Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Progress in implementing the Joint Assessment Papers on employment policies in acceding countries
Date: 2003-11-06
Institutions: European Commission
Subjects: European Employment Strategy, accession to the European Union, employment policy, project evaluation

EN

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 6.11.2003
COM(2003) 663 final

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

Progress in implementing the Joint Assessment Papers on employment policies in
acceding countries

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

Progress in implementing the Joint Assessment Papers on employment policies in
acceding countries

Executive Summary

the  assessment  presented 

the  Commission
The  present  Communication  updates 
Communication  on "Progress  in  implementing  the  Joint  Assessment  Papers  on  employment
policies  in  candidate  countries"  (COM  (2003)  37  final)  for  the  ten  acceding  countries.  The
analysis  summarises  the  conclusions  of  the  in-depth  reviews  that  took  place  between  the
Commission  and  the  acceding  countries  in  Spring  and  Summer  this  year.  These  reviews
concluded the JAP co-operation process and were aimed at assisting the future Member States
to  prepare  for  participation  in  the  European  Employment  Strategy  and  to  prepare  their
National Action Plans for employment in 2004.

in 

The Communication underlines the strategic challenges for the labour markets of the acceding
countries:  increasing  employment  and  labour  supply,  ensuring  that  the  functioning  of  the
labour market is supportive of the on-going restructuring of the economy and adapting labour
force skills. It assesses progress in labour market reforms and concludes that important efforts
and reforms are needed to develop policies, that will allow progress to be made towards the
EU objectives and targets set by the new European Employment Strategy.

The Communication also reviews certain elements of governance and partnership. Substantial
efforts  are  needed  to  move  towards  a  more  co-ordinated  design  and  implementation  of
employment  policies,  to  up-grade  the  administrative  capacity  for  policy  planning  and
delivery, and to promote the participation of the social partners. There are also concerns about
the  financial  and  administrative  resources  needed  to  ensure  full  use  of  the  Structural  Funds
and of the ESF in particular. 

2

I

Introduction

Once they become members, the new Member States will start to participate in the European
co-ordination of employment policies and present their first National Action Plans in October
2004. The new Employment Guidelines (EGLs), now part of a Guidelines Package  together
with the Broad Economic Policy Guidelines (BEPGs), provide the future Member States with
a clear basis for the required labour market reforms (see Annex 1).

Acceding countries started participating as observers in the Employment Committee (EMCO)
and its groups in April 2003. This has already enabled them to get acquainted with important
aspects of the European Employment Strategy (EES) and to make an early input into policy
development at the EU level. 

The Commission Communication on "Progress in implementing the Joint Assessment Papers
on  employment  policies  in  candidate  countries"1  (hereafter  the  "JAP  Progress  Report")
summarised the co-operation in the field of employment based on Joint Assessment Papers of
employment  policy  priorities  (JAPs).  A  supporting  Document2  described  country-specific
developments. 

To conclude the JAP co-operation the Commission proposed in this Report to each acceding
country  to  organise  a  seminar  to  review  in  depth  the  state  of  employment  policies  and  the
institutional  setting  and  administrative  capacities  for  implementing  employment  policy  and
ESF activities. These seminars were held between May and July 2003. The seminars reviewed
the  way  the  future  Member  States  could  relate  their  employment  policies  to  the  new  EGLs
and how they should prepare their first NAPs.

This document updates the findings of the "JAP Progress Report" on common policy issues
and on institutional setting and administrative capacities on the basis of the in-depth reviews.
The supporting document reports on country specific developments.

II Labour market trends and challenges 

In  the  context  of  deep  and  rapid  economic  restructuring  that  characterises  most  candidate
countries  the  "JAP  Progress  Report"  had  identified  four  key  strategic  labour  market
challenges that are largely confirmed:

(cid:1)  Increasing labour supply as a precondition for economic and social development 

In mid-2002, when the "JAP Progress Report" was drafted there were some signs of a pick up
in activity rates in some countries but there is currently no evidence that these changes have
been  sustained.  In  2002  labour  market  participation  continued  to  stagnate  or  decline  as  in
previous years - in particular in the prime working age group - in all countries except Latvia.

(cid:1)  Increasing  employment to  support  economic  growth  and the  catching-up  of  income  in

the enlarged EU 

Despite rather strong real economic growth of 2.4% in 2002 for the AC-10, against 1.3% in
the  EU-15,  there  was  no  noticeable  change  in  the  employment  pattern  of  growth,  which

1

2

COM (2003) 37 final
SEC (2003) 200

3

                                                
continues to be driven by strong increases in productivity while employment growth remains
modest or stagnant.

The  three  Baltic  countries  are  the  only  ones  recording  significant  increases  in  their
employment rates in 2002. Apart from Cyprus and in the Czech Republic, employment rates
remain below the EU average (Chart 1).

Increasing employment of older workers remains a major challenge in most countries, notably
in Hungary, Malta, Poland, Slovenia and Slovakia (Chart 3); employment of older women is
also  very  low  in  these  countries,  and  exceptionally  low  in  Malta,  Slovakia  and  Slovenia.
Significant efforts are needed with a view to reaching the EU targets agreed in Stockholm and
Barcelona i.e. an  employment  rate  for  older  workers  of  50  %  and  a  progressive  increase  of
about 5 years of the exit age from the labour market by 2010. Efforts to promote active ageing
include limiting the use of early retirement schemes.

(cid:1)  Ensuring that labour market functioning is supportive of the on-going restructuring of

the economy

Most  new  Member  States  will  see  a  continuation  of  rapid  restructuring  and  of  employment
shifts out of agriculture and old style industries into services. This takes place in societies and
work cultures which in some respect are not yet fully adapted to market economies and to the
single  market.  Skilled  and  adaptable  people  will  benefit,  while  low  skilled  people  with
difficulties  to  respond  to  change  and  disadvantages  may  suffer.  Potentially  large  pockets  of
unemployment, low activity and poverty will tend to emerge and persist. 

The  "JAP  Progress  Report"  already  noted  that  labour  markets  tend  to  be  highly  segmented
with a split between capital cities and regions in which the modern and dynamic economy and
the skilled labour force are concentrated on the one hand, and the  rest of the regions on the
other. The issue of segmentation is now more widely recognised. Indeed, labour shortages in
the most developed regions coexist with high unemployment in other regions. Differentials in
labour market outcomes between the high and the low skilled remain substantial. Unless this
trend is reversed, most acceding countries run a high risk of marginalising important parts of
the  population  and  excluding  them  from  regular  employment.  Encouraging  regional  and
occupational mobility remains a key challenge.

Signs  of  increasing  segmentation  are  also  low  activity  (see  above)  and  high  long-term
unemployment:  long-term  unemployment  increased  in  the  acceding  countries  from  6.5  in
1997 to 8.1% in 2002 with levels of over 10% in Poland and Slovakia.

A further sign of severe labour market distortions is the persistence of a widespread informal
sector and undeclared work that reflects low productivity, in particular in agriculture but also
policy failures in establishing  a  stable  institutional  and  legal  environment  and  in  addressing
socio-economic problems resulting from the transition. 

(cid:1)  Increasing  and  adapting  labour  force  skills  in  the  context  of  restructuring  and  future

pressures linked to the Single Market

Skill  shortages  and  mismatches  signal  that  adapting  and  upgrading  skills  remain  a  major
challenge. The adjustment will be borne essentially by an ageing labour force which does not
possess  the  skills  and  capacities  for  adaptation  required  in  a  rapidly  changing  environment.
Therefore life-long learning is firmly on the agenda in all countries. 

4

Adapting  and upgrading skills is also an issue for the  younger  generations  as  shown  by  the
persistence  of  high  youth  unemployment  despite  a  relatively  high  level  of  education  (as
indicated by the share of young people aged 20-24 having completed at least upper-secondary
education).  This  reflects  amongst  other  things  the  still  limited  degree  of  responsiveness  of
vocational education and training to labour market needs.

III Progress in addressing key policy issues

Greater efforts are needed to ensure that wage developments and wage formation systems
are employment-friendly…

The "JAP Progress Report" drew attention to the need for social partners and Governments to
promote  employment-friendly  wage  developments  and  to  monitor  the  impact  of  wage
increases and of minimum wages on employment. 

Recent wage developments in the Czech Republic, Estonia, and Hungary confirm this concern
as they exceeded productivity trends. While wage differentials by skills continue to encourage
skill formation there is now more concern about wages differentials between regions. Coupled
with  high  costs  of  housing  and  transport  current  wage  levels  seem  to  contribute  little  to
attracting workers to regions with skill and labour shortages.

Regular increases of the minimum wage aim at encouraging job take-up by widening the gap
with  welfare  benefit  levels.  This  should  also  contribute  to  preventing  informal  activity  and
wage under-reporting. Care must be taken not to price low-skilled workers out of the labour
market.  Poland  has  introduced  a  lower  minimum  wage  for  the  young  and  Slovakia  is
considering a regionally differentiated minimum wage.

…and that tax-benefit systems are supportive to employment

While recognising the complexity of the task, the "JAP Progress Report" stressed the need to
address  the  high  tax  burden  on  labour,  and  on  low  paid  labour  in  particular,  in  order  to
encourage  job  creation  and  take-up  in  the  formal  sector.  Concerning  benefit  systems,  the
Report  insisted  on  the  importance  of  consistent  links  between  activation  and  income
protection to support work take-up.

Recent attempts to reduce the tax burden on labour focus on increasing the level of the non-
taxable income but this has a limited impact on the tax-wedge which is for the low paid often
almost exclusively composed of social security contributions. Only Hungary and Latvia have
decreased social contributions and in most countries social contributions bear heavily on the
overall  tax  burden  on  labour.  Given  the  need  to  sustain  fiscal  consolidation  efforts  should
concentrate  on  achieving  a  significant  reduction  of  the  tax  burden  on  low  paid  workers  as
asked for in EGL 8.

Unemployment benefit reforms are progressing. Under present systems benefit levels are low
but  can  still  generate  unemployment  traps  in  particular  for  unemployed  with  children.
Hungary  has  complemented  the  standard  unemployment  benefits  with  a  premium  for  job
search. Reforms of social assistance systems are on-going or envisaged in Cyprus, the Czech
Republic,  Estonia,  Latvia,  Lithuania,  Poland  and  Slovakia  with  the  aim  of  reducing
dependency and encouraging work take-up.

Recent  work  on  benefit  systems  in  particular  in  Poland  and  Hungary  has  shown  that  other
welfare schemes such as disability and other health related benefits for people of working age

5

are  often  more  important  than  unemployment  benefits  or  social  assistance  and  need  to  be
examined and reformed. Unemployment insurance with a well established link to job search
and activation is preferable to provide social protection rather than benefits which encourage
labour market exit.

Gradual increases in retirement ages and reforms of early retirement schemes have so far had
a  limited  impact  on  older  people's  participation  and  employment.  More  proactive  and
comprehensive strategies are needed to promote active ageing in line with EGL 5. 

Ensuring the right balance between flexibility and security remains an important challenge

The  in-depth  reviews  confirmed  that  developing  more  flexible  work  contracts  and
arrangements could make an important contribution to job creation and higher participation,
in particular for women and older workers.  As  an  illustration, the share  of part-time (8% in
AC-10)  and  fixed-term  work  (11%  in  AC-10)  in  total  employment  remains  substantially
lower  than  in  the  EU-15  where  the  availability  of  more  diversity  in  work  arrangements  has
contributed to a more intensive growth pattern3. It is crucial that further reforms of labour law,
which are part of the translation of the acquis aim inter alia at  facilitating more  diversity in
working time arrangements and labour contracts without compromising workers' security. 

Putting in place the legal framework is an important step but the new provisions need to be
used and accepted by enterprises and workers, who often perceive new contractual or working
arrangements as an additional bureaucratic burden or a threat to their security. Enabling social
partners and enterprises to play their role in ensuring the right balance between flexibility and
security is now a key task as required by EGL 3 in order to promote adaptability and mobility. 

Tackling undeclared and informal work: a new policy focus

The "JAP Progress Report" drew attention to the role of tax and benefit levels in encouraging
informal  and  undeclared  work.  The  in-depth  reviews  showed  that  undeclared  work  is
recognised  as  a  matter  of  concern  also  in  the  acceding  countries  (see  EGL  9).  Efforts  are
being made  to improve  the control of businesses' registration  and declaration,  but  there  is  a
need to understand better the nature and size of the informal sector. Monitoring the impact of
income  support  to  the  unemployed  or  the  (formally)  inactive,  including  pensioners,  and  of
taxation on labour while developing appropriate control of benefit systems and support to job-
search and take-up are essential for transforming undeclared work into regular employment.

Progress in human resource development needs to be consolidated

The "JAP Progress Report" supported the reforms of education and training systems in order
to  adjust  them  to  the  requirements  of  modern  economies  and  societies.  Similar  to  the  ETF
"Country  Monographs"4,  the  report  highlighted  the  importance  of  improving  the  quality  of
education and training and called for making the concept of lifelong learning operational.

3

4

see "Employment in Europe 2002", chapter 2
European  Training  Foundation,  "Country  Monographs"  on  VET  and  employment  services";  "Cross
country  summary  of  needs  in  the  fields  of  employment/human  resource  development"  (monographs
synthesis  report,  April  2003);  "Thirteen  years  of  reform  of  vocational  training  systems  in  candidate
countries – Lessons to be learned in relation with the Lisbon objectives" (Draft June 2003).

6

                                                
The  implementation  of  reforms  is  well  advanced  regarding  general  education  and  is  now
moving towards making vocational education and training more responsive to labour market
needs. Improving the quality of education for all remains an important issue. Steps have been
taken  in  Estonia,  Latvia  and  Lithuania  to  address  drop-outs  and  this  is  a  specific  target  in
Hungary's recent amendment to the Education Act. Sustained efforts and careful monitoring
of results will be needed to ensure progress towards the European target set in EGL 7 of no
more than 10% of early school leavers by 2010. 

The  in-depth  reviews  documented  some  progress  in  developing  credible  strategies  and
operational frameworks for lifelong learning in particular in the Czech Republic, Poland and
Lithuania.  Systems  to  define  and  recognise  skills  and  to  certify  adult  training  providers  are
being established. 

Establishing  incentives  for  business  and  individuals  for  training  remains  a  crucial  issue
everywhere.  Hungary  has  developed  a  set  of  fairly  comprehensive  financial  incentives
(benefits and  tax  credits) for participation  in  training  addressed  at  workers,  the  unemployed
and the inactive.

Systems are being progressively put in place but actual participation in training remains low
(Chart 4) and achieving the EU average level of 12.5% of the adult working age population in
lifelong learning targeted by EGL 4 will require considerable efforts.

Moreover, there is concern over the very low levels of participation in education and training
of  low-skilled  adults5  which  is  below  1%  in  the  Czech  Republic,  Hungary  and  Poland.
Ensuring access to lifelong learning for all and in particular for those with the lowest levels of
education and skills is likely to be a considerable challenge for all countries.

Serious efforts are needed for activation and prevention

Active  labour  market  policies  (ALMP)  and  preventative  approaches  play  a  critical  role  in
supporting people's adjustment to structural changes. The "JAP Progress Report" asked for a
shift towards measures enhancing people's employability and adaptability and for more focus
on prevention, as well as for better targeted policy measures. 

The need for activation and more preventative approaches is more widely recognised and has
been translated into measures promoting individual action plans and programmes targeted at
the  long-term  unemployed  and  the  young.  The  picture  is  more  mixed  regarding  the  shift
towards  measures  enhancing  employability,  in  particular  training,  and  in  several  countries
programmes  continue  to  be  focused  on  temporary  employment.  Targeting  and  evaluation
remain crucial to ensure a high efficiency of ALMP spending.

Recent progress should be a good basis for countries to move from pilot programmes towards
a  mainstream  approach.  Even  in  countries  with  relatively  low  levels  of  unemployment  its
duration increases. Considerable efforts will be needed in all countries to reach the targets set
in EGL1 regarding prevention and activation.

Integrating people at a disadvantage and achieving inclusive labour markets remain major
issues to increase labour supply and promote social cohesion 

5

Defined  as  population  aged  25-64  with  less  than  upper  secondary  studies  completed.  LFS  data  only
available for CZ, HU, POL and SK.

7

                                                
More  inclusive  labour  markets  support  social  cohesion  and  also  contribute  to  increasing
participation and employment. While recognising efforts  made in the  field of education, the
"JAP progress Report" asked for more  rigour in the implementation of integration strategies
directed at the disadvantaged, ethnic minorities and the Roma in particular. 

Recently, acceding countries put more emphasis on labour market integration of people with
disabilities, who represent sizeable shares of the inactive people of working age in particular
in  Hungary,  Poland,  Estonia  and  the  Czech  Republic.  Promoting  effective  labour  market
integration  requires  linking  specific  programmes  with  health  policies  and  with  reform  of
related benefit systems. 

Facilitating access to mainstream initial education continues to be the focus for the integration
of Roma. There is little news on the implementation of already adopted integration strategies
in  the  Czech  Republic  and  Hungary.  The  new  priority  given  to  the  integration  of  Roma  in
Slovakia  needs  to  be  rapidly  translated  into  concrete  action.  Setting  appropriate  conditions
and providing adequate resources for access to active support and employment services, and
more  generally,  enabling  the  Roma  community  to  participate  in  mainstream  society  at  all
levels remain crucial tasks in most Central and Eastern European acceding countries. 

The  "JAP  Progress  Report"  documented  the  higher  unemployment  risk  of  the  non-native
population in the Baltic countries, in particular in Latvia and Estonia. Little progress has been
made  in  Latvia  and  therefore  developing  a  policy  response  to  promoting  the  integration  of
Non-Latvians into the labour market and addressing possible obstacles to their registration at
the  PES  remain  urgent  tasks.  Estonia  needs  to  monitor  the  efficiency  of  employment
programmes targeted at the disadvantaged regions in which the non-Estonian population are
concentrated. 

Substantial  efforts  are  needed  to  achieve  a  significant  reduction  of  unemployment  gaps  for
people at disadvantage in relation with EGL 7. 

Foreigners  employed  on  a  temporary  basis  represent  a  high  share  of  the  labour  force  in
Cyprus  and  their  contribution  to  the  economy  needs  to  be  fully  recognised  and  reflected  in
overall employment and social policy. 

Little change regarding the promotion of gender equality

The  "JAP  Progress  Report"  recognised  the  rising  awareness  of  gender  equality  policies  and
asked  for  the  full  implementation  of  the  legal  and  strategy  frameworks  in  relation  to  the
acquis. As already noted in this report, women's employment rates are above the EU average
except  in  Malta,  Hungary,  Poland  and  Slovakia  (Table  1,  Chart  2),  but  both  female
participation in the labour market and employment are on  a  declining or  stagnating  trend in
most countries.  Women continue  to run  high risks of long-term  unemployment  including  in
countries with a relatively low level of unemployment.

The in-depth reviews have focused attention on the low incidence of family-friendly working
contracts and  flexible  working  time  arrangements  as  an  obstacle  to  female  participation  but
progress in this respect remains  slow. There  is now  also  more understanding  of  the  need  to
promote  affordable  child-care  facilities  but  important  efforts  will  be  needed  to  achieve  the
related targets set in EGL6. 

IV Ensuring good governance for implementing the EES

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The "JAP Progress Report" identified capacity building in a broad sense as a precondition for
developing and implementing employment policies. It urged to improve policy planning and
co-ordination as well as implementation capacities, including for ESF support.  It  underlined
social partners' responsibilities in modernising the labour markets. All these are  elements of
the  good  governance  and  of  the  partnership  approach  emphasised  in  the  new  EGLs  as
important issues for the implementation of the EES. 

Policy planning, guidance and supervision

All countries have for several years been developing employment strategies. The JAPs have
contributed to identifying priorities for supporting a comprehensive approach to employment
policies.  Nevertheless,  efforts  are  still  necessary  in  many  countries,  particularly  Latvia,  to
develop a strategic approach beyond a series of measures and programmes. 

The agreed strategies have been prepared with the participation of the relevant Ministries and
led  to  the  setting-up  of  ad-hoc  co-ordination  structures.  Evidence  is  mixed  on  the  extent  to
which policy planing and guidance reflect regional and local situations. There is now a need
to ensure policy co-ordination on a permanent basis  so that  it actually  translates  into  policy
guidance at all levels and is reflected in the first NAPs. 

Countries' employment strategies often lack precise and realistic objectives and targets, which
have been recognised in the evaluation of the EES as a crucial element in stimulating reforms.
At the same time, deficiencies in monitoring and evaluation systems and a lack of organised
feed-back to all relevant levels and partners affect the ability to measure progress effectively.
A policy evaluation culture is still at its beginning and capacities need to be enhanced for this
purpose both in the PES and the Ministries. 

All  acceding  countries  are  gradually  moving  towards  a  more  co-ordinated  and  integrated
approach  to  employment  and  related  policies.  Nevertheless,  the  way  various  policies,  in
particular  economic,  regional,  education  and  training  and  taxation  policies,  can  promote
employment needs to be further elaborated in the NAPs. 

The NAPs must also reflect the synergies between employment and social policies. Improving
the labour market situation of the disadvantaged for example, requires a sound application of
the antidiscrimination acquis and employment policies. The implementation of the acquis in
labour law, equal treatment between men and women, social dialogue, and health and safety
should  help  in  promoting  employment.  If  policies  are  pursued  in  isolation  impacts  will  be
weak  and  targets  will  not  be  reached,  while  together  they  have  the  potential  to  make  a  real
difference. 

Efforts  to  improve  policy  planing  are  also  directly  related  to  planing  for  the  purposes  of
Structural Funds financing, including the ESF. The JAPs formulate the substantive basis for
the ESF programming documents. The key challenges identified in the JAPs must be clearly
addressed in those programmes by elaborating corresponding strategies and concrete actions
for  ESF  support.  This  exercise  is  crucial  for  the  progressive  adjustment  of  the  acceding
countries' policies and institutions to the implementation of the EES.

Social partnership 

Social partners have a key role to play in ensuring good governance and are explicitly invited
to  play  their  part  in  the  effective  implementation  of  the  new  EGLs.  As  noted  in  the
Commission JAP Progress Report, national tripartite structures exist in all acceding countries,

9

but  apart  from  Cyprus  and  Slovenia,  where  social  partnership  is  well  established,  there  is
scope  for  a  stronger  and  more  active  role  of  social  partners  at  this  level  and  for  making
tripartism effective also at regional and local levels. 

The autonomous bi-partite social dialogue is still not sufficiently established to enable social
partners  to  play  a  meaningful  role  in  wage  formation,  human  resource  development,  the
adaptability  of  firms  and  workers,  the  synergy  between  flexibility  and  security  as  well  as
health and safety at work. 

While governments are generally favourable to a stronger involvement of social partners, it is
not certain that the latter always grasp their role and responsibilities for employment policies
to the fullest extent possible. While progress  is being  made  in strengthening social partners'
capacities there is still a long way to go until social dialogue becomes a reality at all levels.

Social partners' involvement must also be ensured in the ESF implementation process. Most
of the acceding countries refer to the social partners under certain measures, but their overall
involvement in the process is still not sufficiently guaranteed.

Delivery systems 

The "JAP Progress Report" underlined the need to sufficiently resource employment policies
in terms of staff and financial means. This includes the capacity to fully exploit the potential
of the European Structural Funds and of the ESF in particular, from the moment of accession.
More  specifically,  the  Report  stressed  the  crucial  role  of  the  Public  Employment  Services
(PES)  as  the  institution  for  policy  delivery  and  often  also  for  the  implementation  of  ESF
support. 

Progress  in  the  modernisation  of  the  PES  has  recently  been  made  in  Lithuania  and
commitments  have  been  re-stated  in  the  Czech  Republic  and  Hungary.  The  intention  of  the
Polish authorities to re-establish nation-wide  PES  co-ordination  would  be  an  important  step
forward for the delivery system in this country. PES structures are progressively up-graded to
respond to the increasing number of tasks and responsibilities given to PES, but there is still
considerable scope for improvement in particular in Slovakia and Latvia but also in Slovenia. 

Most  countries  are  making  an  important  effort  to  up-grade  PES  staff  skills  but  quantitative
bottlenecks remain. The allocation of staff to the local  PES  is far  from optimal and there is
still a long way to go to establish PES as a meaningful partner at regional and local levels.

Setting  up  structures  appropriate  for  the  ESF  implementation  and  management  requires
further efforts. Delays in designating and establishing structures for the ESF implementation
are of particular concern in Slovakia. Administrative capacity has been improved or is being
upgraded  in  most  of  the  other  countries  but  stronger  efforts  in  that  respect  are  needed,  in
particular  in  the  three  Baltic  countries,  the  Czech  Republic  and  Hungary.  Establishing  or
improving  arrangements  to  ensure  appropriate  co-ordination  is  crucial  for  all  countries.
Without  a  major  step  forward  in  terms  of  delivery  and  resource  allocation  meaningful  ESF
implementation cannot be taken for granted. As the main resource of the acceding countries is
their  workforce,  making  the  optimal  use  of  ESF  assistance  is  crucial  to  their  economic  and
social development.

Financial resources

10

As highlighted in the new EGLs ensuring adequate financial resources is a crucial factor for
an  efficient  delivery  of  employment  policies.  At  the  moment  and  despite  the  policy  priority
given to employment in most countries, uncertainty in the overall budgetary environment as
well  as  in  policy  planning  and  supervision  does  not  allow  for  a  sustained  and  credible
allocation of financial resources. Given the dire financial situation, it is all the more important
to focus on the quality of spending and on the efficiency of measures.

Active expenditures have decreased or stagnated in several countries and the overall level of
active spending (as a % of GDP) remains low given the level of unemployment particularly in
the three Baltic countries, Poland and Slovakia. 

Public  spending  on  education  remains  relatively  high  in  most  countries  but  follows  a
decreasing or stagnating trend. Allocation is unbalanced towards general education and shifts
in spending are necessary to respond to the need for higher quality. Funding mechanisms are
lacking to back lifelong learning strategies through a consistent flow of resources.

Developing  active  labour  market  policies  and  modernising  the  PES,  developing  vocational
education and training systems and promoting measures to ensure equal and fair access to the
labour market regardless of gender, age or ethnicity are tasks which  fall squarely within the
scope of interventions supported by the ESF and the Fund is to be the preferred instrument for
providing structural finance for these purposes. As recalled in the EGLS, the Structural Funds
and  ESF  in  particular  can  also  play  an  important  role  in  strengthening  the  institutional
capacity for employment policies.

V

Next steps

In Autumn 2003, Member States presented their 2003 NAPs based on the new EGLs. In mid-
January 2004, the Commission will adopt the draft Joint Employment Report (JER), together
with  the  draft  BEPGs'  implementation  report.  The  Employment  Committee  (EMCO)  will
make its multilateral review of the NAPs and in the first and second quarters of 2004, it will
discuss  the  draft  JER  proposed  by  the  Commission  and  individual  recommendations  to  the
present Member States. The future Member States will be involved in the work through their
participation  in  EMCO.  These  discussions  will  further  familiarise  them  with  the  NAP
exercise, the key policy issues and the employment co-ordination process with a view to the
presentation of their first NAPs by October 2004. 
(cid:1)  The  acceding  countries  have  joined  the  "Employment  Incentive  Measures"  programme
(EIM) in 2003 and have all signed the Memorandum of Understanding on the EIM. In the
EIM  Committee  they  will  articulate  their  needs  regarding  the  2004  work  programme
supporting their participation in the EES.

Through  the  EIM  programme,  acceding  countries  will  also  benefit  from  operational
support  in  their  preparation  for  implementation  of  the  EES.  They  will  in  particular  take
part  in  the  exchange  of  experiences  and  identification  of  good  practice  in  employment
policies via  the  peer  review  exercise  carried-out  within  the  framework  of  the  EES.  They
will also be involved in the two expert networks (MISEP and SYSDEM) of the European
Employment  Observatory.  Co-operation  among  the  Public  Employment  Services  will
continue and include a set of EIM-financed training modules for acceding countries.

(cid:1)  ESF programming documents currently under discussion with the Commission will set the
framework for human resource development priorities for future ESF funding. Establishing

11

appropriate  links  between  the  JAP  policy  issues  and  ESF  funding  has  been  of  particular
concern  for  the  Commission.  The  documents  must  therefore  clearly  demonstrate  the
coherence  of  human  resource  development  strategies  with  the  issues  and  priorities
identified in the JAPs. In order to allow for ESF support to start as intended in 2004, the
negotiations of the documents should be concluded by the end of 2003. 

12

ANNEX 

The new European Employment Strategy

In July 2003, the Council adopted a new set of Employment Guidelines6. The new Guidelines
address three overarching objectives:

–  full employment, in particular meeting the Lisbon and Stockholm employment targets;

–  the  promotion  of  quality  and  productivity  at  work,  reflecting  in  particular,  the  need  for
better jobs in a knowledge-based economy and the need to promote EU competitiveness;
and

–  the  fostering  of  social  cohesion  and  inclusive  labour  markets,  including  the  reduction  of

regional employment disparities.

They also comprise ten specific guidelines: 

(cid:1)  active and preventative measures for the unemployed and inactive; 

(cid:1)  job creation and entrepreneurship; 

(cid:1)  address change and promote adaptability and mobility in the labour market; 

(cid:1)  promote development of human capital and lifelong learning; 

(cid:1)  increase labour supply and promote active ageing; 

(cid:1)  gender equality; 

(cid:1)  promote the integration of and combat the discrimination against people at a disadvantage

in the labour market; 

(cid:1)  make work pay though incentives to enhance work attractiveness; 

(cid:1)  transform undeclared work into regular employment; 

(cid:1)  address regional employment disparities.

A special emphasis is also given to improving implementation and governance. This includes
efforts  to  strengthen  delivery  mechanisms,  the  involvement  of  social  partners  and  backing
with adequate financial means. 

6

Council Decision of 22 July 2003, (2003/578/EC), Official journal of the European Union, L1 97, 5. 8.
2003

13

                                                
Table 1

ANNEX 2

Employment, participation and unemployment rates in 2002

Country performance towards 2010 EU employment 
rate targets

Activity and unemployment rates

Employment rate 15-64 in 
2002 (% population 15-64)

Employment rate older 
workers aged 55-64 in 2002 
(% population 55-64)

Activity rate 15-64 in 2002 (% 
population 15-64)

Total harmonised 
unemployment rate in 2002 
(% labour force)

CY
CZ
EE
HU
LT
LV
MT
PL
SI
SK

AC10

EU15

EU25

Total

Men

Women

Total

Men

Women

Total

Men

Women

Total

Men

Women

68,6
65,5
62,0
56,6
59,9
60,4
54,2
51,5
63,4
56,8

55,9

64,3

62,9

78,8
74,0
66,5
63,5
62,7
64,3
76,4
56,9
68,2
62,4

61,8

72,8

71,0

59,2
57,1
57,9
50,0
57,2
56,8
31,6
46,2
58,6
51,4

50,2

55,6

54,7

49,2
40,8
51,6
26,6
41,6
41,7
31,0
26,1
24,5
22,8

30,5

40,1

38,7

67,0
57,3
58,4
36,7
51,5
50,5
52,5
34,5
35,4
39,1

41,2

50,1

48,9

32,1
26,0
46,5
18,5
34,1
35,2
11,3
18,9
14,2
9,5

21,4

30,5

29,1

71,0
70,7
69,3
60,1
69,6
68,8
-
64,6
67,8
69,9

65,8

69,7

69,0

81,0
78,7
74,6
67,7
73,6
74,1
-
70,6
72,5
76,7

72,3

78,4

77,4

61,7
62,8
64,4
52,9
65,8
63,9
-
58,7
63,0
63,2

59,5

60,9

60,7

3,8
7,3
9,1
5,6
13,1
12,8
7,4
19,9
6,0
18,6

14,8

7,7

8,9

2,9
5,9
9,8
6,0
13,3
13,7
6,4
19,1
5,7
18,4

14,2

6,9

8,0

5,0
9,0
8,4
5,1
13,0
11,8
9,8
20,9
6,4
18,8

15,6

8,7

9,9

Source: Employment rates for Malta refer to 4th Quarter 2001. Employment and activity rates, comparable annual estimates based on LFS, Eurostat. 
Unemployment rates, harmonised unemployment series, Eurostat.

14

Total employment rate in 2002 (% of population aged 15-64)

EU Lisbon target = 70% by 2010

68.6

65.5

62.0

56.6

59.9

60.4

63.4

64.3

62.9

54.2

51.5

56.8

55.9

Chart 1

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

CY

CZ

EE

HU

LT

LV MT

PL

SI

SK AC10 EU15 EU25

Source: Annual averages based on quarterly labour force survey, Eurostat. MT, Q4 2001.

Female employment rate in 2002 (% of their population 15-64)

EU Lisbon target = more than 60% by 2010

59.2

57.1

57.9

57.2

56.8

58.6

50.0

55.6

54.7

51.4

50.2

46.2

31.6

Chart 2

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

CY

CZ

EE

HU

LT

LV

MT

PL

SI

SK AC10 EU15 EU25

Source: Annual averages based on quarterly labour force survey, Eurostat. MT, Q4 2001.

15

Older workers employment rate, 2002 (% of population 55-64)

49.2

51.6

EU Stockholm target = 50% by 2010

40.8

41.6

41.7

40.1

38.7

26.6

31.0

30.5

26.1

24.5

22.8

Chart 3

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

CY

CZ

EE

HU

LT

LV

MT

PL

SI

SK AC10 EU15 EU25

Source: Annual averages based on quarterly labour force survey, Eurostat. MT, Q4 2001.

Chart 4

15.0
14.0
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

Adult population in education and training, 2002
(% population 25-64)

EU target = 12.5% by 2010

8.2

9.1

9.0

8.5

8.0

6.0

5.2

3.7

3.3

3.3

4.3

5.0

CY

CZ

EE

HU

LT

LV

MT

PL

SI

SK AC10 EU15 EU25

Source: Labour Force Survey (EU definitions), Spring results, Eurostat. 

16