiveness of technical and vocational education and to
build a more solid foundation for the knowledge-based economy and society;

take concerted action to increase labour mobility between regions through the
provision of labour market information and further improvements to the coordination
of labour market policies.

II. DENMARK

Problems in employment performance

The labour market situation remains very favourable with the highest female employment rate
in the EU (71.6 %), one of the highest male employment rates (80.8 %) and one of the lowest
unemployment rates (4.7 %). While Denmark exceeds the Lisbon targets, key challenges for
Denmark are:

–

–

The overall tax burden which is still high. The small differences between benefits
and low wage incomes have limited so far the effects from tax reforms on work
incentives for low income groups.

The tightening of the labour market in 2000, while a considerable part of the working
age population is on early retirement or on social benefits, and the employment rate
remains low amongst migrant workers.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning: the reduction of the tax burden; and increasing
labour market participation.

Denmark should therefore:

1.

2.

pursue and closely monitor implementation of on-going reforms to reduce the overall
fiscal pressure on labour, in particular through lowering the high marginal effective
tax rates on low and medium income earners;

pursue incentives to encourage yet more people to take up employment, particularly
through further development of the inclusive labour market and further efforts
towards the integration of migrant workers.

III. GERMANY

Problems in employment performance

Positive overall employment and unemployment trends over recent years were confirmed in
2000. While the overall employment rate of 65.3 % exceeds the EU average, it remains 5
percentage points below the Lisbon target. The key challenges still facing Germany's labour
market are:

–

Relatively slow decreases in long-term unemployment, which still accounts for 4%
of the labour force, with persistent regional differences, notably in unemployment
rates, the new Länder being particularly badly affected. In addition, the outcomes of
the active labour market policies in the Eastern part of the country are mixed.

8

–

–

–

–

The employment rate of people aged 55-64, at 37.3%, which decreased slightly to
below the EU average.

The need for modernising work organisation and for a continuing substantial lifelong
learning effort to overcome skill gaps and to enhance generally the qualification level
of the labour force.

Despite on-going reforms, the still high overall tax burden on labour.

One of the highest gender pay gaps in the EU and relatively few childcare facilities.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: preventive policies; increasing older people's
labour market participation;
the tax burden on labour; and equal
opportunities.

lifelong learning;

Germany should therefore:

1.

2.

3.

4.

5.

in order to substantially reduce long-term unemployment, devote additional effort to
the prevention of inflows into long-term unemployment, particularly in the Eastern
part of the country and in respect of ethnic minorities and migrant workers, and
increase the effectiveness of active labour market policies;

continue to remove obstacles and disincentives liable to discourage labour market
participation amongst older workers and other groups at risk; examine and report on
the effectiveness of initiated and agreed actions and adopt further measures to
improve the employability of workers above 55 years of age;

Take measures, where appropriate in the framework of the "Alliance for Jobs", to
make work contracts and work organisation more flexible ; tackle skill gaps in the
labour market through the implementation of agreed improvements for initial and
continuing training, and through further developing a comprehensive strategy for
lifelong learning supported by qualitative and quantitative targets. The social partners
and the Government, each in its field of competence, are invited to strengthen their
efforts to raise the quality of continuing training and to set up systems for the
accreditation and recognition of formal and non-formal learning;

pursue efforts to reduce taxes and social security contributions at the lowest end of
the wage scale to make work pay and to enhance viable and acceptable employment
prospects; examine and report on the impact of measures undertaken;

strengthen action to reduce the gender pay gap and address the impact of the tax and
benefit system on women's employment; promote the availability of childcare
facilities and more family-friendly working times and school
times. The
implementation of these policies, involving the respective actors at all levels, should
be monitored with appropriate verifiable indicators and targets.

IV. GREECE

Problems in employment performance

Greece still has one of the lowest employment rates in the EU (55.6% overall and 40.9 % for
women, well below the Lisbon targets). Unemployment has now stabilised at 11% - well

9

above the EU average - with growth in employment outweighed by long-term structural
increases in the labour force. Long-term unemployment has been reduced to 6.2% but remains
significantly higher than the EU average. This situation reflects the following structural
problems in the labour market:

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–

–

–

–

–

The low employment rate, while there is still unexploited job-creation potential in its
SME and services-based economy.

Against the background of high youth, female and long-term unemployment, the
public employment services do not deliver yet a preventive and personalised
approach. Despite efforts to monitor flow statistics, a comprehensive system is not
yet available.

In the context of low employment rates, the tax system as well as rules on pension
entitlements should be reviewed in order to increase labour supply.

Educational reforms include steps to develop lifelong learning, but there is still no
clear overall strategy, and education and vocational training systems need further
improvement.

There is room for further improvement in the modernisation of work organisation,
including through the social partners' contribution.

There are wide gender gaps in employment and unemployment which should be
addressed inter alia by increased provision of childcare facilities.

After due analysis, it appears that further efforts are required in response to the employment
the overall policy approach; prevention of
guidelines and recommendations concerning:
unemployment; tax-benefit reform; lifelong learning; the modernisation of work organisation;
and gender mainstreaming.

Greece should therefore:

1.

2.

3.

4.

improve the strategic framework, in particular by developing a set of well co-
ordinated and balanced policies for the implementation of the employment guidelines
across the four pillars with a view to increasing employment and the employment
rate, in particular for women and young people;

speed up the restructuring of the Public Employment Services and take decisive and
coherent action to prevent young and adult unemployed people from drifting into
long-term unemployment through inter alia swift implementation of the personalised
approach; upgrade the statistical system so that policy indicators on prevention and
activation are available in good time and progress can be effectively monitored;

examine and eliminate distortions arising from labour taxes and pension entitlements,
thus improving incentives to work;

further develop and implement a comprehensive strategy on lifelong learning,
including the setting of targets; increase investment in and further improve education
and vocational training systems, including apprenticeship, in order to enhance the
skills of the labour force and meet the needs of the labour market.

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5.

6.

ensure full implementation of the recent labour market reform package and build on
these efforts by promoting concrete commitments by the social partners at all
appropriate levels on the modernisation of work organisation, while achieving a
balance between flexibility and security;

take effective and comprehensive action to increase the employment rate for women
and to reduce the employment and unemployment gender gaps. To this end, care
facilities for children and other dependants should be extended.

V. SPAIN

Problems in employment performance

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

–

–

–

–

–

Unemployment is still very high at 14.1%, despite a significant decline since 1996.
Long-term unemployment has also declined, but women remain particularly badly
affected by unemployment.

The employment rate of 55 %, though on the increase, is among the lowest in the EU
and far below the Lisbon target. Although the female employment rate has been
steadily increasing, at 40.3% it is still one of the lowest in the EU. Gender gaps in
both employment and unemployment (29.6 and 10.8 percentage points respectively)
are among the highest in the EU.

While levels of educational attainment and participation in further learning are low, a
fully coherent and comprehensive approach to lifelong learning is not yet in place.

Employment under fixed term contracts is high; most of these temporary contracts
are of short duration and tend to be taken predominantly by women and young
people.

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

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: activation and prevention of unemployment;
gender mainstreaming; lifelong learning; adaptability; and regional disparities.

Spain should therefore:

1.

2.

3.

complete the modernisation of the Public Employment Services so as to improve its
efficiency, and step up implementation of the preventive approach, particularly with
regard to the adult unemployed, so as to cover all potential beneficiaries. These
efforts should include the completion of the statistical monitoring system;

take effective and comprehensive action to increase the overall employment rate and
to close gender gaps in employment and unemployment. As part of a gender
mainstreaming approach, targets for the provision of care facilities for children and
other dependants should be adopted and implemented;

vigourously complete reforms on vocational training to encompass a comprehensive
and coherent strategy on lifelong learning, including the setting of verifiable targets,

11

with a view to increasing the levels of educational attainment and the participation of
adults in education and training, addressing the low level of skills and developing
non-formal learning;

further modernise the labour market and work organisation with the active
involvement of the social partners with a view to reducing the high share of fixed-
term contracts, and increasing the use of part-time contracts;

reduce regional disparities in employment and unemployment by encouraging
conditions conducive to employment creation in regions lagging behind and by
diminishing obstacles to labour mobility.

4.

5.

VI. FRANCE

Problems in employment performance

The employment situation continues to improve. At 62.2%, the overall employment rate is
close to the EU average, whilst
the female employment rate exceeds the EU average.
However, significant structural problems persist:

–

–

–

–

–

The employment rate of people aged 55-64 rose in 2000 but remains considerably
lower than the EU average (29.7% compared to 37.7%).

Despite some progress, the marginal effective tax rate is still relatively high.

The unemployment rate continues to exceed the EU average (9.5% compared to
8.2%) thus necessitating the pursuit and evaluation of programmes that implement
the preventive approach.

The modernisation of work organisation needs to be pursued ; the implementation of
working time legislation constitutes an important new challenge for
small
enterprises.

Lifelong learning must be promoted and the social dialogue must be strengthened in
this area.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning:
increasing older people's labour market
participation; efforts to reduce the tax burden on labour; the prevention of unemployment; the
implementation of legislation on the 35 hour working week; and lifelong learning.

France should therefore :

1.

2.

3.

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

building on recent tax-benefit reforms, continue implementing and monitoring the
impact of policy measures designed to encourage workers to seek and remain in
work, particularly measures with an effect on low-skilled and low-paid workers;

pursue implementation of personalised and early intervention schemes for the
unemployed; examine the effectiveness of and report on the implementation of the

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4.

5.

Personalised Action Plans for a New Start initiative; evaluate the medium term
impact of on-going efforts to create new job opportunities for young people;

intensify efforts to modernise work organisation with a view to better combining
security with greater adaptability to facilitate access to employment ; closely monitor
the net effects of the implementation of the 35 hour working week legislation,
especially on small businesses;

pursue efforts within the framework of the social dialogue to improve the efficiency
of the continuous training system and to promote a comprehensive lifelong learning
strategy.

VII. IRELAND

Problems in employment performance

Ireland's economic and employment performance has been very good. In 2000 the overall
employment rate at 65.1 % was higher than the EU average for the second year running and
the already low unemployment rates continued to fall for all groups. These developments
indicate a further tightening of the labour market and some structural problems still exist:

–

–

–

Whilst labour supply shortages have increased in recent years and have fuelled wage
inflation pressures, the employment rate for women (despite recent increases) has
only just reached the EU average (54%) and the gender gap in employment remains
high.

In this context, further effort is also needed to boost the low rates of participation in
further learning, especially amongst those in employment.

Considerable regional disparities – in employment and unemployment rates but also
educational levels and earnings – risk impeding sustained and balanced development.

it appears that continued efforts are required in response to the
After due analysis,
employment guidelines and recommendations concerning:
increasing labour market
participation rates, particularly amongst women; lifelong learning, especially in-company
training; and regional disparities.

Ireland should therefore:

1.

2.

pursue further its comprehensive strategy to increase labour supply and employment
rates. Particular efforts should be undertaken to mobilise and integrate further into
the labour market economically inactive people, in particular women, by removing
tax barriers, increasing the number of affordable childcare places and taking action
with the aim of reducing the gender pay gap;

pursue 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 overall targets, and in this
respect promote active involvement of the social partners in implementing the
Programme for Prosperity and Fairness;

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3.

in the context of the Spatial Strategy programme, address imbalances in employment,
unemployment, job creation and human capital endowment between various areas in
Ireland.

VIII. ITALY

Problems in employment performance

increased and unemployment fell during 2000.
As in the previous year, employment
However, these improvements leave several structural problems of the Italian labour market
still unresolved:

–

–

–

–

–

The low employment rate of 53.5% is still some 10 percentage points below the EU
average and far below the Lisbon target. The employment rate for women (39.6 %) is
the lowest in the EU and for older people it is one of the lowest in the EU (27.8 %).

Work organisation needs to be further modernised ; the planned general review of the
social benefit system was postponed for the second time.

Unemployment fell to 10.5% but remains almost 2 percentage points above the EU
average. Regional disparities remain significant with unemployment rates ranging
from less than 5% to over 20%, despite recently recorded faster growth in the South.

Wide gender gaps in employment — at 27.9 percentage points — are characteristic
of the labour market, particularly in the Southern regions, and female unemployment,
at 14.4%, is almost double the male unemployment rate of 8.0%.

In a context of low levels of educational attainment and participation in further
learning, improvements in the approach to lifelong learning are required, including as
regards those in employment.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning:
the appropriate policy mix to favour
employment growth, reduce regional imbalances and combat undeclared work; tax and
benefit systems; activation and prevention of unemployment; gender mainstreaming and
gender gaps; and lifelong learning.

Italy should therefore:

1.

2.

3.

pursue policy reforms to sustain growth in employment rates,
in particular for
women. Such reforms should address regional imbalances by further strengthening
employability policies, and by promoting job creation and the reduction of
undeclared work, with the active involvement of the social partners ;

continue to increase labour market flexibility with a view to better combining
security with greater adaptability to facilitate access to employment ; pursue the
implementation of the reform of the pensions system through the review planned for
2001, and undertake the planned review of other benefit systems in order to reduce
the outflow from the labour market; pursue efforts to reduce the tax burden on
labour, especially on low-paid and low-skilled workers;

in the context of employability policies, take further action to prevent the inflow of
young and adult unemployed people into long-term unemployment. Such action

14

should include: the full implementation of the reform of the Public Employment
Services across the country; the speedy introduction of the Employment Information
System; and continuation of current efforts to upgrade the statistical monitoring
system;

improve the effectiveness of active labour market policies and implement specific
measures to reduce the wide gender gaps in employment and unemployment within
an overall gender mainstreaming approach, and in particular by setting targets for the
provision of care services for children and other dependants;

strengthen efforts towards the adoption and implementation of a coherent strategy on
lifelong learning, including the setting of national targets; social partners should
continue their efforts to provide more training opportunities for the work force.

4.

5.

IX. LUXEMBOURG

Problems in employment performance

In Luxembourg, the labour market is benefitting from a favourable environment supported by
the
strong economic growth (8.5%) and an increase in employment (5.5%). At 2.4%,
unemployment rate continues to be the lowest in the EU. However, some structural problems
persist:

–

–

–

At 62.9%, the employment rate continues to fall short of common objectives, despite
the highly favourably employment situation. The latter results, however, in large part
from a high level of cross-border working. Activity rates are particularly low
amongst older workers (27.4%) and women (50.3%) though both figures have been
on the increase since 1996.

The gender employment gap – 24.8 percentage points – remains one of the highest in
the EU.

Efforts underway in respect of continuing training must be pursued in order that the
needs of a modern and dynamic economy be met.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: increasing labour market participation amongst
older people and women; the coherence of lifelong learning policy.

Luxembourg should therefore:

1.

2.

further strengthen action aimed at significantly increasing labour market participation
rates amongst workers over the age of 55 by reviewing early retirement and disability
pension schemes ;

strengthen efforts aimed at increasing labour market participation rates amongst
women, by improving services to facilitate a better reconcilation of work and family
life, by encouraging their return to work after long periods outside the labour market
and by adopting measures to promote equality between men and women particularly
as far as the gender pay gap is concerned;

15

3.

ensure effective implementation of the framework law on continuous training, with
strong involvement by the social partners, combat early school leaving and undertake
a revision of the overall learning system with a view to achieving better coherence
between the different education and training sectors.

X. THE NETHERLANDS

Problems in employment performance

Employment growth was healthy in 2000 and employment rates (73.2 % overall and 63.7 %
for women) are well above the EU averages and the Lisbon targets. The official
unemployment rate continued to fall in 2000, to less than 3%, which is significantly below the
EU average. However, a key structural imbalance characterises the labour market:

–

Despite emerging labour market shortages, the labour force is constrained by the
high proportion of the working age population drawing on disability, unemployment
or welfare benefits.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: labour supply and benefit reforms.

The Netherlands should therefore:

1.

2.

in addition to measures to decrease the inflow into disability benefits, develop
effective policies to reintegrate people currently drawing on such benefits into jobs
that take account of their remaining capacity to work;

in order to tap all possibilities of potential labour supply and reduce inactivity,
address the cumulation of benefits, including local cost of living subsidies for low
income recipients.

XI. AUSTRIA

Problems in employment performance

The Austrian labour market's performance improved last year, with an overall employment
rate of 68.3% (59.4% for women) close to the targets set by the Lisbon Summit and well
above the EU average. Overall unemployment was reduced to 3.7% in 2000 and, together
with youth and long-term unemployment, is still among the lowest in the EU. Despite the
overall good performance, structural problems remain in the labour market.

–

–

–

In the context of ensuring an adequate labour supply in a tightening labour market,
there is room to boost the participation of older and low-paid workers, as well as
ethnic minorities and migrant workers.

There is still a significant gender gap in employment and one of the highest pay gaps
in the EU, requiring new measures to facilitate the reconciliation of work and family
life. Childcare coverage rates are among the lowest in the EU and need to be
extended.

A comprehensive and coherent lifelong learning strategy, with quantitative targets
and the appropriate involvement of all relevant actors, is still lacking.

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After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: increasing labour market participation ; gender
gaps and childcare provision; ; and lifelong learning.

Austria should therefore:

1.

2.

3.

develop policies to ensure an adequate labour supply in the future. In this context,
Austria should pursue and extend the reform of tax and benefit systems to increase
the participation of older workers and low skilled and low paid workers, and improve
equal opportunities for ethnic minorities and migrant workers on the labour market;

develop a target-based strategy for narrowing the gender pay gap, in agreement with
levels action to reduce the gender gap in
the social partners; promote at all
employment, by extending childcare facilities and promoting policies to facilitate the
reconciliation of work and family life;

adopt and implement a comprehensive and coherent strategy on lifelong learning in
agreement with all actors involved, which includes
indicators and national
quantitative targets and ensures that appropriate resources are made available to
initial and
support structural
continuing training, and adult education.

links between compulsory and higher education,

XII. PORTUGAL

Problems in employment performance

With an overall employment rate of 68.3 %, the employment situation has further improved
and come close to the Lisbon target. At 4.2%, unemployment is among the lowest in the EU
and long-term unemployment is at a low level (2.7%). However, the labour market suffers
from structural weaknesses which require action:

–

–

–

In the context of low levels of educational attainment and participation in further
learning, as well as (despite a fall) the highest rates of early school leaving in the EU
(43.1%), improvements in the field of lifelong learning are required.

Further 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,

Portugal has a good record in terms of its female employment rate, having now
reached the 60% target set at the Lisbon Summit. However, the Portuguese labour
market displays one of the most pronounced gender
imbalances in terms of
employment across sectors in the EU.

After due analysis, it appears that more efforts are required in response to the employment
guidelines and recommendations concerning: lifelong learning and skills; the partnership
approach; and gender imbalance.

Portugal should therefore:

1.

better articulate the lifelong learning strategy, by improving education and training
systems in order avoid skill shortages, increase the supply of skilled labour and thus

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promote the creation of medium and highly skilled jobs and raise labour
productivity;

2.

3.

pursue efforts to implement a partnership approach and promote concrete
commitments from the social partners, in particular in the areas of modernisation of
work organisation and adaptation of employment
including labour
regulations, carefully monitoring the implementation of the agreements already
signed by the Government and the social partners;

relations,

pursue efforts to reconcile family and working life,
in particular by extending
childcare facilities, and examine new ways to promote a better gender balance at
sectoral level.

XIII. FINLAND

Problems in employment performance

While Finland has maintained strong employment growth over the past five years, reaching an
overall employment rate (67.5 %) close to the Lisbon target and a female employment rate
(64.4 %) in excess of the EU average and the Lisbon target , some major structural problems
remain.

–

–

–

The overall unemployment rate is still high at 9.8%, with high youth and long-term
unemployment rates among older workers giving particular cause for concern, as
well as large regional differences in unemployment.

Finland has a high female employment rate and well developed equal opportunities
policies. However, the Finnish labour market displays one of the most pronounced
gender imbalances in terms of employment across sectors and occupations in the EU,
as well as a considerable gender pay gap.

Finland faces skills shortages in several sectors (both in high and low-skilled jobs)
and in some regions ; the outcome of active labour market programmes in terms of
employment contracts of the participants is mixed.

After due analysis, it appears further efforts are required in response to the employment
guidelines and recommendations concerning:
incentives to increase
participation; the gender pay gap and gender imbalance; and regional disparities.

tax and benefit

Finland should therefore :

1.

2.

continue to review tax and benefit schemes with a view to encouraging participation
in the labour market and ensuring the availability of labour; in particular, strengthen
efforts to reduce high marginal effective tax rates especially on low wage earners and
to improve incentives in benefit schemes, especially pensions, for people to take up
work and to stay in the labour force;

take appropriate action, in the context of a gender mainstreaming approach, to close
the gender pay gap and continue taking action to improve the balance in
representation between men and women across both occupations and sectors;

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3.

increase the effectiveness and quality of active labour market programmes with a
view to combating unemployment and reducing regional disparities and labour
market bottlenecks, focusing on the needs of the long-term and young unemployed.

XIV. SWEDEN

Problems in employment performance

At 73% and 71% respectively, Sweden exceeds the Lisbon targets and has among the highest
overall and female employment rates in the EU. Overall unemployment fell to 5.9% in 2000.
However, a number of structural problems remain in the labour market:

–

–

–

A large number of people of working age are dependent on benefits: the tax burden
on labour is still high, and tax and benefit incentives to work could be further
enhanced.

Sweden has a high female employment rate and well developed equal opportunities
policies. However,
the Swedish labour market displays one of highest gender
imbalances across sectors and occupations in the EU.

Regional differences in unemployment are significant and the labour market situation
of ethnic minorities and migrant workers could be improved; the effectiveness of
different types of active labour market policies is mixed.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning:
the tax burden on labour and tax-benefit
incentives to work; gender imbalance; and the efficiency of active labour market policies.

Sweden should therefore:

1.

2.

3.

pursue reforms, including the setting of targets taking into account the national
situation, to reduce significantly the high tax burden on labour in particular for low
wage earners; pursue reforms of tax and benefit systems to promote work incentives;

take new initiatives to tackle the current imbalance in representation between women
the gender
and men (at both occupational and sectoral
mainstreaming reforms begun in 1999;

level), as part of

review the effectiveness of the active labour market programmes, especially in
relation to long-term unemployment, in this context paying particular attention to the
needs of ethnic minorities and migrant workers.

XV. UNITED KINGDOM

Problems in employment performance

The UK saw further employment growth in 2000 and, at 77.8% and 64.6% respectively, the
employment rates for men and women are well above the EU average and the Lisbon targets.
The unemployment rate continued to fall in 2000, to 5.5%, below the EU average. However,
important structural problems persist:

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–

–

–

–

At national level, despite increasing role and visibility, there is no general approach
to social partners' involvement which therefore remains restricted to a number of
specific issues.

Though diminishing, the gender pay gap and the current imbalance in representation
between women and men (both occupational and sectoral) remain high compared to
the EU averages; the provision of affordable childcare places, although it has started
to improve, is important in this regard.

Inflows into long-term unemployment amongst young people and adults slowed only
slightly in 2000 (to 16% and 10% respectively) and are still rather high. Inactivity,
long-term unemployment and low employment rates are concentrated in households
with no-one in work, certain regions and particular disadvantaged groups (lone
parents, certain ethnic minorities, male older workers, the disabled, and the low
skilled).

The low level of basic skills amongst the workforce is contributing to emerging skills
gaps and to levels of labour productivity which, despite recent improvements, remain
low.

After due analysis, it appears that further efforts are required in response to the employment
guidelines and recommendations concerning: the partnership approach; gender imbalance;
activation policies, especially for adults and disadvantaged groups; and the role of work-based
training in tackling skill gaps.

The United Kingdom should therefore:

1.

2.

3.

4.

foster

social partnership at

to improve policy
further
implementation and development. In particular, efforts should be aimed at improving
productivity and skills, and the modernisation of working life;

the national

level

strengthen efforts to reduce the gender pay gap and improve the balance in
representation between women and men across occupations and sectors, by involving
all relevant actors including the social partners and enabling monitoring with
appropriate verifiable indicators and targets; further implement and monitor the
impact of actions taken to improve the provision of affordable childcare facilities;

reinforce active labour market policies for the adult unemployed before the 12 month
point to supplement the support provided by the Jobseekers' Allowance Benefit and
schemes to improve job search effectiveness. Within this context, particular attention
should be paid to groups facing particular problems in the labour market;

reinforce current efforts to encourage and develop work-based training to address
increasing workforce skill gaps and low levels of basic skills.

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