Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Progress on the implementation of the Joint Assessment Papers on employment policies in candidate countries
Date: 2003-01-30
Institutions: European Commission
Subjects: Central and Eastern European countries, employment policy, employment statistics, enlargement of the Union, labour market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 30.01.2003
COM(2003) 37 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL,
THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Progress on the implementation of the Joint Assessment Papers on
employment policies in candidate countries

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL,
THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Progress on the implementation of the Joint Assessment Papers on
employment policies in candidate countries

Background

The  EU  co-ordination  on  employment  is  laid  down  in  the  Employment  Title  of  the
Amsterdam Treaty and it is an important part of the Community acquis. The objective of the
Commission  is  to  ensure  that  candidate  countries  define  employment  policies  that  prepare
them  for  membership  of  the  Union  and  progressively  adjust  institutions  and  policies  to  the
European Employment Strategy, to allow the full implementation of the Employment Title of
the Treaty  as  from  accession.  To  this  end,  in  1999  the  Commission  initiated  a  co-operation
process  on  employment  with  these  countries.  Furthermore,  co-operation  also  aimed  at
ensuring that both the present EU financial support for accession and the preparations for ESF
implementation would focus on supporting the identified employment policy priorities.

It was agreed that in a first step candidate countries and the Commission would analyse the
key  challenges  for  employment  policies  in  "Joint  Assessments  Papers"  ("JAPs").  The  work
was  started  with  background  studies  funded  by  the  Commission  in  co-operation  with  the
European  Training  Foundation.  Most  candidate  countries  consulted  extensively  on  the  draft
Joint  Assessment  Papers,  including  the  Finance  and  Education  Ministries  and  the  social
partners, which helped to establish policy coherence. The draft JAPs benefited from excellent
co-operation between the Commission services, ensuring overall coherence.

These documents were signed by the Commissioner for Employment and Social Affairs and
by  the Ministers of  Labour. The first JAPs  were  signed with  the  Czech  Republic,  Slovenia,
Poland and Estonia in 2000 and early 2001,  followed  by Malta,  Hungary,  Slovakia,  Cyprus
and Lithuania in late 2001/early 2002 and by Romania, Bulgaria in Autumn 2002. The JAP
with  Latvia  will  be  signed  early  2003.  Co-operation  with  Turkey  is  at  an  early  stage;  the
background study is under preparation.

The  candidate  countries  and  the  Commission  agreed  to  monitor  the  implementation  of  the
JAP  commitments.  Shortly  after  the  signature  of  the  JAPs  the  main  commitments  were
discussed  in  technical  seminars  between  Commission  and  representatives  of  different
Ministries, regional authorities, the PES and the social partners to encourage policy action. In
late Spring 2002, candidate countries sent progress reports on the implementation of the JAP
commitments.  The  Commission  and  representatives  of  candidate  countries  reviewed  these
Communications in a second set of technical seminars.

The Göteborg European Council of June 2001 asked candidate countries to translate the EU
economic, social and environmental objectives underpinning the "Lisbon Strategy" into their
national  policies  and  announced  that  the  Synthesis  Communication  2003  would  include
information  on  candidate  countries  in  this  respect.  This  Communication  summarises  the
challenges identified in the JAPs and reviews the progress in follow up. Thereby it points to
the  employment  policy  challenges  resulting  from  applying  the  Lisbon  objectives  and  from
preparing the implementation of the Employment Title.

2

1.

Labour market strategic challenges 1

To date economic restructuring has had a heavy impact on the labour markets in the candidate
countries  (CCs)  in  particular  those  in  Central  and  Eastern  Europe.  With  participation  and
employment still adjusting, unemployment has risen. A significant increase in employment in
services has been achieved, but it has not yet been sufficient to compensate for the job losses
in  agriculture  and  industry,  which  remain  the  main  employers  in  most  CCs.  Against  the
background of rapid restructuring the JAPs identify a number of crucial strategic challenges
for the labour market.

(cid:1)  Increase employment rates

Employment rates are generally below that of the EU (Table 1) with high unemployment in
Bulgaria, Slovakia, Poland, Estonia,  Latvia and Lithuania. The low employment rates in the
candidate countries are mainly accounted for by low male employment rates. At the moment
none of the CCs meets the two Lisbon employment targets, with Cyprus at 67.9% being the
closest and Poland at 53.8% the most distant from the overall 70% target. Like most Member
States, the majority of  countries are still far behind the target set by the Stockholm  Council
for the employment rate of the older age group. While at the moment economic growth often
results only from strong increases in productivity, in future it will depend on both productivity
growth and increases in employment, both key conditions for the process of real convergence
of incomes in the enlarged EU.

(cid:1)  Increase labour supply

In  most  candidate  countries,  a  feature  of  the  transition  process  was  substantial  withdrawals
from the labour market. More recently, participation has been stagnating in most countries –
although at a high level in the Czech Republic and Slovakia – and has continued to decline in
Romania, Estonia  and  Lithuania.  It  has  started to increase in Hungary, but from  a  very  low
level.  In  2001,  half  of  the  candidate  countries  had  activity  rates  below  the  EU  average
(Table 1)2.  Most  candidate  countries  need  to  reverse  the  trend  of  labour  force  participation
and  bring  back  major  parts  of  the  working-age  population  into  the  labour  market  as  a
precondition for economic and social development.

(cid:1)  Labour market functioning should support the restructuring of the economy

Rapid restructuring is driving economic growth, at least in the Central and Eastern European
candidate countries and structural adjustment is likely to continue after membership.

The  importance  of  agriculture  for  the  economies  of  some  candidate  countries  remains
significantly greater than in the EU (Chart 1) but the high share of agricultural workers is not
reflected  in  a  proportionately  high  share  of  gross  valued-added,  and  productivity  levels  are
much  below  the  EU  average.  This  is  of  particular  concern  in  Romania  which  has  an
increasing  share  of  agricultural  employment  of  more  than  40%,  in  Bulgaria  with  a  share  of
28%3 and in Poland with a share of almost 20%. Latvia  and  Lithuania  seem to be half way
through the adjustment in agricultural employment with shares still  around  15% down from
around 20% in the late 1990s.

1

2

3

This section is based on "Employment in Europe 2002" and on the Joint Assessment Papers.
Eurostat  LFS  data  are  not  available  for  Malta.  According  to  the  national  LFS,  the  activity  rate
(age group 15-64) was 58.0% in 2001.
According to ILO data based on National Accounts and used in the JAP.

3

                                                
While Cyprus has a sectoral structure similar to the more service-oriented EU economies, in
most other candidate countries the industrial sector is more important than in the EU (Chart 2)
and the process of industrial restructuring is not yet complete. Hungary achieved the greatest
change  in  its  industrial  structure  with  industrial  employment  comparable  to  several  EU
countries and employment in services  continuously  rising.  In the Czech Republic, Slovenia,
Slovakia and Estonia and to a certain  extent in  the  other  Baltic  countries  labour  reserves  in
industry seem to be still substantial. Employment in services is increasing in these countries
but not enough to absorb surplus labour.

These  sectoral  shifts  are  likely  to  affect  some  regions  more  sharply  than  others.  Since  job
creation  in  services  mainly  takes  place  in  the  capital  cities,  this  could  widen  the  gap  in
employment and unemployment with agricultural regions and increase regional disparities in
the  medium-term.  While  these  shifts  are  part  of  the  necessary  adjustment  process,  regional
development policies need to address the negative effects on employment.

Clearly  there  is  in  all  countries  a  large  potential  for  increasing  employment  in  services
(Chart 3). To  fully  exploit  this  potential, policies  and  institutions  need  to  ensure  that  labour
market  structures  enable  people  to  adapt  and  manage  economic  change  and  move  from
declining to modern industries.

(cid:1)  Increase  labour  force  skill  levels  in  the  context  of  restructuring  and  future  pressures

linked to the Single Market

The  ongoing  process  of  restructuring  has  heightened  the  disparities  in  the  employment
outcomes  of  different  skills  groups.  The  employment  rate  of  the  high-skilled  is  markedly
higher  than  that  for  the  low-skilled  -  even  if  compared  to  the  already  high  EU  differentials
(Chart 4). This is also reflected in much higher unemployment rates for the lower-skilled. The
expected  shifts  in  the  sectoral  employment  structures  in  these  countries  suggest  that  the
demand for a more qualified labour supply will increase further (Chart 6).

Declining participation combines with demographic evolution, which, as in the EU15 leads to
an  ageing  population  and  a  contraction  of  the  working  age  population.  In  most  candidate
countries the labour force is ageing and therefore the supply of skills needed to match the new
demand will rely heavily on the up-grading and up-dating of the skills of the present labour
force.

A  serious  effort  to  upgrade  skills  is  necessary  if  candidate  countries  are  to  increase  their
productivity to the levels required to be competitive in an enlarged EU.

2.

Common policy issues identified in the Joint Assessment Papers

Against the background presented in the previous section, the review carried-out in the JAPs
has identified the following policy issues.

2.1

Ensuring  that  wage  developments  and  wage  formation  system  are  employment-
friendly …

In  most  candidate  countries,  overall  wage  developments  seem  to  be  broadly  in  line  with
economy-wide  productivity  trends.  Given  the  low  and  in  many  countries  stagnating  or
declining levels of employment the question arises whether social partners could not do more
to ensure that wage developments ease job creation.

4

It is important that wages reflect better the skill and educational levels of workers. Progress is
reported, notably for Estonia, Hungary, the Czech Republic, and also for Slovenia, Lithuania,
Latvia  and  Poland.  But  in  many  candidate  countries  labour  mis-matches  and  shortages,
together  with  persistent  high  unemployment  indicate  that  social  partners  should  review
whether  relative  wages  give  appropriate  signals  to  people  to  invest  in  human  capital  and  to
facilitate mobility between sectors and regions.

Given  the  extremely  low  employment  rates  of  unskilled  workers,  labour  costs  for  lower-
skilled  workers  should  not  discourage  recruitment  into  moderately-paid  employment,  while
the  net  wages  offered  to  such  workers  should  be  sufficiently  attractive  for  unemployed  or
inactive  people  to  seek  and  take  up  work.  Important  reforms  are  underway  in  all  candidate
countries including  reviewing minimum wages  and  tax-benefit  systems  and  these  should  be
continued with renewed effort.

… and that tax and benefit systems are supportive to employment

The  level  of  the  tax  and  social  security  burden  in  the  candidate  countries  is  at  least
comparable  to  the  one  observed  in  Member  States,  which  seems  to  be  very  high  given  the
level  of  economic  development  of  these  countries,  contributing  to  a  high  tax  wedge  in
Lithuania,  Latvia  and  Hungary  in  particular,  comparable  to  Germany,  Sweden  or  France,
which are among the highest in the EU (Table 2).

Progress  in  reducing  labour  taxation  is  slow.  There  are  no  simple  solutions,  as  this  would
require  a  reform  of  the  whole  tax  system  and  as  revenue  from  taxes  and  social  security
contributions finances social benefits and measures for people affected by rapid restructuring.
Reforms  are  further  complicated  by  the  present  tight  budgetary  situation.  Addressing  tax
evasion  and  non-payment  of  taxes  and  transforming  undeclared  work  into  regular
employment  may  increase  the  tax  base  and  create  scope  for  action  at  the  lower  end  of  the
wage scale.

In  many  candidate  countries  net  replacement  ratios  of  benefits  and  of  social  assistance  in
particular, compared with work income, represent disincentives to take-up work, in particular
for the low skilled. Most countries face  a  conflicting  situation in  reducing both poverty  and
unemployment  traps  as  benefits  are  used  to  ensure  a  subsistence  minimum.  In  Central  and
Eastern European countries activating and stimulating people to take-up work was often not
considered as a  key objective  of  benefit systems when the  current  social protection systems
were designed after the  collapse of the previous  schemes.  In addition  to  better  targeting  the
benefits  and  means-tested  social  cash  assistance,  policies  therefore  need  to  focus  on
improving  the  coherence  between  income  protection  and  activation  policies  in  order  to
support  a more pro-active  attitude  and  encourage  economic  activity  and  work  in  the  formal
sector.

2.2

Investing in human resources and addressing skills gaps

Most  countries  have  undertaken  in-depth  reforms  of  their  initial  education  and  vocational
the  de-concentration  or  devolution  of
training  systems,  which  sometimes 
responsibilities to the regional level. These reforms already show positive results in terms of
shifting  participation  towards  the  general  stream  of  education,  thus  providing  young  people
with the broader skills required by the modern and knowledge-based society.

include 

Several countries and Slovakia, Estonia, Lithuania, Romania and Bulgaria in particular, have
significant  shares  of  drop-outs,  early  school  leavers  and  school  failure.  From  the  four  CCs

5

covered by the PISA Survey4, only the Czech republic scores  around the OECD average. A
stronger focus needs to be made on improving the quality of initial education and training.

Enrolment in higher  education is increasing in most CCs but remains lower than in the  EU.
Except in Estonia and Lithuania, participation in education of students  at the age of leaving
the educational system (15-20) tends to be lower than in the EU, in Bulgaria and Romania in
particular but also in the Czech Republic and Hungary.

Investment in education is already important in most candidate countries. Except for Bulgaria,
Slovakia  and  Romania,  public  spending  on  education  measured  as  a  share  of  GDP  is  at  or
above the EU average and above it in the three Baltic countries (Table 3).

Upgrading  and  adapting  the  skills  of  the  labour  force  is  an  urgent  task  in  most  CCs.
Enterprises need appropriate frameworks and incentives to invest in their employees training.
Participation in continuing training is low except in the Czech Republic and Estonia where it
is  at  the  level  of  several  present  Member  States  and  higher  than  in  Spain  and  Greece
(Chart 5). The concept of lifelong learning is generally recognised but operational strategies,
frameworks, incentives and resources are lacking.

Both  in terms  of  expenditures and participants,  training  measures  still  occupy  a  small  place
within  the  range  of  active  support  offered  to  the  unemployed.  The  situation  is  particularly
critical in those countries which are still and will be undergoing major restructuring of their
economy.

Overall, on-going reforms of the education and training systems, the development of lifelong
learning  capacities  and  the  strengthening  of  quality  will  continue  to  require  a  considerable
shift  of  resources  which  is  often  difficult  to  achieve  in  the  general  context  of  budgetary
constraints.

2.3

Enabling the Public Employment Services to play an effective role

An effective employment service is an important instrument of employment policy in a period
of  economic  transition  and  restructuring.  The  Public  Employment  Services  (PES)  have  a
critical role in people’s adjustment to changed circumstances – by encouraging mobility and
flexibility and by helping people acquire the skills required in growing economic sectors. In
most  countries,  the  PES  set  up  at  the  beginning  of  the  1990s  are  undergoing  a  continuous
reform and modernisation  process.  Recent  reforms  aim  at  giving  the  PES  a  stronger  role  in
implementing active labour market policies. As shown by the ratio of unemployed people to
PES  staff  (Table  4),  the  PES  capacity  appears  particularly  low  in  Latvia,  Lithuania  and
Bulgaria given the present level of unemployment and might need strengthening in Romania
to face the likely increase of unemployment resulting from the on-going restructuring.

The framework is in place, but implementation needs to follow. While the development of a
customer-oriented approach is progressing, the PES needs to play a more active role towards
the employers. PES capacity needs to be strengthened essentially in local offices which are in
direct contact with the unemployed and the employers. The capacity of the PES to develop a
more active and preventive approach will require a consistent allocation of resources in terms
of financing and staff as well as important training efforts for the staff in place.

4

The PISA Survey concentrates on the 15-year olds and assess reading, mathematic and scientific skills.
Candidate countries covered are the Czech Republic, Hungary, Latvia and Poland.

6

                                                
2.4

Promoting a more pro-active and preventive policy approach

The development of active measures was prompted by the surge of massive unemployment in
the  1990s.  Given  the  high  level  of  unemployment  and  of  long-term  unemployment  in
particular,  the  levels  and  shares  of  expenditure  for  active  programmes  appear  rather  low
compared to the EU. Most countries spend less on  active  policies  than Greece  and  Portugal
which  have  the  lowest  level  of  active  spending  in  the  EU  (Table  5).  The  shift  towards  a
preventive approach is progressing in Slovenia and first initiatives in this direction have been
taken in the Czech Republic and Malta.

As in other domains, budgetary constraints limit the expansion of active programmes. While
most candidate countries probably need to increase the share of resources allocated to active
policies,  in  the  very  short-term  a  shift  of  resources  between  the  various  measures,  towards
training measures in particular as well as an improved targeting and impact monitoring could
already  enhance  the  efficiency  of  ALMPs.  A  careful  design  and  targeting  is  particularly
important in the case of training measures in order to minimise the deadweight effect. Equally
important is an early and more individualised intervention towards the unemployed as well as
the promotion of active job search though a better linkage between benefit systems and active
support.

2.5

Ensuring social cohesion and integrating ethnic minorities

Most candidate countries have significant ethnic minority  groups  and most  of them  are  in a
disadvantaged  position  in  the  labour  market.  Some  of  these  groups  –  Roma  in  particular  –
face  broader  difficulties  in  terms  of  integration  into  society  and  are  at  high  risk  of  social
exclusion  and  poverty.  In  their  case,  lower  outcomes  on  the  labour  market  are  the  result  of
cumulative handicaps in terms of access to education, social services, housing and health care.

Efforts  are  being  made  to  better  tailor  the  educational  provision  to  minorities'  needs
(possibility  to  study  in  minority  languages,  tutors  and  teaching  staff  from  minority  groups
etc.)  in  countries  with  important  ethnic  minorities,  Romania  in  particular,  but  need  to  be
intensified.  Many  individual  integration  projects  exist,  generally  run  by  NGOs.  There  is  an
awareness of the problem reflected in the development by the governments of comprehensive
integration  strategies  that  generally  include  measures  related  to  education  and  to  the  labour
market,  but  the  development  is  slow  in  Slovakia  in  particular  and  practical  implementation
also  remains  piecemeal  in  Bulgaria.  Integrating  the  minorities  –  and  the  Roma  minority  in
particular  –  is  an  important  issue  with  respect  to  social  inclusion.  Progress  in  setting
appropriate  conditions  and  allocation  of  resources  for  implementation  of  the  integration
strategies on a significant scale need to be speeded up.

2.6

Modernising the labour market - a key role for social partnership

The transformation process included a radical change in the functioning and the "social" role
of enterprises and in particular in how security was provided for workers. Strong progress has
been made in terms of public policies and enterprise reform putting the need to innovate work
organisation  and  working  conditions  firmly  on  the  agenda.  It  is  also  clear  that  the
development of a new framework for flexibility and security and of a culture of modernising
work organisation and  working conditions takes time and depends  heavily  on the  actions of
the  two  sides  of  industry,  workers  and  employers  and  their  representatives.  Therefore  there
are key challenges not only for governments but also for the social partners.

7

In  this  context,  social  partners  and  public  authorities  should  work  together  to  ensure  that
improved flexibility and adaptability of  the regular labour market help shifting  employment
from the informal towards the formal sector.

In  all  candidate  countries  social  partners  are  involved  in  policy-making  through  tripartite
advisory structures. They are also generally involved in the main implementing bodies and in
the PES in particular, again via tripartite management or advisory boards. In several countries,
the  autonomous  bi-partite  social  dialogue  appears  still  under-developed  or  in  a  few  cases
barely existing.

The basic conditions do not yet exist for a meaningful involvement of social partners in issues
where they have a crucial part to play, such as labour relations in general and wage formation
in  particular,  the  adaptability  of  the  enterprises  and  the  workforce  and  to  ensure  a  proper
balance between flexibility and security. Considerable progress in that respect should be made
urgently, given the challenges that most candidate countries face in terms of modernising their
work organisation, including training and working time arrangements for the employees.

2.7

Promoting equal opportunities

In all Central Eastern European countries, women's participation used to be high but dropped
dramatically  during  the  early  years  of  the  transition.  More  recently,  while  stagnating  or
further  declining  in  several  countries,  female  participation  increased  in  Latvia,  Slovakia,
Bulgaria  and  in  Cyprus;  in  some  of  these  countries  this  accounted  for  almost  the  entire
increase of the labour supply. Women's activity rates are currently at or above the EU average
except in Malta5, Hungary and to a lesser extent Bulgaria (Table 1). The female employment
rate  is  higher  than  or  at  the  EU  level  except  in  Hungary,  Malta,  Poland,  Bulgaria  and  to  a
lesser  extent,  Slovakia.  The  gender  employment  gap  tends  to  be  lower  than  in  the  EU  as  a
whole  but  this  reflects  also  the  particularly  low  male  employment  rates.  In  contrast  to  EU
patterns, in several candidate countries, in particular Central and Eastern European countries,
unemployment is not significantly higher for women than for men but female unemployment
is characterised by more high-skilled women out of work and unemployed women also tend
to  stay  longer  unemployed.  CCs'  labour  markets  are  strongly  gender  segregated  and
substantial gender pay gaps exist.

There is awareness of the need for gender equal opportunities among policy-makers and legal
as  well  as  strategy  frameworks  have  been  put  in  place  in  relation  to  the  fulfilment  of  the
acquis,  which  now  needs  to  be  fully  implemented.  Progress  is  in  general  slower  in  other
initiatives  necessary  to  support  an  increased  participation  of  women.  Family-friendly
working-time  arrangements  remain  poorly  developed  beyond  basic  provisions  for  maternity
and family-related leaves. Most CCs also need to  develop affordable child-care facilities, in
particular  those  Central  and  Eastern  European  countries  where  such  facilities  disappeared
with the collapse of the previous system.

5

According to the  national  LFS, the  female  activity  rate  (age  group  15-64)  was  34.2%  and  the  female
employment rate (age group 15-64) was 31.6% in 2001.

8

                                                
2.8

Strengthening capacity building to design appropriate policies and policy mix (co-
ordination between policy areas) and ensuring implementation

The  2002  Commission  Strategy  Paper  "Towards  the  enlarged  Union"6  stresses  the  need  to
develop the administrative capacities for policy development and implementation in all policy
areas  including  employment  and  social  policies.  The  JAPs  also  underline  that  candidate
countries need to improve planning and implementation capacities to respond to the complex
employment policy challenges which they face in a period of rapid restructuring. The mix of
different dimensions of employment policies has to be right and they must fit into the overall
economic policy strategy.

Co-operation between different government departments and the education system is decisive
in  this  respect.  There  is  a  need  in  most  candidate  countries  to  develop  the  PES  as  the  key
implementation agency for active policies. Employment policies require a strong contribution
from  the  social  partners  in  particular  in  terms  of  their  responsibility  to  promote  the
modernisation of the labour market.

In many candidate countries administrative preparations for the management of the ESF raise
concerns, especially in the area of financial management and control. Preparations for the ESF
need to be accelerated, with a particular emphasis on a sufficient allocation of staff and on the
provision  of  training  that  gives  the  staff  the  relevant  qualifications.  It  is  vital  that  these
preparations  do  not  only  target  central  administrations  but  also  all  intermediate  bodies  and
final beneficiaries and the regional ESF-implementation structures in particular.

2.9

Ensure availability of resources for employment policies including human capital
investment and social infrastructure

Employment  policies  as  outlined  in  the  JAPs  require  the  mobilisation  of  resources  for
investment  in  active  labour  market  policies,  human  capital  and  the  appropriate  social
infrastructure.  This  is  a  threefold  task.  First,  a  review  of  the  structure  of  public  finances  is
needed  to  translate  the  government's  policy  commitments  into  appropriate  levels  of  public
expenditure.  Second,  government  and  social  partners  ought  to  ensure  that  individuals  and
enterprises  have  the  right  incentives  to  invest  in  improving  employability  and  upgrading
skills. Thirdly, governments need to guarantee that EU funds are fully utilised in line with the
priorities set and that no time is lost when Structural Funds become available.

3.

Next steps

The  present  Communication  confirms  that  candidate  countries  have  made  progress  in
transforming  the  functioning  of  their  labour  markets  and  in  policy  design  with  a  view  to
advancing towards the objectives of the European Employment Strategy. However, progress
remains variable.

Co-operation between the future Member States and the Commission will need to be pursued
in advance of membership focusing on four areas:

(cid:1)  The  joint  work  on  JAPs  and  the  follow-up  are  already  helping  to  shape  the  National
Development Plans (NDPs) to be submitted by Future Member States by early 2003. These
will  set  the  framework  for  employment  and  human  resources  development  including  the

6

"Towards the Enlarged Union", Strategy paper and Report of the European Commission on the progress
towards accession by each of the candidate countries, COM(2002) 700 final.

9

                                                
options  and  policy  priorities  for  future  ESF  funding  and  should  be  coherent  with
employment policies. They should address in particular the need for capacity building, for
policy design and implementation.

(cid:1)  The  review  of  the  European  Employment  Strategy  will  conclude  in  June  2003  with  the
adoption of new Employment Guidelines. This will allow the future Member States to start
with  the  work  on  their  National  Action  Plans  to  be  presented  in  October  2004.  In  this
context  the  Commission  proposes  that  each  future  Member  State  organises  an  in-depth
review of policies, of the institutional setting and administrative capacities for employment
policy  and  related  ESF  activities.  Such  reviews  would  take  place  in  Spring  and  Summer
2003.

(cid:1)  The future Member States will have joined the "Employment Incentives Measures" (EIM)
participation  in  2003.  The  EIM  activities  may  help  them  to  make  faster  progress.  The
Commission  proposes  to  concentrate  EIM  activities  in  2004  on  supporting  preparatory
work for participation in the European Employment Strategy.

(cid:1)  The Commission proposes in its 2002 Strategy paper for enlargement7 that, after signature
of  the  Accession  Treaty,  representatives  of  the  future  Member  States  will  participate  as
observers in the Employment Committee and in the ESF Committee.

Co-operation  with  Romania  and  Bulgaria  will  continue  within  the  framework  of  the  JAP
follow-up  process.  In  view  of  major  economic  and  social  restructuring  ahead  in  these  two
countries,  within  the  intended  increased  EU  financial  assistance  from  2004  onwards,  pre-
accession funding related to ESF type of support could make a significant contribution to help
the reallocation of labour and support human resource development in line with the priorities
identified  in  the  JAPs.  The  preparation  of  the  JAP  with  Turkey  will  start  once  Turkey  has
completed the background study.

The Commission will present a final progress report on the follow-up of the Joint Assessment
Papers in Autumn 2003.

7

See footnote 6.

10

                                                
ANNEX

Chart 1

Total employment in agriculture (% total employment) in 2001

44.4%

19.2%

16.5%

15.1%

7.1%

6.1%

4.9% 4.9%

9.9%

6.3% 5.8%

16.0%

12.9%

6.7%

5.8%

4.1%

7.0%

5.2%

3.5%

2.6%

1.4%

3.1%

2.9%

1.5%

4.2%

1.4%

CY  CZ  EE  HU  LT  LV  PL  RO  SI  SK  A

B

D DK  E FIN F EL IRL

I

L NL  P

S UK  EU

50.0%

45.0%

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

Note:

–  Due  to  the  very  high  proportion  of  persons  having  agricultural  activity  in  addition  to
another  main  occupation  in  Bulgaria,  the  LFS  does  not  provide  an  accurate  estimate  of
total employment by sector.

–  No Eurostat LFS data available for Malta.

Source: LFS, Eurostat. 2000 for Sweden.

Total employment in industry (% total employment) in 2001

40.5%

34.2% 34.5%

38.6%

37.1%

30.7%

29.4%

32.8%

31.3%

31.7%

29.1%

27.2%

25.3%

25.8%

25.5%

25.4%

27.1%

26.0%

34.0%

28.6%

24.4% 24.9%

22.8%

21.4% 21.6%

Chart 2

45.0%

40.0%

35.0%

30.0%

25.0%

24.0%

20.0%

15.0%

10.0%

5.0%

0.0%

CY  CZ  EE  HU  LT  LV  PL  RO  SI  SK  A

B

D DK  E FIN F EL IRL

I

L NL  P

S UK  EU

Source: LFS, Eurostat. 2000 for Sweden.

11

Chart 3

Total employment in services (% total employment) in 2001

71.1%

58.7%59.4%

59.6%

56.3%

54.6%

56.7%

50.1%

51.4%

73.1%

71.1%

64.8%

64.6%

69.9%

67.1%

62.0%

63.9% 63.1%

61.2%

77.0%

75.3%

72.7%73.7%

67.2%

53.0%

29.7%

90.0%

80.0%

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

CY  CZ  EE  HU  LT  LV  PL  RO  SI  SK  A

B

D DK  E FIN F EL IRL

I

L NL  P

S UK  EU

Source: LFS, Eurostat. 2000 for Sweden.

Chart 4

Difference in the employment rate by educational attainment 
levels: High and Low in 2001

Males
Females
Total

80

70

60

50

40

30

20

10

0

SK 

CZ 

PL 

LT 

HU 

BG 

LV 

EE 

SI 

CY  RO 

EU

Note:  The  bars  (and  line)  represent  the  difference  -  in  percentage  points  -  between  the
employment  rates  of  high  skilled  (tertiary  education  completed)  and  low  skilled  (less  than
upper secondary education completed) by gender (for the total).

Source: LFS, Eurostat. 2000 for the EU.

12

Chart 5

100

90

80

70

60

50

40

30

20

10

0

Note:

Continuing Vocational Training (CVT) in enterprises
(percentage of employees participating in CVT and of training entreprises in 1999)

Participants

Training enterprises

DK

S

NL

FIN IRL

F

D

A

L

B

CZ

EE

LV

SL

LT

PL HU

E

BG

P

EL RO

–  Continuing  vocational training (CVT):  training  measures  or  activities  financed  wholly  or
partly by enterprises for their  employees with employment contracts. For the purposes of
this survey, "employees" means the persons employed, excluding apprentices and trainees.

–  Training  enterprises:  Number  of  enterprises  providing  CVT  to  their  employees  as  a

percentage of the total number of enterprises.

–  Participants:  Number  of  employees  who  took  part  in  one  or  more  CVT  courses  at  some

time during 1999 as a percentage of the total number of employees.

Source:  Second  Survey  on  Continuous  Vocational  Training  in  Enterprises  (CVTS  2),
Eurostat.

13

Difference in occupational employment structure between the 
EU and the CCs, 2001
(Difference in their respective employment shares, 15-64 age-group)

Percentage points

Chart 6

10,0%

6,0%

2,0%

-2,0%

-6,0%

-10,0%

-14,0%

-18,0%

High skilled non-
manual

Medium skilled
non-manual

Low skilled non-
manual

Skilled manual

Unskilled manual

Note:  The  five  categories  presented  in  the  chart  are  based  on  the  International  Standard
Classification  of  Occupations  ISCO-88.  The  aggregation  has  been  done  at  the  1  digit  level
(the highest level of aggregation). The five categories are (coding in brackets):

–  High  skilled  non-manual  (100  +  200  +300).  Legislators,  senior  officials,  and  managers

(100); professionals (200); technicians and associate professionals (300).

–  Medium skilled non-manual (400). Clerks (400).

–  Low skilled non-manual (500). Service workers and shop and market sales workers (500).

–  Skilled manual (600 + 700). Craft and related trade workers (700). These include building
trade  workers,  metal  and  machinery  workers,  glass  makers,  wood,  textile  and  precision
metal workers, among others. Skilled agricultural workers and fishery workers (600).

–  Unskilled  manual  (800  +  900).  Plant  and  machinery  operators  and  assemblers  (800);

elementary occupations (900).

Source: LFS, Eurostat. Data refer to 2001 for candidate countries and 2000 for the EU.

14

Table 1

Employment, participation and unemployment in 2001

Employment rate 15-64

Activity rate 15-64

Unemployment rate 15+

Youth 
unemployment 
rate

Long-term 
unemployment 
rate

BG 
CY 
CZ 
EE 
HU 
LT 
LV 
PL 
RO 
SI 
SK 
EU15

Total
50.7%
67.9%
65.0%
61.1%
56.3%
58.6%
58.9%
53.8%
63.3%
63.6%
56.7%
64.0%

Men
53.6%
79.7%
73.2%
65.6%
63.3%
59.8%
61.9%
59.2%
68.6%
68.5%
61.8%
73.0%

Women
47.9%
56.5%
57.0%
56.9%
49.6%
57.4%
56.1%
48.4%
58.2%
58.6%
51.8%
54.9%

Total
63.3%
70.8%
70.7%
69.9%
59.7%
70.4%
68.0%
66.1%
68.3%
67.5%
70.4%
69.2%

Men
67.8%
81.9%
78.5%
74.5%
67.6%
74.5%
72.7%
71.6%
74.3%
72.5%
77.4%
78.1%

Women
59.1%
60.0%
63.0%
65.6%
52.2%
66.5%
63.6%
60.8%
62.4%
62.5%
63.6%
60.2%

Total
19.9%
4.0%
8.0%
12.4%
5.7%
16.5%
13.1%
18.4%
6.6%
5.7%
19.4%
7.6%

Men
20.8%
2.7%
6.7%
11.8%
6.3%
19.4%
14.6%
17.0%
7.0%
5.4%
20.1%
6.6%

Women
18.9%
5.8%
9.6%
13.1%
4.9%
13.5%
11.5%
20.0%
6.0%
6.0%
18.6%
9.0%

Total
39.3%
8.4%
16.3%
24.5%
10.5%
30.9%
22.9%
41.5%
17.6%
15.7%
38.9%
15.3%

Total
12.5%
0.9%
4.1%
5.8%
2.5%
9.3%
7.7%
9.2%
3.2%
3.6%
11.3%
3.2%

Note:  At  present,  all  CCs  (except  Turkey)  provide  LFS  data  in  accordance  with  Eurostat
definitions.  In  2001  most  of  these  countries  (except  Cyprus,  Latvia  and  Lithuania)  had  a
quarterly  LFS.  Time-series  labour  market  data  are  regularly  published  in  Employment  in
Europe.  The  availability  varies  across  countries:  1996-2001  (SL,  HU),  1997-2001  (PL,  CZ,
EE, RO), 1998-2001 (LT, LV), 1999-2001 (CY, SK). Data for Malta starting in 2000 have not
yet been released by Eurostat. For legal reasons, Eurostat has not yet  received  LFS  data for
Turkey,  although  the  LFS  does  exist  in  this  country  and  the  definitions  applied  follow  the
guidelines laid down in the above-mentioned Council Regulation.

Source: Eurostat.

15

Table 2 - Tax-wedge (%) for an average production worker

Bulgaria

Cyprus

Czech Republic

Estonia

Hungary

Latvia

Lithuania

Malta

Poland

Romania

Slovak Republic

Slovenia

Germany

France

Sweden

EU maximum

EU minimum

43

n.a.

43

42

52

50

48

n.a.

43

48.2

42

n.a.

47

48

50

56
(Belgium)

29 (Ireland)

Note: The tax  wedge represents personal income tax plus employer's and  employee's  social
contributions as a percentage of total labour cost (including employer's contribution).
Source: "Labour market and social policies in the Baltic States", OECD (forthcoming 2003),
data 2000. Bulgaria, Romania: JAP.

16

Table 3 - Public expenditures on education (as % of GDP)

Bulgaria

Cyprus

Czech Republic

Estonia

Hungary

Latvia

Lithuania

Malta

Poland

Romania

Slovak Republic

Slovenia

EU average

EU maximum

3.6

5.6

4.6

7.6

5.1

7.2

6.0

5.5

5.4

4.0

4.0

5.6

5.0

8.3
(Sweden)

EU minimum

3.5 (Greece)

Note: Data 1998 for Malta and Poland; 1999 for Bulgaria, Estonia, Latvia, Slovenia; 2000 for
Cyprus, Czech republic, Slovakia; 2001 for Hungary, Romania and the EU.
Source: Country monographs on vocational education and training and employment services,
European Training Foundation (EE, MT, PL, SK, SI), Progress Reports (CY, CZ, HU,  LT),
JAP (BG, LV, RO).

17

Table 4 - Ratio unemployed per PES staff

Bulgaria

Cyprus

Czech Republic

Estonia

Hungary

Latvia

Lithuania

Malta

Poland

Romania

Slovak Republic

Slovenia

EU 15

214

203

236

228

286

300

360

n.a.

n.a.

182

100

118

212

Source: JAPs and Progress Reports, European Training Foundation Country Monographs.

18

Table 5 - Expenditures on active labour market policies
(as % of GDP)

Bulgaria

Cyprus

Czech Republic

Estonia

Hungary

Latvia

Lithuania

Malta

Poland

Romania

Slovak Republic

Slovenia

EU average

EU maximum

EU minimum

0.35

n.a.

0.10

0.09

0.48

0.15

0.12

0.18

n.a.

0.15

0.23

0.36

0.92

1.64
(Denmark)

0.25
(Greece,
Portugal)

Source:  JAPs  and  Progress  Reports.  Data  2001  except  Latvia  (2000)  and  Czech  Republic.
EU: JER 2002, data 2000.

19