Proposal for a Council Decision on guidelines for the Employment Policies of the Member States
Date: 2003-04-08
Institutions: European Commission
Subjects: European Employment Strategy, economic and social cohesion, employment policy, full employment, governance, labour market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 08.4.2003
COM(2003) 176 final

2003/0068 (CNS)

Proposal for a

COUNCIL DECISION

ON GUIDELINES FOR THE EMPLOYMENT POLICIES
OF THE MEMBER STATES

(presented by the Commission)

EXPLANATORY MEMORANDUM

A  fundamental  review  based  on  an  extensive  evaluation  and  the  European
Council's orientation

Article 128.2 of the Treaty provides for the annual adoption of the Guidelines for the
employment  policies  of  the  Member  States  on  the  basis  of  a  proposal  from  the
Commission.

The present proposal provides for a fundamental review of the guidelines based on a
major  evaluation,  carried  out  jointly  by  the  Commission  and  the  Member  States,  of
the  experience  of  the  first  five  years  of  the  Employment  Strategy.  This  led  to  a
Communication of 14th January 2003 outlining the Commission's view on the future of
the  European  Employment  Strategy  and  on  the  priorities  for  the  new  Employment
Guidelines1.  The  proposals  account  for  the  extensive  debate  and  consultation  held
throughout 2002, and so far in 2003, with all EU institutions and major stakeholders,
including civil society. In particular they account for the important contributions from
the  European  Parliament,  including  the  Resolution  of  25th  September  2002  on  the
evaluation  of  the  EES,  the  resolution  on  streamlining  the  annual  economic  and
employment policy co-ordination cycles of 5th December 2002, and the Resolution of
February 2003 on the preparation to the Spring European Summit.

At  its  meeting  on  20th  and  21st  March  2003,  the  Spring  Brussels  European  Council
provided  clear  orientations  for  the  future  Employment  Guidelines,  reflecting  in
particular  the  key  messages  sent  by  the  Council  and  the  Commission  in  the
framework of the Joint Employment Report adopted on 06/03/03.

A Medium Term Strategy to address the new labour market challenges

The Guidelines  address  the need  to  re-design  the  Employment  Strategy  to account
for  an  enlarged  European  Union  and  to  better  deliver  the  Lisbon  strategy.  The
evaluation  of  past  experience  has  confirmed  the  positive  role  of  the  Employment
Strategy  in  supporting  the  employment  performance  of  recent  years.  However,  the
acceleration  of  economic,  social  and  demographic  change,  globalisation  and  the
demands  of  a  modern  economy,  and  the  forthcoming  EU  enlargement,  represent
important employment challenges that must now be addressed by the guidelines.
In line with the request for a streamlined approach, the Employment Guidelines  are
intended to be more stable and orientated towards delivering the medium-term goals
of the 2010 time-horizon set at Lisbon. To this end, whilst maintaining the annuality in
line with the Treaty, changes to the guidelines should be kept to a minimum until the
mid-term  review  in  2006.  Such  stability  should  be  facilitated  by  fewer  and  simpler
guidelines reflecting key common challenges. In line with the conclusions of the 2003
Brussels  European  Council,  emphasis  is  placed  on  more  result-oriented  guidelines
which allow Member States to design the appropriate mix of action. This requires that
the guidelines be underpinned by appropriate targets.

1

The future of the European Employment Strategy "A strategy for full employment and better jobs for
all" COM(2003)6 final 14.01.03

2

                                                
Support for the Lisbon objectives

The  successful  implementation  of  the  Lisbon  agenda  calls  for  the  employment
policies of Member States to foster, in a balanced manner, three complementary and
mutually  supportive  objectives  of  full  employment,  quality  and  productivity  at  work,
and  social  cohesion  and  inclusion.  The  achievement  of  these  objectives  requires
further  structural  reforms  concentrating  on  10  key  and  equally  important  priorities,
and  special  attention  paid  to  the  governance  of  the  process.  The  Employment
Guidelines are therefore presented  in  three parts, addressing  respectively  the  three
over-arching objectives for the strategy, the 10 key priorities for structural reform, and
the need to improve the delivery and governance of the process. All three elements
of  the  guidelines  deserve  to  be  reflected  in  National  Employment  Plans  and
monitored at EU level.

Priorities designed to tackle existing and new challenges

Within  the  priorities,  continuity  is  assured  by  the  fact  that  many  of  the  previous
generation  of  guidelines  and  priorities  are  also  covered  in  the  new  guidelines.
Important  examples  include  activation  and  prevention,  reform  of  tax  and  benefit
systems,  entrepreneurship,  adaptability  and  balancing  flexibility  and  security,  and
ensuring equal opportunities for all. Increased stress is placed on a number of areas
such  as  lifelong  learning,  active  ageing,  the  need  to  increase  the  supply  of  labour,
and to tackle undeclared work.

Good  governance  requires  building  an  effective  partnership  between  major
stakeholders and notably on the active involvement of European institutions, national
governments and parliamentary bodies, regional and local authorities, social partners
and civil society. The need to improve the delivery and governance of the process is
given a higher profile in the Guidelines.

Consistency and complementarity with the Broad Economic Policy Guidelines

The  Barcelona  European  Council  requested  that  policy  co-ordination  processes  be
more  streamlined,  with  synchronised  calendars  for  the  adoption  of  the  Broad
Economic  Policy  Guidelines  and  the  Employment  Guidelines.  In  its  report  on
streamlining of 3 December 2002, the Council considered that streamlining should be
guided  by  the  objective  of  increased  transparency  and  efficiency,  avoidance  of
overlap  and  repetition  in  the  formulation  of  the  guidelines,  and  ensure  consistency,
complementarity  and  coherence.  The  Employment  Guidelines  are 
therefore
presented  as  part  of  a  package  together  with  the  Employment  Recommendations
and the Broad Economic Policy Guidelines. The package is intended to be adopted
by the Council at the end of the first semester 2003.

Within  a  streamlined  approach  the  Broad  Economic  Policy  Guidelines  provide  the
overarching economic policy co-ordination for the European Union, while the leading
role  on  employment  policy  co-ordination  lies  with  the  Employment  Guidelines  and
Recommendations  to  Member  States.  The  2003  Brussels  European  Council
requested  that  the  Employment  Guidelines  and  the  Broad  Economic  Policy
Guidelines operate in a consistent way.

3

2003/0068 (CNS)

Proposal for a

COUNCIL DECISION

ON GUIDELINES FOR THE EMPLOYMENT POLICIES
OF THE MEMBER STATES

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission 2,

Having regard to the Opinion of the European Parliament 3,

Having regard to the Opinion of the European Economic and Social Committee 4,

Having regard to the Opinion of the Committee of the Regions 5,

Having regard to the Opinion of the Employment Committee,

Whereas:

(1)

(2)

(3)

2

3

4

5

6

Article  2  of  the  Treaty  on  the  European  Union  sets  the  Union  the  objective  of
promoting economic and social progress and a high level of employment. Article 125
of the  EC Treaty states  that  Member  States  and  the  Community  shall,  work  towards
developing  a  co-ordinated  strategy  for  employment  and  particularly  for  promoting  a
skilled,  trained  and  adaptable  workforce  and  labour  markets  responsive  to  economic
change with a view to achieving the objectives defined in Article 2.

Following the extraordinary European Council meeting on Employment on 20 and 21
November 1997 in Luxembourg, the Council Resolution of 15 December 1997 on the
1998 Employment Guidelines 6 launched a process with high visibility, strong political
commitment and a wide-ranging acceptance by all parties concerned.

The Lisbon European Council on 23 and 24 March 2000 set a new strategic goal for
the  European  Union  to  become  the  most  competitive  and  dynamic  knowledge-based
economy in the  world  capable  of sustainable economic  growth  with  more  and  better
jobs and greater social cohesion. To this end the Council agreed overall employment
targets  and  employment  targets  for  women  for  2010,  which  were  completed  at  the

OJ C …, …, p. .
OJ C …, …, p. .
OJ C …, …, p. .
OJ C …, …, p. .
OJ C 30, 28.1.1998, p 1.

4

                                                
(4)

(5)

(6)

(7)

(8)

Stockholm  European  Council  on  23  and  24  March  2001,  by  intermediate  targets  for
January 2005, and a new target for 2010 for the employment rate of older women and
men.

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  ambitious
policies  in  terms  of  increasing  employment  rates,  reducing  regional  gaps,  reducing
inequality and improving job quality.

The Barcelona European Council of 15 and 16 March 2002 called for a strengthening
of  the  European  Employment  Strategy  through  a  reinforced,  simplified  and  better-
governed  process,  with  a  timeframe  aligned  to  2010,  and  which  incorporates  the
targets  and  goals  of  the  Lisbon  strategy.  The  Barcelona  European  Council  also
requested  a  streamlining  of  policy  co-ordination  processes,  with  synchronised
calendars  for  the  adoption  of  the  Broad  Economic  Policy  Guidelines  and  the
Employment Guidelines.

The  Brussels  European  Council  of  20  and  21  March  2003  confirmed  that  the
Employment  Strategy  has  the  leading  role  in  the  implementation  of  the  employment
and  labour  market  objectives  of  the  Lisbon  strategy,  and  that  it  and  the  Broad
Economic  Policy  Guidelines,  which  provide  the  overarching  economic  policy  co-
ordination  for  the  Community,  should  operate  in  a  consistent  way.  The  European
Council  called  for  guidelines  to  be  limited  in  number,  results  orientated,  allowing
Member  States  to  design  the  appropriate  mix  of  action,  and  should  be  supported  by
appropriate targets.

The Employment Strategy has been exhaustively evaluated, including a thorough mid
term review of the strategy, completed in 2000, and a major evaluation in 2002 of the
experiences of the first five years. This evaluation pointed to the need for continuity in
the strategy to address remaining structural weaknesses, as well as the need to address
new challenges facing an enlarged European Union.

The successful implementation of the Lisbon agenda calls for the employment policies
of Member States to foster, in a balanced manner, three complementary and mutually
supportive objectives of full employment, quality and productivity at work, and social
cohesion and inclusion. The achievement of these objectives requires further structural
reforms  concentrating  on  10  key  interrelated  priorities,  and  special  attention  paid  to
the  coherent  governance  of 
the  process.  Policy  reforms  require  a  gender-
mainstreaming approach in implementing actions.

(9)

On  6th  December  2001  the  Council  adopted  a  series  of  indicators  to  measure  ten
dimensions for investing in quality in work and called for these indicators to be used
in monitoring the European Employment Guidelines and Recommendations.

(10) Active and preventative policies should contribute to the goals of full employment and
social inclusion by ensuring that unemployed people, and inactive people  wanting to
work, are able to compete in and integrate into the labour market.

(11)

Entrepreneurship  and  business  innovation  should  be  encouraged  in  order  to  exploit
better  the  potential  of  enterprises  to  create  more  and  better  jobs.  Member  States  are
committed  to  implementing  the  European  Charter  for  Small  Enterprises  and  are
engaged in a process of benchmarking of enterprise policy.

5

(12)

(13)

Providing  the  right  balance  between  flexibility  and  security  will  help  support  the
competitiveness of firms, increase  quality and productivity  in work and facilitate  the
adaptation  of  firms  and  workers  to  economic  change.  Levels  of  health  and  safety
standards at work need to be raised in line with the new Community strategy for 2002-
2006. The sectors of fishing, agriculture, construction, and health and social  services
are particularly high-risk sectors for accidents at work. Access of workers to training is
an  essential  element  of  the  balance  between  flexibility  and  security  and  the
participation  of  all  workers  should  be  supported  through  appropriate  targets,  taking
into account the returns on investment for workers, employers as well as society as a
whole.

The  implementation  of  coherent  and  comprehensive  lifelong  learning  strategies  is
critical in delivering full employment, improved quality and productivity at work, and
better  social  cohesion.  The  Barcelona  European  Council  welcomed  the  Commission
Communication ‘Making a European Area of Lifelong Learning” which spelt out the
essential  building  blocks  of  lifelong  learning  strategies  of  partnership,  insight  into
demand for learning, adequate resources, facilitating access to learning opportunities,
creating a learning culture, and striving for excellence. The Lisbon European Council
called  for  a  substantial  per  capita  increase  in  investment  in  human  resources.
Increasing investment requires sufficient incentives for employers and individuals, and
re-directing  public  finance  towards  more  efficient  investment  in  human  resources
across the learning spectrum.

(14) An  adequate  labour  supply  is  needed  in  order  to  support  economic  growth,  promote
employment,  and  support  the  sustainability  of  social  protection  systems.  The  Joint
report  from  the  Commission  and  the  Council  "Increasing  labour-force  participation
and promoting active ageing"7, concludes that this requires developing comprehensive
national  strategies  based  on  a  lifecycle  approach.  Policies  need  to  exploit  the
employment  potential  of  all  groups,  including  women,  older  workers,  people  with
disabilities  and  immigrants.  The  Barcelona  European  Council  agreed  that  the
European Union should seek, by 2010, a progressive increase of about 5 years in the
effective  average  exit  age  at  which  people  stop  working.  This  age  was  estimated  at
59.9 in 2001.

(15) Gender gaps in the labour market need to be progressively eliminated, if the EU is to
deliver  full  employment,  increase  quality  in  work  and  promote  social  inclusion  and
cohesion.  This  requires  both  a  gender  mainstreaming  approach  and  specific  policy
actions to create the conditions for women and men to enter, re-enter, and remain in
the labour market. The Barcelona European Council agreed that Member States should
provide childcare by 2010 to at least 90% of children between three years old and the
mandatory  school  age  and  at  least  33%  of  children  under  3  years  of  age.  The
underlying  factors  of  the  gender  gaps  in  unemployment  and  in  pay  should  be
addressed  and  targets  on  the  reduction  of  such  gaps  should  be  achieved  as  a  result,
without  calling  into  question  the  principle  of  wage  differentiation  according  to
productivity and labour market situation.

7

Joint report from the Commission and the Council "Increasing labour-force participation and promoting
active ageing", adopted by the Council on 7 March 2002.

6

                                                
(16)

The effective integration into the labour market of those at a disadvantage will deliver
increased social inclusion, employment rates, and improve the sustainability of social
protection  systems.  Policy  responses  need  to  tackle  discrimination,  provide  a
personalised  approach  to  individual  needs,  and  create  adequate  job  opportunities  by
providing recruitment incentives for employers. The Council Decision of 3 December
2001 designated 2003 as the "European Year of People with Disabilities"8. Access to
the labour market is a major priority with respect to people with disabilities who are
estimated  to  represent  some  37  million  people  in  the  EU,  many  of  whom  have  the
ability and desire to work.

(17)

In order to improve the prospects for full employment and social cohesion, the balance
between income from work against income in unemployment or  inactivity  should be
such as to encourage people to enter and to remain in the labour market, and to foster
job creation.

(18) Undeclared work is taken to mean "any paid activities that are lawful as regards their
nature but not declared to public authorities9". Studies estimate the size of the informal
economy on average at between 7% and 16% of EU GDP. This should be turned into
regular work in order to improve the overall business environment, the quality in work
of those concerned, social cohesion and the sustainability of public finance and social
protection  systems.  Improving  statistical  knowledge  about  the  extent  of  undeclared
work in Member States and the EU should be given priority.

(19)

(20)

(21)

The Barcelona European Council welcomed the Commission action plan on Skills and
Mobility  and  the  Council  Resolution  on  Skills  and  Mobility  of  3  June  2002  further
invited  the  Commission,  Member  States  and  the  Social  Partners  to  undertake  the
measures required. Better occupational and geographic mobility and job matching will
help increase employment and social cohesion. The potential of immigration to solve
labour  market  bottlenecks  should  be  given  due  consideration,  whilst  supporting  the
long-term development objectives of the countries of origin.

The  evaluation  of  the  first  five  years  of  Employment  strategy  highlighted  better
governance  as  a  key  for 
the  strategy's  future  effectiveness.  A  successful
implementation  of  employment  policies  depends  on  partnership  at  all  levels,  the
involvement of a number of operational services, and an adequate financial provision
to support the implementation of the guidelines. Member States have responsibility for
the  effective  implementation  of  the  Employment  Guidelines,  including  ensuring  a
balanced delivery at regional and local level.

The  effective  implementation  of  the  Employment  Guidelines  requires  active
participation  of  social  partners  at  all  stages,  from  designing  policies  to  their
implementation.  At  the  social  summit  on  13  December  2001  the  social  partners
expressed the need to develop and improve co-ordination of tripartite consultation. It
was also agreed that a Tripartite Social Summit for Growth and Employment would be
held before each Spring European Council.

8

9

OJ 19/12/2001 (2001/903/EC)
COM (1998) 219 final

7

                                                
(22)

In  addition to these Employment  Guidelines, Member  States  should  fully  implement
the Broad Economic Policy Guidelines and ensure that action is fully consistent with
the maintenance of sound public finances and macro-economic stability.

HAS DECIDED AS FOLLOWS:

The  guidelines  for  Member  States'  employment  policies  as  set  out  in  the  annex  are  hereby
adopted.

Article 1

Article 2

All  aspects  of  the  guidelines  shall  be  taken  into  account  by  the  employment  policies  of
Member  States  in  a  comprehensive  and  integrated  manner  and  reported  upon  in  National
Action Plans submitted annually on the 1st of October.

Done at Brussels,

For the Council
The President

8

The Employment Guidelines

A European strategy for full employment and better jobs for all

Member  States  shall  conduct  their  employment  policies  with  a  view  to  implementing  the
objectives  and  priorities  for  action,  and  progressing  towards  the  targets  specified  below.
Special attention will be given to ensuring good governance of employment policies.

to 

In  addition 
their  associated  Employment
Recommendations,  Member  States  should  fully  implement  the  Broad  Economic  Policy
Guidelines and ensure that the two instruments operate in a consistent way.

these  Employment  Guidelines  and 

A. The overarching objectives

Reflecting  the  Lisbon  agenda,  the  employment  policies  of  Member  States  shall  foster  the
three objectives of full employment, quality and productivity at work, and social cohesion and
inclusion.

These objectives should be pursued in a balanced manner, reflecting their equal importance in
achieving  the  ambitions  of  the  Union.  Synergies  should  be  fully  exploited,  building  on  the
positive interaction between the three objectives.

Full employment

Member  States  shall  aim  to  achieve  full  employment  by  implementing  a  comprehensive
policy approach incorporating demand and supply side measures and thus raise employment
rates towards the Lisbon and Stockholm targets. .

Policies shall contribute towards achieving on average for the EU:

- An overall employment rate of 67% in 2005 and 70% in 2010

- An employment rate for women of 57% in 2005 and 60% in 2010

- An employment rate of 50% for older workers in 2010.

Member States shall set corresponding national targets consistent with the outcome expected
at EU level.

Improving quality and productivity at work

Improved  quality  at  work  is  closely  inter-linked  with  the  move  towards  a  competitive  and
knowledge-based  economy  and  should  be  pursued  through  a  concerted  effort  between  all
actors  and  particularly  through  social  dialogue.  Quality  is  a  multi-dimensional  concept
addressing both job characteristics and the wider labour market. It encompasses intrinsic job
quality, skills, lifelong learning and career development, gender equality, health and safety at
work,  flexibility  and  security,  inclusion  and  access  to  the  labour  market,  work  organisation
and  work-life  balance,  social  dialogue  and  worker  involvement,  diversity  and  non-
discrimination, and overall work performance.

9

Increasing  employment  rates  must  go  hand  in  hand  with  raising  overall  labour  productivity
growth. Quality at work can help increase labour productivity and the synergies between both
should be fully exploited. This represents a specific challenge for social dialogue.

Strengthening social cohesion and inclusion

Employment  policies  should  foster  social 
in
employment through: promoting access to stable and quality employment for all women and
men  who  are  capable  of  working;  combating  discrimination  on  the  labour  market;  and
preventing the exclusion of people from the world of work.

inclusion  by  facilitating  participation 

Economic  and  social  cohesion  should  be  promoted  by  reducing  regional  employment  and
unemployment disparities, tackling the employment problems of deprived areas in the EU and
positively supporting economic and social restructuring.

Policies  should  contribute  notably  to  achieving  a  substantial  reduction  by  2010  in  the
proportion of working poor in all Member States.

B. Priorities for Action

In  pursuing  the  three  overarching  objectives,  Member  States  shall  implement  the  following
priorities.  In doing  so they  shall adopt a  gender-mainstreaming  approach  across  each  of  the
priorities.

1. 

ACTIVE AND PREVENTATIVE MEASURES FOR THE UNEMPLOYED AND INACTIVE

Member  States  will  prevent  inflows  into  long-term  unemployment  and  promote  the
sustainable reintegration into employment of both unemployed and inactive people wanting to
work. They will:

– 

– 

ensure that job seekers benefit from an early identification of their needs, advice and
guidance,  job  search  assistance  and  a  personalised  action  plan  at  an  early  stage  of
their  unemployment  spell;  by  2005,  such  services  should  be  offered  to  all
unemployed people before they enter their 4th month of unemployment

offer  job  seekers  access  to  effective  and  efficient  measures  to  enhance  their
employability  and  chances  of  integration.  Active  labour  market  measures  should
meet  individual  needs,  with  special  attention  given  to  people  facing  the  greatest
difficulties in the labour market, and should equip people with relevant experience to
compete in the labour market; in particular Member States will ensure that:

by  2005,  all  unemployed  people  are  offered  a  new  start  in  the  form  of  work
experience  or  training  (combined  where  appropriate  with  on-going  jobsearch
assistance) before reaching 6 months of unemployment in the case of young people
most prone to becoming long-term unemployed, and 12 months of unemployment in
all other cases

by 2010, 30% of the long-term unemployed  participate  in  an active measure  in  the
form of work experience or training.

10

– 

ensure  regular  evaluation  of  the  effectiveness  and  efficiency  of  labour  market
programmes and review them accordingly.

2. 

FOSTER ENTREPRENEURSHIP AND PROMOTE JOB CREATION

Member  States  will  encourage  the  creation  of  more  and  better  jobs  by  fostering
entrepreneurship  and  innovation  in    a  favourable  business  environment.  Particular  attention
will be given to exploiting the job creation potential of new enterprises, of the service sector
and of R&D. Policy initiatives supported by national targets will focus on:

– 

– 

Promoting  education  and  training  in  entrepreneurial  and  management  skills  and
providing  support,  including  through  training  to  make  entrepreneurship  a  career
option  for  all,  especially  for  women,  unemployed  and  inactive  people  wanting  to
work;

Simplifying  and  reducing  administrative  and  regulatory  burdens  for  business  start-
ups and for the hiring of staff, facilitating access to micro-credits and risk capital for
start-ups  and  enterprises  with  a  high  growth  potential  (see  also  BEPGs,  Guideline
11).

3. 

ADDRESS CHANGE AND PROMOTE ADAPTABILITY IN WORK

Member States will facilitate the adaptability of workers and firms to change, taking account
of the need for both flexibility and security. They will modernise employment legislation by
relaxing overly restrictive elements that affect labour market dynamics and the employment
of  those  groups  facing  difficult  access  to  the  labour  market,  develop  social  dialogue,  foster
corporate social responsibility, and undertake other appropriate measures to promote:

– 

– 

– 

– 

diversity  of  contractual  and  working  arrangements,  including  on  working  time,
favoring  career  progression,  a  better  balance  between  work  and  private  life  and
between flexibility and security;

better working conditions, including health and safety, and access for all workers to
training; policies will aim to achieve in particular:

a  15%  overall  reduction  in  the  incidence  rate  of  accidents  at  work,  and  a  25%
reduction for high risk sectors, in each Member State

a reduced gap in the participation in training of low skill workers compared to high
skill workers.

the  design  and  dissemination  of  innovative  and  sustainable  forms  of  work
organization;

the positive management of economic change and restructuring.

11

4. 

MORE  AND  BETTER  INVESTMENT  IN  HUMAN  CAPITAL  AND  STRATEGIES  FOR
LIFELONG LEARNING

Member States  will  implement lifelong learning strategies, including through improving the
quality and efficiency of education and training systems, in order to equip all individuals with
the  skills  required  for  a  modern  workforce  in  a  knowledge-based  society,  to  permit  their
career development and to reduce skills mismatch and bottlenecks in the labour market.

Policies will aim in particular to achieve the following outcomes by 2010:

– 

– 

Member States should ensure that the average percentage of 25-64 years old in the
EU with at least upper secondary education reaches 80% or more.

an increase in the participation rate of adults in  education  and  training  to  15%  in
the EU, with participation rates above 10% in every Member State.

Efficient  investment  in  human  capital  by  employers  and  individuals  will  be  facilitated,  for
example  through  appropriate  tax  treatment  of  expenditure  on  education  and  vocational
training, and public finance will be re-directed towards investment in human resources in line
with overall budgetary commitments.

Policies will aim in particular to achieve by 2010 a substantial per capita increase of  public
and  private  investment  in  human  resources,  according  to  national  targets  including  a
significant increase in investment by enterprises in the training of adults to aim at 5% of total
labour costs overall in the EU.

5. 

INCREASE LABOUR SUPPLY AND PROMOTE ACTIVE AGEING

Member States will promote an adequate availability of labour and employment opportunities
to support economic growth and employment. They will:

– 

– 

– 

increase  labour  market  participation  by  using  the  potential  of  all  groups  of  the
population, through a comprehensive approach covering in particular the availability
and  attractiveness  of  jobs,  making work pay,  raising  skills,  and  providing  adequate
support measures;

promote  active  ageing,  notably  by  fostering  working  conditions  conducive  to  job
retention  -  such  as  access  to  continuing  training  and  flexible  forms  of  work
organisation  -  and  eliminating  incentives  for  early  exit  from  the  labour  market,
notably  by  reforming  early  retirement  schemes  and  ensuring  that  it  pays  to  remain
active in the labour market;

In  particular,  policies  will  aim  to  achieve  by  2010  an  increase  by  5  years,  at  EU
level, of the effective average exit age from the labour market (estimated at 59.9 in
2001). In this respect, Member States shall set national targets which are consistent
with the outcomes expected at EU level.

and,  make  use  of  the  additional  labour  supply  resulting  from  immigration,  in  line
with  Community  immigration  policy  and  in  a  manner  supporting  the  long-term
development objectives of the countries of origin.

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6. 

GENDER EQUALITY

Member  States  will,  through  a  gender  mainstreaming  approach  and  specific  policy  actions,
progressively  eliminate  gender  gaps  in  employment  rates,  unemployment  rates,  and  pay.  In
particular,  policies  will  aim  to  achieve  by  2010  the  elimination  of  gender  gaps  in
unemployment and a halving of the gender pay gap in each Member State, through a multi-
faceted approach addressing the underlying factors of the gender pay gap, including sectoral
and  occupational  segregation,  education  and  training,  job  classifications  and  pay  systems,
awareness raising and transparency.

Particular  attention  will  be  given  to  reconciling  work  and  family  life,  notably  through  the
provision of care services for children and other dependants. Policies will aim to achieve, by
2010,  a  33%  coverage  of  childcare  services  for  0-3  year  olds  and  a  90%  coverage  of
childcare services for 3 years old to mandatory school age in each Member State.

7. 

PROMOTE  THE  INTEGRATION  OF  AND  COMBAT  THE  DISCRIMINATION  AGAINST
PEOPLE AT A DISADVANTAGE IN THE LABOUR MARKET

Member States will foster the integration of persons facing particular difficulties on the labour
market,  such  as  early  school  leavers,  people  with  disabilities,  immigrants,  and  ethnic
minorities, by developing their employability, increasing job opportunities and preventing all
forms of discrimination.

In particular, policies will aim to achieve by 2010:

– 

– 

– 

a  halving  of  the  school  dropout  rates  in  each  Member  State  leading  to  an  overall
reduction in the EU to 10%.

a reduction by half in each Member State in the unemployment gaps for people at a
disadvantage, according to national definitions.

a reduction by half in each Member State in the unemployment gaps between non-EU
and EU nationals.

8. 

MAKE WORK PAY THROUGH INCENTIVES TO ENHANCE WORK ATTRACTIVENESS

Member  States  will  reform  financial  incentives  with  a  view  to  make-work  attractive  and  to
encourage  people  to  seek,  take  up  and  remain  in  work.  They  will  reform  tax  and  benefit
systems and their interaction with a view to eliminating unemployment, poverty and inactivity
traps,  and  encouraging  the  participation  of  women,  low  skilled  workers,  older  workers  and
those furthest from the labour market in employment.

Whilst  preserving  an  adequate  level  of  social  protection,  they  will  in  particular  review
replacement  rates  and  benefit  duration;  ensure  effective  benefit  management,  notably  with
respect to the link with effective job search, taking into account individual situations; consider
the provision of in work benefits, where appropriate; reduce high marginal effective tax rates
to eliminate inactivity traps; and reduce the tax burden on the low paid.

In particular, policies will aim at achieving by 2010 a significant reduction in the tax burden
on low paid workers according to national targets.

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9. 

TRANSFORM UNDECLARED WORK INTO REGULAR EMPLOYMENT

Member States will develop and implement a broad policy mix to eliminate undeclared work,
which  combines  simplification  of  the  business  environment,  removing  disincentives  and
providing  appropriate  incentives  in  the  tax  and  benefits  system,  improved  law  enforcement
capacity and the application of sanctions. They will invest in the development of the statistical
basis at national and EU level to measure the extent of the problem and progress achieved at
national level.

Policies  will  aim  to  achieve  by  2010  a  substantial  reduction  in  undeclared  work  in  each
Member State, based on an improved statistical basis.

10. 

PROMOTE  OCCUPATIONAL  AND  GEOGRAPHICAL  MOBILITY  AND  IMPROVE  JOB
MATCHING

Member  States  will  address  labour  shortages,  bottlenecks,  and  regional  employment  and
unemployment  disparities,  by  promoting  occupational  mobility  and  removing  obstacles  to
geographic  mobility,  especially  by  implementing  the  Skills  and  Mobility  Action  Plan,
improving  the  recognition  and  transparency  of  qualifications  and  competencies,  the
transferability of  social security and pensions rights,  providing  appropriate  incentives  in  tax
and benefit systems, and by harnessing the potential of immigration.

The transparency of job and training opportunities at national and European level should be
promoted  in  order  to  support  effective  job  matching.  In  particular,  by  2005,  jobseekers
throughout  the  EU  should  be  able  to  consult  all  job  vacancies  advertised  through  Member
States' employment services.

 C. Promoting better governance, partnership and delivery

Member  States  will  ensure  the  effective  implementation  of  the  Employment  Guidelines,
including at the regional and local level.

The mobilisation of all relevant actors

With due respect to different national traditions and practices, close involvement of relevant
parliamentary bodies in the implementation of the guidelines should be ensured. In addition,
all  main  stakeholders,  including  civil  society,  should  play  their  full  part  of  the  European
Employment Strategy.

Participation  of  regional  and  local  actors  in  the  development  and  implementation  the
Guidelines  should  be  supported  notably  through  local  partnerships,  the  dissemination  of
information and consultation.

A strong involvement of the Social Partners

Partnership with social partners should be promoted at national, sectoral, regional, local and
enterprise levels to ensure the implementation, monitoring and follow-up of the Employment
Strategy.

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Social partners at national  level  are invited,  in  accordance  with  their  national  traditions  and
practices, to ensure the effective implementation of the guidelines and to report on their most
significant  contributions  in  all  areas  under  their  responsibility,  in  particular  concerning  the
management  of  change  and  adaptability,  synergy  between  flexibility  and  security,  human
capital development, gender equality, making work pay, as well as health and safety at work.

European  Social  partners  at  inter-professional  and  sectoral  level  are  invited  to  contribute  to
the implementation  of  the  Employment Guidelines  and  to  support  efforts  undertaken  by  the
national social partners at all levels, such as at inter-professional, sectoral and local level. As
announced in  their  joint  work  programme  the  social  partners  at  inter-professional  level  will
report annually on their contribution to the implementation of the guidelines. Sectoral social
partners are invited to report on their respective actions.

Effective and efficient delivery services

Member States shall ensure the capacity of operational services to deliver employment policy
objectives and priorities in an efficient and effective way. This requires in particular a modern
system  of  Employment  Services  working  in  close  co-operation  with  Social  Re-integration
services;  the  availability  of  quality  services  supporting  life-long  learning;  and  Labour
inspectorates promoting better work conditions.

Adequate financial allocations

Member  States  will  ensure  that  adequate  financial  resources  are  allocated  to  the
implementation  of  the  Employment  Guidelines,  while  complying  with  the  need  for  sound
public finances in line with the Broad Economic Policy Guidelines.

They  shall  fully  exploit  the  potential  contribution  of  the  European  Structural  Funds,  in
particular the European Social Fund, to support the delivery of policies and to strengthen the
institutional capacity in the field of employment.

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