Council Recommendation of 18 February 2002 on the implementation of Member States' employment policies
Date: 2002-02-18
Institutions: Council of the European Union
Subjects: Council of the European Union, EC recommendation, EU Member State, employment policy

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COUNCIL RECOMMENDATION

of 18 February 2002

on the implementation of Member States' employment policies

(2002/178/EC)

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
Committee and the Economic Policy Committee,

the Employment

Whereas:

The Council adopted the employment guidelines for
2001 by the Decision of 19 January 2001 (1).

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
to be
employment. Targets
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.

for employment

rates

The Nice European Council on 7, 8 and 9 December
2000 approved the European Social Agenda, which
states that the return to full employment involves ambi-
tious policies in terms of increasing employment rates,
reducing
and
improving job quality.

inequality

reducing

regional

gaps,

(7)

(8)

(9)

the Council Recommendation of 19 January 2001 on
the implementation of Member States' employment poli-
cies (2).

The Council considers it appropriate, in the light of the
examination of
the Member
States' employment policies, to make recommendations.
They should be used sparingly, concentrate on priority
issues and be based on sound and accurate analysis.

the implementation of

In complementing action undertaken by the Member
States with a view to contributing towards the achieve-
ment of full employment, the powers of the Member
States should be respected.

The Council acknowledges the significant efforts already
undertaken by Member States with a view to imple-
menting the Employment Guidelines and the Recom-
mendation of 19 January 2001. In the assessment of the
impact of these policies, the multi-annual perspective of
taken into
the
account.

employment guidelines

should be

(10) Member States should articulate their envisaged response
to the Guidelines under the four pillars in a coherent
overall strategy aiming at full employment, recognising
Member States' different starting positions, the develop-
ment
and
coherent strategies for lifelong learning and a compre-
hensive partnership with the social partners. Due consid-
eration 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.

and implementation of

comprehensive

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 situa-
tion in the Community and examines the action taken
by Member States in implementing their employment
policy in line with the 2001 employment guidelines and

(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)

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.

(1) OJ L 22, 24.1.2001, p. 18.

(2) OJ L 22, 24.1.2001, p. 27.

(1)

(2)

(3)

(4)

(5)

(6)

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(14)

and implementation of

lifelong
The development
learning, covering the development of systems for initial,
secondary and tertiary education, 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 inclu-
sion 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.

(16)

(17)

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 employ-
ment 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.

(18)

(19)

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

the objectives of

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

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

sectors and occupations,

HEREBY ISSUES to the individual Member States the recommen-
dations set out in the Annex.

Done at Brussels, 18 February 2002.

For the Council

The President

M. ARIAS CAÑETE

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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 Community average of 8,2 %) was
recorded and employment growth picked up to match the European Community 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 Community average,

— participation in employment amongst older workers is still the lowest in the European Community (at 26,3 %, 11,4
points below the Community average), while the rate amongst women, at 51,5 %, remains below the Community
average,

— the tax burden on labour remains one of the highest in the Community,

— 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 and point to inadequate labour mobility.

After due analysis, it appears that more efforts are required in response to the employment guidelines and recommenda-
tions 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. 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;

2. 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;

3. 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;

4. reinforce, in cooperation with all actors concerned, 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;

5. continue, together with the social partners, efforts to better combine security with greater labour market flexibility, and
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 European
Community (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 — although declining — 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 recommenda-
tions concerning: the reduction of the tax burden; and increasing labour market participation.

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Denmark should therefore:

1. 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;

2. 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 European Community 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, regions in the new Länder being particularly badly affected. While
active labour market policies have been able to soften the impact of changes, the outcome of these policies in the
eastern part of the country are mixed,

— the employment rate of people aged 55 to 64, at 37,3 %, which decreased slightly to below the Community average,

— the need for modernising work organisation and for a continuing substantial and 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,

— a high gender pay gap, according to available data, and relatively few childcare facilities.

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

Germany should therefore:

1.

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;

2. 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;

3. 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;

4. 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;

5. 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 improve their correspondence with working hours and
school schedules. The implementation of these policies,
levels, should be
monitored with appropriate verifiable indicators and targets.

involving the respective actors at all

IV. GREECE

Problems in employment performance

Greece still has one of the lowest employment rates in the European Community (55,6 % overall and 40,9 % for women,
well below the Lisbon targets). Unemployment has now stabilised at 11 % — well above the Community 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 Community 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 small and medium-sized

enterprises (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,

— while the recent labour market reforms constitute an important move towards modernisation of work, there is room

for further improvement. Success in this field will require the active involvement of the social partners,

— 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 guidelines and recommenda-
tions concerning: the overall policy approach; prevention of unemployment; tax-benefit reform; lifelong learning; the
modernisation of work organisation; and gender mainstreaming.

Greece should therefore:

1.

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

2. 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; further upgrade the statistical system so that indicators on prevention and activation are
available in good time and progress can be effectively monitored;

3. examine and eliminate distortions arising from labour taxes and pension entitlements, thus improving incentives to

work;

4. 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;

5. ensure the full implementation of the recent labour market reform package, in close cooperation with the social
in this context, the social partners should make further commitments on the modernisation of work

partners;
organisation, while seeking an appropriate balance between flexibility and security;

6. take effective and comprehensive action 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 European Community 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 Community. Gender gaps in both employment and unemployment (29,6 and 10,8 percentage points
respectively) are among the highest in the Community,

— while levels of educational attainment and participation in further learning are low, a fully coherent and compre-

hensive 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 recommenda-
tions concerning: activation and prevention of unemployment; gender mainstreaming; lifelong learning; adaptability; and
regional disparities.

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Spain should therefore:

1. 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;

2. 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;

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

4. 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;

5.

improve the conditions conducive to employment creation in regions lagging behind and eliminate obstacles to labour
mobility, with a view to reducing regional disparities in employment and unemployment.

VI. FRANCE

Problems in employment performance

The employment situation continues to improve. At 62,2 %, the overall employment rate is close to the European
Community average, whilst the female employment rate exceeds that average.

However, significant structural problems persist:

— the employment rate of people aged 55 to 64 rose in 2000 but remains considerably lower than the Community

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 Community 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 recommenda-
tions 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. strengthen efforts to curb older workers' early withdrawal from working life by developing a more comprehensive

approach towards active ageing involving the social partners;

2. 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;

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

4.

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;

5. 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 European Community 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:

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— 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 Community 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.

After due analysis,
it appears that continued efforts are required in response to the 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. 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;

2. 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;

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

As in the previous year, employment increased and unemployment fell during 2000. 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 European Community average and
far below the Lisbon target. The employment rate for women (39,6 %) is the lowest in the Community and for older
people it is one of the lowest in the Community (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 Community 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
is almost double the male unemployment rate

in the southern regions, and female unemployment, at 14,4 %,
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 recommenda-
tions 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. pursue policy reforms to sustain growth in employment rates, in particular for women and older workers. Such
reforms should address regional imbalances by further strengthening employability policies, and by promoting job
creation and the reduction of undeclared work,

in partnership with the social partners;

2. 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;

3.

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 should include: the full implementation of the reform of the public
employment services across the country,
information system, and
strengthened efforts to upgrade the statistical monitoring system;

the speedy introduction of an employment

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4.

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;

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

IX. LUXEMBOURG

Problems in employment performance

In Luxembourg, the labour market is benefiting from a favourable environment supported by strong economic growth
(8,5 %) and an increase in employment (5,5 %). At 2,4 %, the unemployment rate continues to be the lowest in the
European Community. 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 Community,
— 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 recommenda-
tions concerning: increasing labour market participation amongst older people and women; the coherence of lifelong
learning policy.

Luxembourg should therefore:

1. 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;

2. strengthen efforts aimed at increasing labour market participation rates amongst women, by improving services to
facilitate a better reconciliation 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;

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 European Community averages and the Lisbon targets. The official unemployment rate continued to fall in 2000, to
less than 3 %, which is significantly below the Community 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 recommenda-
tions 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 European Community 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 Community. Despite the overall good performance, structural problems remain in the labour market:

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— 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 Community, requiring new
measures to facilitate the reconciliation of work and family life. Childcare coverage rates are among the lowest in the
Community and need to be extended,

— efforts are being made to define a comprehensive and coherent lifelong learning strategy in the ‘Zukunftsforum
Weiterbildung’, involving all relevant actors and through which quantitative targets on financing and participation will
legal framework.
be developed,

in accordance with the national

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

Austria should therefore:

1. 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;

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

3. adopt and implement a comprehensive and coherent strategy on lifelong learning in agreement with all actors
involved, which includes indicators and quantitative targets on financial resources and participation, in accordance
with the national legal framework; this strategy should strengthen links between compulsory and higher education,
initial and continuing training, and adult 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 European Community 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 Community (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,

in particular the low skill

level, the modernisation of work organisation and employment relations,

— 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 Community.

After due analysis, it appears that more efforts are required in response to the employment guidelines and recommenda-
tions 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 promote the creation of medium and highly skilled jobs and
raise labour productivity;

2. pursue efforts to implement an approach based on partnership and support the concrete commitments of social
partners, in particular in the areas of modernisation of work organisation and adaptation of employment relations,
including labour regulations, carefully monitoring the implementation of the agreements already signed by the
Government and the social partners;

3. 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.

1.3.2002

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Official Journal of the European Communities

L 60/79

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 Community 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 European Community, 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 lasting integration on the labour market is mixed.

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

Finland should therefore:

1. 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;

2. 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;

3. ensure the effectiveness 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 European Union. Overall unemployment fell to 5,9 % in 2000. However, a number of structural
problems remain in the labour market:

— Sweden has taken a number of measures to reduce the number of people receiving benefits; however, the tax and
benefit incentives to work could be further enhanced in line with the employment guidelines; the tax burden on
labour is still high,

— 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 Community,

— some regional differences in unemployment persist 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 recommenda-
tions concerning: the tax burden on labour and tax-benefit incentives to work; gender imbalance; and the effectiveness of
active labour market policies.

Sweden should therefore:

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

2. pursue initiatives to tackle the current imbalance in representation between women and men (at both occupational and

sectoral

level), as part of the gender mainstreaming reforms begun in 1999;

3. ensure 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.

L 60/80

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Official Journal of the European Communities

1.3.2002

XV. UNITED KINGDOM

Problems in employment performance

The United Kingdom 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 European Community average and the Lisbon targets. The unemployment
rate continued to fall in 2000, to 5,5 %, below the Community average. However, important structural problems persist:
— 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 Community 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 (single 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 recommenda-
tions 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. further foster social partnership at the national

level,

in particular to improve productivity and skills, and the

modernisation of working life;

2. 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;

3. 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;

4. reinforce current efforts to encourage and develop work-based training to address increasing workforce skill gaps and

low levels of basic skills.