Opinion of the European Economic and Social Committee on the "Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions — The future of the European Employment Strategy (EES) A strategy for full employment and better jobs for all" (COM(2003) 6 final)
Date: 2003-03-26
Institutions: European Economic and Social Committee
Subjects: EU employment policy, European Employment Strategy, full employment

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Opinion of the European Economic and Social Committee on the ‘Communication from the
Commission to the Council, the European Parliament, the Economic and Social Committee and
the Committee of the Regions — The future of the European Employment Strategy (EES) “A
strategy for full employment and better jobs for all”’

(COM(2003) 6 final)

(2003/C 133/09)

On 14 January 2003 the Commission decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the above-mentioned
communication.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee’s work on the subject, adopted its opinion on 4 March 2003. The rapporteur was Mr Koryfidis.

At its 398th plenary session on 26 and 27 March 2003 (meeting of 26 March), the European Economic
and Social Committee adopted the following opinion by 93 votes to five with three abstentions.

1.

Introduction

At the end of 1997 the Luxembourg summit launched
1.1.
the European Employment Strategy (EES). The ambition was
to achieve decisive progress within five years, especially in the
areas of long-term unemployment and youth unemployment.
Even before the entry into force of the Treaty of Amsterdam,
the summit initiated implementation of the new open method
of coordination, which is enshrined in Article 128, by ratifying
the first set of Employment Guidelines.

1.2.
Article 126 of the Treaty reaffirms national com-
petence for employment policy while also stating that employ-
ment is a common concern and inviting the Member States to
develop a coordinated strategy at EU level.

1.2.1.
Largely inspired by the Treaty provisions on coordi-
nation of economic policy (1) and by the coordination of
employment policies which began at the Essen European
Council in 1994, the new Article 128 laid down the framework
for the development of national employment policies based
on the EU’s common priorities and interests.

1.2.2.
According to this new framework, policy coordi-
nation is achieved on the basis of a ‘management by objectives’
approach. More specifically, this involves the following steps:

— The Employment Guidelines are decided each year by
following a proposal by the European

the Council
Commission.

— National employment action plans (NAPs) are drawn up

by the Member States based on the guidelines.

— The NAPs are evaluated in a joint report on employment

by the European Commission and the Council.

— The next year’s guidelines are laid down on the basis of

this evaluation.

1.2.3.
Since 2000, the Council, following a proposal from
the Commission, has published specific recommendations for
the Member States as a supplement
to the Employment
Guidelines.

The ‘management by objectives’ approach was also
1.2.4.
backed up with measurable targets at European and national
level in many areas and with the progressive development of
agreed statistical indicators to measure progress.

1.2.5.
Synchronising the Luxembourg process with the
process of coordinating the broad economic policy guidelines
constitutes the new framework for implementation of the new
EES.

1.2.6.
Since the very start, the EESC gave effective sup-
port (2) for the preparatory work that led to adoption of the
European employment strategy. Since then it has been
involved, always actively, in formulating the guidelines and
more generally in assessing and shaping the European employ-
ment strategy (3).

( 1) Treaty Articles 98 and 99.

OJ C 36, 8.2.2002.

(2) OJ C 19, 21.1.1998.
(3) OJ C 209, 22.7.1999, OJ C 368, 20.12.1999, OJ C 14, 16.1.2001,

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2. The Commission Communication

— specific messages addressed to the social partners;

2.1.
In the Communication from the European Com-
mission, the EES is singled out as being a key tool to meet the
ambitious Lisbon objectives of full employment, quality in
work and social inclusion/cohesion through employment.

The three overarching objectives of employment policy

2.5.
associated with the Lisbon strategy are:

— the definition of appropriate targets.

However, it is pointed out that, in order to be effective,
2.2.
the EES will have to be articulated with a range of other
policies which are well established and Treaty based, as in the
case of the Broad Economic Policy Guidelines, or more recent,
such as in the area of education and training, entrepreneurship,
social inclusion, pensions and immigration.

2.3.
The open method of coordination of the EES based on
Article 128 of the Treaty is considered to have proved its
value. Following the request of the Barcelona European Council
calling for a strengthening of the EES and the conclusion of
the Council debate on the ‘streamlining’, consideration must
be given to the optimal use of the instruments provided by the
Treaty and developed by the practice so far. In specific terms,
the requirements are as follows:

— full employment;

— quality and productivity at work;

— cohesion and an inclusive labour market.

2.6.
The priorities proposed by the Commission as being
essential for achieving the overarching objectives above define
the content of the new EES more specifically. These are:

— active and preventive measures for the unemployed and

the inactive;

— making work pay;

— fostering entrepreneurship to create more and better jobs;

— stable and result-oriented Employment Guidelines;

— transforming undeclared work into regular employment;

— specific policy guidance through recommendations;

— promoting active ageing;

— focus on implementation through NAPs;

— the Joint Employment Report;

— building on evaluation and mutual learning;

— ensuring consistency with other processes;

— better governance.

2.4.
The Communication points to the need for a new
generation of Employment Guidelines which will move away
from the horizontal objectives and specific guidelines clustered
under four pillars of the first period of the EES (1997-2002).
The new generation will have to incorporate:

— the three overarching objectives reflecting the Lisbon

balance;

— immigration;

— promoting adaptability in the labour market;

— investment in human capital and strategies for lifelong

learning;

— gender equality;

— supporting integration and combating discrimination in

the labour market for people at a disadvantage;

— addressing regional employment disparities.

Lastly,

2.7.
the Communication refers to the effective
delivery and governance of the new EES. Making particular
mention of the European Parliament Resolution of September
2002 emphasising the need to better integrate the EES with
national, regional and local labour market policy and with ESF
policies, the Communication highlights the importance of the
local actors, NGOs
involvement of national parliaments,
and civil society in the European employment process. The
emphasis must be on achieving the following goals:

— a stronger emphasis on the delivery and governance of

the EES;

— effective and efficient delivery services;

— the identification of a limited number of priorities;

— strong involvement of the social partners;

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— mobilisation of all relevant actors;

— adequate financial allocations.

3.2.1.
The EESC supports the view that the key priority of
the new EES must be to achieve the objectives set at Lisbon on
more and better jobs and greater social cohesion.

3. General comments

The EESC agrees

3.1.
the employment policies
that
implemented by the Member States under the EES over the
period 1997-2001 in order to improve the functioning of
labour markets have led to an increase in the employment rate
and a reduction of unemployment.

3.1.1.
However, compared to the Lisbon targets on levels
of employment and participation, and on unemployment and
productivity per worker in the EU as a whole — targets which
the EESC accepts and endorses — there are still substantial
weaknesses and deficiencies.

3.1.2. Moreover, disparities related to gender, age and
disability, as well as disparities between Member States and
between regions within Member States, continue to give cause
for concern.

On the one hand, responsibility for this lies with the
3.1.3.
Member States and their inadequate response to the demands
and obligations arising from the Lisbon strategy and objectives.
On the other hand, it should also be pointed out that achieving
these objectives will require European economic policy to be
more strongly geared towards the objective of high levels of
employment. That can only be secured by considerable
improvements in future coordination between the European
broad economic policy guidelines and the EES employment
policy guidelines. In this context, the EESC deeply regrets the
loss of impetus in the Lisbon strategy as a result, inter alia, of
the global economic crisis. Consequently, all European leaders
and, in particular, monetary and fiscal authorities must reiterate
their commitment to achieving the Lisbon objectives and must
learn the lessons of past failures in order to remain on course,
in particular by supporting reflationary macroeconomic poli-
cies. These measures are essential to achieving the objective of
3 % growth which underpins the whole Lisbon strategy and
which will enable more, better quality jobs to be created.

3.2.2.
At the same time, the EESC supports the view that
the Lisbon objectives on increasing employment rates and the
supply of jobs, promoting better quality in work and increased
productivity, consolidating labour markets without exclusion
and reducing disparities between regions are interlinked and
complementary.

3.2.3.
The Committee also takes the view that achieving
the above-mentioned objectives will require first and foremost:

— strong and sustainable economic growth (2) and

— rebuilding confidence among European citizens and
creating a positive vision for the future, based on citizens’
involvement, ensuring a more balanced distribution of
the wealth produced and the surplus created by modern
technology (2).

The EESC obviously endorses the aim of sustainable
3.2.3.1.
economic growth in particular, the policies associated with it
and the interlinking of
these with employment policies.
However, it would stress particularly the need for a multi-
faceted approach to the problem taking account of
the
international economic situation, the single market and opti-
mum utilisation of it, consolidating the Eurozone and using it
to greater effect and the need to develop more integrated and
uniform policies on all matters, including immigration.

3.2.4.
In addition, the Committee would point out that the
unemployment problem in a 25-member EU may assume
different, more critical forms and proportions if there are no
integrated preventive policies developed immediately.

The EESC emphasises its agreement with the three

3.3.
similarly interlinked objectives of the new EES, namely:

— increasing the employment rate and full employment;

3.2.
This being the case, in order to achieve the Lisbon
objectives, also bearing in mind the forthcoming enlarge-
ment (1) in particular, the EESC feels that the Member States
must promote the structural changes envisaged.

— quality and productivity at work;

— social cohesion in a labour market without exclusions.

( 1) OJ C 85, 8.4.2003.

(2) Resolution to the Spring European Council of 21 March 2003.

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3.4.
The EESC feels that fewer, simpler and more constant
guidelines concentrating on the new priorities of the EES and
on measurable objectives will make the EES more effective.

3.7.1.
The EESC welcomes the fact that significant progress
has been made in developing a true territorial dimension and
endorses the willingness to increase the involvement of civil
society at local level.

3.4.1.
In line with the views expressed in previous EESC
opinions, the guidelines must maintain a broad and integrated
policy scope, encompassing labour market policies, economic
growth, entrepreneurship, employee protection and social
protection, which help to increase employment and improve
quality in work.

The Committee would also point out that the quality
3.7.2.
of the EES would certainly be improved if the national action
plans were discussed and approved by national parliaments in
the context of annual national employment policy budgets.

3.5.
In the course of its work, the EESC has welcomed the
new priorities put forward, such as the policy on active
ageing (1), the combination of social protection and employ-
ment (2),
the priority concerning immigration (3) and the
priority of transforming undeclared work into regular employ-
ment (4). The EESC would also stress the need to marry active
ageing policies with consideration for difficult work situations
and the current state of the economy, which is leading to
company restructuring on a major scale, all too often resulting
in redundancy for older workers. Ambitious social pro-
grammes must ensure that redundancies are accompanied by
back-to-work or retraining measures while also leaving open
current opportunities for early retirement.

3.5.1.
The Committee also stresses the need to promote
quality in work under the policy for more and better jobs
given that quality jobs are proven to be more viable and are
associated with increased productivity.

3.5.2.
balance between flexibility and safety in the labour market.

It also emphasises the importance of ensuring a

3.8.
As pointed out in previous EESC opinions, in order to
improve the effectiveness of the new EES, there is still a need
for:

— the guidelines to be combined with quantitative objec-
tives, especially at national, regional and local level;

— greater emphasis to be put on results and on more
effective implementation (including the monitoring there-
of) and

— these results to be accompanied by recommendations.

3.8.1.
The EESC firmly believes that these recommen-
dations in particular provide the key to implementation of the
strategy by the Member States. Therefore, the annual review of
implementation and progress in relation to the objectives set
(based on the NAPs and the performance indicators) will have
to continue, and EES reform will thus also have to focus on
increasing the onus on Member States, for instance, through
additional quantifiable objectives.

3.6.
The EESC feels that synchronising the Luxembourg
process with the process of coordinating the Broad Economic
Policy Guidelines is essential for effective management of the
EES. As the EESC has reiterated many times in the wider
context of viable development, employment must be a major
part of the economic policy mix and the objectives thereof.

In any event and irrespective of the results, the
3.8.2.
relevant statistical data are vital for feedback on the EES. The
EESC highlights the importance of such data and calls on the
Commission to work in a coordinated manner and with all its
resources to secure in good time reliable statistical data based
on comparable and credible indicators for all the Member
States.

3.7.
The EESC feels that there is a need for a strong
commitment by the social partners at all levels — European,
national and local — from the policy-making stage through to
policy evaluation and implementation.

4. Specific comments

( 1) EESC opinion on ageing workers, OJ C 14, 16.1.2001 and OJ

C 36, 8.2.2002, point 2.2.

( 2) OJ C 117, 26.4.2000.
( 3) OJ C 125, 27.5.2002.
( 4) COM(2002) 487 final, 3.9.2002.

4.1.
Based on the points made above, the EESC feels that
the new EES, which includes concrete intermediate targets,
may help to achieve the Lisbon objectives inasmuch as it
will be accompanied by firm and integrated guidelines. The
effectiveness of these will be monitored systematically.

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4.2.
If the choice of guidelines with a three-year time frame
is to be productive, it must tie in with the major challenges of
time, of which the most prominent are the
the present
economic situation (recession) and the forthcoming enlarge-
ment of the EU.

4.4.2.
There should also be a guideline devoted to the
gradual conversion of undeclared work into legal employment
and of the black economy into legitimate economic activity.
This can be achieved with a combination of measures and
incentives, by simplifying procedures and by reducing taxation
on work.

4.2.1.
In any event, the EESC particularly welcomes the
new element of the EES, i.e. guidelines with a three-year time
frame, as this makes it possible to develop medium-term
policies to solve the unemployment problem.

In order to create the conditions for addressing the
4.3.
major medium and long-term challenges, as well as quality in
jobs and improved productivity, the EESC attaches particular
importance to the question of investment in human capital. It
considers lifelong learning to be a guideline of prime import-
ance and strongly emphasises the need to substantially increase
the relevant investment using public and private resources. At
the same time, it highlights the need to find and develop a
more flexible and productive way of using the funds available,
emphasising the role and contribution of the Structural Funds
and particularly of the European Social Fund for this purpose.

In addition to tying the guidelines in with today’s
4.4.
major issues (point 4.2) and giving priority to investment in
human capital, as well as simplifying the guidelines and
underpinning those in the previous EES which have proved
effective, it will be necessary to reinforce the newly introduced
elements in the new generation of employment guidelines,
specifically:

4.4.1.
There should be a guideline devoted to enhancing
preventive and active measures for the long-term unemployed,
the inactive, the disabled, women, young people and ethnic
minorities with the aim of removing the obstacles preventing
them from entering and staying in the labour market and in
viable jobs. In that connection, particular importance is also
attached to identifying jobseekers’ requirements at an early
stage and the appropriate provision of support and reinte-
gration schemes.

As regards the disabled (1), an integrated insti-
4.4.1.1.
tutional approach is required, including strengthening employ-
ment guideline 7, powerful
incentives for employers who
employ disabled workers and the creation of the necessary
conditions for familiarising disabled people with modern
technologies.

4.4.3.
Another guideline should be devoted to the creation
of favourable conditions for developing businesses and rein-
forcing entrepreneurship, especially for small and medium-
sized enterprises, as well as partnerships (cooperatives, associ-
ations, mutual societies), the prime objective of which would
be to create more high-quality and durable jobs.

4.4.3.1.
the EESC would point out that

On the subject of entrepreneurship in particular,

— entrepreneurial activity, including that by people who
aim to provide social services and/or services of general
interest, is the real job creator;

— small enterprises are usually labour-intensive, creating
more jobs than large enterprises, which tend to be more
capital-intensive;

— an increase in the number of small and medium-sized
enterprises in the EU on its own is not an adequate
indicator of policy success;

— care must be taken to ensure that there is an increase in
the number of small businesses and that people are not
being forced to opt for independent entrepreneurial
activity because the regular labour market does not
provide any opportunity or prospect of paid employ-
ment (2);

— businesses in the traditional sectors still contribute to job
creation and should therefore be included in European
and national policies in support of enterprises;

— there is a need to improve quality in the creation
of enterprises by providing appropriate training for
prospective entrepreneurs and support
services for
emerging businesses.

4.4.4.
Another guideline should be devoted to the manage-
ment of migration trends (3) and the integration of immigrants
into an evolving society through employment.

( 1) OJ C 241, 7.10.2002.

(2) OJ C 368, 20.12.1999, point 3.2.
(3) OJ C 125, 27.5.2002, point 4.1.12.

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4.4.4.1.
The EESC believes it is necessary for the EU to
develop a uniform immigration policy as immigration, illegal
immigration and undeclared work are interlinked. With regard
to the new EES, the EESC supports the inclusion of immigrants
in the formal labour market as this may contribute to achieving
the Lisbon objectives and social cohesion.

5. Conclusions and proposals

The EESC endorses the three interlinked objectives of

5.1.
the new EES, i.e.:

— increasing the employment rate and full employment;

4.4.4.2.
In this connection, the Committee endorses the
Commission principle of non-discrimination in relation to
non-EU workers, but feels that this must be linked to the clear
and reliable management of new labour immigration and
effective measures to combat undeclared work.

— quality and productivity at work;

— cohesion in a labour market without exclusions.

4.4.5.
Lastly, the removal of regional disparities in employ-
ment, both between Member States and within them, is also a
priority to which the new EES should devote a guideline.

4.4.5.1.
The EESC feels that this guideline should focus on
mobilising the Member States and local social partners and
territorial authorities.

The EESC does not agree with the Commission’s
4.5.
argument (1) regarding ‘poverty traps’ as it is too much of a
generalisation (2).

4.6.
The Committee endorses the high priority given to
reducing the number of accidents at work (3). This should also
be a priority in the Member States.

4.7.
The Committee welcomes and endorses the line taken
by the Commission in promoting the mobilisation of all
players, including civil society and NGOs, in the employment
strategy and creating opportunities for them to be involved (4).

( 1) Point 2.2.2 of the Communication.
( 2) Experience in the Member States shows that this only happens in
particular cases and that there are legal provisions prohibiting
abusive claims. The EESC fears that this generalisation might be
interpreted in the Member States as an incentive to cut all social
welfare services.

( 3) Last sentence of point 2.2.2 of the Communication.
( 4) This approach follows on from the positive example set by
involving the economic and social partners in the Structural Funds
monitoring committees. The economic and social partners see it
as their own particular challenge to be involved in national
dialogue on the EES. For example, they are directly implicated in
the use of the term ‘Social Economy’ in point 2.2.11, in pursuing
the goal of cohesion and an inclusive labour market and in
delivery and governance at local level.

The Committee feels it is extremely important that these
objectives be translated into clear guidelines for the Member
States.

This endorsement, as well as the EESC’s proposals, take

5.2.
account of the following factors:

— the role of economic policies in creating growth and

therefore jobs;

— the current economic slowdown;

— the major step of enlargement;

— the longstanding trend towards an ageing population;

— the continuing disparity between the sexes, despite a

slight improvement.

The EESC feels that investment in human capital and
5.3.
the development of the institution of lifelong learning are key
factors for achieving the objectives of the new EES. With
regard to the latter in particular, the EESC proposes that there
should be higher quantitative objectives for 2010 in the EES
than those given (5).

5.4.
The proposal to make work pay highlights the complex
interconnection between social protection and employment,
as well as the need for synergy between policy areas which
affect one another (e.g. fiscal policy and taxation, benefit policy
and social protection, job protection).

(5) ‘By 2010, the EU-average level of participation in lifelong learning
should be at least 15 % of the adult working age population (25-
64 age group) and in no country should it be lower than 10 %’
COM(2002) 629 final, point 59. ‘The EESC therefore feels that
the proposed European benchmark for lifelong learning should
be modified to make it more ambitious. A target of bringing the
country with the lowest performance today up to the level of the
highest performer by 2010 is ambitious, but necessary.’ EESC
opinion in preparation (point 3.6.1), on COM(2002) 629 final
(European benchmarks in education and training).

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5.4.1.
In this context, the EESC proposes that the Member
States establish incentives to subsidise unemployed people
who are receiving education or training (lifelong learning). It is
clear that these incentives will be provided in addition to the
unemployment benefit paid by the state where the unemployed
person resides. Social Fund resources could be used for this
purpose.

5.5.
The EESC feels it is right that immigration policy is
highlighted as a facet of the new EES and points out the need
to give priority to developing a single EU immigration policy.

5.6.
The Member States will have to commit administrative
and financial resources (even if, in some cases, it is necessary
to restructure public spending) to support implementation of
the ambitious goals of the new EES.

5.6.1.
On this point, the Committee calls for national
parliaments to be involved in procedures to do with the EES.
If NAPs were discussed and approved by national parliaments
in the context of the corresponding annual national budgets,
this would certainly improve the quality of employment
policy, as well as helping to integrate it more effectively with
the various other national and European policies.

5.7.
The EESC proposes the immediate implementation of
the social partners’ proposal for tripartite cooperation on
growth and employment, as well as formalisation of the
subsequent proposal of the European Commission to hold a
tripartite social summit before the Spring European Council.

The Committee also agrees with the proposed quanti-
5.8.
tative objectives in the new EES with 2010 as the target date
and feels that relevant intermediate national objectives should
be set. These should be determined by the Member States and
systematically assessed under the open method of coordi-
nation.

It

5.9.
The EESC feels that an integrated policy to create more
high-quality and viable jobs requires favourable conditions to
foster entrepreneurship in general and thus all kinds of
therefore calls on the Member States and
enterprises.
the Commission to develop specific and integrated policies
according to circumstances. With the prime objective being to
create more high-quality and viable jobs, the EESC points out
in particular the importance of actually implementing the
recommendations of the European Charter for Small Enter-
prises and bolstering such enterprises, as well as partnerships
(cooperatives, associations, mutual societies).

Brussels, 26 March 2003.

The President

of the European Economic and Social Committee

Roger BRIESCH

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APPENDIX

to the opinion of the European Economic and Social Committee

The following amendment was rejected but obtained at least one-quarter of the votes cast:

Point 4.4.2

Last sentence — amend to read as follows:

‘... There should also be a guideline devoted to the gradual conversion of undeclared work into legal employment
and of the black economy into legitimate economic activity. This can be achieved with a combination of measures
and incentives, and by simplifying procedures and by reducing taxation on work.’

Reason

Reducing taxation on all types of work would lead to huge reductions in revenue, as taxes would have to be removed
almost completely in order to make illegal work unprofitable. If taxes were only to be cut in sectors where illegal
work is rife, whole sections of industry would have to be subsidised. This would lead to completely unacceptable
distortions of competition between sectors.

Result of the vote

For: 41, against: 48, abstentions: 8.