Communication from the Commission to the Council - Draft Joint Employment Report 2003/2004
Date: 2004-01-21
Institutions: European Commission
Subjects: EU Member State, EU employment policy, employment statistics, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.1.2004 
COM(2004) 24 final/2 

CORRIGENDUM 
Annule et remplace le COM(2004) 24 du 21.1.2004, 
suite à des erreurs matérielles constatées. 
Concerne uniquement la version EN. 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL 

Draft Joint Employment Report 2003/2004 

EN 

   EN 

 
 
 
  
TABLE OF CONTENTS 

EXECUTIVE SUMMARY......................................................................................................... 4 

INTRODUCTION....................................................................................................................... 9 

1. 

1.1 

1.2 

2. 

2.1 

2.2 

2.3 

3. 

3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

3.7 

3.8 

THE POLITICAL AND ECONOMIC CONTEXT ................................................ 10 

EMPLOYMENT GROWTH AT A STANDSTILL............................................................ 10 

THE MEDIUM TERM EMPLOYMENT STRATEGY REMAINS VALID ........................ 10 

OVERALL ASSESSMENT WITH REGARD TO THE EU EMPLOYMENT 
OBJECTIVES ............................................................................................................. 12 

FULL EMPLOYMENT: THE EU IS AT RISK OF FALLING SHORT OF  
THE EMPLOYMENT RATE TARGETS ......................................................................... 12 

QUALITY AND PRODUCTIVITY AT WORK: MIXED PROGRESS ACROSS  
THE VARIOUS DIMENSIONS....................................................................................... 14 

SOCIAL COHESION AND INCLUSION: INCREASING ATTENTION GIVEN  
TO INCLUSIVE LABOUR MARKETS ........................................................................... 15 

IMPLEMENTATION OF SPECIFIC GUIDELINES: ASSESSMENT  
OF PERFORMANCES AND POLICIES................................................................. 17 

ACTIVE AND PREVENTATIVE MEASURES FOR THE UNEMPLOYED AND 
INACTIVE ..................................................................................................................... 17 

JOB CREATION AND ENTREPRENEURSHIP .............................................................. 19 

ADDRESS CHANGE AND PROMOTE ADAPTABILITY AND MOBILITY IN THE 
LABOUR MARKET ....................................................................................................... 21 

PROMOTE THE DEVELOPMENT OF HUMAN CAPITAL AND LIFELONG 
LEARNING .................................................................................................................... 23 

INCREASE LABOUR SUPPLY AND PROMOTE ACTIVE AGEING.............................. 26 

GENDER EQUALITY .................................................................................................... 28 

PROMOTE THE INTEGRATION OF AND COMBAT THE DISCRIMINATION 
AGAINST PEOPLE AT A DISADVANTAGE IN THE LABOUR MARKET.................... 30 

MAKE WORK PAY THROUGH INCENTIVES TO ENHANCE WORK 
ATTRACTIVENESS....................................................................................................... 32 

3.9 

TRANSFORM UNDECLARED WORK INTO REGULAR EMPLOYMENT .................... 34 

3.10 

ADDRESS REGIONAL EMPLOYMENT DISPARITIES ................................................. 35 

4. 

5. 

GOOD GOVERNANCE AND PARTNERSHIP IN THE IMPLEMENTATION 
OF THE EMPLOYMENT GUIDELINES ............................................................... 36 

ASSESSMENT OF PERFORMANCES AND POLICIES OF THE MEMBER 
STATES ....................................................................................................................... 38 

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6. 

CONCLUSIONS: FURTHER STRENGTHENING OF THE EUROPEAN 
EMPLOYMENT STRATEGY TAKING FULL ACCOUNT OF THE EUROPEAN 
EMPLOYMENT TASKFORCE REPORT HEADED BY  WIM KOK ...................... 55 

Annex 1: Key and context indicators , ........................................................................................ 57 

Annex 2: Progress against the targets ......................................................................................... 76 

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EXECUTIVE SUMMARY 

This Joint Employment Report (JER)  provides the first assessment of the progress made by 
Member  States  in  implementing  the  new  Employment  Strategy  agreed  for  2003-2006:  A 
strategy  based  around  the  three  over-arching  objectives  of  full  employment,  quality  and 
productivity in work and strengthened social cohesion and inclusion. 

The  report  is  released  at  a  time  when  the  goals  of  the  Lisbon  strategy  are  being  seriously 
challenged  by  the  labour  market  situation.  Europe  continued  to  feel  the  impact  of  the 
economic  downturn  throughout  most  of  2002  and  2003.  Employment  growth  came  to  a 
standstill  by  the  beginning  of  2003  and  is  expected  to  rise  only  slowly  over  2004-2005. 
Unemployment  has  gradually  increased  to  8.1%  in  2003.  The  reforms  undertaken  over  the 
past  few  years  have  made  Europe's  labour  market  more  robust  in  adapting  to  shocks,  but 
unless the economy picks up, and further labour market reforms are implemented, there is a 
risk of stagnation in employment, and of higher unemployment and inactivity. 

Progress  towards  the  Lisbon  2010  target  of  a  70%  overall  employment  rate  has  come  to  a 
standstill  and,  at  64.3%,  it  is  now  clear  that  the  EU  will  miss  the  intermediate  employment 
rate target for 2005 of 67%. The employment rate for women improved in 2002 (55.6%), and 
remains on track towards the intermediate target for 2005 (57%). Progress towards the target 
for 2010 will crucially depend upon improvements in the employment rate of older workers. 
Although this rate has increased to just over 40% in 2002, the target of 50 % for 2010 is a 
considerable way off. 

In the face of the economic slowdown, and reflecting a strong concern from Heads of State 
and  Governments  to  intensify  the  momentum  for  structural  reforms,  the  2003  Spring 
European  Council  invited  the  Commission  to  establish  a  European  Employment  Taskforce, 
under the chairmanship of the former Prime Minister of the Netherlands Wim Kok, to report 
to  the  European  Commission  on  practical  reforms  that  can  have  the  most  direct  and 
immediate  impact  on  the  implementation  of  the  Employment  Strategy.  The  December  2003 
Brussels European Council invited the Commission and the Council to consider the Taskforce 
report in the preparation of the Joint Employment Report. 

The  Employment  Taskforce  concentrated  on  the  need  to  increase  both  employment  and 
productivity growth and identified four key conditions for success: increasing adaptability of 
workers  and  enterprises;  attracting  more  people  to  the  labour  market;  investing  more  and 
more effectively in human capital; and ensuring effective implementation of reforms through 
better  governance.  The  Taskforce  identified  priorities  for  action  of  general  relevance  for 
Member States under each of these headings and specific messages on the reforms needed to 
each  of  the  fifteen  current  and  the  ten  new  Member  States.  The  Employment  Taskforce's 
assessment  and  policy  messages  are  shared  by  the  Commission  and  the  Council  and,  since 
they  are  fully  consistent  with  the  European  Employment  Strategy  Guidelines,  have  been 
closely integrated into this Joint Employment Report. 

The Three Over-arching Objectives: 

In their response to the objective of full employment, some Member States have displayed a 
wider commitment by setting national targets, either in the form of employment rate targets or 
an objective of employment creation. Some of these targets reflect more ambition than in the 
past. The setting of targets needs to be backed up by rigorous implementation of reforms. The 
National Action Plans (NAPs) illustrate that the pace of labour market reform has continued, 

4 

 
 
  
 
and  in  some  cases  been  stepped  up,  especially  reforms  to  increase  participation  and  labour 
supply. However, reforms to improve the environment for job creation are more piecemeal. 

The EU has also seen a worrying decline in labour productivity growth over the past decade. 
In  contrast,  the  US  has  been  able  to  combine  a  strong  employment  performance  with 
acceleration in labour productivity. Productivity is predominantly illustrated within the NAPs 
as an objective in its own right; the link with better quality in work is not as well explored. 
However, recent performance concerning quality in work is encouraging1. Although there is 
scope  for  improvement,  progress  can  be  seen  in  terms  of  education  and  skills,  gender  gaps 
(except the pay gap), and safety at work. 

The  NAPs  demonstrate  that  employment  plays  a  vital  role  in  fostering  social  cohesion  and 
inclusion.  Some  Member  States  adopt  a  'making  work  pay'  approach  favouring  across  the 
board social security and taxation reforms. Others focus on tailor-made measures for specific 
groups. Many Member States stress the importance of a multidimensional approach extending 
beyond labour market policies to tackle regional and social disparities. 

The Specific Guidelines: 

Prevention and Activation 

Preventative and active labour market policies are essential in order to tap the potential of the 
workforce  and  are  even  more  crucial  in  periods  of  economic  slowdown.  In  line  with  the 
strengthened  approach  in  the  new  guidelines,  progress  can  be  seen  in  ensuring  all  the 
unemployed  benefit  from  individual  job  search  and  guidance  services  at  an  early  stage  of 
unemployment, and a new start tailor-made for each unemployed person before reaching six 
or  twelve  months  respectively  for  young  people  and  adults.  However,  substantially  less 
attention  is  given  to  the  participation  of  inactive  persons  (in  particular  women).  Member 
States are committed to modernising Public Employment Services, with some moving towards 
cooperation  with  the  private  sector.  Only  a  minority  of  Member  States  provide  data  on  the 
effectiveness  of  activation  measures,  and  more  effort  is  needed  to  provide  comparable 
activation and prevention indicators to allow an assessment of progress. 

Entrepreneurship 

More must be done to tap the job creation potential in the EU through an improved business 
environment  and  by  fostering  business  capacity  to  innovate.  Most  Member  States  aim  to 
facilitate  start-ups,  lower  the  administrative  burden,  and  expand  business  support  services. 
Several have set up taskforces on the simplification and improvement of regulation, including 
bankruptcy  laws.  Access  to  funding  for  start-ups  and  existing  SMEs  is  receiving  increased 
attention, but remains a major bottleneck. To make entrepreneurship a career option for all, 
many  Member  States  include  managerial  training  in  all  levels  of  education,  with  some 
providing targeted action towards underrepresented groups. Stimulating innovation and R&D 
and spreading its results more effectively across the economy remains a challenge. 

Address change and promote adaptability 

Member  States,  social  partners,  enterprises  and  workers  must  increase  their  capacity  to 
anticipate,  trigger  and  absorb  change.  In  addition  to  action  necessary  under  other  relevant 

1 

"Improving  quality 
COM(2003) 728 

in  work:  a 

review  of 

recent  progress"  Commission  Communication  

5 

 
 
  
 
                                                 
specific guidelines, the need to strike a more effective balance as regards flexibility combined 
with  security  in  the  labour  market  is  increasingly  recognised.  Attractive  contractual 
arrangements must be available to meet the needs of both employers and workers and avoid 
the  emergence  of  a  two-tier  labour  market.  There  is  evidence  of  a  trend  towards  greater 
flexibility  through  changes  to  working  time  patterns  and  the  working  environment.  In  a 
number  of  Member  States  attention  has  shifted  towards  introducing  flexibility  into  standard 
contracts, improving working conditions, and reducing the number of accidents at work and 
occupational diseases. Actions to promote geographical mobility remain underdeveloped, and 
tend  to  focus  on  reducing  regional  disparities.  The  management  of  restructuring  receives 
insufficient attention. 

Develop Human Capital 

Europe needs to invest more and more efficiently in human capital. A much greater effort is 
needed if the EU is to have any chance of reaching the 2010 targets of 85% of 22 year-olds 
completing  upper  secondary  education  and  12.5%  of  the  adult  population  participating  in 
education  and  training.  A  number  of  Member  States  are  making  efforts  to  reform  lifelong 
learning systems to deliver a more demand led system and make opportunities more adapted 
to individual  needs. Only a few Member States  show  a commitment  to increased and more 
efficient  investment  in  human  capital.  Strategies  to  increase  private  investment  (from  the 
individual or firm) remain partial. Reforms to encourage individuals to invest focus on the use 
of financial incentives. Many initiatives target the recognition and certification of non-formal 
or workplace learning to recognise existing skills. Social partners are more involved in the 
design and delivery of training, with increasing use of collective agreements. The sharing of 
costs and responsibilities needs to be improved and become more transparent. 

Increase labour supply and promote active ageing 

Increasing  the  labour  supply  is  indispensable  for  increasing  employment  and  economic 
growth  in  the  medium  and  longer-term.  Reaching  the  70%  employment  rate  target  depends 
crucially on significantly increasing the employment rate of older workers and on extending 
the  average  exit  age  from  the  labour  market.  A  growing  number  of  Member  States  are 
implementing  national  ageing  strategies,  applying  a  range  of  measures  focusing  on  benefit 
reforms, improving the working capacity through better access to training, and better working 
conditions.  A  strong  focus  is  placed  on  pension  reform,  including  increases  in  standard 
retirement  age  and  discouraging  early  retirement.  However  poor  management  of  economic 
restructuring,  voluntary  early  retirement  schemes  and  existing  disincentives  within  statutory 
retirement  schemes  are  preventing  the  employment  rates  of  older  workers  from  picking  up 
significantly.  It  is  vital  that  Member  States  develop  comprehensive  strategies  to  increase 
labour  force  participation.  Raising  female  participation  is  a  critical  part  of  the  ageing 
challenge,  and  Member  States  cannot  rely  on  cohort  effects  alone  to  meet  the  targets. 
Immigration is considered an important source of additional labour supply for professions or 
sectors encountering recruitment difficulties. 

Gender Equality 

Tapping the potential of female participation is both an issue of gender equality and a matter 
of  economic  effectiveness.  Many  Member  States  aim  to  increase  female  participation  and 
reduce employment and unemployment gaps, primarily through policies to reconcile work and 
private  life.  However  the  underlying  factors  of  gender  gaps  in  employment,  unemployment 
and pay (for example gender segregation, taxation and wages) are not well addressed. Many 
Member States present a range of measures which should have a positive impact in reducing 

6 

 
 
  
 
the gender pay gap, but most actions are piece-meal, especially in countries with the highest 
gaps.  Many  initiatives  remain  voluntary  with  a  lack  of  evaluation  of  impact.  Childcare  is 
presented  as  a  priority  in  most  Member  States,  but  the  approach  often  varies  in  focus  and 
ambition,  and  insufficient  attention  is  given  to  its  quality  and  affordability.  Gender 
mainstreaming continues to be non-systematic, lacking gender impact assessment of existing 
systems and new policies. 

The integration of the disadvantaged 

A  more  effective  integration  of  people  facing  particular  difficulties  in  the  labour  market  is 
key to increasing labour supply and reinforcing social cohesion. Most Member States present 
policies  to  reduce  the  numbers  of  early  school  leavers  and  to  improve  the  labour  market 
situation of people with disabilities, migrants and ethnic minorities. However significant gaps 
remain  and  effort  needs  to  be  intensified  and  expanded  to  encompass  other  people  at  a 
disadvantage  such  as  the  low-skilled,  social  benefit  recipients  and  lone  parents.  Employers 
should  be  more  involved  in  achieving  the  objective  of  increased  participation  of 
disadvantaged people. 

Making work pay 

In  order  to  raise  labour  force  participation  and  to  promote  inclusive  labour  markets,  it  is 
essential  to  reduce  remaining  unemployment,  inactivity  and  poverty  traps.  An  increasing 
number of Member States are pursuing reforms to make work pay by addressing the combined 
impact  of  taxes  and  benefits.  Reforms  largely  focus  on  reducing  taxes,  and  introducing  in-
work benefits, which have been introduced or are planned by a growing number of Member 
States.  Some  Member  States  have  tightened  qualifying  conditions  for  the  eligibility  or 
duration  of  benefits,  but  reforms  of  benefit  systems  are  not  sufficiently  comprehensive. 
Several  Member  States  still  need  to  tackle  the  disincentives  to  take  up  a  low  paid  job,  in 
particular  by  addressing  the  situation  for  inactive,  and  by  considering  the  non-financial 
incentives to taking-up a job, including aspects related to quality in work. Further benefit, tax 
and pension reforms aiming to encourage older workers to remain longer in work is needed, 
particularly in Member States with low employment for older workers. Member States should 
pursue efforts to reduce non-wage labour costs, particularly for the low-skilled and those on a 
low wage. 

Transforming undeclared work 

Undeclared  work  creates  unfair  competition  between  businesses  and  acts  against  a  lasting 
integration of the workers concerned in the labour market. The NAPs confirm the increased 
commitment  of  Member  States  to  address  undeclared  work  through  a  more  integrated 
approach,  combining  the  simplification  of  the  business  environment,  reforms  in  tax  and 
benefit systems, improved law enforcement and  the application of  sanctions. More needs to 
be  done  to  understand  the  nature  and  extent  of  the  problem.  A  number  of  measures  are 
reported  by  Member  States  to  simplify  administrative  procedures  and  the  registration  of 
employment and social security contributions and to improve coordination between relevant 
authorities.  In  addition,  to  enhance  work  attractiveness  several  report  on  tax  measures  to 
prevent undeclared work and make work pay. Many Member States take measures directed at 
foreign workers or illegal immigrants, such as better information on labour market rights and 
greater control of working conditions. 

7 

 
 
  
 
Address regional disparities 

Employment  and  unemployment  disparities  between  regions  remain  significant,  and  will 
increase  with  enlargement.  Research  confirms  a  strong  correlation  between  investment  in 
human capital and economic performance at national and regional level, making investment 
an important tool of regional cohesion policy. The role of the European Social Fund is key in 
this respect. 

Good Governance and Partnership in the Implementation of the Guidelines 

The success of employment policy depends on the quality of implementation. The 2003 NAPs 
are  generally  well  developed  baseline  documents  but  only  rarely  constitute  the  central 
instrument  for  discussing  and  defining  national  employment  priorities.  In  particular  the 
involvement of parliamentary bodies needs to be raised in profile. Social Partners as well as 
regional  and  local  authorities  are  seen  as  important  partners  for  national  governments  but 
their involvement in the NAPs could be improved. 

Member States are increasingly attempting to report on budgetary priorities in the NAPs, but 
the  information  remains  patchy.  Information  on  the  implementation  of  the  NAP  and  on 
delivery services concentrates on the role of the PES, and little consideration is given to other 
delivery services such as education and training, and social services. 

There is a need to improve governance of employment policies at national and EU level. At 
national  level  this  implies  building  reform  partnerships,  formulating  ambitious  employment 
policies with targets reflecting those fixed at EU level, and using the NAPs more effectively 
as  central  planning  and  monitoring  documents  bringing  together  the  different  elements  of 
reform.  At  European  level  this  implies  strengthening  the  role  of  EU  country-specific 
recommendations,  targeting  more  closely  EU  funds  to  address  the  Lisbon  agenda, 
encouraging  strong  commitment  from  the  European  Social  Partners,  and  reinforcing 
dissemination and systematic and more open mutual learning through exchange of experience. 

8 

 
 
  
 
INTRODUCTION 

This Joint Employment Report (JER) provides the first overview of the employment situation 
and an assessment of the progress made by Member States in the implementation of the new 
set  of  Employment  Guidelines  agreed  for  the  period  2003-2006  with  three  over-arching 
objectives:  full  employment,  quality  and  productivity  in  work  and  strengthened  social 
cohesion and inclusion. The Joint Report contains both an analysis of progress across the EU 
under the major agreed objectives and guidelines, and a brief country by country review. Key 
and  context  indicators  agreed  by  the  Employment  Committee  underpin  the  analysis  and  are 
provided in the annexes. 

Title VIII of the Treaty establishing the European Community lays down the principles and 
procedures  for  developing  a  co-ordinated  strategy  for  employment.  Article  128  sets  out  the 
specific steps leading to the formulation of such a strategy. This includes, on an annual basis, 
guidelines for Member States' employment policies; Each Member State provides the Council 
and the Commission with an annual National Action Plan on the principal measures taken to 
implement  its  employment  policy  in  the  light  of  the  guidelines.  The  examination  of  the 
National  Action  Plans  results  in  the  presentation  to  the  European  Council  of  a  Joint 
Employment Report of the Council and the Commission on the employment situation for the 
EU and on the implementation of the guidelines for employment. On the basis of this report 
the  European  Council  adopts  each  year  conclusions  that,  in  turn,  may  give  rise  to  a 
reformulation of the Guidelines. Moreover, on a recommendation from the Commission, the 
Council addresses appropriate recommendations to the Member States. 

The European Employment Strategy (EES), which has been developed according to the above 
institutional  framework,  is  a  major  contribution  to  the  wider  EU  political  agenda  defined  at 
the  Lisbon  Summit  and  subsequent  European  Councils.  In  the  context  of  a  streamlining 
decided upon in 2002, of the policy co-ordination cycle, the major areas contributing to the 
Lisbon  agenda,  this  Joint  Employment  Report,  the  Implementation  Report  on  the  Broad 
Economic Policy Guidelines and the Implementation Report on the Internal Market Strategy 
are presented as part of the "Implementation Package" designed to synchronise and strengthen 
policy coordination and coherence. 

While  the  National  Action  Plans  for  Employment  submitted  in  Autumn  2003  by  each 
Member State constitute the main contribution to this report, a major input to this year's JER 
is the report submitted by the Employment Taskforce constituted at the request of the Spring 
2003 European Council, under the chairmanship of Mr Wim Kok, former Prime Minister of 
the Netherlands, who presented his report to the European Commission on 26-11-20032. 

On this basis, in the final section this Joint Employment Report outlines key messages for the 
spring 2004 European Council. 

2 

"Jobs,  Jobs,  jobs  –  Creating  more  Employment  in  Europe"  Report  of  the  Employment  Taskforce 
chaired by Wim Kok  

9 

 
 
  
 
                                                 
1. 

THE POLITICAL AND ECONOMIC CONTEXT 

This Joint Employment Report is released at a time of cautious optimism for a recovery in EU 
labour markets. The employment policies and structural reforms undertaken over the past few 
years have made Europe's labour market more robust in adapting to shocks, as demonstrated 
by the relative resilience of employment over the recent period. We now start from a better 
position to ensure a resumption of growth and high employment, although it should be borne 
in  mind  that  labour  hoarding  and  the  lagged  effects  of  the  economic  cycle  on  employment 
will delay the increase in employment. The new European Employment Strategy provides an 
integrated  and  coherent  response  to  the  employment  challenges  facing  the  EU.  This  report 
examines  the  commitments  made  by  Member  States  under  the  new  European  Employment 
Guidelines  and  points  to  areas  where  progress  and  delivery  are  most  pressing.  Action  now 
will help underpin the recovery of the economy and employment. 

1.1 

EMPLOYMENT GROWTH AT A STANDSTILL 

After  an  initial  strong  resilience  of  the  EU  labour  market,  the  impact  of  the  economic 
slowdown has started to be felt more strongly. 

Labour  market  developments  since  the  start  of  the  recent  economic  slowdown  indicate  that 
EU employment now resists better than in the past to weakness in economic activity. Indeed, 
the reaction of employment to the recent slowdown has so far been much more moderate than 
in  the  previous  slowdown  of  the  1990s.  This  reflects  a  path  of  job  creation  and  destruction 
different to that of the early 1990s, with smaller declines in employment so far in agriculture 
and industry, while the service sector has created far more jobs. 

The current resilience has essentially been a consequence of changes in the European labour 
market  that  occurred  over  the  second  half  of  the  1990s  and  which  affected  the  mechanisms 
linking  employment  and  participation  with  the  economic  cycle.  Altogether,  the  combined 
effects of rising female and youth participation, the increasing skill level of the working age 
population and greater availability of new types of contracts facilitated the development of an 
employment-intensive  growth  pattern,  which  was  also  supported  by  more  employment-
friendly wage setting by the social partners and cuts in non-wage labour costs. 

Europe continued to feel the impact of the economic downturn throughout most of 2002 and 
2003,  with  GDP  growth  under  1%.  After  several  years  of  strong  job  creation  employment 
growth came to a standstill by the beginning of 2003. The downward trend in unemployment 
reversed by mid-2001 and levels have gradually increased from the 2001 low of 7.3% to 8% 
in 2003. Employment is expected to rise only slowly over 2004-2005. 

For  2004  there  is  a  risk  of  continuing  stagnation  in  employment,  and  possibly  higher 
unemployment,  unless  the  economy  picks  up,  and  further  labour  market  reforms  are 
implemented.  Even  with  a  modest  economic  recovery,  employment  growth  may  be  limited 
since it can be assumed that enterprises have hoarded labour in the recent slowdown. Growth 
in labour supply is essential to meet the Lisbon targets, but with labour force growth expected 
to exceed employment growth, unemployment may well continue to grow in the near future. 

1.2 

THE MEDIUM TERM EMPLOYMENT STRATEGY REMAINS VALID 

Employment performances are a key component of the Lisbon goal defined in 2000, to make 
the EU the most competitive and dynamic knowledge – based economy in the world, capable 

10 

 
 
  
 
of sustainable economic growth with more and better jobs and greater social cohesion. They 
are closely inter-related with major areas of reform in pensions, education, research and social 
inclusion as well as product, services and labour markets. 

The  new  European  Employment  Strategy  (EES)  has  been  designed  to  support  the  Lisbon 
goals.  The  new  guidelines  fix  the  three  overarching  and  complementary  objectives:  full 
employment;  quality  and  productivity  at  work;  and  social  cohesion  and  inclusion.  Ten 
specific fields for action have been identified to support these objectives. The guidelines also 
cover action to improve the governance of employment policies. 

In the face of the economic slowdown, the prolonged uncertainty as to the timing and scale of 
the recovery, and reflecting a strong concern from heads of States and Governments to keep 
up  and  intensify  the  momentum  for  structural  reforms,  the  2003  Spring  European  Council 
invited  the  Commission  to  establish  a  European  Employment  Taskforce,  under  the 
chairmanship  of  Wim  Kok,  former  Prime  Minister  of  the  Netherlands,  to  help  identify 
practical reforms that can have the most direct and immediate impact on the implementation 
by Member States of the Employment Strategy. 

Recognising the structural improvements achieved in a number of Member States and the rise 
of employment from the mid-1990s to 2002 in the EU, the Taskforce warns that the European 
Union  is  at  risk  of  failing  in  its  ambitious  goal  set  at  Lisbon  in  2000.  Unless  the  Member 
States  step  up  their  efforts,  it  is  looking  increasingly  unlikely  that  the  overarching  goal  for 
2010, and the employment objectives, will be attained. 

In  responding  to  the  slowdown  Europe  should  not  lose  sight  of  the  wider,  longer-term 
challenges it is facing. Globalisation and economic integration are increasingly affecting the 
way  Europeans  live  and  work  and  demanding  for  a  rapid  response  to,  and  management  of, 
change. The rapid ageing of the population is calling into question Europe’s ability to remain 
competitive and achieve higher employment and economic growth in the future. 

Rather than engaging in a process of further changes in EU guidelines the Taskforce considers 
that the emphasis at EU level should now be on stronger monitoring of reforms undertaken by 
the Member States. The present report examines the response given by Member States to the 
full range of the Employment Guidelines taking into account the assessment and proposals of 
the Employment Taskforce. 

The  Employment  Taskforce  exhorts  Member  States  to  act  decisively  now,  so  as  to  increase 
confidence and support economic growth. Beyond the need to create more jobs in the short-
term,  it  underlines  that  employment  policies  must  raise  both  employment  and  productivity 
levels – the key drivers of Europe's economic growth  potential and vital components of  the 
Lisbon strategy. 

The  Employment  Taskforce  identified  four  key  requirements  to  boost  employment  and 
productivity: 

– 

– 

– 

– 

increasing adaptability of workers and enterprises, 

attracting more people to the labour market, 

investing more and more effectively in human capital, 

ensuring effective implementation of reforms through better governance. 

11 

 
 
  
 
The Employment Taskforce identified priorities for action  of general relevance for Member 
States  under  each  of  these  headings.  It  also  addresses  specific  messages  on  the  reforms 
needed to each of the fifteen current and the ten new Member States. 

The new strategy has also been designed to support employment and labour market reforms in 
the  ten  new  Member  States  due  to  join  the  EU  in  2004.  Faced  with  major  restructuring  at 
political, economic and institutional level, the new Member States have embarked on major 
labour  market  reforms  over  the  last  decade  to  adjust  to  a  market  economy  and  prepare  for 
membership.  Through  a  close  partnership  with  the  European  Commission,  they  have 
produced Joint Assessments of their respective employment and labour market challenges and 
a  regular  process  of  reporting3.  They  will  take  their  full  part  in  the  co-ordinated  European 
Employment Strategy as of 1st May 2004. 

2. 

OVERALL  ASSESSMENT  WITH  REGARD  TO  THE  EU  EMPLOYMENT 
OBJECTIVES 

The  2003  National  Action  Plans  prepared  in  response  to  the  new  Guidelines  present  an 
employment  policy  approach  which  is  overall  rather  balanced  across  the  three  EES 
overarching  objectives,  although  in  a  number  of  cases  the  quality-productivity  and/or  the 
inclusion  objectives  are  not  presented  on  an  equal  footing  with  the  objective  of  full 
employment.4 Progress across these objectives is reviewed below. 

2.1 

FULL  EMPLOYMENT:  THE  EU  IS  AT  RISK  OF  FALLING  SHORT  OF  THE 
EMPLOYMENT RATE TARGETS 

Progress towards the Lisbon target of a 70% overall employment rate for the EU has come to 
a standstill, and it is now clear that the EU will miss the intermediate employment rate target 
for 2005 (67% agreed in Stockholm). The overall employment rate is stagnating in 2003 at the 
level reached in 2002 (64.3%). Even with economic recovery the employment rate may only 
reach 65 % in 2005. Some catching up has occurred in some Member States with very low 
employment rates (EL, ES, and IT), where employment growth continued in 2002 and 2003. 
Still, only four Member States reach the 70% target (DK, NL, SE and UK), whereas FI, PT 
and AT are close. 

The  protracted  slowdown  implies  flat  or  very  moderate  employment  growth  for  three  years 
(2002-2004) and no or little improvement in the employment rate in this period. Therefore, as 
illustrated by the graph below, the EU will miss the intermediate employment targets in 2005 
and a substantial acceleration of employment growth is needed in the coming years. To reach 
the Lisbon target of 70%, employment would need to grow on average from 2004 – 2010 by 
1.6% - a break in trend from the present performance but not out of reach if compared to the 
performance  in  the  1997  –  2000  period.  This  would  imply  an  increase  in  employment  by 
some 15 million jobs for the EU-15. This figure would need to be close to 22 million jobs if 
the target was fixed for the EU25. 

3 

4 

"Progress in implementing the Joint Assessment Papers on Employment Policies in acceding countries" 
COM(2003) 663. 
Quality is not explicitly discussed in the 2003 National Action Plans for DE (only as "accompanying 
measures"), IT, NL, and UK. Social inclusion is not explicitly discussed in the case of DE, AT and IT. 
This  does  however  not  prejudge  the  substantive  content  of  the  National  Action  Plans  concerned  in 
regard of these objectives. 

12 

 
 
  
 
                                                 
Chart 1: PATH TO LISBON EMPLOYMENT RATE TARGET: 1997-2010

intermediate target 2005: 67%

Trend as of 1997

Path necessary to 
achieve the Lisbon 

70

69

68

67

66

65

64

63

62

61

60

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

59

discounting 2003-2005 cyclical developments: average growth rate of 1.6% from 2006 to 2010

Historical data

Source:  Commission  services.  European  Labour  Force  Survey  until  2003.  For  2003-2005  employment  rate 
updated  using  DG  ECFIN  employment  forecast  and  Eurostat  Population  projections.  From  2005  employment 
rate extrapolated assuming a constant yearly increase. 

The aggregate picture hides diverging trends in employment rates by gender. The employment 
rate for women continued to improve in 2002, and remains, at 55.6%, on track towards the 
intermediate  target  of  57%  for  2005.  It  exceeds  the  60%  EU  target  set  for  2010  in  seven 
Member States (DK, NL, AT, PT, FI, SE and UK). The EU average is clearly determined by 
the low employment rates for women in only four Member States (BE, EL, ES, and IT). To 
reach the 60% target, the average annual increase in the female employment rate experienced 
since  1997  must  be  maintained  over  the  next  seven  years.  This  cannot  rely  on  economic 
growth alone; the pace of reform must also be maintained. 

Progress  towards  the  Lisbon  target  will  critically  depend  upon  the  trend  in  employment  of 
older workers. Although employment rates for older workers increased more substantially to 
just over 40% in 2002, the target of 50 % is a considerable way off. The 50% target has only 
been reached by four Member States (DK, PT, SE, and UK) and is within reach in a further 
two (FI and IE). Progress towards the target will essentially depend on the remaining Member 
States (in particular BE, FR, IT LU and AT), where the employment rate of older workers is 
less than 33%. Urgent action is therefore required to increase the numbers of older workers in 
work, but also to ensure that tomorrow's older workers – the 40 to 50 age group – can remain 
in the labour market longer. For the EU 50% target to be reached 7 million more people in the 
55-64 age bracket will need to be in work in 2010 for the EU 15. 

Member  States  have  undertaken  a  range  of  reforms  to  stimulate  participation  and  labour 
supply,  such  as  policies  to  make  work  pay,  active  labour  market  policies,  education  and 
training and mobility. However, reforms to improve the environment for job creation are less 
comprehensive.  Approaches  sometimes  focus on job creation by reducing labour costs (BE, 
FR,  AT);  through  deregulation  (DE,  FR,  IT);  by  encouraging  SME  development  and 
innovation (EL, IE, NL, AT, FI, SE, UK); through regional development (PT, IE) or just rely 
on the interaction between economic growth and flexible labour markets (DK, ES, IT). The 

13 

 
 
  
 
 
opportunities of the knowledge-based economy for job creation do not feature prominently in 
the policy package. 

In their response to the 2003 Employment Guidelines, Member States have displayed a wider 
commitment by setting of national targets; either in the form of employment rate targets or an 
objective of employment creation during the government term of office (see Table in Annex 
2).  Some  of  them  (notably  BE,  FR,  EL,  AT  and  FI)  reflect  more  ambition  than  in  the  past. 
However, setting of targets needs to be backed up by rigorous implementation of reforms. 

2.2 

QUALITY  AND  PRODUCTIVITY  AT  WORK:  MIXED  PROGRESS  ACROSS 
THE VARIOUS DIMENSIONS 

The  positive  interactions  between  quality  in  work,  productivity,  employment  and  social 
inclusion  have  been  underlined  in  the  Commission  report  prepared  at  the  request  of  the 
Brussels  Spring  European  Council5.  This  report  contains  a  full  review  of  progress  towards 
quality  in  work,  following  the  multi-dimensional  approach  defined  in  the  Employment 
Guidelines. 

The decline in labour productivity growth over the last decade is particularly worrying for the 
EU.  Labour  productivity  growth  has  further  slowed  over  recent  years,  contrasting  with  the 
rise  in  employment.  Compared  with  the  first  half  of  the  1990s  the  period  1996  to  2002  has 
witnessed a significant increase in the contribution of employment growth to GDP growth. By 
comparison,  up  until  the  recent  downturn,  the  US  has  been  able  to  combine  a  strong 
employment performance with acceleration in labour productivity, resulting in GDP growth 1 
percentage  point  higher  in  the  US  than  in  the  EU  over  period  1996-2002.  It  is  worth 
mentioning that some smaller EU Member States have performed well above the EU average 
and even above that of the US. 

In the short term actual labour productivity growth may deviate from the longer term path, in 
particular in a period of economic slowdown when lower productivity growth may partially 
result from adjustment in hours rather than in number of people. Also, although labour market 
reforms encouraging a more labour intensive growth pattern may lead to actual productivity 
growth below the  longer  term  potential this should not be regarded as a trade-off. A  higher 
employment  rate  implies  an  unambiguous  increase  in  GDP  per  capita  with  no  negative 
implications for the long-run productivity growth of the existing work force. 

There  is,  therefore  a  need  for  acting  simultaneously  on  employment  growth  and  to  increase 
efforts  to  improve  long-term  productivity  growth  where  recent  trends  are  clearly  less  than 
encouraging. Key to this is the existence of a well-educated, skilled and adaptable workforce 
and  the  EU  must  invest  more,  and  more  cost-effectively,  in  its  human  capital,  within  the 
framework of a sound budgetary policy. The EU also needs to speed up the diffusion of ICT 
in particular in the services sector and to increase investment in R&D and infrastructure, act 
on improving the entrepreneurial culture and speed up reforms of goods and services markets. 
As  some  of  the  sectors  which  created  a  high  number  of  jobs  showed  a  rather  dismal 
productivity  growth  performance  efforts  to  increase  quality  in  work  including  upgrading  of 

5 

See Communication COM(2003) 728 of 16.11.2003 "Improving Quality in work – a recent review of 
progress" 

14 

 
 
  
 
                                                 
skills and more adequate work organisation in these sectors should also contribute to meet the 
productivity challenge6. 

Productivity  is  predominantly  considered  within  the  NAPs  as  an  objective  in  its  own  right, 
independently from the link with quality. It is also to be noted that most countries with a high 
employment rate (UK, NL, SE and FI) see productivity increases as a means to compensate 
for expected labour supply tightness in the medium term. In most Member States, there is thus 
ample  scope  for  a  more  comprehensive  approach,  recognising  the  positive  interactions 
between quality in work, productivity and employment growth and social inclusion. 

Recent trends and performances around the various dimensions of quality are encouraging in 
some  respects.  Consistent  improvements  can  be  seen  in  the  EU  in  terms  of  education  and 
skills, in terms of gender gaps (except the pay gap), and for safety at the workplace. However, 
there  is  scope  for  considerable  improvement  under  each  dimension  of  quality.  The 
employment  rate  of  older  workers,  while  slowly  increasing,  is  still  far  from  the  Stockholm 
target of 50%. Young people face increasing difficulties in several Member States to find jobs 
with  reasonable  career  prospects.  Non  EU-nationals  are  at  a  clear  disadvantage  in  terms  of 
employment and unemployment, and the integration of disabled persons in the labour market 
remains  problematic,  especially  for  people  with  severe  disabilities.  As  regards  gender 
equality,  the  lack  of  adequate  facilities  for  childcare  and  care  for  other  dependants  is  a 
constraint  to  higher  women  participation;  gender  pay  gaps  have  shown  little  tendency  to 
decline,  and  sectoral  and  occupational  gender  segregation  remain.  Last  but  not  least,  as 
indicated above, the trend in productivity growth is disappointing. 

Only  few  Member  States  attempt  to  address  each  individual  dimension  of  quality  in  a 
comprehensive  approach.  Rather,  there  is  identification  in  each  Member  State  of  its  own 
specific  critical  dimensions  as  a  priority  for  action.  For  example,  the  balance  between 
flexibility  and  security  and  gender  equality  are  highlighted  as  key  issues  in  IT,  ES,  EL  and 
PT. Training is highlighted in PT and ES, as well as in Member States with high productivity 
(DK, FR, FI, SE). Health and safety emerges as an important priority in many countries, with 
five  (DK,  EL,  FR,  PT  and  the  UK)  having  set  targets  for  the  reduction  of  accidents.  Also 
working  time,  which  is  only  indirectly  covered  by  the  ten  dimensions,  is  mentioned  as  an 
issue (BE, LU, FI). 

2.3 

SOCIAL  COHESION  AND  INCLUSION:  INCREASING  ATTENTION  GIVEN 
TO INCLUSIVE LABOUR MARKETS 

In addition to the registered unemployed, in 2002, 4.5% of the EU working age population (a 
slight  increase  compared  to  2001)  was  inactive  but  wanting  to  work.  Recent  increases  in 
unemployment are worrying as they might pre-curse an increase in long term unemployment, 
which is a major risk  of  social  exclusion. This would also make it increasingly difficult  for 
people at a disadvantage to access the labour market. In this context, the already precarious 
labour  market  position  of  people  with  disabilities,  migrants  and  ethnic  minorities,  single 
parents, early school leavers and older workers may be even more difficult (see GL 7). 

Following  the  presentation  of  National  Action  Plans  on  inclusion7  which  present  national 
approaches for combating poverty and social exclusion across various policy fields, Member 

6 

7 

For a more detail analysis of Productivity trends and performance please see Chapter 2 of "Employment 
in Europe 2003" and the Annual Economic Review 2003. 
Joint Inclusion Report 2003  

15 

 
 
  
 
                                                 
States'  Action  Plans  on  employment  try  to  set  out  in  more  detail  the  contribution  of 
employment  policies  to  social  inclusion.  However,  there  is  still  considerable  scope  for 
improvement in the extent to which the majority of Member States addressed the objectives 
laid down in the third overarching guideline on social inclusion. 

There  is  a  common  thread  in  the  employment  plans  in  considering  that  participation  in 
employment  plays  a  very  important  role  in  fostering  social  inclusion.  However,  there  are 
differences in emphasis as to the extent to which labour market policy can be considered as 
largely  sufficient  to  tackle  the  problem  of  social  exclusion.  Some  Member  States 
(Netherlands,  Finland)  tend  to  focus  on  the  removal  of  obstacles  to  participation  in 
employment.  This  'making  work  pay'  approach  favours  across  the  board  social  security  and 
taxation  reforms  (tax  credits  for  low  income  earners,  removal  of  disincentives  to  work,  in 
combination  with  support  measures  such  as  childcare  provision).  Other  Member  States 
(France, Portugal, Sweden, Austria, Greece), while recognizing the key role of employment 
policy  in  the  fight  against  social  exclusion,  tend  to  focus  more  on  the  difficult  situation  of 
specific groups and favour tailor-made measures taking into account the individual needs of 
the  persons  concerned.  Member  States8  also  explicitly  recognise  the  limits  of  employment 
policies  and  stress  the  need  for  increased  synergy  with  policies  in  other  fields  such  as 
education, healthcare or housing, within a truly multidimensional approach. 

Member States had been invited by the Barcelona European Council to set national targets for 
the reduction of poverty by 2010. Most used the opportunity provided by the NAPs/inclusion 
and the NAPs/employment to set such targets. Relevant examples include EL (bringing down 
by  2010  the  percentage  of  people  at  risk  of  poverty  to  the  EU  15  average),  NL  (target  to 
increase  the  employment  rate  amongst  ethnic  minorities  to  54%  by  2005),  SE  (to  halve  the 
number of persons in need of social assistance between 1999 and 2004), FR (to increase the 
outflow  from  unemployment  of  social  minima  recipients  during  the  period  2003-2005.  The 
UK aims to increase to 70% the proportion of lone parents in work, to reduce the proportion 
of  children  in  workless  households  and  to  increase  the  employment  rate  of  disadvantaged 
areas and groups. 

in 

The  focus  on  regional  disparities  is  less  prominent  (with  the  exception  of  PT,  EL,  BE  and 
UK),  although  regional  differences  in  labour  market  performance  remain  considerable.  The 
disparities 
labour  market  participation,  between  regions,  especially  as  concerns 
unemployment, and the high levels of inequalities between the different social groups, result 
in  pockets  of  deprivation  and  social  exclusion  even  in  the  wealthier  regions  of  the  EU. 
Addressing  these  imbalances  requires  a  balanced  mix  of  productive  and  human  capital 
investment, and labour market reforms such as wage setting that take account of regional and 
local conditions. 

In order to meet the Lisbon objectives, a trend break will be needed over the coming years. 
Both  employment  growth  and  labour  productivity  growth  must  accelerate  strongly.  Recent 
labour  market  reforms  have  demonstrated  their  worth  by  increasing  the  resilience  of 
employment  to  the  economic  downturn.  Stronger  support  to  entrepreneurship,  research  and 
the diffusion of innovation, and increased and more effective investment in human capital are 
all equally important to bring about this change. Such reforms need to be pursued forcefully 
together with reforms in product, services and capital markets. 

8 

For  example  DK  uses  the  concept  of  "negative  social  inheritance",  and  EL  recognises  factors  like 
family composition and education. 

16 

 
 
  
 
                                                 
Member  States  should  confirm  their  commitment  to  such  reforms  by  setting  national 
employment  rate  targets  as  proposed  by  the  Employment  Taskforce,  and  building  up 
synergies  between  employment,  quality  and  productivity  and  social  inclusion  policies  in 
pursuing reforms. By implementing the ten specific guidelines Member States will contribute 
to the promotion of adaptability of workers and enterprises, foster labour supply and improve 
levels  of  human  capital  that  have  been  identified  by  the  Taskforce  as  key  conditions  for 
success. 

3. 

3.1 

IMPLEMENTATION  OF  SPECIFIC  GUIDELINES:  ASSESSMENT  OF 
PERFORMANCES AND POLICIES 

ACTIVE  AND  PREVENTATIVE  MEASURES  FOR  THE  UNEMPLOYED  AND 
INACTIVE 

Key facts and challenges 

The  economic  slowdown  has  stopped  the  long-term  fall  in  the  EU  unemployment  rate.  The 
unemployment rate has risen from 7.4% in 2001 to 8.1% in 2003, and some 14 million people 
are  currently  unemployed  in  the  EU  15  as  a  whole.  Long-term  unemployment  stabilised  at 
over  3%  (more  than  5%  in  EL  and  IT).  Long-term  unemployment  affects  relatively  more 
women than men (with average rates of 3.6% against 2.6%), except in FI, IE, SE and the UK. 
Youth  unemployment  increased  in  the  first  half  of  2003  and  very  high  levels  continue  to  be 
registered in EL, IT, ES, FI, FR and BE9. 

Although the overall unemployment rate is expected to stabilise over the next two years, there 
is  a  continuing  risk  of  a  surge  in  long-term  unemployment  and  inactivity.  This  calls  for  a 
strengthened  emphasis  on  activation  and  prevention  policies  in  order  to  limit  the 
unemployment spell, and prevent inflow into long term unemployment, detachment from the 
labour market and inactivity. 

Policy response 

The specific guideline was revised in 2003, built around a clear sequence of steps to be taken 
from  the  early  stage  of  unemployment  through  to  long-term  unemployment.  As  a 
consequence of the change, the corresponding indicators were revised and a clear evaluation 
of compliance in 2002/03 would be premature. Annex 1 and 2 provide the indicators available 
so far under the new approach. 

Nevertheless, Member States have made further progress in ensuring that every unemployed 
person  benefits  from  individual  job  search  and  guidance  services  at  an  early  stage  of  their 
unemployment spell. This is the case notably in DK (new "intensive contact programme"); in 
BE  (early  screening  in  Flemish  part);  in  FR  (nearly  all  job-seekers  benefit  from  the  PAP)  - 
ND10  within  4  months);  in  DE  (earlier  registration  and  intervention  by  PES  as  result  of  the 
Hartz  reforms);  and  in  IT  where,  in  the  process  of  the  labour  market  reform,  the  PES  will 
have to offer orientation interviews within 3 months of the unemployment spell. 

9 

10 

In the first half 2003, the youth unemployment ratio stood at 7.5%, (and exceeded 9% in EL, SP, IT and 
FI). Youth unemployment rate reached 15.7% (with figures of more than 20% in the same countries).  
Plan d' Action Personnalisé – Nouveau Départ 

17 

 
 
  
 
                                                 
Efforts  are  also  continuing  to  ensure  a  new  start,  in  the  form  of  training,  retraining,  work 
practice, a job, or other employability measure to each unemployed person before reaching six 
or twelve months unemployment respectively for young people and adults. Major reforms to 
be  highlighted  include  the  Jump-Plus  programme  in  DE,  the  revision  in  BE  of  the  first-job 
agreements  system  to  facilitate  recruitment  from  enterprises,  and  the  "High  Unemployment 
Area Programme" in IE aiming at identifying and breaking down the barriers to employment. 
The  indicators  provided  by  Member  States,  although  disparate11,  point  to  an  increased 
coverage of the unemployed by such measures. Eight Member States (BE, DE, FR, IE, LU, 
FI,  SE  and  UK)  attain  or  exceed  the  new  25%  target  on  activation  for  the  long-term 
unemployed.  However,  there  is  still  only  little  attention  given  to  the  inclusion  of  inactive 
persons,  hindering  in  particular  women's  access  to  active  and  preventative  measures.  A 
particular  effort  should  be  made  by  Member  States  to  provide  comparable  activation  and 
prevention indicators to allow for an assessment of progress over the coming years. 

Modernisation of employment services to support activation and prevention is in progress, and 
in  some  Member  States  there  is  a  move  towards  increased  collaboration  between  public 
employment services and private sector partners, in particular temporary work agencies (NL, 
IT,  DE,  UK).  Steps  have  been  taken  to  improve  services  to  employers,  through  the 
development of call centres and the direct input of jobs over the Internet (UK, IE, DE, BE and 
SE). Services are being strengthened at the regional (FR, ES, IT) and local level (DK, NL). 
New  ICT  systems  are  being  developed  within  the  PES  in  most  countries.  Further  efforts  to 
continue the modernisation process are desirable. 

Seven  Member  States  (AT,  DK,  ES,  LU,  FI,  SE  and  UK)  provide  data  on  effectiveness  of 
activation measures in terms of integration into a job after an active measure. In AT, almost 
half of unemployed people find a job six months after participating in a measure, compared 
with roughly one third in SE and SP, and more than two thirds in LU. Several Member States 
implement tailored made measures in favour of the young (BE, DE, FR, EL, IT) and women 
(EL,  ES,  IT),  often  in  combination  with  hiring  incentives  for  employers.  Several  (DK,  FR, 
NL,  FI  and  SE)  have  taken  significant  measures  to  improve  unemployment  benefit 
management,  through  co-operation  between  labour  market  institutions.  Conditionality  of 
benefit receipt linked to participation in the activation process is a clear example of this co-
operation. 

Notwithstanding  budgetary  constraints,  there  remains  considerable  scope  for  further 
redirecting  of  spending  and  greater  efficiency  through  a  better  timing  and  focusing  of 
measures. 

In this context, the Employment Taskforce has underlined that measures aimed at preventing 
unemployment and supporting (re-)integration of the newly unemployed and inactive people 
into  employment  are  essential  to  tap  the  potential  of  the  workforce,  and  that  there  are  even 
more  crucial  in  a  period  of  economic  downturn  and  for  regions  and  sectors  experiencing 
restructuring. The Taskforce urged Member States to: 

– 

11 

Offer  personalised  services  to  all  unemployed  jobseekers  at  an  early  stage,  in  the 
form  of  guidance,  training  or  new  job  opportunities,  in  line  with  the  Employment 
Guidelines; 

Several member States have not been able to report the indicators on the basis of the revised definitions 

18 

 
 
  
 
                                                 
– 

– 

– 

– 

To improve the efficiency of activation programmes by identifying real needs of job 
seekers  and  giving  preference  to  tailor-made  measures  over  general  large-scale 
programmes; 

Develop rapid response schemes in the even of plant closures or large scale company 
restructuring; 

Equip employment services with sufficient capacity (in terms of staff and resources) 
to deliver such tailor-made services, and strengthen local employment partnerships; 

Address the specific needs of the most vulnerable, including disadvantaged younger 
people and people with disabilities. 

3.2 

JOB CREATION AND ENTREPRENEURSHIP 

Key facts and challenges 

In the enlarged European Union some 22 million jobs need to be created in order to reach the 
Lisbon  employment  rate  target  in  2010.  EU  employment  growth  was  only  0.4%  in  2002, 
equivalent to a net job creation of 0.6 million. During 2003, employment growth is expected 
to be particularly weak in DK, DE, NL and PT. The birth rate of new enterprises remained 
stable in 1997-2000. DK, LU, ES and the UK had the highest birth rates of business of those 
Member States providing comparable data. The survival rate of new enterprises was highest 
in  LU  and  the  UK.  Business  investment  as  a  percentage  of  GDP  in  the  EU  declined  from 
18.3% to 17.2% from 2000 to 2002. 

More must be done to tap the job creation potential in the EU through an improved business 
environment  and  by  fostering  business  capacity  to  innovate.  Increasing  job  opportunities 
through entrepreneurship and the creation of new enterprises is essential to reach the Lisbon 
employment  rate  targets.  Stimulating  innovation  and  spreading  its  results  more  effectively 
across the economy is also essential to raise employment and economic growth. 

Policy response 

Most Member States have made progress in facilitating start-ups and lowering administrative 
burdens, especially when combined with e-Government initiatives aiming at simplifying the 
registration of companies and reducing ongoing compliance costs. A few Member States have 
set targets for the creation of new enterprises (FR and BE), and further targets are announced 
by  Member  States  in  context  of  the  enterprise  Quantitative  Target  Project.  The  transfer  of 
business has received increased attention in FR and NL, and measures to ease the tax burden 
of generational change of ownership are taken by EL, FI and SE. Expanding Business support 
services is a priority in most Member States, but only a few take measures to further address 
the  quality  of  these  services  (ES,  FI,  DK,  PT).  Few  Member  States  report  on  specific 
measures designed to ease the administrative burden to the hiring of staff, but systems for the 
registration of employment of new workers have developed (BE, ES, FR and EL). 

The  simplification  of  existing  regulation  continues  in  the  Member  States,  and  efforts  have 
increased  regarding  the  impact  assessment  of  new  legislation  and  in  tackling  conflicting 
regulations.  Several  Member  States  have  set  up  inter-ministerial  working  groups  or  task 
forces  on the simplification  and  improvement  of regulation. In the UK the revised guide on 
regulatory impact assessment requires departments to carry out small business impact tests on 
new regulations, which are to be followed up by clear responsibility for regulatory reform in 

19 

 
 
  
 
each Government Department. A number of Member States are looking into simplification of 
bankruptcy laws, including DK, EL, PT FI, and BE. Several Member States have introduced 
new or strengthened existing measures for access to funding for start-ups, and existing SMEs, 
but it remains a major constraint for the development of businesses, in particular for new and 
small  firms12.  Business  angel  networks,  which  can  offer  management  assistance  and  board 
membership in addition to access to finance, are being further promoted in FR and BE. 

To  achieve  the  aim  of  making  entrepreneurship  a  career  option  for  all,  Member  States 
provide a range of training measures and targeted action towards groups underrepresented as 
entrepreneurs. Female entrepreneurship is mainly promoted through training and the creation 
of  networks  (UK,  LU,  ES,  and  EL).  DK  put  emphasis  on  flexible  services  to  accommodate 
individual needs. The opening of closed professions in EL and the lifting of requirements of 
obligatory  grades  within  certain  trades  in  DE  and  AT  may  increase  the  opportunities  for 
setting  up  businesses.  Some  Member  States  provide  particular  support  for  start-ups  in  the 
social economy. To reduce the risk of transition to self-employment, AT plans to extend the 
eligibility  criteria  for  unemployment  benefits.  The  impact  of  social  protection  systems  on 
incentives  to  take  up  a  self-employed  status  and  to  move  between  the  employed  and  self-
employed  status  should  be  reviewed.  In  the  context  of  an  ageing  population  of  business 
owners, provisions and support need to be further developed in order to ensure a successful 
transfer  of  businesses.  Most  Member  States  recognise  the  importance  of  fostering 
entrepreneurship  through  education  and  training  and  some  include  this  aspect  explicitly  in 
the curricula at various levels of education (but little specification on the modules is given). 
Improving  the  teaching  methods  of  teachers  and  career  counsellors  is  important  to  raise  the 
quality of the education and is outlined as a priority in FI. In some countries, links between 
businesses and education establishments are fostered for entrepreneurial training (AT, IE, LU, 
UK), for training activities to upgrade managerial skills or to further the innovative capacity 
of businesses. 

In this context the Employment Taskforce has underlined the need for Member States to: 

– 

– 

– 

– 

12 

Reduce  administrative  and  regulatory  obstacles  to  the  setting  up  and  subsequent 
management of new business, for instance by developing advisory services (such as 
one-stop  shops)  for  business  start-ups  and  providing  help  for  SME's  in  managing 
human resources; 

Improve access to finance for start-ups and SME's; 

Promote an entrepreneurial culture, particularly by increasing managerial training in 
tertiary  and  vocational  education  and  reviewing  insolvency  law  with  the  aim  of 
reducing excessive risks to entrepreneurs; 

Reduce  the  level  of  non-wage  labour  costs  for  the  low  skilled  and  those  on  low 
wages,  as  well  as  ensure  employment-friendly  wage  developments  that  reflect  the 
labour market situation and overall levels of productivity, and allow sufficient wage 
differentiation across sectors and regions; 

For  further  analysis,  see  the  2004  Report  on  the  implementation  of  the  European  Charter  for  Small 
Enterprises where "access to finance" is one of the priority areas. 

20 

 
 
  
 
                                                 
– 

– 

– 

Encourage  networks  and  partnerships  for  the  promotion  and  the  dissemination  of 
innovation  at  regional  and  sectoral  level,  and  spread  the  use  of  ICT  by  making  it 
more accessible and increasing training at all levels; 

Ensure  proper  incentives  both  fiscally  and  through  intellectual  property  rights  to 
encourage  increased  levels  of  private  investment  in  research  and  innovation  and 
exploit the potential of the Single Market through common standards, cross-country 
cooperation and mobility of researchers; 

Review insolvency law with the aim of reducing excessive risks to entrepreneurs and 
removing the stigma of failure. 

3.3 

ADDRESS  CHANGE  AND  PROMOTE  ADAPTABILITY  AND  MOBILITY  IN 
THE LABOUR MARKET 

Key facts and challenges 

Recent  years  have  seen  increases  in  fixed-term  and  part-time  employment,  although  this 
process  has  come  to  a  standstill  in  2002.  There  is  now  an  observed  trend  towards 
convergencewith Member States in which part-time and fixed-term work is under-represented 
showing  significant  increases  (except  EL  and  IE).  There  is  also  a  n  increasing  diversity  of 
working time patterns in most countries. There is a medium term trend of a decline number of 
work accidents, with substantial improvements in EL, IE, PT and BE. Geographical mobility 
between regions remains rather low. In 2002, it was either unchanged or indeed decreased in 
Member States. 

European  countries  are  experiencing  a  period  of  intensive  economic  change  and  company 
restructuring. Behind the marginal growth in employment in 2002 and stagnation in 2003, an 
important  number  of  jobs  have  been  created  and  shed13.  Member  States,  workers  and 
enterprises  need  to  increase  their  capacity  to  anticipate,  trigger,  and  absorb  change.  Better 
responsiveness  to  change  requires  a  high  degree  of  flexibility  in  labour  markets  and  a 
diversity of contractual and working arrangements. This can only succeed if combined with 
adequate security for workers in terms of their capacity to remain and progress in the labour 
market.  Geographical  and  occupational  mobility  needs  to  be  increased  to  facilitate  an 
adaptable labour market. 

Policy response 

Recent labour market reforms have started to allow greater possibility for enterprises to use a 
variety of different employment contracts. There is an observed trend towards more flexibility 
through working time patterns and the working environment. For example, one can see in the 
majority  of  Member  States,  extended  reference  periods  for  working  time  accounts  or  new 
options  for  career  breaks  created  to  better  balance  work  and  private  life.  Some  Member 
States, are beginning to focus on  introducing more  flexibility  into "standard" contracts. For 
instance,  as  regards  the  definition  of  the  thresholds  beyond  which  stricter  employment 
protection  is  applicable  (DE),  or  legislation  on  dismissals  which  set  out  a  more  transparent 
and  reliable  framework  for  both  employers  and  employees  (ES,  PT).  Some  Member  States 
have launched comprehensive reviews of employment related legislation (NL, PT, FR). 

13 

See Employment in Europe 2003, quoting layoff announcements in the order of half a million, notably 
in the ICT and financial sector. 

21 

 
 
  
 
                                                 
Efforts  to  foster  adaptability  through  vocational  and  continuing  training  tend  to  be  better 
developed in cases where social partners have concluded relevant agreements. Differences of 
training  provision  between  those  who  are  covered  and  those  who  fall  outside  collective 
agreements are particularly marked in BE, DE, ES, FR, IT, LU and PT. 

The  improvement  of  working  conditions,  and  the  reduction  of  accidents  at  work  and 
occupational diseases are important priorities for almost all Member States, with five setting 
targets  for  the  reduction  of  accidents  (UK,  DK,  FR,  EL,  PT).  The  focus  is  on  prevention 
through  better  information  and  counselling,  and  stricter  monitoring.  Member  States  devote 
more  attention 
to  economic  change  and  restructuring.  Professional  re-orientation, 
underpinned by training, targeted counselling, and outplacement services are seen by most as 
the appropriate approach. The implementation of such a policy requires a better co-operation 
and  co-ordination  of  all  actors,  improved  monitoring  and  better  early  warning  systems. 
Actions  to  promote  geographical  mobility  tend  to  be  placed  in  the  context  of  reducing 
regional disparities, since, in the short-run, labour shortages are not a concern in the majority 
of the Member States. Policies aim to facilitate mobility and transport, often through financial 
incentives  (ES);  where  relevant  they  address  skill  aspects  (knowledge  of  foreign  languages 
and validation of competencies in the case of trans-national mobility). 

Most  Member  States  engage  with  EURES  to  provide  additional  service  to  the  supply  and 
demand sides of the labour market. While many Member States refer to the imperative that all 
PES jobs should be available on a common European Platform by 2005, only a few indicate a 
specific ambition to do so (DE, SW, PT, DK). 

In promoting increased labour market flexibility combined with security, Member States must 
take into account the broad spectrum of measures that impact on the capacity of workers and 
enterprises to adapt. Access of workers to continuing training (especially for the low skilled 
and  older  workers)  is  particularly  important.  More  should  be  done  to  increase  levels  of 
participation by creating incentives for employers and individuals. The social partners should 
ensure effective implementation of agreements in this area. 

Building  on  the  interaction  between  flexibility  and  security,  the  modernisation  of  work 
organisation  is  key,  both  to  increasing  employment,  and  to  boosting  productivity.  Whereas 
greater  flexibility  may  be  needed  in  some  Member  States  as  regard  standard  contracts14  a 
review of the contractual framework may also require strengthening security in non-standard 
contracts. The adoption of an EU framework directive on working conditions for temporary 
agency  workers  would  boost  the  opportunities  offered  by  the  temporary  agency  sector  to 
reconcile  flexibility  and  security.  More  attention  should  be  given  to  the  management  of 
restructuring notably in the light of enlargement. This should aim at a preventive approach, 
minimising  the  potential  risks  of  restructuring  for  employees,  enterprises  and  the  local 
communities. 

In  this  context,  the  Employment  Taskforce  has  underlined  the  need  for  Member  States  and 
Social Partners to: 

– 

14 

Examine, and where necessary, adjust the level of flexibility provided under standard 
contracts, to ensure their attractiveness for employers and workers; 

Standard contracts are defined as contracts of unlimited duration, whether full or part-time. 

22 

 
 
  
 
                                                 
– 

– 

– 

– 

– 

– 

Review the role of other forms of contracts with a view to providing more options for 
employers and employees depending on their needs; 

Ensure  there  is  adequate  security  for  workers  under  all  forms  of  contracts  and 
prevent the emergence of two tier labour markets; 

Remove obstacles to the setting up and development of temporary work agencies as 
effective  and  attractive  intermediaries  in  the  labour  market,  offering  improved  job 
opportunities and high employment standards; 

Promote  the  use  of  ICT  and  working  time  flexibility  as  tools  to  modernise  work 
organisation; 

Remove  obstacles  to,  and  raise  the  attractiveness  of  part-time  work  for  employers 
and workers; 

Adapt  social  protection  systems  to  support  labour  market  mobility  and  facilitate 
transitions  between  different  status,  such  as  work,  training,  career  breaks  or  self 
employment (job-to-job insurance). 

3.4 

PROMOTE  THE  DEVELOPMENT  OF  HUMAN  CAPITAL  AND  LIFELONG 
LEARNING 

Key facts and challenges 

The  EU  faces  considerable  difficulty  in  reaching  the  2010  target  of  85%  of  22  year-olds 
completing upper secondary education.  In  2002,  75.5%  of  20-24  year  olds15 had completed 
upper  secondary  level  education,  a  slight  increase  from  2001  (75.2%).  There  are  wide 
disparities  between  Member  States  with  rates  ranging  from  43.7%  in  PT  to  91%  in  UK. 
Women  in  general  have  higher  attainment  levels  than  men.  Participation  in  education  and 
training16 continues to be low, at only 8.5% of the 25-64 year old population (8.4% in 2001). 
If this rate of progress continues, the EU will not meet the 2010 target of a participation rate 
of 12.5%. Participation rates are low in several Member States, below 4% in EL, FR and PT 
and below 6% in ES, IT, IE, and DE. The highest adult participation levels are found in the 
UK  and  SE  with  rates  of  over  21%.  Participation  also  varies  widely  by  age  group  and 
attainment  level.  Groups  most  in  need  are  the  least  likely  to  receive  training.  Those  aged 
between 25 and 34 are nearly five times more likely to take part in education and training than 
those aged between 55 and 64 are. And the low skilled are 4 times less likely to participate in 
training than the high skilled – reinforcing the skills divide. Women are slightly more prone to 
participate in training than men are. 

For  the  EU  to  reach  the  targets  for  2010  demands  an  impetus  in  policy  reform  to  ensure 
lifelong learning opportunities for all. In particular the key challenges are to enhance levels of 
basic  skills  by  giving  everyone  the  right  to  secondary  education,  to  reduce  the  number  of 
people  leaving  school  early,  and  to  increase  access  to  training  throughout  the  life-cycle. 
Furthermore, Member States together with the social partners need to make transparent  the 
rights  and  obligations  in  terms  of  education  and  training,  to  define  and  control  quality 

15 

16 

Due to the sensitivity of data for 22 year olds the agreed indicator as a proxy to measure this target is 
the educational attainment levels of 20-24 year olds 
Source:  Labour  Force  Survey.  For  most  Member  States,  LFS  participation  refers  to  education  and 
training in the four weeks preceding the survey.  

23 

 
 
  
 
                                                 
standards of education and training and ensure that there is a sufficient level of investment by 
employers.  It  is  crucial  that,  especially  given  the  current  economic  climate,  investment  in 
human capital by employers is not allowed to spiral downwards, but instead should increase. 

24 

 
 
  
 
Policy response 

Several  Member  States  have  pursued  considerable  efforts  to  cover  different  aspects  of 
Lifelong  learning,  mainly  relating  to  employability,  but  few  outline  a  coherent  and 
comprehensive lifelong learning system or strategy. Recent reforms in DK, SE, FI, FR aim to 
make  existing  systems  more  flexible  and  adapted  to  individual  needs.  BE,  DE,  AU  and  FI 
prioritise  the  improvement  in  the  transition  for  school  to  work.  In  IT,  vocational  training 
systems  have  seen  widespread  reform  through  a  new  apprenticeship  system,  the  creation  of 
Fondi interprofessionali, and the creation of individual training leaves. Further examples point 
to specific areas of reform, namely combating illiteracy (BE, FR, IE, and the UK), improving 
basic skills (DK, DE, IE, PT, UK), and ICT skills (DK, DE, IE, the NL, EL). 

Reforms  in  several  Member  States  aim  to  deliver  a  more  demand-led  system  through 
mechanisms to better anticipate skill needs. IE has set up of an expert group on "Future Skill 
Needs"  and  the  Skills  Strategy  for  England  aims  to  make  training  provision  more  closely 
related to employer needs. Most Member States report on national progress towards the EU 
wide targets for 2010. Several Member States set national targets that correspond to the EU 
targets (IE, PT, FR, SE and DK). Others set targets on other aspects of lifelong learning (BE, 
UK, ES). It is particularly important that Member States who lag well behind set ambitious 
targets to drive policy. 

A  few  Member  States  illustrate  a  commitment  to  deliver  increased  and  more  efficient 
investment in human capital. However, there is little information on levels of investment or 
ways  of  encouraging  the  more  efficient  investment  of  these  resources.  A  few  targets  have 
been set for increasing investment in human capital, but there is little detail on strategies to 
increase  private  investment –  from the individual or firm. Member  States have  developed a 
reasonably  wide  range  of  policies  in  this  field  but  with  there  is  less  illustration  of  a 
commitment  to  bringing  about  the  increase  called  for  in  the  guideline.  Several  types  of 
policies exist to encourage employers, and in particular SME's to invest in their workforce. 
Approaches include reducing social security contributions for employers who train (ES), tax 
credits to firms which invest, aid for employers to meet the costs of giving staff paid time off, 
contractual agreements on training, and compulsory levies. 

Social  partners  are  increasingly  involved  in  the  design  and  delivery  of  adult  education  and 
training  policies,  with  increasing  evidence  of  collective  or  contractual  agreements  covering 
training.  Efforts  to  encourage  individuals  to  participate  and  invest  in  learning  have  been 
reinforced  in  a  variety  of  ways.  Some  Member  States  have  experimented  with  broadening 
lifelong  learning  participation  through  financial  incentives,  for  example  time  accounts  or 
individual  learning  accounts,  and  payments  to  compensate  for  time  away  from  work. 
However, policies tend to be quite general, and Member States have yet to develop a range of 
policies  that  will  attract  all  individuals  -  from  the  high  to  low  skilled  -  to  take  more 
responsibility  for  learning.  Many  initiatives  also  target  the  recognition  and  certification  of 
non-formal or workplace learning to better recognise existing skills, and cut down the length 
of time needed in training. The important role of ESF in investing in Human Capital could be 
better reflected. 

In this context, the Employment Taskforce has highlighted the importance for Member States 
to  increase  investment  in  human  capital.  The  Taskforce  urges  Member  States  and  Social 
Partners to: 

25 

 
 
  
 
Raise levels of Human Capital: 

– 

– 

– 

– 

– 

Give everyone a right of access to secondary education and a minimum level of basic 
skills; 

Promote access by a larger share of young people to university; 

Increase access to training throughout the life-cycle, with particular attention for the 
low-skilled and other disadvantaged people; 

Better  anticipate  future  skills'  needs,  including  through  a  European  network  of 
forecasting agencies; 

Member states must set themselves transparent and ambitious targets, to complement 
those set at European level, for establishing effective lifelong learning systems. 

Share costs and responsibilities: 

– 

– 

– 

Make  transparent  the  rights  and  obligations  in  terms  of  education  and  training  for 
each party; 

Define  and  control  standards  to  ensure  quality  of  education  and  training  systems, 
whether provided by public authorities, companies or training specialists; 

Guarantee a sufficient level of investment by employers as well as a fair shainrg of 
costs  and  benefits  between  them,  through  a  combination  of  compulsory  and 
voluntary  schemes,  such  as  sectoral  or  regional  training  funds,  and  through  other 
measures such as tax credits and support services. 

Facilitate access to lifelong learning: 

– 

– 

– 

Improve the identification of individual needs and access to training. This could be 
achieved  by  making  training  a  central  element  of  contractual  relationships, 
improving  advice  and  guidance  in  creating  personal  development  plans  and 
enhancing the recognition and validation of competences and qualifications; 

Broaden the supply of training by better exploiting new tools that are available such 
as e-learning; 

Promote  networking  and  partnerships  between  actors  at  all  levels  to  foster  co-
operation and sharing of good practice. 

3.5 

INCREASE LABOUR SUPPLY AND PROMOTE ACTIVE AGEING 

Key facts and challenges 

The continued increase in women's labour participation in most Member States has partially 
offset  the  declining  or  stagnating  participation  rate  for  men.  The  female  activity  rate 
continued  to  increase,  although  at  a  slower  pace,  to  60.9  %  in  2002  (the  male  activity  rate 
slightly increased to 78.4%). Participation rates for young people (15-24) have been stable or 
falling in most Member States since 1997, and employment rates continue to be low, slightly 

26 

 
 
  
 
reduced in 2002 to 40.6%17. The employment rate of older people increased significantly in 
some Member States (FR, FI, NL) and at EU level reached 40.1% in 2002, with a significant 
difference  between  women  and  men  (30.5%  and  50.1%).  However,  in  four  Member  States 
(LU, AT, BE, IT) the rate is still below 30%. 

The ageing of Europe's population will gradually lead to a contraction in the labour force. By 
2030 the population of working age could be reduced to 280 million for the EU25 (compared 
with  the  current  303  million)  implying  a  significant  decline  in  the  volume  of  employment, 
even if the 70% target is reached in 2010. This has implications for growth potential and for 
the  sustainability  of  pensions  and  benefits.  Several  Member  States  are  confronted  with  the 
challenge of a growing number of incapacity or sickness benefit claimants (UK, NL, SE, LU, 
DK) which create serious inactivity traps, mainly occurring at age above 50. 

Considering that the Barcelona Spring Council in 2001 called for an increase by five years of 
the EU average exit age from the labour market by 2010, withdrawal from the labour market 
continues to take place at relatively early ages in several Member States, although the average 
exit  age  has  increased  from  60.518  in  2001  to  61  years  in  2002.  Without  urgent  and  drastic 
measures to reverse current trends, there is no chance of getting near, let alone reaching, the 
European targets for increasing the employment rate of older workers and raising average exit 
ages from the labour market. The challenge is not only to ensure that a higher share of those 
currently aged 55-64 stay in work; but also to enhance the employability of those currently in 
their 40s and 50s. 

Policy response 

Member  States  are  progressing  in  developing  comprehensive  strategies  to  increase  labour 
participation. A few are focusing on all relevant groups, young people, women, older workers 
and  immigrants  (SE,  DK,  FI,  UK).  Policy  efforts  in  most  Member  States  are  now  better 
articulated  and  recent  trends  on  employment  rates  for  both  older  workers  and  women  are 
encouraging. Few  Member  States report on  measures promoting youth participation in both 
education  and  the  labour  market  (SE,  DK,  FI,  AT),  although  most  Member  States  are 
promoting  activation  for  young  people  under  specific  guideline  1.  Raising  female 
participation  is  a  critical  part  of  the  ageing  challenge,  and  Member  States  can  not  rely  on 
cohort effects alone to meet the targets. Measures focus on childcare and other care facilities 
(see section 3.6 below). 

Economic restructuring, voluntary early retirement schemes and existing disincentives within 
statutory retirement schemes are still hampering the employment rates of older workers from 
picking  up  significantly.  A  growing  number  of  Member  States  are  implementing  national 
ageing strategies (SE, UK, DK, FI) and some have set national targets to raise the average exit 
age (FR, FI, PT). Member States apply a range of measures focusing on benefit reforms and 
more  attention  is  given  to  improving  the  working  capacity  through  better  access  to  training 
and adaptation to working conditions. A strong focus is placed on pension reform, including 
increases  in  standard  retirement  age  and  discouraging  early  retirement  whilst  favouring 
flexible retirement. 

17 
18 

Part of this trend is a result of increased participation  
This figure  was  revised  upwards  from  the original  estimate  presented  in  the Employment Guidelines. 
Figures for 2001 and 2002 remain provisional 

27 

 
 
  
 
                                                 
Immigration is considered by most Member States as an important source of additional labour 
supply, but only for professions or sectors encountering recruitment difficulties. Several (BE, 
DE,  ES,  IE)  aim  to  simplify  the  system  of  work  permits  and  regulations  for  recruiting 
immigrants and facilitate immigration from the Accession countries (IE, AT, UK). Most give 
increased attention on integration policies for migrants currently living in the EU (GL 7) or on 
alleviating labour shortages and bottlenecks. 

Despite  progress,  employment  rates  of  older  workers  and  women  have  to  improve  more 
rapidly  if  the  agreed  EU  targets  on  employment  and  exit  age  are  to  be  met.  The  ageing 
challenge affects all generations and cannot be tackled successfully in a piecemeal fashion. A 
significant  change  in  economic  incentives,  especially  more  targeted  tax-benefits  structures, 
adequate  and  affordable  childcare  facilities  and  making  part-time  work  financially  more 
attractive to both women and men are essential to stimulate female participation. There is a 
need  for  stronger  and  more  decisive  commitments  by  social  partners  on  labour  supply 
management, especially regarding gender, age and immigration aspects, and on devising and 
disseminating best practices in both the public and private sector. Enterprises, respecting their 
corporate social responsibility, need to recognise the benefits of an age diverse workforce and 
make adjustments to their employment practices to retain experienced workers longer. 

The  development  of  a  more  active  and  co-ordinated  immigration  policy  at  EU  level  is 
necessary as part of a global approach to increasing labour supply. 

In  this  context,  the  Employment  Taskforce  has  underlined  the  need  for  Member  States  and 
Social Partners to define a comprehensive active ageing strategy for workers to retire later and 
for employers to hire and keep older workers. This includes: 

– 

– 

– 

Providing  incentives  for  workers  to  retire  later  and  for  employers  to  hire  and  keep 
older  workers.  This  includes  adjusting  tax-benefit  mechanisms,  employment  and 
pension rules to enhance incentives for older workers to stay longer in employment 
and  to  discourage  early  exits  from  the  labour  market.  Efforts  to  discourage  early 
retirement should be pursued in all member States; 

Promoting  access  to  training  for  all  regardless  of  age  and  developing  lifelong 
learning strategies, in particular workplace training for older workers, who are under-
represented in training; 

Improving  the  quality  of  work  to  provide  an  attractive,  safe  and  adaptable  work 
environment throughout working life, including the provision of part-time work and 
career breaks. 

3.6 

GENDER EQUALITY 

Key facts and challenges 

The  potential  of  female  participation  is  still  largely  untapped.  In  the  EU  15,  6.4  million 
women of working age are not in paid employment, yet would like to work, and 6.6 million 
are  unemployed.  In  2002  the  employment  rate  of  women  increased  slightly  from  55%  to 
55.6%,  reducing  the  employment  gender  gap  to  17.2  percentage  points.  The  unemployment 
gender  gap  decreased  to  1.8%.  The  highest  gaps  (above  20%  in  employment  and  5%  in 
unemployment) are in ES, EL and IT. The gender pay gap has remained high since 1998 at 
16%,  with  a  substantially  higher  gap  in  the  private  sector  (21  %)  than  in  the  public  sector 
(12%). The highest overall gaps (above 20%) are in DE, the UK and the NL. Eight Member 

28 

 
 
  
 
States have pay gaps above 20 pp in the private sector (PT, UK, NL, AT, DE, IE, ES, EL). 
Working  arrangements  are  an  important  dimension  as  well.  Almost  one  third  of  employed 
women  work  part-time,  compared  to  less  than  5%  of  employed  men.  One  third  of  women 
working  part-time  do  so  because  of  care  of  children  or  other  dependants.  In  view  of  the 
impact  of  parenthood  on  employment  for  women  the  issue  of  childcare  is  of  particular 
importance. 

Gender gaps in the labour market should be progressively eliminated, if the European Union 
is  to  deliver  full  employment,  increase  quality  at  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  by  2010  Member  States  should  provide 
childcare to at least 90% of children between three years old and the mandatory school age 
and at least 33% of children under three years of age. The underlying factors of the gender 
gaps  in  employment,  unemployment  and  pay  (for  example  gender  segregation)  should  be 
addressed and targets on the reduction of such gaps should be set without calling into question 
the principle of wage differentiation according to productivity and labour market situation. 

Policy response 

Employment  and  unemployment  gaps  are  rarely  addressed  as  such.  Member  States  mainly 
refer to increased female participation. A further two Member States set national targets for 
female employment (AT and EL), now bringing the total to seven countries. The link between 
setting  a  target  and  developing  a  policy  programme  is  not  always  clearly  made. 
Reconciliation policy is generally seen as the only way to increase women's employment rate 
and  reduce  gaps.  There  is  rarely  a  reference  to  removing  financial  disincentives  related  to 
wages and taxation. PT, EL, FR set national targets to reduce unemployment gaps or rates for 
women. ES and IT, two of the countries with the highest gender gaps in unemployment, do 
not present any specific initiatives. 

The  gender  pay  gap  appears  to  be  given  a  higher  policy  profile  including  through  a  more 
active  role  of  the  social  partners  (BE,  IE,  SE,  DK,  FI,  FR,  LU).  FR  and  EL  set  national 
targets to reduce this gap, others present measures such as greater use of wage statistics, job 
evaluation systems, tool kits for enterprises and equal pay reviews, which should all have a 
positive  impact.  However,  most  actions  are  piece-meal,  especially  in  countries  with  highest 
gaps (DE, PT, AT). Many initiatives are also voluntary with a lack of evaluation of impact. 
Countries with a high share of women in part-time work (the UK, the NL) have not analysed 
the implication of this on the gender pay gap. Many Member States link the gender pay gap 
with  gender  segregation,  making  it  a  more  concrete  policy  priority  than  in  the  past.  Apart 
from  the  Nordic  countries,  the  UK,  IE,  NL,  FR,  AT,  DE  and  BE  mention  in  their  NAPs 
initiatives  with  differing  degrees  of  ambition  (mainly  related  to  educational  choice  and 
encouraging  women  to  enter  into  technology  sectors  and  occupations).  Generally,  policy 
efforts to reduce segregation do not seem sufficient, especially in view of recent increases in 
segregation in the majority of Member States. This is a pressing issue for countries with high 
female employment growth rates such as ES, IE, LU and AT. 

Some  Member  States  have  improved  opportunities  to  work  part-time.  Some  still  consider 
reconciliation a women's issue, whereas others recognise the role of men in care and family 
responsibilities  (mainly  by  encouraging  take-up  or  improving  paternity  leave  schemes). 
Childcare  is  a  policy  priority  in  practically  all  Member  States,  even  though  the  approach 
varies in focus  and  ambition. Regarding  the 2010 EU childcare target of 33% coverage for 
children under 3 years and 90% for those over three up to mandatory school age, only SE, DK 

29 

 
 
  
 
and  BE  (Flanders)  reach  the  target  for  the  young  age  group.  For  children  above  three  the 
situation  improves,  but  many  countries  exclude  after-school  care,  which  has  a  decisive  role 
for parents' possibility to take up work. Those countries still facing the greatest challenges for 
increasing childcare provision, especially for 0-3 year old children, are IT, DE (old Länder), 
AT, LU, the UK, ES, EL, IE and PT. Many Member States set national targets for increasing 
childcare provision (BE, FR, EL, IE, PT, the UK). Policy often lacks a link between childcare 
expansion  and  the  needs  of  the  labour  market,  and  little  attention  is  given  to  quality  and 
affordability.  The  potential  traps  in  policies,  which  reinforce  gender  roles,  like  childcare 
allowance  schemes  or  home  care  subsidies,  do  not  seem  to  attract  attention.  Care  of  other 
dependants generally lacks concrete initiatives. 

Gender mainstreaming continues to be weak and non-systematic (SE an exception), lacking 
gender  impact  assessment  of  existing  systems  and  new  policy  proposals  (except  IE).  The 
provision of gender desegregated statistics and the development of institutional mechanisms 
or tools for gender mainstreaming is given less profile in the 2003 NAPs. 

Substantial  efforts  are  thus  needed  to  keep  up  momentum  towards  the  2010  Lisbon  female 
employment rate target of 60% by reinforcing gender mainstreaming in the guidelines, with 
special  attention  to  taxation  and  wages  policies,  and  to  the  introduction  of  more  family-
friendly working time arrangements in those countries with low levels of female employment. 
Priority should be given to expand childcare services, especially for children 0-3 years old. 

Noting  that  tapping  the  potential  of  female  participation  is  both  an  issue  of  gender  equality 
and  a  matter  of  economic  effectiveness,  the  Taskforce  urges  Member  States  and  Social 
Partners to: 

– 

– 

– 

– 

Remove financial disincentives to the participation of women, notably in relation to 
wages and taxation, including gender pay gaps; 

Increase the availability, affordability and quality of childcare and eldercare; 

Improve  working  arrangements,  with  measures  to  boost  the  attractiveness  of  part-
time work and facilitate career breaks and flexible working; 

Tailor measures to the specific needs of disadvantaged women. 

3.7 

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

Key facts and challenges 

The labour market situation of people facing particular difficulties continues to be much more 
unfavourable  than  the  rest  of  the  population.  For  several  years  definitions  of  disadvantaged 
people have varied between Member States due to the absence of an EU definition. Most cited 
groups of disadvantaged people are disabled people, migrants and ethnic minorities and (to a 
lesser extent) early school leavers and the low skilled. The situation of female disadvantaged 
people  is  often  worse  than  of  males.  The  unemployment  gap  between  EU  and  non-EU 
nationals  remains  stable  at  the  high  level  of  7.7%  in  2002.  Only  FI  displays  an  important 
reduction  (by  8.3  percentage  points  compared  to  2001),  whereas  in  DK  and  BE  the  gap 
increased  by  1.6  and  6.2  percentage  points  respectively.  For  the  low  skilled,  young  people, 
older workers, and disabled people, there remains an important challenge to increase labour 
market participation. 

30 

 
 
  
 
The EU average for early school leavers at 18.8 % in 200219, represents a slight improvement 
on 2001 (19.4 %), still falling far short of the EU 10% target. The rate is particularly high in 
PT (45,5%), ES (29%) and IT (24,2%). 

The integration of immigrants and disabled people, remains a key challenge in most Member 
States. This extends to other persons at risk such as low skilled, social benefit recipients or 
lone parents. 

Policy response 

Most Member States present policies to reduce the numbers of early school leavers. Measures 
range  from  increased  co-operation  between  schools  and  companies  (DE  and  NL)  to  more 
adapted pedagogy and increased personalised guidance of pupils in LU and FR. Most frequent 
policies  to  improve  the  labour  market  situation  of  people  with  disabilities  are  activation 
policies  such  as  personalised  support,  increased  participation  in  education  and  vocational 
training, improved legislation to promote integration of disabled, and tax incentives. 

The majority of Member States continue to implement measures to support the integration of 
migrants and ethnic minorities such as literacy programmes, language courses, diversity plans 
to  increase  recruitment  of  migrants,  training  and  vocational  guidance,  often  funded  through 
ESF  programmes.  Several  Member  States  explicitly  refer  to  the  transposition  of  the  two 
Article 13 Directives or point out additional measures such as awareness campaigns to tackle 
discrimination.  Some  also  make  the  link  between  increased  participation  of  immigrants  as 
part of the solution to ageing and boosting labour supply (GL 5) and in relation to alleviating 
specific  bottleneck  professions  (GL3).  Only  few  Member  States  (NL,  IE,  DK,  FI,  SE)  have 
set  national  targets  for  improving  the  labour  market  position  of  non  EU-nationals  or  ethnic 
minorities.  Also  for  other  disadvantaged  people  such  as  people  with  disabilities  or  lone 
parents, not many Member States (NL, IE, PT, SE, UK) indicate measurable targets. Some of 
these targets refer to labour market outcome such as the UK target of an employment rate of 
70%  for  lone  parents  whereas  other  targets  aim  to  improve  a  specific  situation  as  for  the 
example the increase of participation to 95% of travellers in education in Ireland. 

Employers should also be more involved in achieving the objective of increased participation 
of  disadvantaged  people,  notably  by  using  to  the  full  the  potential  of  diversity  in  the 
management  of  their  human  resources  and  by  adjustments  to  the  workplace  and  the 
introduction of flexible working patterns. 

In  this  context,  the  Employment  Taskforce  has  underlined  the  need  for  Member  States  and 
Social Partners to: 

– 

– 

19 

Cut the number of young people who drop out of school early and give everyone a 
right of access to secondary education and a minimum level of basic skills; 

Build  effective  pathways  to  work  and  training  for  young  people,  including  through 
personalised  advice  and  guidance,  and  developing 
tailor-made  programmes 
addressing the specific needs of people with disabilities; 

Percentage  of  18-24  year  olds  have  achieved  lower  secondary  education  or  less  and  not  attending 
further education or training. 

31 

 
 
  
 
                                                 
– 

Pursue  a  multidimensional  integration  policy  for  migrants  and  non-EU  nationals 
which  facilitate  participation 
training,  combat  workplace 
in  education  and 
discrimination,  address  the  specific  needs  of  immigrant  women,  promote  business 
creation  by  immigrants  and  improve  recognition  of  qualifications  and  competences 
acquired abroad. 

3.8 

MAKE  WORK  PAY  THROUGH  INCENTIVES  TO  ENHANCE  WORK 
ATTRACTIVENESS 

Key facts and challenges 

There still exist financial disincentives for people to enter, remain and progress in the labour 
market. Recent findings on the extent of unemployment traps reveal marginal rates of taxation 
exceeding 85% in several Member States, against 70% in the US20. The declining trend in the 
tax rate on low wage earners in the EU-15 seems to have stalled with the tax rate stabilising 
at 37.8% in 2002. The implicit tax rate on employed labour continued its declining trend to 
36.4% in 2002 expected to stabilise in 2003. However non-wage labour costs remains high in 
several Member States with a potentially negative impact on job opportunities and incentives. 
The  high  proportion  of  working  poor  remains  a  matter  of  concern  in  some  Member  States 
(PT,  LU,  ES,  IT).  Incapacity  traps  -  i.e.  disincentives  for  people  on  long-term  sickness  or 
invalidity to move into work - continue to be present in NL, UK, SE, LU. 

In  order  to  raise  labour  force  participation  and  to  promote  inclusive  labour  markets,  it  is 
essential to reduce remaining unemployment, inactivity and poverty traps. The Employment 
Guidelines call on Member States to review and, where appropriate reform to this effect their 
tax  and  benefit  systems,  including  benefit  duration  and  management,  whilst  preserving  an 
adequate level of social protection. In particular, policies should aim at achieving a significant 
reduction  in  high  marginal  effective  tax  rates  by  2010,  and  where  appropriate,  in  the  tax 
burden on low paid workers, reflecting national conditions. 

Policy response 

An  increasing  number  of  Member  States  are  pursuing  reforms  to  make  work  pay  by 
addressing the combined impact of taxes and benefits (BE, FR, DK, DE, NL, SE, UK, ES). 
Reforms  largely  focus  on  reducing  taxes  and  social  contributions  and  introducing  in-work 
benefits,  reforms  to  incentives  inherent  in  benefit  systems  have  been  less  comprehensive. 
Such in-work benefit schemes or employment related premiums have been introduced or are 
planned  by  a  growing  number  of  Member  States  (BE,  FR,  NL,  UK,  IE),  addressing  at  the 
same time the need to increase incentives to work and the issue of the working poor. 

Several  Member  States  need  to  tackle  the  disincentives  to  take  up  a  low  paid  job  by  the 
inactive,  mainly  due  to  the  loss  of  income  dependent  benefits  combined  with  non-financial 
barriers  to  participation  (such  as  insufficient  access  to  training,  lack  of  career  prospects, 
difficulties  to  reconcile  to  work  and  family  life,  lack  of  childcare  and  other  care  facilities). 
Progress  in  effectively  linking  out-of-work  benefits  to  activation  measures  is  insufficient  in 
many Member States. 

20 

OECD calculations for a single person earning 67% of the average production worker's wage in 2001 
and 2002. Calculations take into account the combined effects of tax and benefits on the income of a 
person moving from unemployment to work. 

32 

 
 
  
 
                                                 
Some  Member  States  have  tightened  qualifying  conditions  for  the  eligibility  or  duration  of 
benefits  (DE,  NL,  SE,  DK,  BE).  Despite  progress  there  is  still  a  widespread  resort  to  early 
retirement schemes. Benefit, tax and pension reforms in some Member States encourage older 
workers  to  remain  longer  in  work  (ES,  AT,  SE,  FI,  DE,  IE),  but  further  reform  is  needed, 
particularly in Member States with low employment rates. 

Many Member States continue to pursue efforts to reduce non wage labour costs, especially 
for low wage earners and the low skilled, by focusing on employer's social contributions (BE, 
FR, NL, LU, ES, EL) accounting for the biggest share of the labour tax burden. Others have 
announced further reforms over 2004-2007 (FI, AT, DK) while IE focused on a reduction in 
employees'  social  security  contributions.  A  few  address  targeted  tax  reductions  for 
women/lone parents to remain into reintegrate the labour market after an interruption (EL, ES, 
IE, FI), disabled people and (young/old) unemployed (EL) or taking up part-time jobs (FR). 
Information  is  lacking  as  regards  gender  segregation  in  tax-benefit  systems  particularly  in 
relation to poverty risk or social exclusion. Family based taxation, where applicable, remains 
an important disincentive especially for women (DE). 

The complex nature of unemployment, inactivity and poverty traps underlines the need for an 
integrated  approach  to  make  work  pay  covering  both  financial  and  non-financial  work 
incentives  including  those  aspects  relating  to  quality  of  work.  Progress  also  needs  to  be 
achieved in the measurement of such traps. Effective implementation of tax-benefit reforms 
rests  upon  further  improving  enforcement  of  eligibility  criteria  and  strengthening  benefit 
management.  Decisive  efforts  are  needed  by  some  Member  States  (NL,  UK,  SE,  LU)  to 
reduce  incapacity  traps  not  only  through  reviewing  tax-benefits  systems  and  eligibility 
criteria but also by improving beneficiaries' workability. Possibilities of substitution between 
unemployment and other out-of-work benefits such as early retirement and incapacity benefits 
should  be  eliminated.  Reforms  in  tax-benefit  systems  need  to  be  linked  to  minimum  wage 
setting to ensure adequate level of earnings to make the acceptance of work more attractive to 
low skilled unemployed and inactive. 

In  this  context,  and  with  a  view  to  ending  unemployment,  inactivity  and  low-pay  traps  by 
adjusting the balance between tax and benefits, the Employment Taskforce has underlined the 
need for Member States to: 

– 

– 

– 

– 

Supplement low wages, where necessary, through the use of in-work benefits, as an 
incentive  for  workers  to  accept  low-paid  jobs,  while  maintaining  wages  at  a  level 
reflecting productivity, 

ensure that income-dependent benefits (such as family or housing allowances) fulfil 
their role of alleviating poverty without constituting a disincentive to take up a job, 

move  from  family-based  income  taxation  systems  to  taxation  systems  based  on 
individual income, 

make part-time work financially more attractive for parents or lone parents wishing 
to combine family with working life, and older workers wishing to combine gradual 
retirement with part-time work. 

33 

 
 
  
 
3.9 

TRANSFORM UNDECLARED WORK INTO REGULAR EMPLOYMENT 

Key facts and challenges 

Undeclared work is an issue covered under a specific guideline for the first time. Estimates on 
the extent of undeclared work range according to national figures from 1.5% of GDP in UK to 
some 14,6% in IT21,,, but many Member States do not give estimates. Moreover, national data 
are based on different sources and makes cross-country comparisons very difficult. 

The difficulty Member States face in measuring the extent of undeclared work is the complex 
nature of the problem. Undeclared work affects the quality of work of those concerned, social 
cohesion, the overall business environment, The Employment Guidelines therefore call for a 
comprehensive approach, combining the simplification of the business environment, reforms 
in tax and benefit systems, improved law enforcement, the application of sanctions and efforts 
to measure the extent of the problem and the progress achieved. 

Policy response 

The  NAPs  confirm  the  generally  increased  priority  given  by  Member  States  to  the  issue  of 
undeclared  work,  and  progress  towards  the  implementation  of  comprehensive  policy 
approaches,. Policy should rely on a mix of preventative actions and, sanctions22. Only a few 
Member States have plans to improve the knowledge of the phenomenon and its extent (FR, 
and PT). A number of measures are taken by Member States in the fields of simplification of 
administrative  procedures  for  businesses  and  for  the  registration  of  employment  and  social 
security contributions which reduces the cost of compliance to the law and contribute to better 
quality employment data (BE, EL, FR, ES). To enhance work attractiveness several Member 
States report on tax related measures to prevent undeclared work and make work pay in the 
formal  economy.  These  include  measures  to  increase  incentives  for  declaring  household 
services (NL, BE, DE, FI and SE), increasing the threshold for non-taxable employment (BE 
and DE), or higher thresholds for VAT-registration (DK and FI) (see also Guideline 8). 

Furthering  the  co-ordination  between  relevant  authorities  is  a  priority  in  several  Member 
States  for  improved  control  of  the  declaration  of  work,  including  through  the  exchange  of 
data.  Special  interdisciplinary  teams  have  been  set  up  in  the  UK  and  are  planned  in  AT.  In 
Italy,  the  Committee  and  Commissions  for  the  surfacing  of  undeclared  work,  fosters  the 
cooperation between relevant bodies and partners at national and local level. In a few Member 
States (BE, FR, IT and PT), co-operation with the social partners is an integrated part of their 
strategy  to  transform  undeclared  work  to  regular  employment.  Public  awareness  raising 
campaigns  about  the  negative  consequences  of  undeclared  work  are  put  in  place  in  some 
Member States by way of a preventative instrument. 

Several  Member  States  (EL,  BE,  SE,  IT,  AT,  NL,  PT,  FI  and  FR)  take  special  measures 
directed  at foreign  workers  or  illegal  immigrants.  Emphasis  is  placed  on  illegal  immigrants 
and  includes  improvements  to  the  registration  process  of  immigrant  workers  and  increased 
sanctions for employers hiring workers without work permits. Measures aimed at integrating 
foreign workers legally residing in Member States concentrate on better information on labour 

21  

22 

The  proportion  of  undeclared  jobs  compared  to  the  total  number  of  jobs  (regular  and  non-regular)  in 
Italy. 
Confirmed by the Council resolution on transforming undeclared work into regular work (OJ C 260 of 
29.10.2003).  

34 

 
 
  
 
                                                 
market rights and increased control of working conditions (FI). Several Member States take 
targeted  actions  in  sectors  where  undeclared  work  is  most  prominent.  Such  measures  build 
both  on  a  preventive  approach  such  as  incentives  for  the  declaration  of  household  services, 
and  increased  control.  In  DE  and  FR,  the  contractors'  obligation  for  the  conformity  of  sub-
contractors of their declaration of employment is being clarified. 

In  this  context  the  Employment  Taskforce  urges  Member  States  to  strengthen  efforts  to 
transform undeclared work into regular employment, in particular by addressing disincentives 
in tax and benefit systems for moving from undeclared work to regular work. 

3.10 

ADDRESS REGIONAL EMPLOYMENT DISPARITIES 

Key facts and challenges 

Regional employment and unemployment disparities are decreasing in most Member States, 
but  still  remain  significant.  Disparities  in  unemployment  are  more  pronounced  than  in 
employment.  The  biggest  unemployment  disparities  are  found  in  IT,  ES  and  BE.  For 
employment  they  are  found  in  IT,  FR  and  ES.  The  least  positive  developments  can  be 
observed for IT, D and BE, whereas in FI, the UK, IE and FR, although levels of disparities 
are high, improvements can be noted. 

Employment  and  unemployment  disparities  between  regions  in  the  European  Union  remain 
large and will increase after enlargement. Research confirms that there is a strong correlation 
between  investment  in  human  capital  and  economic  performance  at  national  and  regional 
level, which makes such investment an important tool of regional cohesion policy. Disparities 
need to be tackled through a broad approach involving actors at all levels in order to support 
economic and social cohesion, making use of the Community Structural Funds. 

Policy response 

All  Member  States  implement  some  form  of  regional  and/or  local  employment  policy  for 
combating  these  disparities,  often  underpinned  by  Structural  Fund  Programmes.  However, 
insufficient  information  is  available  in  the  NAPs  for  assessing  the  extent  to  which  Member 
States  develop  and  implement  policies  aimed  at  reducing  regional  employment  and 
unemployment  disparities.  Some  Member  States  have  set  targets  for  the  reduction  of 
disparities (EL, FR, UK). In general, disparities are seen as the result of inadequate economic 
development and supportive infrastructure, while the human capital dimension is rarely seen 
as  a  major  underlying  factor.  Strategies  to  stimulate  regional  economic  development  are 
underpinned  by  public  services  for  enterprises,  business  creation  and  investment  support 
programmes. This approach is clearly the focus in the case of IE. Other Member States (DK, 
EL) favour the development of infrastructure. Some Member States aim at developing growth 
centres from which a spill over to surrounding areas is expected (IE, PT). The employment 
impact of such initiatives, however, is rarely assessed. 

Regional  employment  policies  focus  on  mobility  and  skills  development.  Schemes  for 
promoting mobility have been put in place in many of the Member States, for both employed 
and unemployed. Skills development can affect education policies, for example in SE where 
parts of education policy focuses on regional imbalances (the setting up of learning centres, 
guidance, co-operation with business). In general, Member States indicate that they allocate 
important resources in supporting employment creation at regional and local level. For some 
Member  States  the  demographic  development  is  impacting  on  regional  disparities  and 
influencing employment policies (FI, PT). 

35 

 
 
  
 
The  social  economy  is  mostly  given  a  place  in  the  context  of  social  inclusion  policies.  LU 
plans  legislation  on  the  social  economy  aiming  to  increase  the  transparency  of  funding  and 
effectiveness.  In  BE  the  regions  have  specific  programmes  supporting  the  social  economy 
with an intention to establish a legal framework for co-operatives. Only BE and PT report on 
Regional  Action  Plans  for  Employment,  whereas  Local  Action  Plans  remain  firmly  on  the 
agenda. The involvement of the social partners has been strengthened in this context (DE, ES, 
AU, BE, DK, IT, PT, FR and UK). 

The  reduction  of  disparities  requires  a  balanced  mix  of  economic  and  human  capital 
development,  raising  productivity  levels  through  investment  in  human  capital  needs  to  be 
given  a  higher  priority,  particularly  in  the  most  disadvantaged  regions.  The  imminent 
enlargement  will  increase  regional  disparities  and  call  for  a  sharper  focus  on  this.  The 
capacity  of  actors  at  sub-national  levels  to  develop  and  implement  employment  strategies 
should be promoted and supported by the Member States. 

The  EU  mobilises  considerable  financial  resources,  especially  to  promote  the  development 
and  structural  adjustment  of  member  States  and  regions  that  are  lagging  behind.  In  this 
context the Taskforce notes that the improved use of the EU budget is an important financial 
lever to implement the European Employment Strategy. 

4. 

GOOD  GOVERNANCE  AND  PARTNERSHIP  IN  THE  IMPLEMENTATION 
OF THE EMPLOYMENT GUIDELINES 

Key facts and challenges 

The success of employment policies largely depends on the quality of their implementation. 
This  is  why  the  Employment  Guidelines  put  particular  emphasis  on  better  governance  for 
employment, calling for the stronger involvement of parliamentary bodies, social partners and 
other relevant actors, effective and efficient delivery systems, and the adequate allocation of 
financial resources. 

Policy response 

The  2003  NAPs  are  generally  well  developed  baseline  documents  with  a  medium-term 
orientation  covering  the  first  three-year  reporting  cycle  of  the  revised  EES.  They  provide  a 
broad range  of  information on national employment  policy approaches and ambitions, often 
underpinned  by  targets  in  a  variety  of  areas  (employment  rates,  accidents  at  work,  poverty, 
prevention  and  activation,  regional  disparities,  lifelong  learning,  female  employment, 
childcare provision, non EU-nationals, enterprises, human capital, exit age). 

The  NAPs  rarely  constitute  the  central  instrument  for  discussing  and  defining  national 
priorities  in  the  field  of  employment  at  national  level.  In  particular,  the  involvement  of 
parliamentary bodies remains weak. Some Member States report that NAPs have been sent to 
parliaments (ES, IE); other engage in ad hoc discussion with parliaments (FI, DK); others still 
have  developed  a  practice  of  more  continuous  information  (LU,  SW,  PT).  The  NAPs  are 
generally addressed to parliamentary committees (mostly labour and social affairs) rather than 
plenary sessions and parliaments rarely have a decisive role in the adoption process. 

Regional,  and  (in  some  cases)  local  authorities  are  important  partners  for  national 
governments  in  developing  and  implementing  employment  policies.  Involvement  of  the 
regional  level  in  the  NAP  process  is  fairly  developed  in  some  Member  States.  Timely 
information and consultation are partly the result of constitutional frameworks (AU, BE, ES), 

36 

 
 
  
 
but emerge elsewhere from intensified co-operation. In some cases, local and regional levels 
of  policy  and  administration  actively  seek  closer  involvement.  Increasingly  multi-layered 
systems  of  participation  and  joint  implementation  of  policies  sometimes  entail  the  need  for 
intensified co-ordination (BE, UK). 

Firmly  established  and  reliable  institutional  frameworks  allow  wider  scope  for  social 
dialogue. The involvement of the social partners in developing the NAPs is progressing, and 
their  contributions  to  implementation  are  better  presented  and  reported.  Participation  has 
either developed within an established institutional set up or has focussed on specific action 
(FR,  IE,  EL,  PT).  European  level  social  partner  involvement  has  been  strengthened  by  the 
adoption of their joint work programme 2003-2005 and the institutionalised social summit for 
growth and employment, which regularly meets on the eve of the Spring European Council. 

The  discussion  within  the  NAPs  on  implementation  and  operational  services  is  partial  and 
concentrates  on  active  labour  market  policies  and  Public  Employment  Services.  Other 
delivery services such as education and training and social services are rarely discussed. The 
strong focus on the PES indirectly deals with sub-national authorities, to the extent to which 
PES  de-centralisation  process  leads  to  new  or  changing  relationships  with  local  authorities. 
Sometimes this is the result of legal changes. Modernisation of PES is progressing. One of its 
many features is a move towards increased collaboration with the private sector/partners and 
in particular temporary agencies (the NL, DE, UK). Several Member States by restructuring 
the  PES  to  deliver  to  a  more  differentiated  client  service  from  both  the  demand  and  supply 
side (DE, BE, NL, FI, IE, DK). Enhanced customer orientation facilitated by new ICT tools 
has  helped  change  the  focus  of  PES  from  a  back  office  to  a  public  office/self-service 
orientation. 

Increased  effectiveness  of  delivery  is  an  objective  shared  by  all  Member  States.  However, 
while  evaluation  mechanisms  are  described  to  a  certain  degree,  more  information  on 
outcomes  and  practical  examples  would  have  been  welcome.  Improved  evaluation  is 
sometimes mentioned in a general sense, for example the review foreseen of the effectiveness 
of local authority labour market instruments in the NL. The less favourable economic climate 
has impacted on PES performance because of the time lag between recognition of the need for 
increased  resources  and  delivery.  This  has  proven  a  problem  in  previous  periods  of  rapid 
increases  in  unemployment.  Increased  resources  are  not  consistently  reflected  in  the  NAPs. 
Notable  exceptions  include  ES,  FI  and  DE,  where  either  more  staff  are  recruited  or 
reallocated. 

The  budgetary  provisions  for  underpinning  Member  States'  employment  policies  affect  a 
variety  of  budget  lines.  Although  budgetary  constraints  are  experienced  almost  everywhere, 
ALMP expenditure actually increased in some Member Sates, such as in BE (above 4%) and 
FI (more than 5%), and particularly in AT with an impressive 17.0% increase in 2002 after 
18.5%  in  2001.  Few  Member  States  illustrate  how  they  ensure  transparency  and  cost-
effectiveness in the allocation of financial resources to the implementation of the Employment 
Guidelines. Reporting tends to be tilted towards the ESF. Only a few Member States have so 
far  undertaken  to  match  ESF  expenditure  with  the  new  structure  of  the  guidelines  (BE,  FR 
and  PT).  Several  Member  States  indicate  a  growing  importance  of  ESF  operations  and 
administration  for  the  voluntary  and  community  sector  (UK,  EL).  In  others,  a  new  focus  of 
the ESF is emerging; this is most pronounced in DK, where it is now considered as a business 
and  industry  tool.  The  mid-term  review  of  the  Structural  Funds  programmes,  soon  to  be 
concluded, will provide further information on how the ESF supported the implementation of 
the Employment Guidelines so far. 

37 

 
 
  
 
In this context the Employment Taskforce has underlined the need to improve governance for 
employment policies. 

Member States should reaffirm their commitment to the employment objectives they have set 
together at European level by: 

– 

– 

– 

Building reform partnerships for employment between all stakeholders; 

Formulating clear national policies with targets reflecting those agreed at EU level, 
in particular for the employment rate targets, the effective exit age from the labour 
market  and  the  EU  benchmarks  for  education  and  training;  and  where  appropriate, 
redirection of spending and greater efficiency in the use of public funds; 

Using the NAPs as central policy planning and monitoring documents reflecting the 
broad spectrum of policies required and mobilising all key actors for reform: NAPs 
need  increased  political  legitimacy  involving  national  parliaments  and  consulting 
social  partners  and  civil  society  should  become  the  norm  throughout  the  EU.  A 
stronger  role  of  national  parliaments  could  also  serve  the  objective  of  better 
integrating the NAPs in annual budgetary cycles; 

In countries where competences for employment policy is shared between national, regional 
and local authorities, the relationship between the different levels might, where appropriate, 
be structured on the basis of an open method of coordination. 

EU level instruments should be used more effectively as a lever by: 

– 

– 

– 

– 

5. 

Strengthening the role of EU country specific recommendations; 

Targeting more closely EU funds to address the Lisbon agenda and the employment 
objectives and targets in particular; 

Encouraging strong commitment from the European social partners; 

Reinforcing dissemination and mutual learning through exchange of experiences. 

ASSESSMENT  OF  PERFORMANCES  AND  POLICIES  OF  THE  MEMBER 
STATES 

The following country sections review, for each Member State, the following topics: 

– 

– 

– 

– 

key economic and employment performances, 

the main characteristics of the employment policy mix as reported in particular in the 
2003 National Action Plans for employment, 

major aspects of governance in the employment policy field, 

The  response  to  the  Council  recommendations  of  July  2003  and  key  challenges 
ahead. 

In considering key challenges ahead, the report also takes into account areas covered by the 
Employment Taskforce, most notably its country specific messages. 

38 

 
 
  
 
BELGIUM 

Economic and labour market context: The Belgian economy has been sluggish throughout 2002 
and into 2003, with 0.7% GDP growth in 2002 and an expected growth below 1% in 2003. Total 
employment  decreased  in  2002  and  a  further  decline  is  expected  for  2003.  The  overall 
employment rate stagnated at a low 59.9% in 2002. The employment rate for older people is still 
by far the lowest of the EU. Unemployment rose faster than on average in the EU to 7.3% in 2002 
and  a  forecasted  8.2%  in  2003.  Long-term  unemployment  (LTU)  represents  almost  half  of  total 
unemployment.  Longstanding  regional  employment  disparities  persist  and  the  tax  and  non-tax 
burden on labour is still high. 

Employment policy developments: Belgium pursues a balanced and strategic approach towards 
the different objectives and guidelines and identified targets in many policy fields. The creation of 
200.000  new  jobs  towards  2007  has  been  set  as  a  key  target,  which  would  raise  the  overall 
employment  rate  to  65%.  Measures,  which  were  agreed  at  the  Employment  Conference  held  in 
September  2003,  are  intended  to  directly  generate  60.000  new  jobs;  the  remaining  part  should 
come  from  future  economic  growth.  Further  labour  cost  reduction  is  the  centrepiece  of  the 
employment  strategy, 
labour  market  policies. 
Administrative simplifications are introduced in order to promote entrepreneurship. Active ageing 
is promoted through targeted measures but more in-depth reform might be necessary. Quality in 
work  is  addressed  under  its  different  dimensions  with  a  good  balance  between  flexibility  and 
security. In spite of recent efforts, participation in education and training is stagnating. 

in  combination  with  strengthened  active 

Governance:  The  predominant  position  of  employment  in  the  government's  priorities  has 
increased  awareness  of  the  EES.  Regional  authorities  and  social  partners  have  been  actively 
involved in the elaboration of the NAP, and participated recently in the Employment Conference 
in  order  to  underpin  the  national  employment  strategy.  The  ongoing  reorganisation  of  public 
employment  services  should  allow  a  better  clarification  of  their  mission.  Important  additional 
budgets  have  been  allocated  to  the  employment  strategy,  but  budgets  for  vocational  training 
remain proportionally low. The ESF contribution is mainly directed to preventive measures, life 
long learning and social inclusion actions. 

Response  to  Council  recommendations  and  key  challenges:  Measures  have  been  adopted 
which  begin  to  address  some  of  the  Council's  Employment  Recommendations.  The  preventive 
approach  has  been  intensified  and  further  efforts  are  announced,  but  their  impact  needs  to  be 
established. In this context, there is a need for a more proactive approach towards restructuring of 
enterprises  and  for  addressing  the  situation  of  disadvantaged  young  people  and  of  immigrants. 
Although  inflows  into  LTU  have  been  reduced  they  remain  important  and  long-term 
unemployment has risen. Labour cost reductions, local employment systems and other activation 
policies  should  raise  employment  rates,  but  the  targeted  200.000  new  jobs  are  only  partially 
covered by agreed measures. While many measures have been taken to promote active ageing, no 
target is set and incentives for early withdrawal subsist. The tax reform is implemented according 
to plan, and additional cuts of social security contributions have been decided. New measures are 
proposed  to  tackle  remaining  unemployment  traps,  but  the  benefit  system  remains  essentially 
unchanged. Initiatives to improve the monitoring of unemployed people on their  availability for 
the labour market have not yet materialised. Actions for local development should reduce regional 
employment disparities, but are focused on activities with low productivity. Some measures have 
been taken to increase labour mobility, and co-operation agreements will be concluded in order to 
tackle  regional  barriers  between  employment  services.  In  addition,  there  is  a  need  to  strengthen 
incentives for lifelong learning. 

39 

 
 
  
 
DENMARK 

Economic  and  labour  market  context:  During  the  last  year  the  Danish  economy  has  shown 
clear  signs  of  a  slowdown  in  economic  activity  after  a  seven  year  period  of  strong  economic 
growth. Real GDP growth in 2003 is expected at 0.8%, down from 2.1% in 2002, while growth 
in  productivity  is  amongst  the  highest  in  EU.  Both  labour  force  and  total  employment  have 
dropped significantly since 2001. Unemployment, expected at 5.5% in 2003, has risen sharply 
since a 25-year low was recorded in early 2002, particularly hitting graduates and worsening the 
long-term unemployment. Participation and activation rates in Denmark are among the highest 
in the EU and Denmark has already achieved all the Lisbon quantitative employment targets. 

Employment  policy  developments:  The  political  agenda  remains  focused  on  the  long-term 
challenges  to  Danish  society,  such  as  the  ageing  population,  potential shortages  of  labour  and 
the under-representation of ethnic minorities in the labour market. The challenges to reverse the 
downward trend in employment and the labour force are major. To maintain the present level of 
taxes and social services and to balance the effects of the ageing population by 2010, the Danish 
authorities estimate that employment should grow by 59,000. The Government's strategy for full 
employment  is  based  on  a  supply-side  approach,  with  an  enhanced  focus  on  job  search 
assistance for the unemployed. For this approach to succeed it is crucial that global economic 
activity  improves  and  that  the  private  sector  recruits  a  large  share  of  graduates  previously 
recruited  by  the  state.  The  Government  has  continued  the  reforms  on  integration  of  ethnic 
minorities  following  a  limited  success  in  this  area  in  recent  years.  The  integration  strategy  is 
seen  as  having  two  purposes:  exploiting  the  workforce  potential  of  this  group,  and  improving 
their integration in the Danish society. 

Governance: In general DK has well established structures for governance thanks to a unique 
tradition for involving social partners in labour market issues. Despite this, a number of issues 
need to be further addressed. One of the operational challenges will be to assure a more equal 
treatment  of  the  unemployed  between  those  covered  by  the  unemployment  insurance  (falling 
under the responsibility of the PES system) and those covered by social assistance (managed by 
the municipalities). There is a need to reinforce the involvement of the regions and local levels 
in the implementation of the national employment strategy and to involve local councils more in 
the definition and implementation of this strategy. 

Response  to  Council  recommendations  and  key  challenges:  Measures  have  been  adopted 
which  begin  to  address  most  of  the  Council's  Employment  Recommendations.  On  labour 
supply,  a  serious  assessment  of  the  challenges  and  identification  of  necessary  policy  response 
has  been  achieved.  However  the  issue  of  bottlenecks  is  insufficiently  addressed,  with  the 
exception  of  local  initiatives  taken  in  the  education  and  health  care  sectors.  Given  that  the 
problem  is  expected  to  become  severe  in  the  future,  this  response  might  turn  out  to  be 
insufficient and call for more comprehensive and co-ordinated action. An adequate response has 
been  given  to  the  recommendation  on  people  at  a  disadvantage.  Reforms  have  been  passed 
which  build  on  both  financial  incentives  to  take  up  work  as  well  as  further  measures  to 
encourage  immigrants  to  integrate  better  in  the  Danish  society.  It  remains  to  be  seen  whether 
reductions in allowances for immigrants combined with the increased activation measures will 
actually lead to increased labour market participation. The response to the recommendation on 
making work pay has been a new tax package, which implies a gradual but moderate reduction 
in tax paid on labour between 2004 and 2007. The real effects of this reform need to be further 
monitored  in  the  years  ahead.  In  addition,  efforts  should  be  made  to  reverse  recent  year's 
negative trend in the participation to continued vocational training (CVT). 

40 

 
 
  
 
GERMANY 

Economic and Labour Market Context: In 2002, real GDP grew by 0.2% and is expected 
to  remain  unchanged  in  2003.  Real  unit  labour  costs  decreased  by  0.8%  in  2002  and  are 
expected to decrease further by 0.9% in 2003. Employment growth in 2002 was negative by -
0.6%, with an overall employment rate at 65.3%. In 2003, employment is expected to decline 
further  by  about  1.5%.  The  employment  rate  for  women  was  stable  at  58.8%  and  the 
employment  rate  of  older  workers  rose  to  38.4%,  but  remains  at  the  level  of  1997.  The 
unemployment rate has increased to 8.6% in 2002 and is expected to increase further to 9.4% 
in 2003. Long-term unemployment increased to 4.0% in 2002. Unemployment was more than 
twice as high in the East than in the West. 

Employment  policy  developments:  Whereas  Germany  confirms  its  commitment  towards 
contributing  to  the  Lisbon  employment  targets,  there  is  no  specific  employment  target  set. 
The NAP does not explicitly establish the link between the three overarching objectives. The 
Job-AQTIV-law, the four laws on the promotion of employment and reform of the financial 
support  for  the  unemployed  (Hartz  I-IV)  aiming  at  improving  ALMP  and  job  placement 
services, and the wider "Agenda 2010" constitute a strengthened response to the main labour 
market  challenges.  Significantly,  there  is  a  commitment  to  offer  every  unemployed  person 
between 15 and 25 years of age a job or qualification measure whilst at the same time limiting 
the  entitlement  to  unemployment  benefits  to 12  months  (18  months  for  those  over  55  years 
old).  Job  creation  will  be  fostered  through  favourable  tax  rates  and  social  security 
contributions  for  "mini-jobs".  Most  of  these  reforms  have  only  recently  been  implemented. 
Consequently, an assessment of the impact of the new legislation can only be preliminary. 

Governance: Co-operation between the federal state, the Länder, the municipalities and the 
social partners is crucial. However, the visibility of the EES remains rather low. Steps need to 
be taken to ensure that the new system of governance of ALMP does not lead to a creaming of 
the  unemployed  and  an  exclusion  of  disadvantaged  groups.  In  2002,  the  contribution  of  the 
ESF to the implementation of the EES amounted to € 1.646 billions. The NAP highlights the 
role of the ESF in particular on the GL 1, 3, 6 and 7. 

Response to Council recommendations and key challenges: Measures have been adopted 
which  begin  to  address  some  of  the  Council's  Employment  Recommendations.    Efforts  to 
improve the efficiency of ALMP continue and the creation of job centres is a major positive 
step.  However,  the  Job-AQTIV  law  has  had  no  immediate  impact.  Since  the  reduction  of 
regional  imbalances  depends  on  the  creation  of  new  jobs  by  firms,  it  is  concerning  that 
business  start-ups  in  East  Germany  fell  below  the  level  in  Western  Länder.  Reform  of 
employment protection is progressing, and changes are intended for small firms and relaxed 
access to professions. It remains to be seen how the recommendations of the expert group on 
financing  lifelong  learning  will  be  implemented.  As  regards  gender  equality,  childcare 
provision for children less than 3 years remains well below the EU-target of 33%, especially 
in the Western Länder, and the gender pay gap remains high. Finally, as regards making work 
pay,  splitting  income  taxation  between  couples  has  provided  disincentives  to  work, 
particularly for women. In contrast, incentives to work have been improved for older workers 
and  for  workers  at  the  lower  end  of  the  wage  scale.  In  addition  to  the  above  challenges, 
consideration should be given to the simplification of the business framework; comprehensive 
active  ageing  strategies  need  to  be  put  into  place,  and  integration  of  immigrants  has  to  be 
strengthened.

41 

 
 
  
 
GREECE 

Economic and labour market context: Real GDP growth accelerated in 2002 to 3.8%, well ahead 
of the EU average of 1.1%, and continued to grow in 2003 by 4.1%. Growth is projected to remain 
strong in 2004, but to slow down in 2005. Labour productivity grew in 2001 and 2002 by over 4%, 
well above the EU average. In contrast, the overall employment rate in 2002 was far below the EU 
average (56.7% compared to 64.3%), especially for women (42.5%). It is estimated to rise by 1% in 
2003, and to grow at a slower rate in 2004 and 2005. Older workers employment rate was very close 
to EU average in 2002 at 39.7%. The unemployment rate at 10%, although clearly declining in 2002, 
remains  above  the  EU  average  (7.7%).  It  is  estimated  to  drop  to  9.5%  in  2003,  and  fall  further  to 
9.0%  in  2005.  The  unemployment  rate  is  particularly  high  for  women  (15%  in  2002)  and  youth 
(9.6%).  Adult  participation  in  learning  is  comparatively  low  (1.2%  of  the  working-age  population 
compared with the EU average of 8.5%). 

Employment policy developments: Raising participation and employment – notably of women and 
young  people,  reducing  the  high  level  of  unemployment  and  strengthening  social  cohesion  and 
inclusion are amongst the main objectives of the Greek government. An ambitious target of creating 
300,000  jobs  has  been  set  and  the  government  plans  to  create  25.000  part  time  jobs  in  the  public 
sector in 2003. The NAP puts high priority on the improvement of equal opportunities, health and 
safety at work, and participation of adults in education and training. Effectiveness and efficiency of 
ALMPs should be increased, notably through a major reform of measures and programs of the PES 
(OAED),  in  consultation  with  the  social  partners.  Further  incentives  to  make  work  pay  should  be 
provided in tax and pension systems, to encourage increased employment in the formal economy. 

Governance:  The  Greek  government  has  actively  pursued  close  collaboration  with  the  Social 
Partners and they are now represented in the National Employment Committee, thus taking an active 
part  in  the  planning  and  implementation  of  the  NAP.  Local  and  regional  authorities  are  also 
represented  in  the  Committee,  and  links  have  been  made  with  respect  to  NAP  inclusion.  Further 
efforts should be made to involve social partners more intensely in the planning and assessment of 
activities. ESF provides a substantial contribution to the implementation of the NAP, notably in the 
field of education, training and gender equality. 

Response to Council recommendations and key challenges: Measures have been adopted which 
begin  to  address  some  of  the  Council's  Employment  Recommendations.  In  the  context  of 
adaptability,  new  measures  promoting  part-time  employment  are  foreseen,  but  the  recent  labour 
market  reform  package  has  had  only  limited  impact  and  is  currently  under  review.  Diversity  in 
working  arrangements  should  be  encouraged,  notably  by  making  part-time  or  temporary  agency 
work  more  attractive  for  companies and workers. Measures to promote  lifelong  learning  go  in  the 
right direction but more effort is needed to co-ordinate education, training and employment systems 
and  to  increase  participation  in  lifelong  learning,  especially  for  adults.  Progress  towards  gender 
equality  is  evident,  but  high  employment  and  unemployment  gaps  remain.  Greece  has  taken  a 
number  of  measures  designed  to  enhance  female  employability  and  to  reconcile  work  and  family 
life,  although  the  NAP  does  not  report  on  progress  since  2002,  making  it  difficult  to  assess  the 
effectiveness  of  policies.  Challenge  remains  to  achieve  the  targets  on  childcare.  As  regards 
activation a shift from passive policies to active policies is planned, while measures to reduce social 
security contributions have had only a limited impact to date. More attention needs to be focused on 
stimulating  labour  supply  and  making  work  pay.  Although  steps  have  been  taken  to  speed-up  the 
reform of the PES and to apply uniformly the preventative and individualised approach, the reform 
should be further pursued. In addition, the administrative burden on business should be reduced to 
foster job creation. 

42 

 
 
  
 
SPAIN 

Economic and Labour market context: In spite of the international context, the Spanish economy 
performed well in 2002 and the first part of 2003, with GDP growing at a quicker pace than the EU 
(2 % in 2002 and 2.3% forecast in 2003). Employment growth remains strong (1.5% in 2002 and 1.7 
expected  in  2003).  The  employment  rate  increased  in  2002  to  58.4%,  but  unemployment  rate  also 
increased  to  11.3%  (forecast  for  2003).  In  both  cases  the  increases  were  greater  for  women. 
Significant  gender  gaps  persist  together  with  a  tendency  to  increased  gender  segregation  in 
occupations  and  sectors.  The  employment  rate  for  older  workers  also  increased  by  0.5  percentage 
points to 39.7%. Fixed-term hiring remains high and explains partly the low participation in training. 
On the contrary, part-time work is underrepresented. 

Employment policy developments: In general terms, the measures presented are a continuation of 
existing policy. Job creation and labour market participation are a major objective, notably pursued 
through measures to make work pay and improve quality at work and productivity. Despite the low 
employment rate, no national targets have been set. Reducing fixed term contracts and increasing the 
participation of women and older workers is actively stimulated. Strengthening social cohesion and 
inclusion  is  addressed  through  focusing  active  measures  on  groups  and  regions  with  particular 
difficulties.  Although  there  has  been  a  strengthening  of  measures  for  the  participation  of  older 
workers,  the  approach  is  essentially  based  on  financial  incentives.  Better  provision  of  childcare 
facilities  is  needed  to  support  female  participation.  To  reduce  regional  disparities,  measures  are 
taken  to  increase  geographical  mobility,  but  the  functioning  of  the  housing  market  remains  an 
obstacle. The integration of the increasing number of immigrant workers needs further attention. 

involves  both  autonomous  communities  and 

Governance:  The  employment  policy 
local 
municipalities. This results in a complex process of co-ordination, in which the definitive completion 
of the information system is a key challenge. A wide range of partners have been consulted during 
the  preparation  of  the  NAP,  but  a  more  systematic  follow-up  and  elaboration  process  has  been 
requested. The NAP provides detailed budgetary information for each of the guidelines. The overall 
budget was increased in 2003 by 9.5% compared with 2002. Although the ESF contribution has been 
highlighted, no analysis is presented about the concentration of resources and results. 

Response to Council recommendations and key challenges: Measures have been adopted which 
begin to address some of the Council's Employment Recommendations. Action to Address change 
and promote adaptability relies heavily on agreements between public administration and the social 
partners and on incentives to promote stable hiring. Notwithstanding the great efforts of the last few 
years,  progress  in  reducing  levels  of  fixed  term  work  is  very  limited.  Diversity  in  working 
arrangements should be encouraged, notably by making part-time or temporary agency work more 
attractive for companies and workers. Gender equality has been addressed through continuation of 
measures implemented in previous years and an important increase in budgetary resources. Provision 
of childcare for children under three is expected to improve significantly but out-of-school care for 
children  over  three  and  other  dependants’  care  have  not  been  addressed  in  the  NAP.  Regional 
disparities  in  employment  and  unemployment  rates  have  been  reduced  slightly  in  2002  however, 
there  is  limited  evidence  of  new  instruments  being  introduced  to  further  address  this  issue. 
Modernisation of the public employment services has registered some. However, the completion of 
the statistical monitoring system, announced in the 2001 NAP, has not been achieved. In addition, 
access to active labour market policies should be widened for disadvantaged persons (in particular 
young and immigrants) and access to training improved through incentives. 

43 

 
 
  
 
FRANCE 

Economic and labour market context: The economy and labour market performance deteriorated 
substantially  over  the  2002-2003  period.  Economic  growth  fell  to  1.2%  of  GDP  in  2002  and  is 
forecasted to fall to 0.1% in 2003. The labour market adjustment to the prolonged downturn resulted 
in sharply moderated employment growth (0.7%) in 2002 and negative employment growth (-0.2% 
forecasted) in 2003. In parallel, unemployment rose by 0.3% to 8.8% in 2002 and is forecasted to 
rise  to  9.4%  in  2003.  Although  the  employment  rate  stands  at  63%  (2002),  it  remains  heavily 
concentrated in the 25-54 year age group (79.5%) as opposed to the 15-24 year age group (30.1%) or 
the 55-64 age group (34.8%). Participation in education and training, at 2.7%, remains substantially 
below the 8.5% EU average. 

Employment policy developments: The French NAP sets out quite well balanced approach towards 
increasing  the  employment  rate,  quality  and  productivity  at  work  and  social  inclusion,  based  on 
targets  for  the  government's  remaining  term  of  office  (2003-2006).  It  contains  several  policy 
orientations  which,  although  dependent  upon  economic  growth,  will  improve  the  balance  of  the 
policy mix. Key policy orientations relate to more generalised reductions in social security charges 
for  enterprises,  the  encouragement  of  labour  market  participation  through  increased  financial 
attractiveness  and  activation  policies  for  the  unemployed  and  inactive,  and  increased  efforts  to 
accompany change and investment in human resources. The role of the social partners in delivering 
several  reforms,  notably  in  the  area  of  lifelong  learning,  gender  equality,  benefit  reform  and  the 
modernisation  of  work  organisation  will  be  enhanced.  Active  ageing  strategies  will  be  reinforced, 
leading on from the recent pension reform. 

Governance: Improving governance of employment policy is part of wider institutional reforms and 
a  devolution  of  responsibilities  for  some  labour  market  instruments  (cf.  vocational  training)  to  the 
regional level. It has also become closely associated with the re-launch and ongoing reform of social 
dialogue.  The  new  Employment  Budget  has  gained  in  transparency  as  it  now  indicates  financial 
allocations  for  all  major  policy  measures.  The  NAP  has  indicated  the  link  between  current  ESF 
support and the employment guidelines, with a focus on prevention and human capital development. 

Response to Council recommendations and key challenges: Measures have been adopted which 
begin to address some of the Council's Employment Recommendations. Policy response with regard 
to  prevention  and  activation  is  reflected  in  extended  personalised  guidance  schemes  for  the 
unemployed,  the  activation  of  income  support  schemes  and  a  review  of  unemployment  benefits. 
Lifelong  learning  was  addressed  in  a  major  social  partners  agreement  on  the  individual  right  to 
vocational training and it will be important to ensure that low skilled workers as well as SME worker 
benefit from increased access to training. Labour supply and active ageing is anticipated to improve 
through  the  increase  of  the  legal  pension  age,  the  reduction  of  early  retirement  schemes  and  the 
encouragement  for  older  workers  to  remain  in  employment.  Social  partnership  is  being  promoted 
with  the  social  partners  invited  to  negotiate  agreements  on  the  accompaniment  of  economic 
restructuring  and  on  professional  gender  equality.In  addition  to  the  above  issues,  France  should 
consider  how  to  counter  labour  market  segmentation  by  encouraging  the  transition  of  people 
employed under fixed term contracts into permanent contracts. The weak position of young people 
and  of  immigrants  in  the  labour  market  deserve  close  attention.  The  reduction  of  early  school 
leaving and easier access to apprenticeships should be pursued. 

44 

 
 
  
 
IRELAND 

Economic  and  labour  market  context:  Although  Ireland  again  recorded  the  highest  real  GDP 
growth (6.8%) amongst all Members States in 2002, growth rates have slowed significantly, due to 
deterioration  in  the  global  economy.  This  is  reflected  in  a  GNP  growth  rate  of  just  0.1%.  It  is 
expected  that  the  economy  will  remain  relatively  weak  throughout  2003  before  strengthening 
somewhat in 2004. Employment continued to increase by 1.4% in 2002, compared to 2.9% in 2001, 
mainly  due  to  growth  in  the  public  sector.  The  overall  employment  rate  was  65.3%,  with  the 
employment rate for women at 55.4% (EU average 55.6%), the male employment rate at 75.2% (EU 
average  72.8%),  and  older  workers  at  48.1  (EU  average  40.1).  Unemployment  rose  from  3.9%  to 
4.4%  and  long-term  unemployment  to  1.3%.  Labour  productivity  growth,  both  per  capita  and  per 
hour,  increased  substantially  to  4.6%  and  real  unit  labour  costs,  which  had  increased  slightly  in 
2001, declined by –3.6, the greatest reduction in the EU. 

Employment policy developments: Ireland faces a dual challenge: to increase participation rates in 
inactive and unemployed groups, and to ensure that those recently unemployed do not drift into long 
term unemployment. The mainstreaming of the 'full engagement' process, to all unemployed people, 
when  they  are  six  months  unemployed,  is  a  significant  move  that  emphasises  the  importance  of 
activation  policies.  There  are  also  a  range  of  employment  programmes  targeted  at  those  who  are 
socially excluded, specific vulnerable groups and areas of deprivation. National targets have been set 
to increase the participation rates for women and vulnerable groups. Ireland is active in a number of 
areas to improve quality of work and productivity. In the health and safety area, good reductions in 
both serious and fatal accidents have been recorded. Research and development has been prioritised 
for  investment.  An  Expert  Group  on  Future  Skills  Needs  has  produced  a  number  of  reports 
identifying emerging skills gaps and recommending a  strategy to address them. This has led to an 
increase  in  investment,  including  computer  training.  However,  the  NAP  is  weak  in  reporting  on 
impacts. 

Governance: Social partnership remains strong in Ireland, but the recent downturn in the economy 
has put pressure on the partnership process. Awareness of the European Employment Strategy is low 
amongst the general public. Apart from ESF, little information is provided on financial allocations to 
support the Guidelines. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which  begin  to  address  most  of  the  Council's  Employment  Recommendations.  Good  progress  has 
been achieved in addressing regional imbalance. The gap in unemployment rates has now narrowed 
to just over one per cent between the two regions and targeting of investment and grants towards the 
poorer region has shown positive impacts. The recent National Spatial Strategy presents a 20 year 
strategic framework to promote a more even spread of development across regions. Good increases 
in  participation  rates  in  lifelong  learning  have  been  achieved  and  initiatives  in  the  in-company 
training  area  have  commenced.  However,  despite  evidence  of  a  large  number  of  initiatives  and 
measures  in  this  area,  it  is  difficult  to  see  an  overall  coherent  framework.  Some  targets  are 
mentioned  but  there  is  little  information  on  progress.  A  number  of  measures  are  being  taken  to 
address  gender  issues,  and  Ireland  is  committed  to  developing  a  five-year  National  Women's 
Strategy. However, occupational segregation and the gender pay gap (19% in 2000) remain high and 
no targets have been set in this area. Some progress has been made in the childcare area but supply 
and  affordability  continues  to  be  a  problem.  Further  progress  was  made  in  removing  low  wage 
earners from the tax net but not in the area of tax individualisation. 

45 

 
 
  
 
ITALY 

Economic and labour market context: GDP grew only by 0.4% in 2002, and the forecast for 2003 
does  not  go  beyond  0.3%.  Job  creation  continued  at  a  good  pace  in  2002  (+1.1%),  but  at  a  lower 
pace throughout 2003 (+0.8% is forecast). Despite exceeding for the first time the 55% mark in 2002 
(55.5%), Italy’s employment rate is still the lowest in EU-15. Women’s employment rate is on the 
rise, but remains very low at 42.0%. The rate for older workers also grew marginally, but at 28.9% 
remains  very  low.  Unemployment  declined  further  in  2002  and  reached  9.0%:  another  marginal 
decline to 8.8% is forecast for 2003. Youth unemployment remains a concern (with a ratio of 9.7% 
in  2002  against  the  EU  average  of  7.2%),  as  does  the  LTU  rate  at  5.3%  and  the  female 
unemployment  rate  at  12.2%.  The  vast  geographical  imbalances  persist  despite  recent  favourable 
trends. 

Employment  policy  developments:  The  NAP  2003  confirms  the  following  targets  for  2005:  an 
overall employment rate of 58.5%, a rate for women at 46% and for older workers at 40%. These 
targets are intended to be met as a result of reforms enhancing flexibility of contractual and working 
time  arrangements,  and  of  the  education  and  pension  system  reforms.  Two  more  reforms  in  the 
pipeline  (of  duration  and  level  of  unemployment  benefits  and  of  the  tax  rates  on  labour  income) 
should  also  increase  labour  supply  by  making  work  more  attractive.  While  the  reforms  have 
increased  the  flexibility  of  the  labour  market  in  order  to  improve  its  efficiency,  the  issue  of 
segmentation  across  types  of  contract  and  sectors,  together  with  the  risk  of  gender  segregation, 
remains  to  be  addressed.  For  the  South  the  NAP  confirms  the  targets  contained  in  the  CSF  2000-
2006: achieving above-EU-average growth by mid-decade and an employment rate of about 60% by 
2010, through greater flexibility and transparency in the labour markets, which should also indirectly 
favour the emergence of workers already employed in the informal economy. A much-needed boost 
to  continuous  training  and  lifelong  learning  should  come  from  the  launch  in  2004  of  “inter-
professional funds” that will be managed by the social partners. 

Governance:  There  has  been  a  strong  involvement  of  the  regions  which  are  invested  with  policy-
making  tasks  and  with  the  management  of  the  PES  and  of  the  ESF  within  their  geographical 
boundaries. A similarly strong involvement of the social partners was limited by lack of agreement 
among their 37 different organisations. The ESF contribution is especially important for the regions, 
for which it represents the main financial tool for active policies. 

Response to Council recommendations and key challenges: Measures have been adopted which 
begin  to  address  some  of  the  Council's  Employment  Recommendations.  As  a  response  to  the 
recommendation on adaptability, legislation on flexibility was adopted. Attention should be given to 
countering the segmentation of the labour market between permanent and non-permanent contracts. 
The recommendation on labour supply and active ageing was addressed through the recent pension 
reform. Adequate incentives should be offered to retain workers longer in work (including part time 
work)  only  limited  progress  was  made  in  the  provision  of  childcare  services.  As  for  lifelong 
learning,  the  announced  release  of  additional  funds  would  go  a  long  way  in  addressing  existing 
weaknesses.  Educational  reforms  should  contribute  to  the  prevention  of  early  school  leaving  and 
increase  the  labour  market  relevance  of  tertiary  education.  Uneven  progress  can  also  be  reported 
concerning delivery services, because if the PES was indeed strengthened (but less effectively in the 
South), a computerised national data system is not yet in place. The coverage and effectiveness of 
unemployment insurance and of ALMP should be improved, especially in the South. Concerning job 
creation, performance indicators show that improvements have been obtained, but the net-result of 
the incentives aimed at the South is not clear, even though it appears likely that the transformation of 
undeclared work into regular work was helped. Undeclared work should be further reduced through 
a removal of disincentives in the tax system and an improvement of the law enforcement capacity. 

46 

 
 
  
 
LUXEMBOURG 

Economic and labour market context: The poor economic situation in 2002 influenced the labour 
market  with  a  marked  slowdown  of  GDP  growth  (+1.3%  in  2002  against  +8.9%  in  2000).  The 
unemployment rate increased for the first time since 1998 (2.8% of the working population in 2002 
and is forecast at 3.7% in 2003). The rate of growth in employment slowed (+3.2% in 2002 compared 
with +5.6% in 2001). The employment rate increased slightly (63.7% in 2002, i.e. + 0.6%), the female 
employment rate showing the same tendency (51.6% in 2002; 50.9% in 2001). The employment rate 
of old workers progressed well but remains low (28.3% in 2002; 25.6% in 2001).  

Employment  policy  developments:  On  the  whole,  detailing  a  number  implemented  or  planned 
measures, the NAP rarely announces fixed targets. The NAP concentrates on raising the employment 
rate of women, using employment to strengthen social inclusion, and continued reform to education 
and training policy. The problem of the low rate of employment of old workers still remains mainly at 
the  stage  of  examining  potential  causes.  Even  if  unemployment  has  a  largely  frictional  nature, 
employment creation continues to be encouraged, either by better recognition of social initiatives for 
employment or through the promotion of entrepreneurial activity. The improvement in the quality and 
productivity  of  work  through  the  search  for  a  better  reconciliation  between  professional  and  family 
life, and through the extension of the legal provisions on the organisation of work, should be better 
exploited, in particular to the benefit of older workers.  

Governance:  A  tripartite  Committee  (government-employers-Trade  unions)  adopted  the  NAP,  with 
l’observatoire des relations professionnelles et de l’emploi assuring the monitoring of implementation. 
The  Social  Partners  also  play  an  important  autonomous  role  either  through  common  (for  part-time 
work, teleworking) or specific initiatives. Collaboration between all Luxembourg services, private or 
public, concerned with employment or training seems to have been strengthened. The Ministries most 
involved  in  the  NAP  (for  Work,  for  Women,  for  Education)  are  also  members  of  the  Programme 
management Committee for Objective 3 and EQUAL.  

Response  to  Council  recommendations  and  key  challenges:  Measures  have  been  adopted  which 
begin  to  address  some  of  the  Council's  Employment  Recommendations.  The  improvement  of  the 
quality  of  education  and  training  continues,  in  particular  through  new  measures  targeted  on  young 
people without qualifications, and through the facilitation of individual access to further training. The 
evaluation of the overall strategy, announced in the 2002 NAP should make it possible to strengthen 
consistency  between  the  education  and  training  systems.  There  is  no  overall  strategy  currently 
developed, at least in the private sector, to react to the low rate of employment of the older workers. 
One  should  note  the  intention  to  abolish  the  obligation  for  prior  authorization  imposed  on  the 
recipients of a incapacity benefit or old-age pension who would like to work. The legislation voted in 
2002  encouraging  economic  activity  through  the  reform  of  the  system  of  incapacity  benefit  and  of 
reclassification, has yet to be subject to an evaluation. The progression in the employment of women 
rate continues to be supported by measures of reconciliation of professional and family life, through 
facilitating  the  return  to  employment,  and  through  strengthening  the  attractiveness  of  professional 
activities  for  women.  In  addition,  work  oriented  solutions,  should  be  further  developed  for  people 
covered  by  the  disability  schemes  who  are  able  to  work.  With  a  view  to  diversifying  the  business 
structure  and  encouraging  alternative  sources  of  job  creation,  start-ups  should  be  supported  and 
business training promoted.  

47 

 
 
  
 
THE NETHERLANDS 

Economic and labour market context: For 2003 a negative GDP growth of -0.9% is forecast, the 
weakest  performance  of  the  EU  and  illustrative  of  the  continued  economic  slowdown.  Real  unit 
labour costs, at a peak level in 2003 which has considerably weakened the competitive position, are 
expected to decrease as from 2004. Unemployment has been rising fast since the end of 2001. While 
the  employment  rates  for  women  and  men  well  exceed  the  Lisbon  targets,  employment  of  ethnic 
minorities stays much behind. Employment of older workers has fairly improved and exceeds the EU 
average. 

Employment  policy  developments:  The  NAP  identifies  the  main  challenges  against  a  three-year 
horizon.  While  the  strategic  approach  to  the  objectives  of  "full  employment"  and  of  "strengthening 
social  cohesion"  is  strong,  the  objective  “to  improve  quality  and  productivity”  remains  somewhat 
underexposed. However, for the implementation of the principle that “everybody able to work should 
do so”, less shallow investments in people and strong investment in capital and innovation seem very 
important.  Ambitious  national  targets  have  been  set  for  the  labour  market  participation  of  ethnic 
minorities and women. Youth unemployment shall not exceed twice the overall level. Tax measures 
reduce but do not yet fully tackle the unemployment traps. Social security reforms focus on reducing 
the high benefit dependency: around 8% of the work force is in the unemployment or social assistance 
scheme and around 13% in the disability scheme. Subject to fine-tuning with the social partners, the 
favourable tax treatment of early retirement schemes should end. Immigration policies, rejected as an 
opportunity to counterbalance the ageing of the population, are restrictive. The continued weak use of 
the comprehensive approach to adults (78% non-compliance and 25% entries into LTU) is worrying. 
Figures  on  the  sustainability  of  job  placements  also  point  to  a  need  to  improve  the  quality  of 
activation measures. 

Governance: The recent agreement on a contractual wage freeze  confirms  the strong  role of social 
partnership.  Self-regulation  by  the  social  partners  is  also  well  advanced.  Reintegration  programmes 
are  tendered  out  to  private  companies  on  a  results  basis.  These  companies  have  yet  difficulties  to 
reach these results and to meet the demand of programmes for people remote from the labour market. 
The  PES  role  is  reduced  to  job  mediation  for  new  unemployed.  Charged  with  the  full  financial 
responsibility, municipalities have become the key actors in activation policies. The financing system 
gives municipalities a strong interest in mediating as many welfare clients as possible as quickly as 
possible towards work, which may be at the expense of the sustainability of job placements. The NAP 
is relatively silent on budgetary allocations at the level of policy measures. Shrinking national budgets 
may trigger a better take up of the 1.8 billion available from the ESF. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which begin to address some of the Council's Employment Recommendations. In response to the new 
recommendation on life long learning, the NAP lists some measures to prevent low skilled workers 
from drifting away from the labour market but without indication of expected results. The response to 
the call to also use re-training and education for tackling unemployment is not yet insufficient. For an 
adequate response to the new recommendation to reduce the gender pay gap (21%), policies to tackle 
the gender segregation in occupations need to be complemented by policies encouraging more women 
to  take  up  full-time  work.  In  line  with  the  recommendation  to  make  work  pay,  the  limits  put  on 
municipalities  (from  2004)  to  provide  additional  income  assistance  may  contribute  to  a  further 
reduction of the unemployment trap. The envisaged reform of the disability scheme, combined with a 
“carrot  and  stick”  mechanism  giving  employer  and  sick  employee  a  shared  interest  in  (where 
possible)  a  quick  return  to  the  work  place,  seems  adequate  to  reduce  the  inflow.  Although  more 
attention  is  paid  to  the  activation  of  disability  benefit  recipients  and  to  the  over  representation  of 
ethnic minorities and (young) women in the scheme, the envisaged results, in terms of outflow, are 

48 

 
 
  
 
not clear. In addition action is needed to develop a comprehensive system to encourage active ageing 
and  discourage  early  retirement.  Consideration  should  be  given  to  strengthening  preventative  and 
active measures for adults and to facilitating the integration of minorities and non-nationals into both 
the school system and the labour market. 

49 

 
 
  
 
AUSTRIA 

Economic  and  labour  market  context:  GDP  growth  was  1.4%  in  2002  and  is  expected  to  slow 
down to 0.9% in 2003. The unemployment rate increased in 2002 to 4.3% and is estimated to reach 
4.5% in 2003. However, the LTU rate decreased to 0.8%. Youth unemployment increased to 3.7% in 
2002, and continues to increase, but remains one of the lowest in the EU. Overall employment growth 
in  2002  was  -0.4%,  but  the  employment  rate  increased  to  69.3%.  While  the  male  employment  rate 
went down again (75.7%), the female rate went up strongly (63.1%), mainly due to part-time work. 
The employment rate for older workers (55-64) shows an increase to 30.0% in 2002. 

Employment policy developments: The Austrian government has set a national target to increase the 
female  employment  rate  to  65%  in  2005.  To  tackle  Austria's  key  challenge,  namely  to  raise  the 
participation  of  older  workers,  the  parliament  adopted  a  pension  reform  package  and  a  number  of 
measures,  such  as  reductions  in  social  security  contributions  and  a  more  balanced  early  retirement 
scheme. A strengthening of the right to work part-time is on the agenda. Measures are being taken to 
increase  the  rate  of  business  start-ups  and  develop  active  labour  market  policy.  To  strengthen  the 
economic base and use the labour force potential in the best way, is the government considers it very 
important  to  gradually  increase  the  share  of  R&D  from  1.95%  of  GDP  in  2002  to  3%  in  2010.  As 
regards improving quality and productivity, Austria is focusing on measures in the fields of lifelong 
learning, flexibility and security at work, better health and safety protection, fighting discrimination 
and  improving  work  organisation  and  the  work-life  balance,  though  policies  to  implement  this 
objective have been kept very general in the NAP. With regard to strengthening social cohesion and 
inclusion, the NAP essentially refers to the NAP on inclusion. With a few exceptions, the medium-
term perspective of the policies is not sufficiently elaborated. 

Governance:  All  major  actors  (various  ministries,  the  social  partners,  the  Länder,  regions,  certain 
NGOs) have been involved in the drafting of the NAP. By tradition, the social partners play a major 
role within Austria’s employment policy efforts,  which goes  beyond NAP-related issues. In Austria 
the  ESF  is  particularly  used  to  re-integrate  disadvantaged  groups  into  the  labour  market,  and 
represented about one sixth of the annual ALMP budget in 2002. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which begin to address some of the Council's Employment Recommendations. A number of actions 
are described to foster lifelong learning,  such  as a pact for youth,  employment and  training, agreed 
between  the  government  and  the  social  partners  in  2002.  The  implementation  of  a  comprehensive 
strategy as laid down in the current government programme is currently underway. Important pension 
reform  policies,  ALMPs  and  labour  cost  subsidies  are  being  undertaken.  Increasing  labour  market 
participation  of  older  workers  is  a  long-term  goal  and  the  improvement  of  the  employment  rate  of 
persons aged 55-64 of 1.4 percentage-points from 2001 to 2002 is a good sign. A range of interesting 
projects are being undertaken in the field of equal opportunities, but the only target set has been the 
increase  in  the  female  employment  rate.  The  gender  pay  gap  is  tending  to  increase.  The  offer  of 
childcare does not yet match demand. First assessments of the impact of the childcare allowance on 
the quality and quantity of female employment are mixed. In addition action is needed to monitor and 
complement recent reforms to facilitate occupational mobility, and to reduce non-wage costs for the 
low paid. 

50 

 
 
  
 
PORTUGAL 

Economic  and  Labour  Market  Context:  GDP  growth  has  been  decreasing  since  1998  (4.6%).  In 
2002,  growth  was  only  0.4%  and  negative  growth  is  expected  in  2003.  The  productivity  level 
continues  to  be  the  lowest  in  the  EU  (62.6%  of  the  EU  average).  Progress  towards  the  Lisbon 
employment  targets  has  been  very  encouraging  since  1998,  but  trends  have  reversed  in  2002. 
However, only the total employment target for 2010 has not yet been accomplished (68.2% in 2002), 
but above the target for 2005. The unemployment rate has increased significantly from 4.1% in 2001 
to 6.3% in the third quarter of 2003, with female unemployment higher than male. For the first time 
since 1997, the number of long-term unemployed has increased in 2002. 

Employment policy developments: The approach to the three Strategic Objectives is fairly balanced 
and  addresses  both  demand  and  supply  policies.  The  authorities  are  committed  to  reforms  aimed  at 
developing  the  entrepreneurial  structure,  which  continues  to  be  characterised  by  labour  intensive 
micro sized companies with difficulties in restructuring and embracing innovation. The government 
has  responded  to  these  challenges  mainly  through  Programmes  that  have  a  predominant  economic 
intervention, but play a fundamental role in re-structuring the economy and providing the conditions 
that facilitate  the creation of qualified employment. In spite of progress since 1997, employment in 
the  service  sector  still  has  a  large  potential  for  development.  Strong  focus  is  given  to  the  lifelong 
learning strategy (LLL), which has a crucial role in addressing the serious weaknesses in education, 
training  and  qualification  levels,  including  the  reduction  of  the  high  level  of  early  school  leavers. 
However,  the  implementation  of  the  LLL  strategy  is  not  yet  fully  operational  and  requires  better 
monitoring  mechanisms.  Co-ordination  with  the  Inclusion  strategy  and  National  Plan  for  Equal 
Opportunities  has  improved.  Greater  emphasis  on  management,  control  and  evaluation  systems  is 
crucial  to  assure  the  successful  achievement  of  the  objectives,  and  adequate  assessment  of 
employment policies. 

Governance: Employment and economic policies need to be closely co-ordinated. Effective delivery 
systems  and  structures  at  the  regional  and  local  levels  must  be  assured  together  with  adequate 
financing. Emphasis should go beyond the government level, and include the active involvement of 
social partners and civil society in the implementation of the NAP. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which  begin  to  address  some  of  the  Council's  Employment  Recommendations.  Lifelong  learning:  a 
comprehensive LLL strategy was adopted in 2001. Recent legislative initiatives for new basic laws on 
Education and Vocational Training are also positive contributions to the legal framework supporting 
LLL. However, the persistent negative indicators call for improvements to the implementation of this 
strategy.  Urgent  measures  are  required  to  reduce  the  level  of  early  school  leavers,  and  assure  the 
provision  of  an  education  system  with  greater  quality  and  more  responsive  to  labour  market  needs. 
Gender  equality:  the  supply  of  family  support  services  continues  to  be  improved,  and  progress  has 
been  made  in  particular  in  terms  of  childcare  facilities,  although  still  not  meeting  the  demand. 
Concrete action aimed at addressing the gender pay-gap in the private sector and high levels of gender 
segregation  is  required.  Mainstreaming  of  the  Equal  Opportunities  dimension  (from  a  gender 
perspective) should be further developed throughout the NAP. Social partnership: A new labour code 
will enter into force in 2003. It has been subject to extensive consultation between the social partners, 
and  some  of  its  main  features  include  the  simplification  of  the  administrative  and  regulatory 
framework,  and  the  imposition  of  limits  to  the  use  of  non-permanent  contracts.  In  2003  the 
government presented a proposal for a "Social contract" on Competitiveness and Employment, which 
builds on previous agreements signed in 2001. The effort invested at the negotiation phase must be 
matched with equally strong implementing mechanisms, to assure the fulfilment of expectations. 

51 

 
 
  
 
FINLAND 

Economic  and  labour  market  context:  In  2002,  GDP  grew  by  2.2  and  this  year  GDP  growth  is 
expected to stay at 1.5. Despite the sluggish economic growth, employment remained unexpectedly 
high.  The  total  employment  rate  of  68.1%  was  above  the  EU  target  set  for  2005.  The  female 
employment rate  was  66.2  %, and  above the Lisbon target for 2010. The employment rate of those 
aged  55-64  increased  to  47.8%,  which  is  above  EU  average,  but  below  the  EU  target  of  50%.  The 
unemployment rate remained high and was 9.1% for both sexes in 2002. It is expected to increase to 
9.3% this year. 

Employment  policy  developments:  The  Finnish  employment  strategy  focusses  on  increasing  the 
employment  rate  and  reducing  structural  unemployment,  in  order  to  address  the  medium-term 
challenge  of  a  shrinking  workforce.  This  policy  is  supported  by  measures  to  improve  quality  and 
productivity  at  work  and  strengthen  social  inclusion.  The  goal  of  the  Government  is  to  increase 
employment  by  at  least  100,000  persons  by  the  end  of  the  electoral  period  in  2007.  The  long-term 
projection is to achieve the employment rate of 75% by the end of the following electoral period in 
2011.  The  aim  is  to  raise  the  workforce  participation  rate  in  all  regions  and  all  age  groups,  in 
particular in older age groups, in which employment growth potential will centre. Unemployment is to 
be decreased to 5%. The Government is preparing to increase labour-related immigration. However, if 
economic growth continues to be modest, reaching the 70% target for overall employment by 2010 
remains a challenge in view of the demographic situation. 

Governance:  The  NAP  was  prepared  in  a  tripartite  co-operation,  and  regional  bodies  were  also 
involved in the process. The focal points of the NAP were discussed in the Employment and Equality 
Committee  of  the  Parliament.  However,  there  is  still  space  for  improvement  to  ensure  active 
involvement of all relevant actors in the NAP process. There is some financial data in the NAP. The 
budget proposal for 2004 included an increase of 8% for the implementation of active labour market 
policy. The support of ESF operations to the NAP has been reported by guideline. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which begin to address most of the Council's Employment Recommendations. An employment policy 
programme  in  co-operation  with  social  partners  has  been  launched  to  improve  the  effectiveness  of 
labour market programmes and to boost adequate labour supply. It is well recognised in Finland that 
to decrease structural unemployment, the activation rate needs to be raised. It is to increase to 30% in 
2003-2007. Following its active ageing strategy, Finland aims to ensure that by 2010 people stay on at 
work  2-3  years  longer  than  present.  The  Government's  tax  policy  is  to  make  it  profitable  to  accept 
work and to employ people as well as to promote job creation for those with low income. The aim is 
to reduce taxation by at least €1.120 billion over the electoral period. The tax cuts in 2003 will total 
€792  million.  In  2002,  taxation  on  low-wage  earners  was  40.4%,  which  was  0.6  percentage  points 
lower  in  2001,  but  above  the  EU  average  of  37.8%.  Despite  efforts,  there  is  no  significant  trend 
towards less gender segregation or lower pay gap. A more strategic long-term approach is needed. In 
addition Finland needs to continue with its efforts to improve access to training for low-skilled and 
further  consideration  should  be  given  to  reducing  unemployment  traps  and  labour  costs  for  the  low 
paid. 

52 

 
 
  
 
SWEDEN 

Economic and labour market context: The slowdown of the economy continued in 2002 (growth 
rates  of  0.9%  and  1.9%),  and  employment  growth  was  negative  for  the  first  time  in  five  years,  the 
employment  rate  dropping  from  74.1%  to  73.6%.  This  was  mainly  due  to  a  0.8%  drop  in  male 
employment,  female  employment  remaining  stable,  at  72.2%.  On  the  positive  side,  employment  of 
older  workers  increased  from  66.8%  to  68%.  Despite  the  slight  drop  in  employment,  the  Lisbon 
targets  have  been  more  than  met,  and  unemployment  has  remained  stable  at  4.9%,  though  youth 
unemployment ratio has risen slightly, from 5.9% to 6.4%. Long-term unemployment remains one of 
the lowest in the EU, at 1%. 

Employment policy developments: The first priority for Sweden is full employment, i.e. 80% of the 
age group 20-64, though the date for achievement will be later than the 2004 target. To achieve this, 
measures are being taken to raise the effective exit age, to raise the participation rate of immigrants, 
and (the biggest labour market challenge) to try to reduce the numbers on long-term sick leave, 65% 
of whom are women, particularly in the public sector. The high rate of illness is at odds with other 
indications  implying  a  quality  working  climate,  such  as  the  well-developed  continuous  training 
mechanisms, effective gender mainstreaming and paternity leave. Productivity per hour grew by over 
3% in 2002, but from a relatively low base. Women make up a low proportion of entrepreneurs and 
self-employed, but have taken up 2/3 of funds available for a new scheme encouraging business set-
ups. The main tool for social cohesion remains assisting weak groups to obtain jobs. 

Governance:  Social  dialogue  is  strong  in  Sweden  and  the  social  partners  are  active,  not  only  in 
contributing  to  the  NAP,  but  in  concluding  collective  agreements  for  new  work  organisation,  the 
working  environment,  life-long  learning,  etc.  These  agreements  are  becoming  less  centralised  – 
minimum requirements are set centrally, and local agreements drawn up within them. Since 2001, the 
government has provided reports to Parliament on the implementation of the EES, but the relationship 
between  the  EES  and  national  policy  decisions  is  not  clear.  In  2003,  the  ESF  under  its  various 
programmes  (around  €148  million)  corresponds  to  about  3%  of  Swedish  labour  market  policy,  and 
indicates guidelines to which the ESF contributes. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which begin to address most of the Council's Employment Recommendations. The gap between the 
unemployment rate of Swedes and immigrants continued to decrease, reaching 11% in 2002. Further 
efforts are being made to increase employment, including improved language training, combined with 
on-the-job  training,  and  recognition  of  previously  acquired  qualifications.  In  order  to  halve  the 
number  of  the  long-term  sick  by  2008,  action  is  being  taken  through  temporary  job  subsidies,  joint 
agreements between the sickness insurance and the  public authorities to improve rehabilitation, and 
working  with  employers  on  prevention.  It  is  too  early  to  say  whether  these  measures  will  have 
positive effects. The reform of tax and benefit systems in order to improve work incentives is an on-
going process, having started in 1999. The marginal tax rate has now dropped to 46% from 47.8% in 
2000. In addition further challenges deserve attention, including the need to facilitate the development 
of SMEs, ensure the school system takes effective action to reduce early school leaving, and increase 
access to training for the low skilled, particularly inactive youth. 

53 

 
 
  
 
UNITED KINGDOM 

Economic  and  labour  market  context:  The  UK  continues  to  demonstrate  solid  macro-economic 
performance,  with  growth  rates  above  the  EU  average.  In  2002,  real  GDP  grew  by  1.7%  and  is 
expected  to  rise  to  2.0%  in  2003  and  to  be  2.8%  and  2.9%  2004  and  2005  respectively.  Labour 
productivity growth picked up slightly in 2002 to 1.6% but the UK still has a significant productivity 
gap with major competitors. The overall employment rate remained stable at 71.7% in 2002, with the 
upward trend continuing for women (65.3%) and older workers (53.5%). Employment is expected to 
grow moderately over the period 2003-2005. Unemployment edged up slightly in 2002 to 5.1%, but 
remains significantly below the EU average. Long-term unemployment continued to decline but youth 
unemployment  increased  to  9.2%.  Concentrations  of  unemployment  and  inactivity  persist  in  certain 
communities and amongst particular groups. Overall unemployment is expected to decline to 4.9% in 
2003 and to remain at or around this level throughout the forecast period. The number of working age 
people claiming sickness and disability benefits remains high at 2.7 million. 

Employment  policy  developments:  The  UK  exceeds  all  of  the  Lisbon  quantitative  employment 
targets. The key challenge for the UK is to ensure that its strong performance on employment rates 
can be matched by increased levels of labour productivity and a more inclusive labour market. The 
NAP  does  not  provide  an  explicit  assessment  of  the  national  situation  with  respect  to  the  three 
overarching objectives, but the overall policy response appears relatively strong on full employment 
and  social  inclusion.  There  is  an  increased  emphasis  on  tackling  high  levels  of  economic  inactivity 
and inequities in the pattern and distribution of employment. Efforts to tackle the UK's relatively poor 
skills  position  continue,  with  a  range  of  additional  demand  and  supply  side  measures.  The  policy 
response  to  quality  and  productivity  at  work  focuses  on  promoting  flexible  working  practices, 
combined  with  minimum  levels  of  security.  Regulatory  reform  and  improving  health  and  safety  at 
work are also priorities. Less emphasis is given to broader job quality issues, including working time, 
and marked gender inequalities persist. 

Governance: Social partners and regional and local actors are increasingly involved in the delivery of 
employment initiatives and action is underway to strengthen regional planning systems. In addition to 
the devolved administrations and social partners, progress has been made in engaging a broader range 
of  stakeholders  in  the  preparation  of  this  year's  NAP.  The  ESF  is  identified  as  a  key  instrument  in 
advancing  the  UK's  employment  strategy  and  examples  of  ESF  supported  actions  are  highlighted. 
However, no information is provided on overall financial allocations to support the Guidelines. 

Response  to  the  Council  Recommendations  and  key  challenges:  Measures  have  been  adopted 
which  begin  to  address  some  of  the  Council's  Employment  Recommendations.  There  is  a  general 
absence of evaluation evidence in the NAP on the effectiveness of policy interventions. A progressive 
shift  of  focus  towards  the  economically  inactive  is  taking  place  notably  people  on  sickness  or 
disability  benefit,  with  a  policy  mix  including  benefit  and  tax  reform,  the  modernisation  of  the 
employment  service  and  a  number  of  new  pilot  projects.  Efforts  to  strengthen  activation  focus  on 
providing  some  additional  flexibility  in  mainstream  programmes,  but  the  New  Deal  for  adults  still 
applies only after 18 months unemployment and questions remain about the adequacy of the "active 
job  search"  response  in  tackling  the  low  skills  amongst  the  unemployed  and  promoting  job 
sustainability. On gender equality, the emphasis is on measures to promote work-life balance and to 
improve childcare. Overall, the issue of gender equality is insufficiently mainstreamed in the plan and 
questions remain about the effectiveness of action to address the equal pay gap. Finally, although the 
UK  has  no  plans  to  establish  a  general  framework  for  the  involvement  of  social  partners,  there  is 
evidence  of  increasing  social  partner  involvement  in  specific  policy  issues,  including  the  skills 
agenda.  In  addition,  in  view  notably  of  the  UK's  poor  performance  in  terms  of  labour  productivity, 
particular attention should be given to the effective implementation of the national skills strategies. 

54 

 
 
  
 
6. 

CONCLUSIONS:  FURTHER  STRENGTHENING  OF  THE  EUROPEAN 
EMPLOYMENT  STRATEGY  TAKING  FULL  ACCOUNT  OF  THE 
EUROPEAN  EMPLOYMENT  TASKFORCE  REPORT  HEADED  BY  
WIM KOK 

The  present  report  demonstrates  that  reforms  are  continuing  on  a  wide  range  of  aspects 
covered  by  the  Employment  Guidelines.  Such  reforms  have  already  played  a  part  in 
improving the performances of the labour market throughout the last decade, as confirmed by 
the resilience of employment in the recent economic downturn. They must be continued and 
extended. 

In  order  to  support  Europe's  growth  potential  and  increase  our  chances  of  reaching  the 
employment objectives in 2010, actions need to be taken to accelerate both employment and 
productivity  growth. This is strongly underlined in the report  of the  Employment Taskforce 
headed  by  Wim  Kok.  Such  action  must  also  be  supported  by  efforts  to  improve  other 
dimensions of quality in work and to promote inclusive labour markets. 

A narrow approach to labour market reforms will not suffice. Sound macro-economic policies 
are  needed  to  secure  confidence  and  stability.  An  improvement  of  the  environment  for 
entrepreneurship in general, and for research and innovation in particular, is a key to more job 
creation.  Structural  reforms  are  also  needed  in  the  products,  services  and  capital  markets  to 
support competitiveness and job creation. Progress on all fronts of the Lisbon agenda, notably 
in terms of research and innovation, education and training and the reform of social protection 
systems including pension systems, must go hand in hand. 

Policies  in  these  areas  should  boost  business  investment  in  Europe,  both  in  physical  and 
human capital, and create better conditions for job creation and productivity growth. 

Need to focus on implementation 

A  major  thrust  of  the  EES  review  in  2003  and  of  the  streamlining  of  the  economic  and 
employment policy co-ordination has been the emphasis on medium-term orientations and the 
recognition  that  increased  attention  must  be  given  to  implementation.  The  Employment 
Taskforce has underlined the consistency between the reforms proposed in its report and the 
overall policy framework resulting from the revised Broad Economic Policy Guidelines and 
Employment  Guidelines.  It  has  confirmed  the  need  to  put  emphasis  on  an  intensive 
monitoring of reforms undertaken by the Member States, including through more forceful EU 
country-specific  recommendations  and  a  more  effective  use  of  peer  review,  rather  than 
engaging in a process of further change of the Guidelines. 

Member  States  should  pursue  the  full  range  of  policies  recommended  in  the  Employment 
Guidelines.  They  will  strengthen  the  adaptability  of  employers  and  workers,  increase  the 
labour supply and improve human capital, which, together with better governance, provide the 
thematic focus for action in the Taskforce report. 

The Employment Taskforce's assessment and policy messages are shared by the Commission 
and the Council and are fully consistent with the European Employment Strategy Guidelines. 
The analysis of the report from the Employment Taskforce shows that Member States should 
give immediate priority to: 

55 

 
 
  
 
- 

- 

- 

- 

Increasing  adaptability  of  workers  and  enterprises  by  focusing  on  improving  the 
attractiveness of both standard and non-standard labour contracts, and avoiding a two-
tier labour market, and by reducing obstacles to setting up new businesses. 

Attracting  more  people  to  the  labour  market  by  building  comprehensive  ageing 
strategies, by ensuring active labour market policies with personalised services to all 
those seeking employment, and by developing "making work pay" policies especially 
focused on the low paid. 

Investing  more  and  more  effectively  in  human  capital  by  setting  out  ambitious 
policies for raising levels of human capital, by sharing costs and responsibilities and 
by reviewing incentives for increasing investment and access to lifelong learning. 

Ensuring  effective  implementation  of  reforms  through  better  governance  by 
building  reform  partnerships  that  mobilise  the  support  and  participation  of  various 
stakeholders,  by  defining  clear  national  policies  and  targets  to  reflect  those  set  at  a 
European  level,  and  through  an  efficient  use  of  public  funds.  The  EU  level  has  an 
important role to play to support Member States' efforts by strengthening the role of 
the country-specific recommendations, by linking the EU budget more closely to the 
Lisbon objectives and by developing a more effective system of mutual learning. 

This report and these priorities, as well as the country-specific messages in the Employment 
Taskforce report provide the basis for the formulation of the EU recommendations on national 
employment policies in 2004. 

Opening the EES to ten new Member States 

Labour  market  challenges  in  the  acceding  Member  States  are  well  identified23  and  the 
Employment  Guidelines  have  been  designed  to  support  reforms  both  in  current  and  new 
Member  States.  The  ten  new  Member  States  will  submit  their  first  NAPs  shortly  after 
accession  and  be  fully  integrated  in  the  implementation  of  the  new  European  Employment 
Strategy. The resources available from the ESF in 2004 and 2005 must be used to the full to 
support the most urgent reforms needed in the new Member States. 

23 

"Progress in implementing the Joint Assessment Papers on Employment Policies in acceding countries" 
COM(2003) 663. 

56 

 
 
  
 
                                                 
ANNEX 1: KEY AND CONTEXT INDICATORS 

24,25 

BE  DK  DE 

EL 

ES 

FR 

IE 

IT 

LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

Key Indicators 

Unemployment Rate  

Men 

Women 

7.3 

4.5 

8.6 

10.0  11.3 

8.7 

4.4 

9.0 

2.8 

2.7 

4.3 

5.1 

9.1 

4.9 

5.1 

7.7 

6.6 

4.4 

8.7 

6.6 

8.0 

7.8 

4.6 

7.0 

2.1 

2.5 

4.1 

4.2 

9.1 

5.3 

5.6 

6.9 

8.2 

4.6 

8.3 

15.0  16.4 

9.9 

4.0 

12.2 

3.9 

3.0 

4.5 

6.1 

9.1 

4.5 

4.5 

8.7 

Employment rate (15-64) 

59.9  75.9  65.3

56.7  58.4  63.0  65.3  55.5  63.7  74.4  69.3  68.2  68.1  73.6  71.7  64.3 

Men 

Women 

68.2  80.0  71.7

71.4  72.6  69.5  75.2  69.1  75.6  82.4  75.7  75.9  70.0  74.9  78.0  72.8 

51.4  71.7  58.8

42.5  44.1 

56.7  55.4  42.0  51.6  66.2  63.1  60.8  66.2  72.2  65.3  55.6 

Employment rate (55-64) 

26.7  57.8  38.4

39.7  39.7  34.8  48.1  28.9  28.3  42.3  30.0  50.9  47.8  68.0  53.5  40.1 

Men 

Women 

36.1  64.5  47.1

56.0  58.6  39.3  65.1  41.3  37.9  54.6  39.8  61.2  48.5  70.4  62.6  50.1 

17.6  50.4  29.9

24.4  22.0  30.6  30.8  17.3  18.6  29.9  20.9  41.9  47.2  65.6  44.7 

30.5 

Growth in labour productivity (per capita) 

0.9 

2.3 

0.8 

4.2 

0.7 

0.5 

4.6 

-0.7 

-1.9 

-0.3 

1.4 

0.3 

1.3 

1.7 

1.1 

0.7 

Growth in labour productivity (per hour) 

0.9 

2.3 

1.2 

4.2 

0.7 

0.4 

4.6 

-1.0 

-1.9 

-0.5 

1.4 

0.3 

1.4 

3.1 

1.1 

0.6 

24 
25 

Reference year is 2002 unless specified otherwise 
Indicators marked with * are based on data from non harmonised national sources and therefore not strictly comparable 

57 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Long-term unemployment rate 

3.6 

0.9 

4.0 

5.1 

3.9 

2.7 

1.3 

5.3 

0.8 

0.7 

0.8 

1.8 

2.3 

1.0 

1.1 

3.0 

BE  DK  DE 

EL 

ES 

FR 

IE 

IT 

LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

3.1 

0.8 

3.9 

3.0 

2.3 

2.3 

1.7 

4.1 

0.6 

0.6 

0.6 

1.4 

2.5 

1.2 

1.4 

2.6 

4.1 

1.0 

4.1 

8.3 

6.3 

3.3 

0.7 

7.2 

1.0 

0.8 

1.1 

2.2 

2.0 

0.8 

0.7 

3.6 

Men 

Women 

Preventative services 
(young unemployed) 

Preventative services* 
(adult unemployed) 

New start(a) (young unemployed)* 

New start(a) (adult unemployed)* 

New start(b) * 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

Activation of long-term unemployed* 

32 

24 

Rate of inflow into employment* 

3 months after participation in a measure 

6 months after participation in a measure 

Rate of return to unemployment* 

3 months after participation in a measure 

6 months after participation in a measure 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

29 

27 

Enterprise births (gross) (2000) 

7.0 

10.0 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

30.3 

22.3 

22 

46.4 

: 

: 

: 

68 

: 

: 

11 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

3.9 

2.1 

82.2 

82.9 

: 

14 

: 

44 

49 

: 

24 

27 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

2.6 

16 

17.4 

9 

2.6 

17.4 

: 

0 

0 

: 

25 

50 

47 

: 

: 

40 

47 

35 

38 

: 

: 

: 

19 

: 

: 

47 

20 

: 

17 

: 

: 

7.8 

11.4 

9.4 

: 

7.6 

7.3 

7.0 

8.9 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

11.7 

12.9 

59.6 

49 

: 

32 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

32 

: 

: 

52 

9.7 

58 

 
 
  
 
 
BE  DK  DE 

EL 

ES 

FR 

IE 

IT 

LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

Employment growth 

-0.2 

-0.7 

-0.6 

-0.2 

1.3 

0.8 

1.4 

1.4 

3.2 

0.8 

-0.4 

0.2 

0.3 

0.2 

0.2 

0.4 

Men 

Women 

-0.9 

-0.8 

-1.3 

-0.7 

0.5 

0.1 

0.3 

0.9 

1.1 

0.0 

-2.5 

-0.1 

-0.8 

-0.2 

0.0 

-0.2 

0.7 

-0.6 

0.2 

0.6 

2.6 

1.7 

2.9 

2.1 

6.6 

1.9 

2.3 

0.5 

1.6 

0.6 

0.5 

1.1 

Survival rates of newly born enterprises (2000) 

:  

63.8 

: 

: 

69.3 

: 

71.3  78.4 

:  

: 

71.6  68.4 

:  

77.8 

: 

Diversity of working arrangements (part-time + 
fixed-term + self-employment) 

35.5  32.9  37.8

39.9  45.6  33.8  33.2  35.1  21.3  54.7  32.9  43.1  34.4  36.4  36.4  38.0 

Diversity of working arrangements (part-time) 

18.3  18.3  19.2

1.9 

3.7 

12.9  13.2 

6.3 

10.8  34.8  18.0 

2.4 

8.1 

14.0  22.2  15.4 

Men 

Women 

4.8 

9.6 

4.2 

0.8 

0.8 

3.0 

3.2 

1.7 

0.8 

14.7 

3.8 

0.6 

4.6 

5.2 

6.8 

4.3 

35.7  27.6  36.9

3.6 

8.1 

24.2  24.6  12.9  25.1  59.9  34.8 

4.6 

11.6  23.0  39.2  28.9 

Diversity of working arrangements (fixed-term) 

4.6 

5.9  10.0

9.3 

26.5  10.2 

2.3 

7.0 

3.3 

5.0 

6.2 

19.2  13.2 

8.6 

3.2 

9.7 

Men 

Women 

Diversity of working arrangements 
(self-employment) 

Men 

Women 

4.2 

5.7  10.6

8.7 

27.5  10.4 

2.4 

6.5 

3.4 

6.0 

6.8 

19.0  11.1 

8.7 

3.7 

10.1 

5.1 

6.2 

9.2 

10.2  25.0  10.0 

2.2 

7.8 

3.1 

3.8 

5.6 

19.5  15.2 

8.4 

2.8 

9.1 

13.6 

8.0  10.0

32.0  17.5 

9.7 

16.8  23.4 

7.4 

11.1  10.9  25.4  12.3  10.2  11.4  14.0 

16.5  11.8  12.9

38.0  20.5  12.9  24.3  28.3 

9.5 

13.2  13.1  27.8  15.9  14.8  15.4  17.8 

9.7 

3.7 

6.4 

22.3  12.5 

5.7 

6.3 

15.2 

4.1 

8.4 

8.3 

22.6 

8.5 

5.2 

6.5 

8.9 

Trends in accidents at work (serious)  

Trends in accidents at work (fatal)  

83 

82 

124 

55 

88 

65 

86 

78 

106 

98 

105 

92 

81 

79 

43 

62 

97 

37 

92 

79 

83 

94 

: 

: 

87 

111 

110 

94 

98 

105 

92 

79 

59 

 
 
  
 
 
 
BE  DK  DE 

EL 

ES 

FR 

IE 

IT 

LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

Trends in occupational diseases 

Transparency of job vacancies* 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

Educational attainment of 20-24 year olds 

81.1  63.9  73.3

81.3  64.9  81.7  83.9  69.1  69.8  73.3  85.0  43.7  86.2  86.7  91.0  75.6 

Men 

Women 

77.6  65.4  72.6

76.3  58.2  80.5  79.7  64.2  74.0  70.0  85.6  35.4  81.9  85.2  90.7  72.9 

84.7  62.5  73.8

85.9  71.9  82.8  88.1  74.0  65.5  76.7  84.4  52.0  90.4  88.3  91.3  78.4 

Participation in education and training 

6.5 

18.4  5.8 

1.2 

5.0 

2.7 

7.7 

4.6 

7.7 

16.4 

7.5 

2.9 

18.9  18.4  22.3 

8.5 

Men 

Women 

6.8 

16.2  6.1 

1.2 

4.5 

2.4 

6.5 

4.5 

8.9 

16.9 

7.6 

2.4 

16.5  15.7  18.6 

7.9 

6.3 

20.7  5.5 

1.1 

5.4 

3.0 

8.8 

4.7 

6.4 

15.9 

7.4 

3.3 

21.4  21.2  26.3 

9.2 

Investment in human resources (2000) 

5.2 

8.4 

4.5 

3.8 

4.4 

5.8 

4.4 

4.6 

: 

4.8 

5.7 

5.7 

6.0 

7.4 

4.4 

4.9 

Participation in continuous vocational 
training (Men) (1999) 

Participation in continuous vocational 
training (Women) (1999) 

. 

. 

54 

51 

28 

48 

64 

55 

51 

54 

50 

43 

52 

62 

67 

53 

58  44 

30 

46 

59 

54 

53 

56 

40 

47 

47 

67 

69 

51 

: 

: 

Activity rate 

64.7  79.6  71.5

63.1  66.0  69.1  68.4  61.1  65.5  76.5  73.0  72.1  74.9  77.6  75.6  69.7 

Men 

Women 

73.1  83.6  78.7

76.6  79.0  75.7  79.0  74.3  77.1  84.5  80.1  79.5  77.0  79.4  82.7  78.4 

56.2  75.5  64.2

50.1  52.8  62.7  57.8  47.9  53.7  68.3  66.0  65.0  72.8  75.8  68.3  60.9 

Average exit age from the labour force (2001) 

57.0  61.9  60.7

59.6  60.6  58.1  63.1  59.4  56.8  60.9  59.6  62.0  61.6  62.0  62.1  59.9 

Men 

Women 

57.8  62.2  60.9

61.2  60.7  58.2  63.2  59.6  57.5  61.1  60.0  62.0  61.6  62.1  63.1  60.5 

55.9  61.1  60.4

57.7  60.2  58.0  62.2  59.2  55.3  60.3  58.6  61.5  61.4  61.9  61.0  59.1 

60 

 
 
  
 
 
Employment gender gap 

16.9 

8.3  12.9

28.9  28.5  12.8  19.8  27.1  24.0  16.3  12.6  15.1 

3.8 

2.7 

12.7  17.2 

Unemployment gender gap 

1.6 

0.2 

-0.4 

8.4 

8.4 

2.1 

-0.6 

5.2 

1.8 

0.5 

0.4 

1.9 

0 

-0.8 

-1.1 

1.8 

BE  DK  DE 

EL 

ES 

FR 

IE 

IT 

LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

Gender pay gap 

Private sector 

Public sector 

Employment impact of parenthood (Men) 

Employment impact of parenthood (Women) 

Childcare coverage 0-3 years* 
(1998 DE;2001 NL,FI) 

Childcare coverage 3- compulsory school age* 
(1998 DE;2001 NL,FI) 

12 

15 

: 

-10.6

3.1 

15 

16 

13 

: 

: 

21 

24 

20 

15 

22 

9 

15 

23 

3 

13 

: 

: 

19 

23 

15 

6 

15 

0 

: 

: 

: 

21 

26 

19 

20 

24 

8 

28 

17 

15 

14 

-17 

25 

-7.9 

-6.5 

-13.1 -14.3

: 

-14.2

-8.3 

-4.7 

-5.4 

-10.6

-9.9 

21.4

5.2 

8.8 

11.5  16.3 

4.9 

5.4 

11.5 

8.9 

-1.4 

: 

18 

16 

18 

: 

: 

21 

15.8 

26 

21.9 

18 

11.0 

-4.8 

-9.5 

22.9  12.7 

28.3 

68 

7 

: 

11 

30 

: 

7 

10 

22.5 

8.8 

16.3  26.1 

73 

10.8 

: 

100 

94 

89.5

100 

98 

82.5  81.6 

61.3  76.7  29.4 

Early school leavers 

12.4  15.4  12.6

16.1  29.0  13.4  14.7  24.3  17.0  15.0 

9.5 

45.5 

9.9 

10.4 

Men 

Women 

14.9  13.8  12.6

20.1  35.4  14.9  18.5  27.9  14.4  15.7 

8.8 

52.9  12.6  11.4 

9.9 

17.0  12.6

12.3  22.3  11.9  10.8  20.7  19.6  14.3  10.3  38.1 

7.3 

9.3 

Unemployment rate gaps for people at a 
disadvantage* 

: 

: 

: 

: 

: 

: 

: 

Unemployment rate gap between non EU and EU 
nationals 

27.2 

8.9 

8.2 

-0.1 

4.6 

16.8 

-0.3 

Working poor 

Men 

Women 

6 

6 

5 

5 

4 

5 

4 

4 

5 

13 

14 

12 

8 

9 

5 

8 

9 

6 

7 

8 

6 

: 

: 

10 

12 

6 

: 

: 

: 

: 

: 

: 

6.6 

3.2 

5.5 

3.5 

11.8  10.2 

5.0 

8.7 

8 

8 

7 

7 

7 

7 

6 

6 

6 

14 

14 

15 

5 

5 

5 

7 

8 

6 

6 

5 

7 

Unemployment trap 

91.3  90.7  88.4

80.8  81.7  84.0  73.4  59.9  86.7  84.8 

72 

87.0  83.4  87.1  70.3 

61 

: 

: 

: 

: 

18.8 

21.4 

16.2 

: 

7 

8 

6 

: 

 
 
  
 
 
 
 
 
 
 
 
BE  DK  DE 

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FR 

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LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

Taxation on low-wage earners 

48.9  40.4  45.9

34.3  33.9  37.8  16.6  42.7  27.3  37.2  39.9  29.5  40.4  45.9  24.7  37.8 

Regional disparities (employment) 

Regional disparities (unemployment) 

7.4 

45.5 

: 

: 

: 

: 

5.61 

8.7 

25.1  34.8 

: 

: 

: 

: 

15.5 

76.5 

: 

: 

1.9 

: 

4.8 

8.9 

21.5 

29.5  37.3 

: 

: 

6.5 

30.1 

: 

: 

Context Indicators 

GDP growth 

0.7 

1.6 

0.2 

4.0 

2.0 

1.2 

6.0 

0.4 

1.1 

0.2 

1.0 

0.5 

1.6 

1.9 

1.8 

1.1 

Employment rate (age group 15-24) 

29.4  63.5  45.6

26.5  33.3  30.1  47.9  25.8  32.3  70.0  51.8  42.1  40.7  42.8  56.3  40.6 

Employment rate (age group 25-54) 

76.5  84.1  78.7

71.1  70.1  79.5  76.1  70.1  79.1  82.8  84.1  81.6  81.6  84.2  80.6  77.2 

Employment rate (age group 20-64) 

64.9  77.7  68.7

61.4  62.6  68.7  70.7  59.4  68.5  75.8  72.3  73.4  72.6  78.5  74.7  68.2 

Employment rate full-time equivalent 

55.4  69.7  58.1

56.3  56.2  60.4  60.7  53.6  60.9  58.1  63.0  67.1  65.8  68.1  62.1  58.9 

Men 

Women 

67.6  76.7  69.9

72.0  72.2  70.4  74.4  68.4  76.0  74.7  74.8  76.7  69.3  72.9  74.0  71.2 

43.2  63.1  46.4

41.3  40.1  50.9  47.0  39.2  45.7  42.0  51.4  58.0  62.4  63.4  50.8  46.8 

Job Satisfaction 

4.6 

4.9 

4.0 

4.3 

4.7 

: 

4.2 

4.8 

5.2 

4.2 

4.4 

 :  

: 

4.4 

Real unit labour costs 

1.2 

0.5 

-0.8 

-1.2 

-1.1 

0.7 

-3.6 

0.4 

5.0 

1.7 

-0.6 

0.4 

-0.2 

0.8 

-0.7 

-0.2 

Labour productivity (per capita) 

120 

99 

97 

83 

93 

112 

124 

111 

131 

97 

99 

63 

102 

93 

93 

100 

Labour productivity (per hour) 

125 

106  108 

68 

82 

117 

118 

110 

128 

115 

103 

58 

96 

94 

87 

100 

Inflow into long-term unemployment* 

62 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BE  DK  DE 

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NL 

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FI 

SE 

UK  EU15 

Youth unemployment ratio 

6,3 

5,2 

4,9 

9,6 

9,5 

7,4 

3,9 

9,7 

2,8 

3,9 

3,7 

5,5 

10,8 

6,4 

7,8 

7,2 

Men 

Women 

7.1 

6.5 

6.0 

7.6 

8.8 

7.5 

4.7 

9.6 

2.4 

4.0 

3.9 

5.1 

11.0 

6.4 

9.2 

7.6 

5.5 

3.9 

3.8 

11.4  10.3 

7.4 

3.2 

9.7 

3.2 

3.8 

3.6 

5.9 

10.6 

6.5 

6.2 

6.8 

LMP expenditure (active) (2001) 

1.0 

1.6 

0.9 

0.3 

0.7 

0.9 

0.7 

0.5 

: 

0.9 

0.4 

0.2 

0.7 

1.3 

0.1 

0.7 

LMP expenditure (passive) (2001) 

2.2 

2.3 

2.0 

0.4 

1.4 

1.4 

0.7 

0.6 

0.5 

1.7 

1.2 

1.0 

2.1 

1.1 

0.4 

1.3 

Employment in newly established enterprises (2000) 1.6 

2.4 

: 

: 

4.5 

: 

: 

2.9 

: 

: 

: 

2.7 

0.5 

1.8 

: 

: 

Employment rate in services 

47.6  58.1  49.1

34.7  38.2  48.8  43.1  40.8  74.0  59.3  46.6  39.2  45.7  56.4  60.6  48.3 

Men 

Women 

46.5  51.9  43.8

39.9  39.1  45.4  39.1  44.9 

76.7  57.4  40.4  36.5  37.1  47.7  55.7  46.0 

48.7  64.4  54.5

29.7  37.2  52.2  47.2  36.8  71.2  61.2  53.0  41.8  54.3  65.4  65.6  50.6 

Working time 

39.3  39.1  39.9

41.0  40.4  37.7  39.5  38.5  39.5  38.9  40.0  40.3  39.2  39.9  43.3  40.0 

Men 

Women 

39.7  40.1  40.3

41.9  41.0  38.2  40.7  39.8  40.3  39.1  40.1  41.1  40.0  40.1  44.9 

40.8 

38.3  37.7  39.2

39.7  39.5  36.9  37.7  36.4  37.9  38.1  39.9  39.2  38.2  39.6  40.6  38.6 

Overtime work 

1.1 

4.8 

7.9 

0.3 

0.2 

2.2 

1.5 

1.4 

3.8 

6.4 

6.3 

1.4 

8.5 

8.0 

4.2 

4.1 

Men 

Women 

1.4 

5.4  10.2

0.3 

0.2 

2.3 

2.2 

1.8 

5.4 

7.4 

8.2 

1.8 

10.4  10.9 

4.7 

5.0 

0.8 

4.1 

5.2 

0.2 

0.1 

2.1 

0.8 

0.9 

1.6 

5.0 

3.9 

0.9 

6.6 

5.3 

3.5 

3.1 

Vacancies per unemployed* 

0.10  0.03  0.11

: 

0.03 

: 

: 

: 

: 

0.49 

: 

: 

0.01  0.28 

: 

: 

Use of computers 

53 

72 

57 

35 

36 

45 

46 

59 

56 

72 

62 

32 

70 

73 

58 

53 

Investments by enterprises in training of adults 
(1999) 

0.9 

1.4 

0.7 

0.5 

0.9 

1.2 

1.0 

0.6 

1.0 

1.1 

0.5 

0.6 

1.1 

1.3 

0.8 

0.8 

63 

 
 
  
 
 
BE  DK  DE 

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LU 

NL 

AT 

PT 

FI 

SE 

UK  EU15 

Labour reserve 

2.9 

3.6 

3.7 

1.4 

4.4 

2.0 

4.3 

8.0 

1.8 

3.7 

3.9 

1.5 

6.1 

1.8 

6.0 

4.4 

Men 

Women 

2.2 

2.7 

2.9 

0.8 

2.9 

1.5 

3.6 

5.1 

1.3 

2.8 

2.6 

1.0 

5.7 

1.8 

5.0 

3.2 

3.7 

4.5 

4.4 

2.0 

6.0 

2.5 

5.0 

10.9 

2.3 

4.6 

5.2 

1.9 

6.4 

1.8 

7.1 

5.6 

Labour supply growth 

0.5 

-0.3 

0.0 

1.0 

1.4 

0.3 

0.0 

0.5 

1.1 

0.7 

1.6 

0.3 

-0.1 

-0.3 

0.0 

0.4 

Men 

Women 

0.0 

-0.2 

-0.2 

0.3 

0.7 

0.4 

-0.7 

0.3 

0.9 

0.2 

0.5 

0.0 

-0.5 

-0.6 

-0.3 

0.1 

1.1 

-0.4 

0.3 

1.5 

2.1 

0.3 

0.7 

0.6 

1.4 

1.2 

2.8 

0.5 

0.4 

0.0 

0.3 

0.7 

Employment gender gap in full-time equivalent 

24.4  13.6  23.5

30.7  32.1  19.5  27.4  29.2  30.3  32.7  23.4  18.7 

6.9 

9.5 

23.2  24.4 

Employment gender gap (age group 15-24) 

5.7 

0.8 

3.1 

10.0  12.3 

8.0 

6.5 

9.1 

7.8 

2.6 

8.2 

11.2 

1.3 

0.6 

3.6 

6.5 

Employment gender gap (age group 25-64) 

19.4 

7.8  13.8

34.3  31.9  16.1  21.9  31.8  28.8  18.5  13.7  15.2 

4.4 

3.3 

13.4  19.5 

Employment gender gap (age group 55-64) 

18.4  14.3  17.3

30.7  36.1 

8.6 

34.4  24.2  19.5  25.9  19.4  20.6 

0.6 

5.2 

17.4  19.6 

Employment gender gap (high educational 
attaiment) 

Employment gender gap (medium educational 
attaiment) 

4.2 

2.4 

2.4 

6.3 

11.0 

4.9 

7.6 

8.6 

10.5 

6.3 

2.1 

3.4 

1.0 

0.2 

3.3 

4.5 

17.7 

5.4 

8.6 

25.6  21.4  13.1  20.5  18.3  18.8  10.7  12.7 

8.6 

8.3 

5.6 

9.4 

12.3 

Employment gender gap (low educational attaiment) 20.6  15.7  18.2

25.6  31.6  13.4  27.6  29.0  23.5  25.8  15.6  19.8  12.2  11.6 

8.2 

22.8 

Gender pay gap (age group 16-24) (2000) 

13 

6 

6 

11 

7 

Gender pay gap (age group 25-54) (2000) 

11 

15 

19 

13 

14 

Gender pay gap (age group 55-64) (2000) 

18 

19 

34 

19 

15 

Gender pay gap (high educational attainment) 
(2000) 

18 

15 

19 

9 

21 

: 

: 

: 

: 

2 

19 

6 

5 

28 

16 

17 

13 

: 

: 

: 

: 

: 

: 

: 

: 

17 

10 

10 

19 

10 

18 

28 

-14 

21 

: 

: 

: 

5 

6 

22 

15 

27 

23 

29 

10 

26 

24 

: 

18 

64 

 
 
  
 
 
BE  DK  DE 

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IE 

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NL 

AT 

PT 

FI 

SE 

UK  EU15 

Gender pay gap (medium educational attainment) 
(2000) 

12 

14 

16 

23 

14 

Gender pay gap (low educational attainment) (2000)

12 

9 

14 

24 

24 

: 

: 

25 

9 

30 

15 

: 

: 

: 

: 

19 

16 

18 

16 

16 

20 

17 

14 

: 

: 

14 

17 

Gender segregation (occupations) 

25.3  28.3  26.9

21.8  25.2  26.3  26.9  21.8  27.1  24.5  27.7  27.7  29.4  27.8  26.4  25.1 

Gender segregation (sectors) 

18.2  18.5  18.1

15.5  19.4  17.5  21.0  15.4  19.7  16.7  20.3  22.1  21.6  21.5  18.8  17.7 

Dependent elderly* 

Labour market gaps for disadvantaged groups 

: 

: 

56.6 

: 

: 

: 

: 

: 

: 

: 

14.1 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

28.6  17.3 

: 

: 

: 

: 

: 

: 

Implicit tax rate on employed labour 

43.4  40.0  39.8

36.2  30.3  42.5  26.7  40.7  30.9  30.6  39.3  34.2  43.4  45.7  24.8  36.3 

65 

 
 
  
 
 
T r a n s itio n s  in to  e m p lo y m e n t a n d  tr a in in g

T r a n s itio n s  o f u n e m p lo ye d  p e o p le  in to  e m p lo ym e n t a n d  tr a in in g
fr o m   ye a r  n  to   ye a r  n + 1

1 9 9 9  (y e a r

2 0 0 0  (y e a r

)

W O R K

E D U C _ T R A I
N

N O N _ E M P L O Y E

1 )

W O R K
E D U C _ T R A I
N
N O N _ E M P L O Y E
D
W O R K
E D U C _ T R A I
N
N O N _ E M P L O Y E
D
W O R K
E D U C _ T R A I
N
N O N _ E M P L O Y E
D
W O R K
E D U C _ T R A I
N
N O N _ E M P L O Y E
D

8 4

0
1 6

A T

6 1
3

3 6

:

:
:
4 5
2

5 3

7 7

3
2 0

B E

4 2
6

5 2

:

:
:
2 7
7

6 6

D E

4 8
5

4 8
8 0
0
1 9

2 6
5

6 8

2
4 1
3 3

D K

3 3
1 2

5 6

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:

:
:
1 3
1 1

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E S

E U -1 5

4 6
1

5 3
7 5
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:

:
:
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3
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:

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F I

4 6
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5 1
7 6
0
2 4
:

:
:
2 9
5

6 6

F R

G R

3 9
2

5 9
7 4
0
2 6
:

:
:
2 4
2

7 4

4 5
2

5 3
8 2
0
1 8
:

:
:
2 1
2

7 6

8 9

1
1 0

IE

4 4
1 3

4 3

:

:
:
2 5
1 6

5 9

IT

3 0
3

6 7
8 1
4
1 5

1 7
2

8 1

3 4
2 1
4 4

L U

:
:

:
:
:
:
:

:
:
:
:

:

7 7

6
1 8

N L

3 5
1 0

5 5

2 1
7

7 2

P T

6 2
0

3 8
9 1
1
9

3 9
0

6 1

S E

U K

:
:

:
:
:
:
:

:
:
:
:

:

:
:

:
:
:
:
:

:
:
:
:

:

S o u r c e :  E u r o p e a n  C o m m u n it y H o u s e h o ld  P a n e l (E C H P ),
E u r o s ta t

N o t e s

A g e  G r o u p :  1 7 -  6 5  in  2 0 0 0  a n d  u n e m p lo y e d  in  1 9 9 8

C la s s if ic a tio n  b a s e d  IL O  a c tiv it y  s ta tu s  a n d  s e lf -d e f in e d  m a in  a c tiv it y  s t a tu s
W O R K  in c lu d e s  p e r s o n s

- w o rk in g  w ith  a n  e m p lo y e r in  p a id  e m p lo y m e n t
- s e lf-e m p lo y e e s  a n d

- u n p a id  fa m ily  w o rk e rs

N O N  E M P L O Y E D  in c lu d e s  p e r s o n s

- w h o s e  IL O  a c tiv ity  s ta tu s  is  'u n e m p lo y e d ', 'in a c tiv e ' o r 'd is c o u ra g e d  w o rk e r'
- w h o  w o rk  le s s  th a n  1 5  h o u rs  in  p a id  e m p lo y m e n t a n d  d o  n o t  c o n s id e r th is  w o rk  a s  m a in  a c tiv ity

E D U C  T R A IN  in c lu d e s  p e r s o n s

- w o rk in g  w ith  a n  e m p lo y e r in  p a id  a p p r e n tic e s h ip  o r in  tra in in g  u n d e r s p e c ia l s c h e m e s

- in  e d u c a tio n  o r  tra in in g

66 

 
 
  
 
 
Transitions between non-employment and employment and within employment by pay level (gross monthly earnings) from year n to year n+1

Transitions by pay level

1999 (year n)

2000 (year n+1)

TOTAL

DECILE1

DECILE2

DECILE3

DECILE4+

NON_EMPLOYED

DECILE1
DECILE2
DECILE3
DECILE4_10
NON-EMPLOYED
DECILE1
DECILE2
DECILE3
DECILE4_10
NON-EMPLOYED
DECILE1
DECILE2
DECILE3
DECILE4_10
NON-EMPLOYED
DECILE1
DECILE2
DECILE3
DECILE4_10
NON-EMPLOYED
DECILE1
DECILE2
DECILE3
DECILE4_10
NON-EMPLOYED
DECILE1
DECILE2
DECILE3
DECILE4_10
NON-EMPLOYED

AT
7
7
7
51
28
63
13
8
2
13
5
60
17
12
6
1
11
61
19
8
0
1
1
93
5
6
3
2
6
83

BE
6
7
7
46
35
59
9
4
4
24
9
53
15
18
5
2
17
49
24
8
0
1
3
92
3
5
3
2
4
87

DE
6
7
7
51
29
55
12
5
4
24
11
55
11
13
9
2
11
55
23
9
0
1
2
92
4
6
4
3
5
82

DK
6
7
8
59
19
46
25
3
4
21
3
45
23
12
17
4
6
49
31
10
1
1
2
92
4
9
6
5
10
71

ES
6
5
5
39
45
34
12
8
7
39
15
36
15
19
15
2
10
25
50
14
0
1
5
88
5
5
4
2
5
84

EU-15
6
7
7
47
33
53
14
5
5
23
11
48
16
14
11
2
12
45
32
8
0
1
3
91
4
5
4
3
5
84

FI
7
7
7
51
28
44
12
6
6
31
12
36
15
18
20
3
16
47
28
6
0
1
4
90
4
7
7
3
7
76

FR
6
7
7
46
35
54
19
4
4
19
10
44
20
14
12
2
11
42
39
6
0
1
3
91
5
5
4
2
5
83

GR
6
6
6
41
41
60
13
4
6
16
12
45
20
11
13
1
16
45
32
6
0
1
3
92
4
3
3
2
3
89

IE
6
7
7
48
32
38
20
7
8
26
10
32
19
16
24
3
9
32
43
12
0
1
3
90
5
5
7
4
7
77

IT
6
5
6
39
44
59
11
4
4
21
11
44
16
19
11
3
13
38
37
8
1
2
5
89
3
3
2
1
3
91

LU
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:

NL
6
7
7
54
25
52
18
3
6
20
7
52
21
11
10
1
6
57
31
5
0
1
2
95
3
6
6
3
7
79

PT
7
7
7
52
27
48
12
7
13
21
18
46
15
16
4
1
24
42
30
3
1
1
4
89
5
5
3
2
9
81

SE
:
:
:
:
:
:
:
:
:
:

:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:

UK
6
7
8
55
24
56
13
6
5
20
10
54
15
10
11
3
16
47
27
7
1
1
3
92
4
4
3
3
6
84

Source: European Community Household Panel (ECHP),
Eurostat

Notes

Age Group: 15- 65

Classification based on ILO activity status and gross monthly earnings

NON_EMPLOYED = ILO activity status is 'unemployed', 'inactive' or 'discouraged worker'

: means data not available or sample size below 20

67 

 
 
  
 
 
 
 
SOURCES AND DEFINITIONS 

Data used in this report mainly originates from Eurostat, the Statistical Office of the European 
Communities. Some data is also provided in the National Action Plans on Employment. The 

main Eurostat data sources are: 

- the European Community Labour Force Survey (LFS), 
- the Eurostat Quarterly Labour Force Data series (QLFD), 
- the European harmonised series on unemployment, and 
- the European Community Household Panel (ECHP). 

The European Community Labour Force Survey (LFS) is the EU's harmonised survey on 

labour market developments. Some Member States provide quarterly results from a 

continuous labour force survey, others conduct a single annual survey in the spring. 

The Eurostat Quarterly Labour Force Data series (QLFD) is a harmonised series of quarterly 

employment statistics based on LFS and on national sources where applicable. The QLFD 
consist of two sets of quarterly series: 1) population, employment and unemployment by sex 
and age, mainly based on the Community LFS results, and 2) employment by economic 
activity and employment status (mainly based on the ESA 1995 national accounts 

employment data), further broken down by sex and by some job characteristics. 

The European Community Household Panel (ECHP) is an annual longitudinal survey of a 

representative panel of households launched in 1994, covering living conditions, employment 
status, health, education and income. Data were available for the time period 1994-2000. 
at the time of publication of this report. The survey is based on a harmonised 
Eurostat questionnaire, adapted by national institutes. 

68 

 
 
  
 
Key indicators 

Unemployment rate 
Definition: Total unemployed persons as a share of total active population (by gender) 
Source: Eurostat unemployment harmonised series 
Employment rate 
Definition: Total employment rate (age group 15-64), breakdown by gender and breakdown for older workers (age group 55-64). Persons in employment as a proportion of 
total population in the same age group. 
Source: Quarterly Labour Force Data (QLFD), Eurostat26 
Transitions by pay level 
Definition: Transitions between non-employment and employment and within employment by pay level (gross monthly earnings) from year n to year n+127. 
Source: European Community Household Panel (ECHP), Eurostat 
Growth in labour productivity 
Definition: Growth in GDP per capita of employed population and per hour worked. 
Source: ESA95, DG ECFIN 
Transitions by employment status 
Definition: Transitions between employment, unemployment and inactivity from year n to year n+1. 
Source: ECHP, Eurostat 
Long-term unemployment rate 
Definition: Total long-term unemployed population (12 months or more) as a proportion of total active population (by gender) 
Source: QLFD, Eurostat 
Preventative services 
Definition: Share of young/adult unemployed becoming unemployed in month X, still unemployed in month X+6/12, and not having benefited from intensive counselling and 
job-search assistance. (LMP category 1) [target value 0%=full compliance] (by gender) 
Source: National data 
New start (a) 
Definition: Share of young/adult unemployed becoming unemployed in month X, still unemployed in month X+6/12, and not having been offered a new start in the form of 
training, retraining, work experience, a job or other employability measure. (LMP categories 2-7) [target value 0%=full compliance] (by gender) 
Source: National data 
New start (b) 
Definition: Share of young/adult unemployed becoming unemployed in month X, still unemployed in month X+6/12, and not having been offered a new start in the form of 
training, retraining, work experience, a job or other employability measure. (LMP categories 1-7) [target value 0%=full compliance] (by gender) 
Source: National data 

26 
27 

QLFD are comparable estimates based on the Labour Force Survey and ESA-95 
Pay levels shown are deciles 1, 2, 3 and 4-10. Non-employment refers to ILO activity status 'unemployed', 'inactive' and 'discouraged worker'. 

69 

 
 
  
 
                                                 
Activation of long-term unemployed 
Definition: Number of long-term registered unemployed participants in an active measure (training, retraining, work experience or other employability measure) in relation to 
the sum of the long-term unemployed participants plus registered long-term unemployed (yearly averages). Broken down by types of measures and gender. (LMP categories 
2-7) 
Source: National data (in the medium-term the LMP database) 
Follow-up of participants in active measures 
Definition: 
1. Rate of inflow of LMP participants into employment (3 or 6 months after participation in a measure) 
2. Rate of return of LMP participants into unemployment (3 or 6 months after participation in a measure) 
Source: National data 
Enterprise births 
Definition: Gross birth rate of new enterprises as a percentage of total stock of active enterprises 
Source: Eurostat Structural Business Statistics (SBS) 
Employment growth 
Definition: Annual change in total number of employed persons, overall and by main sector (by gender) 
Source: QLFD, Eurostat 
Survival rate of newly born enterprises 
Definition: Newly born enterprises of year n that are still active in year n+3 
Source: Eurostat Structural Business Statistics (SBS) 
Diversity of contractual and working arrangements 
Definition: Total employees in part-time and/or fixed-term contracts plus total self-employed as % of persons in employment. Employees in non-standard employment (part-
time and/or fixed-term) as % of total employees. (Breakdown by part-time, fixed-term, part-time and fixed-term, by reason, by gender.) Total self-employed as % of total 
persons in employment. (Breakdown by part-time, by gender.) 
Source: LFS, Eurostat 
Transitions by type of contract 
Definition: Transitions between non-employment and employment and within employment by type of contract from year n to year n+1.28 
Source: ECHP, Eurostat 
Trends in accidents at work 
Definition: The evolution of the incidence rate, defined as the number of accidents at work per 100 000 persons in employment. 
Source: European Statistics on Accidents in Work (ESAW), Eurostat 
Trends in occupational diseases 
Definition: Trends in occupational diseases 
Source: European Occupational Diseases Statistics (EODS), Eurostat 
Transparency of job vacancies 
Definition: Share of job vacancies advertised through Member States' public employment services that are accessible on a common platform by jobseekers throughout the EU 
Source: National sources 

28 

Type of contract refers to permanent, fixed-term, education and training (e.g. paid apprenticeship), and self-employed. 

70 

 
 
  
 
                                                 
Educational attainment of 22 year olds 
Definition: Percentage of 22 year olds having achieved at least upper secondary education (ISCED level 3). The age group 20-24 is used as proxy. (by gender) 
Source: LFS, Eurostat 
Participation in education and training 
Definition: Participation in education and training (25-64), overall, and by age group, working status and educational attainment. (by gender) 
Source: LFS, Eurostat 
Investment in human resources 
Definition: Total public expenditure on education as a percentage of GDP29. 
Source: Joint UNESCO/OECD/Eurostat questionnaire 
Participation in CVT 
Definition: Share of employees participating in continuous vocational training (CVT) (by gender) 
Source: CVTS, Eurostat 
Activity rate 
Definition: Share of employed and unemployed in total population of working age 15-64. (by gender) 
Source: QLFD, Eurostat 
Average exit age from the labour force 
Definition: The average age of withdrawal from the labour market, based on a probability model considering the relative changes of activity rates from one year to another at 
a specific age. (by gender) 
Source: LFS, Eurostat and DG EMPL 
Employment gender gap 
Definition: The difference in employment rates between men and women in percentage points. 
Source: QLFD, Eurostat 
Unemployment gender gap 
Definition: The difference in unemployment rates between women and men in percentage points. 
Source: Unemployment harmonised series, Eurostat 
Gender pay gap 
Definition: Difference between men’s and women’s average gross hourly earnings as percentage of men's average gross hourly earnings (for paid employees at work 15+ 
hours). Breakdown by public and private sectors. 
Source: ECHP, Eurostat 
Employment impact of parenthood 
Definition: The difference in percentage points in employment rates without the presence of any children and with presence of a child aged 0-6, by gender (age group 20-50). 
Source: LFS, Eurostat 
Childcare 
Definition: Children cared for (other than by the family) as a proportion of all children of the same age group. Breakdown by: before entry into non-compulsory pre-school 
system (0-3 years), in the non-compulsory or equivalent pre-school system (3-6 years), and compulsory primary education (6-12 years)30. 
Source: National data (until EU-SILC data is available) 

29 
30 

The demographic structure should be taken into account in the analysis. 
The age of the child may differ between countries in terms of start of pre-school and primary education. 

71 

 
 
  
 
                                                 
Early school leavers 
Definition: Percentage of 18-24 year olds having achieved lower secondary education (ISCED level 2) or less and not attending further education or training. (by gender) 
Source: LFS, Eurostat 
Unemployment rate gaps for people at a disadvantage 
Definition:  Difference  in  unemployment  rates  for  disadvantaged  groups  (according  to  national  definitions)  and  the  overall  unemployment  rate,  in  percentage  points.  (by 
gender) 
Source: National data 
Unemployment rate gap between non EU and EU nationals. 
Definition: Unemployment rate gap between non EU and EU nationals, in percentage points. (by gender) 
Source: LFS, Eurostat 
Working poor 
Definition: Number of working poor as % of working population, calculated separately for wage and salary employees and self-employed. (by gender) 
Working poor (in-work poverty) is defined as the share of individuals who are classified as "at work" (either in wage and salary employment or self-employed) according to 
the definition of most frequent activity status (the status that individuals declare to have occupied for more than half the total number of months for which information on any 
status in the calendar of activities is available) whose household equivalised disposable income is below 60% of national median equivalised income. 
Source: ECHP, Eurostat 
Unemployment trap 
Definition: The marginal effective tax rate on labour income taking account the combined effect of increased taxes and benefits withdrawal as one takes up a job. Calculated 
as  the  ratio  of  change  in  gross  income  minus  (net  in  work  income  minus  net  out  of  work  income)  divided  by  change  in  gross  income  for  a  single  person  moving  from 
unemployment to a job with a wage level of 67% of the APW, measured at the first month of unemployment. 
source: OECD-Commission 
Taxation on low-wage earners 
Definition: Tax wedge on labour cost: ratio of income tax plus employee and employer social contributions including payroll taxes less cash benefits divided by the labour 
costs for a single earner earning 67% of the APW. 
Source: OECD-Commission 
Regional disparities – coefficients of variation 
Definition: Standard deviation of employment (unemployment) divided by the weighted national average (age group 15-64 years). (NUTS II) 
Source: LFS 

Context indicators 

GDP growth 
Definition: Annual average of GDP growth. 
Source: ESA95, DG ECFIN 
Employment rate by age groups 
Persons in employment in age bracket 15-24, 25-54 and 20-64 years as a proportion of total population in the same age bracket. (by gender) 
Source: LFS, Eurostat 
Employment rate in full-time equivalent 
Definition:  Total  hours  worked  divided  by  the  average  annual  number  of  hours  worked  in  full-time  jobs,  calculated  as  a  proportion  of  total  population  in  the  15-64  age 
bracket. 
Source: LFS, Eurostat 

72 

 
 
  
 
Job satisfaction 
Definition: Satisfaction with type of work in present job expressed as the average on a 1 to 6 score 
Source: ECHP, Eurostat 
Real unit labour costs 
Definition: Growth in total compensation per employee adjusted for labour productivity and GDP deflator 
Source: ESA95, DG ECFIN 
Labour productivity 
Definition: Total annual output divided by number of occupied population and hours worked (GDP in PPS per person employed/per hour worked relative to EU-15) 
Source: ESA95, DG ECFIN 
Transitions into employment and training 
Definition: Transitions of unemployed people into employment and training from year n to year n+1. 
Source: LFS, Eurostat 
Inflow into long-term unemployment 
Definition: Share of young/adult unemployed becoming unemployed in month X, still unemployed in month X+6/12 without any break. 
Source: National sources 
Youth unemployment ratio 
Definition: Total unemployed young people (15-24 years) as a share of total population in the same age bracket (by gender) 
Source: Unemployment harmonised series, Eurostat. 
LMP expenditure 
Definition: Active/passive LMP expenditure as % of GDP 
Source: Eurostat LMP database 
Employment in newly established enterprises 
Definition: Number of persons employed in newly born enterprises (in year n) and in surviving enterprises (set ups in years n-3, n-2 and n-1) in relation to the number of 
persons employed in all active enterprises (in year n). 
Source: SBS, Eurostat 
Employment rate in services 
Definition: Number of employed persons working in the services sector (in main job) aged 15-64 as percentage of the population of the same age group. (by gender) 
Source: QLFD, Eurostat 
Working time 
Definition: 
1. Average weekly number of hours usually worked per week defined as the sum of hours worked by full-time employees divided by the number of full-time employees (by 
gender) 
2. Trends in average effective annual working time per employed person. (by gender) 
Source: LFS, Eurostat 
Overtime work 
Definition: Number of employees for whom the number of hours actually worked exceeds the number of hours usually worked due to overtime as a % of all employees. (by 
gender) 
Source: LFS, Eurostat 

73 

 
 
  
 
Vacancies per unemployed 
Definition: Trend within a Member State of the ratio between the total number of the stock of vacancies compared to the total number of unemployed (v/u ratio) 
Source: National data (Job Vacancy Survey as from 2004) 
Use of computers 
Definition: Share of the workforce, using computers at home and/or at the workplace for work purposes 
Source: Eurobarometer survey on ICT and employment (2002) 
Investments by enterprises in training of adults 
Definition: Investment by enterprises in continuous vocational training (CVT) in relation to labour costs. 
Source: CVTS, Eurostat 
Labour reserve 
Definition: Inactive persons wanting to work as a percentage of working age population 15-64, breakdown by main reason for inactivity. (by gender) 
Source: LFS, Eurostat 
Labour supply growth 
Definition: Annual change in labour supply (including employed and unemployed in working age 15-64). (by gender) 
Source: QLFD, Eurostat 
Employment gender gap in full-time equivalent 
Definition: The difference in employment rates measured in full-time equivalent between men and women in percentage points. 
Source: LFS, Eurostat 
Employment gender gap by age group and educational attainment 
Definition: The difference in employment rates between men and women in percentage points, by age group (15-24, 25-54, 55-64) and by education level (less than upper 
secondary, upper secondary and tertiary education, according to the ISCED classification). 
Source: LFS, Eurostat 
Gender pay gap (breakdowns and adjustment) 
Definition: 
1. Gender pay gap by age group and educational attainment (difference between men’s and women’s average gross hourly earnings as percentage of men's average gross 
hourly earnings for paid employees at work 15+ hours). 
2. Gender pay gap, adjusted for sector, occupation and age 
Source: ECHP, Eurostat 
Gender segregation 
Definition: 
1. Gender segregation in occupations, calculated as the average national share of employment for women and men applied to each occupation; differences are added up to 
produce a total amount of gender imbalance presented as a proportion of total employment (ISCO classification). 
2. Gender segregation in sectors, calculated as the average national share of employment for women and men applied to each sector; differences are added up to produce a 
total amount of gender imbalance presented as a proportion of total employment (NACE classification). 
Source: LFS, Eurostat 
Dependent elderly 
Definition: Dependent elderly men and women over 75 as a proportion of all men and women over 75. Breakdown by: living in specialised institutions, help at home (other 
than by the family), and looked after by the family. 
Source: National data 

74 

 
 
  
 
Labour market gaps for disadvantaged groups 
Definition:  Gaps  in  the  labour  market  (such  as  employment,  unemployment  and  inactivity  gaps),  for  disadvantaged  groups  (such  as  disabled  people,  ethnic  minorities, 
immigrants, low skilled people, lone parents, etc.) according to national definitions. 
Source: National data 
Implicit tax rate on employed labour 
Definition: Ratio of total taxes on employed labour (personal income taxes plus employees' and employers' social security contributions plus payroll taxes) divided by the 
total compensation of employees plus payroll taxes 
Source: Commission 

75 

 
 
  
 
ANNEX 2: PROGRESS AGAINST THE TARGETS 

THE LISBON AND STOCKHOLM EMPLOYMENT RATE TARGETS: 

Policies shall contribute towards achieving on average for the European Union: 

– 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 (55-64) in 2010. 

Any national targets should be consistent with the outcome expected at European Union level 
and should take account of particular national circumstances. 

Employment rates in Member States 
in 1997 and 2002

1997  2002 

Lisbon Target = 70 % by 2010

80 
70 
60 
50 
40 
30 
20 
10 
0 

B 

DK  D 

EL 

E 

F

IRL

I 

L

NL

A

P

FIN 

S 

UK  EU15

Source: QLFD, comparable annual estimates based on LFS and ESA95, Eurostat.

Female employment rates in Member States in 1997 
and 2002

1997

2002

Lisbon Target > 60 % by 2010

80

70

60

50

40

30

20

10

0

B

DK

D 

EL

E 

F

IRL

I 

L

NL

A

P

FIN

S

UK

EU15

l

n
o
i
t
a
u
p
o
p

e
g
a

i

g
n
k
r
o
w
e
a
m
e
f

l

f
o
%

Source: QLFD, comparable annual estimates based on LFS and ESA95, Eurostat.

76 

 
 
  
 
 
 
 
 
 
 
 
 
 
 Employment rates of older workers (55-64) in 
Member States in 1997 and 2002

1997

2002

Lisbon Target - 50 % by 2010

4
6
-
5
5

d
e
g
a

l

n
o
i
t
a
u
p
o
p

f
o
%

80

70

60

50

40

30

20

10

0

B

DK

D 

EL

E 

F

IRL

I 

L

NL

A

P

FIN

S

UK EU15

Source: QLFD, comparable annual estimates based on LFS and ESA95, Eurostat.

77 

 
 
  
 
 
 
 
 
 
 
National Employment Targets 

MEMBER 
STATES 

TOTAL 

WOMEN 

OLDER 
WORKERS 

OTHER TARGETS / REMARKS 

NATIONAL TARGETS 

EU Targets 

70% for 2010 

60% for 2010 

50% for 2010 

Austria 

Belgium 

67% for 2005 

57% for 2005 

65% by 2005 

Employment  growth  objective 
2007  of  200.000  new  jobs  ( 
employment rate : ca. 65%) 

Denmark 

Employment  growth  objective 
of  60.000  new  jobs  for  2010 
(result: employment rate  75 %) 

France 

65% by 2006 

60% by 2006 

40% by 2006 

(+ 2% vs. 2002) 

(+ 3% vs. 2002) 

(+ 5% vs. 
2002) 

No  other  targets  set  on  the  grounds  that  Lisbon 
and  Stockholm  targets  are  nearly  attained  (except 
for older workers) 

Regions  have  set  their  own  employment  rate 
targets. 

All Lisbon/Stockholm targets are already reached. 

Finland 

Germany 

Greece 

Employment  growth  objective 
of  100.000  new  jobs  for  2007, 
consistent with aim to reach by 
2010 employment rate of 75% 

No  other  targets  set  (close  to  Lisbon/Stockholm 
targets,  and  the  target  for  women  is  already 
exceeded). 

Employment  growth  objective 
of  300.000  new  jobs  for  2008, 
(resulting 
rate 
62%) 

employment 

50 % by 2008 

Employment  rate  for  young  people  to  reach  35% 
in  2008.  By  2008  the  unemployment  rate  should 
be reduced to 6% overall and 8 % for women. 

Italy 

58.5 % (2005) 

46% (2005) 

40 % (2005) 

The  2005  employment  rates  represent  only  a 
forecast. 

Ireland 

Luxem-
bourg 

Nether-
lands 

65 % (2010) 

Portugal 

67 % (2005) 

60 % (2010) 

50% (2010) 

No targets set. 

No targets set. 

Lisbon/Stockholm  targets  are  already  reached 
(except  for  older  workers).  Target  for  ethnic 
minorities  (54%  by  2005).  Youth  unemployment 
not to exceed twice the average rate (2010). 

Targets  corrrespond  to  government  commitment 
to keep employment rates at least at current levels. 

Spain 

No targets set. 

Sweden 

80 % (2004) (+ 2% vs. 2002) 

United 
Kingdom 

70  % 
parents (2010) 

for 

lone 

78 

Lisbon/Stockholm  targets  are  already  met.  Target 
for 2004 corresponds to age group 20-64. 

Lisbon/Stockholm targets are already met.  

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SPECIFIC GUIDELINE 1: ACTIVATION AND PREVENTION 

Member States will ensure that: 

– 

- 

every  unemployed  person  is  offered  a  new  start    before  reaching  6  months  of 
unemployment in the case of young people and 12 months of unemployment in the 
case  of  adults  in  the  form  of  training,  retraining,  work  practice,  a  job,  or  other 
employability  measure,  combined  where  appropriate  with  on-going  job  search 
assistance; 

by 2010, 25% of the long-term unemployed participate in an active measure in the 
form of training, retraining, work practice, or other employability measure, with the 
aim of achieving the average of the three most advanced Member States. 

Information  is  only  presented  for  the  Member  States  providing  the  indicators  in  their 
NAPs. 

Indicators on prevention according to the new definition31 

Non-compliance: 
unemployed people 

Young 

    Non-compliance :   Adult unemployed people 

Men  Women  Total 

Men  Women 

Total 

AT 

82.2 

82.1 

82.2 

81.8 

84.3 

82.9 

IE 

59.6 

49.0 

LUX 

18.4 

26.4 

22.0 

45.5 

47.4 

46.4 

SW 

3.1 

2.1. 

2.6 

19.6 

15.0 

17.4 

UK 

0 

0 

31 

Share of young/adult unemployed becoming unemployed in month X, still unemployed in month 
X+6/12, and not having been offered a new start for example in the form of training, retraining, 
work experience, or a job. Figure broken down by gender. 

79 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Indicators on prevention according to the previous definition32 

Non-compliance 

    Non-compliance  

Young unemployed people 

   Adult unemployed people 

Men  Women  Total  Men 

Women  Total 

BE 

26.2 

24.6 

25.4 

45.1 

46.6 

45.9 

DK 

76.0 

75.0 

76.0 

57.0 

43.0 

50.0 

DE 

- 

17.5 

16.2 

- 

19.9 

18.4 

ES 

50.8 

47.2 

49.0 

65.6 

56.6 

61.1 

FR 

15.8 

12.3 

14.0 

16.7 

14.4 

15.5 

NL 

0 

78.0 

PT 

14.0 

12.4 

13.0 

15.4 

14.2 

14.7 

FIN 

9.1 

10.3 

9.6 

5.9 

6.4 

6.1 

32 

Share of young/adult unemployed becoming unemployed in month X, still unemployed in months 
X+6/12  and  having  not  started  an  individual  action  plan  (involving  a  range  of  actions  including 
one to one assessment of needs and job search assistance) Figure broken down by gender. 

80 

 
 
  
 
 
 
 
 
 
 
 
  
                                                 
Activation rates of the Long-term Unemployed (2002)33 

Activation LTU34 

W 

32 

20 

45 

24 

M 

32 

27 

BE 

DK 

DE     

Young 

43 

Adults 

24 

FR  

Young 

Adults 

IE 

LUX 

Young 

95 

Adults 

68 

91 

68 

NL 

AT 

FIN 

13 

17 

SW 

54 

45 

UK 

T 

32 

24 

43 

24 

36 

42 

32 

93 

68 

14 

25 

50 

47 

33  

34  

Long-term  unemployment  defined  as  a  young  person  in  registered  unemployment  for  6  months 
and an adult for 12 months. 
Number  of  long-term  registered  unemployed  participants  in  an  active  measure  (in  the  form  of 
trainings,  work  practice,  or  other  employability  measure)  in  relation  to  the  number  of  registered 
long-term unemployed (%) 

81 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
SPECIFIC GUIDELINE 3 : ADAPTABILITY 

Policies  will  aim  to  achieve  in  particular  a  substantial  reduction  in  the  incidence  of 
accidents at work and of occupational diseases. 

Accidents at Work National Targets: 

UK 

All targets to be achieved by 2009/2010 (baseline 1999/2000). 

•  Reduction of the incidence rate of fatal injuries by 10%. 
•  Reduction of the rate of incidence of work-related ill health by 20%. 
•  Reduction of the number of days lost because of work-related injuries and 

ill health by 30%.  

DK 

Targets for 2005 (baseline 2000). 

•  Reduction of number of serious accidents at work by 15%.  
•  Reduction of highly repetitive work by 10%. 
•  Reduction of lifting/pulling/pushing activities by 15%. 
•  Reduction of the number of persons with psyco-social problems by 5%. 

FR 

Targets for 2006. 

•  Reduction of work-related accidents by 15% overall. 
•  Reduction of work-related accidents by 20% in high-risk sectors. 
•  Reduction of commuting accidents by 20%. 
•  Reduction of the number of persons exposed to noise by 20%. 

EL 

Target for 2008. 

•  Reduction of work-related accidents by 20% overall. 
•  Reduction of work-related accidents by 25% in high-risk sectors. 

PT 

No target year. 

•  Reduction of incidence rate of accidents at work by 40%. 

The  remaining  Member  States  did  not  present  a  target  in  the  National  Action  Plan. 
Comparable data is not available at EU level. 

By  2005,  jobseekers  throughout  the  EU  should  be  able  to  consult  all  job  vacancies 
advertised through Member States' employment services. 

All Member States commit within the National Action Plans to this target. 

82 

 
 
  
 
SPECIFIC GUIDELINE 4: HUMAN CAPITAL 

In  accordance  with  national  priorities,  policies  will  aim  in  particular  to  achieve  the 
following outcomes by 2010: 

– 

– 

at least 85% of 22 year olds in the European Union should have completed upper 
secondary education; 

the European Union average level of participation in lifelong learning should be at 
least 12,5% of the adult working age population (25-64 age group). 

Percentage of 22 year olds having achieved at least upper secondary education. The 
age group 20-24 is used as proxy. (2002) 

EU Target 2010

100

90

80

70

60

50

40

30

20

10

0

GR FR PT IT ES DE BE AT IE LU EU-
15

NL DK SE FI  UK

Percentage  of  the  working  age  population  participating  in  education  and  training 
(2002) 

EU Target  2010: 12.5% 

25

20

15

10

5

0

GR FR PT

IT

ES DE BE AT

IE

LU EU-
15

NL DK SE FI  UK

83 

 
 
  
 
 
 
 
SPECIFIC  GUIDELINE  5:  ACTIVE  AGEING  BARCELONA  TARGETS  FOR 
THE AVERAGE EXIT AGE 

Policies will aim to achieve by 2010 an increase by 5 years, at European Union level, of 
the  effective  average  exit  age  from  the  labour  market (estimated  at  59,9  in  200135).    In 
this  respect,  the  social  partners  have  an  important  role  to  play.    Any  national  targets 
should be consistent with the outcome expected at the European Union level and should 
take account of particular national circumstances. 

Average Exit Age from the labour market: 

BE 
DK 
DE 
GR 
ES 
FR 
IE 
IT 
LU 
NL 
AT 
PT 
FI 
SE 
UK 
EU 15 

2001  
56.8 
61.6 
60.6 
59.4 
60.4 
58.1 
62.8 
59.8 
56.8 
60.9 
59.2 
61.8 
61.4 
61.7 
62 
60.4 

200236   Difference: total 
58.5 
1.7 
60.9 
-0.7 
60.7 
0.1 
62.6 
3.2 
61.5 
1.1 
58.8 
0.7 
62.4 
-0.4 
59.9 
0.1 
59.3 
2.5 
62.2 
1.3 
59.3 
0.1 
62.9 
1.1 
60.5 
-0.9 
63.2 
1.5 
62.3 
0.3 
60.8 
0.4 

National Targets on Average exit age: 

France: to increase the average exit age by 1.5 years and raise the employment rate of 
older workers by 5 percentage points by 2008. 

Finland: increase the exit age by 2-3 years by 2010. 

Portugal: 2006 target to maintain the current average exit age of 62. 

35  
36 

Subsequently revised upwards to 60.5 years 
Provisional figures 

84 

 
 
  
 
 
                                                 
SPECIFIC GUIDELINE 6:  GENDER EQUALITY 

Member  States  will,  through  an  integrated  approach  combining  gender  mainstreaming 
and specific policy actions, encourage female labour market participation and achieve a 
substantial reduction in gender gaps in employment rates37, unemployment rates, and pay 
by 2010. 

MEMBER 
STATES 

UNEMPLOYMENT GENDER GAP 

CURRENT SITUATION AND NATIONAL TARGETS 

% (year 2002) 

Gender gap (women – men) 

NATIONAL TARGETS 

EU Target 

A substantial reduction in the gender gap in unemployment rates by 2010 

Austria 

Belgium 

Denmark 

France 

Finland 

Germany 

Greece 

Italy 

Ireland 

Luxembourg 

Netherlands 

Portugal 

Spain 

Sweden 

United Kingdom 

EU-15 

0.4 

1.6 

0.2 

2.1 

0 

-0.4 

8.4 

5.2 

-0.6 

1.8 

0.5 

1.9 

8.4 

-0.8 

-1.1 

1.8 

Decrease long-term unemployment of women with 
5% 

Reduce unemployment of women to below 10% by 
2006 and to 8% by 2008 

Reduce unemployment gender gap with one third 
by 2005/2006. 

37 

See chart 2 

85 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Unemployment gender gap 1998-2002

1998

2002

5
1
-
U
E

n
e
d
e
w
S

i

m
o
d
g
n
K
d
e
t
i
n
U

%

12
10
8
6
4
2
0
-2
-4

a
i
r
t
s
u
A

i

m
u
g
e
B

l

e
c
n
a
r
F

k
r
a
m
n
e
D

d
n
a
n
F

i

l

y
l
a
t
I

d
n
a
e
r
I

l

e
c
e
e
r
G

y
n
a
m
r
e
G

i

n
a
p
S

l

a
g
u
t
r
o
P

s
d
n
a
l
r
e
h
t
e
N

Source: Unemployment harmonised series, Eurostat

86 

 
 
  
 
 
 
 
MEMBER 
STATES 

GENDER PAY GAP38 

CURRENT SITUATION AND NATIONAL TARGETS 

% (year 2000) 

TOTAL 

PRIVATE SECTOR 

PUBLIC SECTOR 

NATIONAL TARGETS 

EU Target 

A substantial reduction in the gender pay gap in each Member State by 2010 

Reduce the gender pay gap by one 
third between 2003 and 2010 

Austria 

Belgium 

Denmark 

France 

Finland 

Germany 

Greece 

Italy 

Ireland 

Luxembourg 

Netherlands 

Portugal 

Spain 

Sweden 

United Kingdom 

EU-15 

20 

12 

15 

13 

17 

21 

15 

6 

19 

- 

21 

8 

15 

18 

21 

16 

24 

15 

16 

- 

15 

24 

22 

15 

23 

- 

26 

28 

23 

16 

26 

22 

14 

- 

13 

- 

25 

20 

9 

0 

15 

- 

19 

-17 

3 

18 

18 

11 

38  

Difference  between  men’s  and  women’s  average  gross  hourly  earnings  as  percentage  of  men's 
average gross hourly earnings (for paid employees at work 15+ hours).  

87 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Gender pay gap 1997-2000

1997

2000

5
1
-
U
E

n
e
d
e
w
S

i

m
o
d
g
n
K
d
e
t
i
n
U

%

25

20

15

10

5

0

a
i
r
t
s
u
A

i

m
u
g
e
B

l

e
c
n
a
r
F

k
r
a
m
n
e
D

d
n
a
n
F

l

i

y
n
a
m
r
e
G

e
c
e
e
r
G

y
l
a
t
I

d
n
a
e
r
I

l

n
ai
p
S

l

a
g
u
t
r
o
P

s
d
n
a
l
r
e
h
t
e
N

Source: European Community Household Panel (ECHP)

88 

 
 
  
 
 
 
 
NATIONAL TARGETS IN THE FIELD OF CHILDCARE 

Member  States  should  remove  disincentives  to  female  labour  force  participation  and  strive,  taking  into  account  the  demand  for 
childcare facilities and in line with national patterns of childcare provision, to provide childcare by 2010 to at least 90% of children 
between 3 years old and the mandatory school age and at least 33% of children under 3 years of age. 

Country: 

Latest performance 0-3 years 

Latest performance 3 years - compulsory school age 

National target 

EU TARGET 

33% by 2010 

Austria 

0-3 years 

90% by 2010 

3-6 years 

- 

Institutional childcare centre (KTH) 

Institutional childcare centre (KTH) 

2002: 8.8% ; 2001: 7.81% 

2002: 81.6% ;2001: 78.43% 

(61.6% for 3 year olds) 

Belgium 

0-3 years 

3-6 years 

Belgium 

Belgium, Flanders and Wallonie 

2002: 100% 

2001: 100% 

2002: 28.3% ; 2001: 28.0% 

Flanders 

2002: 32.0%; 2001: 31.4% 

Wallonie 

2002: 23.8%;  2001: 23.8% 

89 

Flanders:  10,000  new  childcare  places  during 
2000-2004;  1,400  new  after-school  care  places 
will be created 2003-2004 

 
 
  
 
 
 
 
 
 
Germany 

0-3 years 

1998: 

3-6.5 years 

1998: 

Germany 7.0% -old Länder 2.8%;  new Länder 
36.3% 

Germany 89.5% 

-old Länder 86.8%; -new Länder 111.8% 

Denmark 

6 months-2 years 

3-5 years 

Day-care  provision,  clubs  for  school  children, 
etc. 

Day-care provision, clubs for school children, etc. 

2002: 68% ;2001: 67%; 2000: 66% 

2002: 94%; 2001: 93%; 2000: 93% 

Spain 

Children in schooling 

Children in schooling 

0-2 years: 11% 

3 years: 92.9% 

4-5 years: 100% 

Finland 

0-2 years (2001) 

3-6 years (2001) 

Total day-care arrangements: 26.1% 

Total day-care arrangements: 61.3% 

- 

- 

-day-care centre 11.6% 

-family day-care 11.7% 

-other charged arrangement 1.3% 

-other arrangement free of charge 1.5% 

-day-care  centre  43.5%;  family  day-care  15.4%;  -other  charged 
arrangement 1.1% -other arrangement free of charge 1.3% 

Afternoon care: 10.6% 

-charged arrangement 4.8%; arrangement free of charge 0.6% 

-no arrangement for care (?) 5.2% 

90 

 
 
  
 
 
 
France 

2001: 

See first column. 

Increase childcare coverage by 2010 in line with 
the targets of the Guideline. 

Crèches collectives: 6.7% (0-3 years) 

Crèches parentales: 1.4% (0-3 years) 

Crèches familiales: 1.3% (0-6 years) 

Jardins d’enfants: 0.3% (2-6 years) 

Halte garderies: 1.6% (0-6 years) 

Assistantes maternelles: 20.6%   

Greece 

Ireland 

- 

- 

- 

Pre-school children 

-73,000  families  (42.5%  of  all  families)  rely  on  non-parental 
childcare 

-23,000 families rely on unpaid relatives 

Increase childcare coverage by 2010 in line with 
the targets of the Guideline. 

2003: Increase childcare places by 30%; 450 new 
facilities 

2006: Increase childcare places by 50%; 800 new 
facilities 

Italy 

0-2 years 

3-5 years 

- 

Public childcare: 6.5% 

Infant school: 98% 

Other type of nursery services: 0.6% 

Luxembourg 

0-4 years 

4-12 years 

Crèches 9.98% 

Out-of-school care 5.87% 

Netherlands 

0-2 years (2001) 

2-4 years (2001) 

Day nursery or childminder 22.5% 

Playgroup, day nursery and childminder 82.5% 

-playgroup 60% 

91 

 
 
  
 
 
 
 
 
 
-day nursery or childminder 22.5% 

4-12 years (2001) 

After school care and/or holiday care 7% 

Portugal 

0-3 years 

- 

Care before pre-school 

2002: 16.3% 

2001: 16.0% 2000: 14.6% 

2006: 20% coverage of childcare services for 0-3 
year olds 

2010:  90%  coverage  of  pre-school  education  for 
3-5 year olds 

Sweden 

1-3 years 

4-5 years 

- 

Total pre-school and nursery: 

Total pre-school and nursery: 

Public: 61.2% 

Private:11.8% 

Pre-school: 

Public: 54% 

Private:11% 

Nursery: 

Public: 7.2% 

Private: 0.8% 

Public: 76.7% ; Private:14.8% 

Pre-school: 

Public: 69% ; Private:14% 

Nursery: 

Public: 7.7% ;Private: 0.8% 

6-9 years 

Total out-of-school care and nursery: Public: 68.5%; Private 6.1% 

Out-of-school care: 

Public: 67% ;Private: 6% 

Nursery: Public: 1.5%; Private: 0.1% 

92 

 
 
  
 
 
UK 

0-2 years 

3-4 years 

Formal and informal care 27.6% 

Formal and informal care 58.1% 

2004:  Have  a  total  of  1.6  mio  childcare  places; 
Early education for all 3-year olds 

2006: Create an additional 250.000 places  

Only formal 29.4% 

Only informal 8.9% ;Only family care 3.6% 

5-14 years 

Formal and informal care 23%; Only formal 10.8% 

Only informal 46.9%; Only family care 19.3% 

93 

 
 
  
 
 
 
 
 
SPECIFIC GUIDELINE 7: DISADVANTAGED GROUPS 

In particular, policies will aim to achieve by 2010: 

– 

– 

– 

an EU average rate of no more than 10% early school leavers;  

a significant reduction in each Member State in the unemployment gaps for people at a 
disadvantage, according to any national targets and definitions; 

a significant reduction in each Member State in the unemployment gaps between non-
EU and EU nationals, according to any national targets. 

Rate of Early School Leavers – as measured by the percentage of 18-24 year olds having 
achieved lower secondary education or less not attending further education or training 
(2002) 

EU target 2010 10%

50

45

40

35

30

25

20

15

10

5

0

NL AT

FI 

SE BE DE FR IE DK GR LU EU-
15

IT

ES PT UK

94 

 
 
  
 
 
 
MEMBER 
STATES 

NATIONAL TARGETS 

Early school leaving 

Migrants  and  ethnic 
minorities 

disabled 

Other groups or targets 

EU Target  Max 10% by 2010 

Austria 

Belgium 

Denmark 

3.5%  of  state  employees 
should  be  immigrants  or 
descendants 
from 
outside 
countries 
and 
Western  Europe 
Northern America 

France 

A  reduction  of  the  early 
school leavers by 10.000 
in 5 years 

90%  of  the  target  group 
should 
of 
immigrants 
integration 
an 
sign 
contract by 2005 

Increase the job return of 
long-term 
unemployed 
by 2% each year 

Individual  guidance  of 
all  job  seekers  form  the 
first 
of 
month 
registration during 2003-
2005 

Increase  the  outflow  out 
of 
unemployment 
of 
RMI during 2003-2005 

of 
percentage 
The 
individuals  at  risk  of 
poverty 
social 
and 
exclusion  to  be  reduced, 
after  social  transfers,  to 
the EU average by 2008 

transfer 

All  travellers  attending 
primary  education  and 
the 
rate  of 
travellers to post primary 
schools  increase  to  95% 
by 2004 

Employment  of  people 
with  disabilities  in  the 
public sector to 3% 

The  elimination  of  long-
term  unemployment  as 
soon  as  circumstances 
permit  but  in  any  event 
no longer than 2007 

95 

Finland 

Germany 

Greece 

Italy 

Ireland 

Luxem-
bourg 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
individuals 

Attendance  of  13.000 
disabled 
in 
vocational  training  and 
socioprofessional 
integration  actions 
2004 

in 

Attendance  of  50.000 
individuals 
in 
programmes  connected 
to 
Social 
Employment  Market  in 
2004 

the 

Target  of  a  reduction  of 
30%  for  early  school 
leavers  by  2006  and  of 
50% by 2010 

Target  for  employment 
rate  of  ethnic  minorities 
54% by 2005 

of 

early 
Reduction 
school  leaving  for  those 
aged  18-24  to  35%  in 
2006 and 25% in 2010 

Nether-
lands 

Portugal 

Spain 

96 

 
 
  
 
 
 
 
 
 
 
 
 
 
SPECIFIC GUIDELINE 8: MAKING WORK PAY 

Policies will aim at achieving by 2010 a significant reduction in high marginal effective tax 
rates  and,  where  appropriate,  in  the  tax  burden  on  low  paid  workers,  reflecting  national 
circumstances. 

Marginal effective tax rate39:  

2000 

2001 

2002 

AT 

BE 

DE 

DK 

ES 

EU-15 

FI 

FR 

GR 

IE 

IT 

LU 

NL 

PT 

SE 

UK 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

74.8 

88.8 

87.9 

91.2 

81.3 

: 

80.6 

86.8 

79.4 

72.6 

59.6 

87.6 

85.2 

87.7 

87.3 

70.4 

72.0 

91.3 

88.4 

90.7 

81.7 

: 

83.4 

84.0 

80.8 

73.4 

59.9 

86.7 

84.8 

87.0 

87.1 

70.3 

Source: OECD-Commission 

39 

The marginal effective tax rate on labour income taking account the combined effect of increased taxes 
and benefits withdrawal as one takes up a job. Calculations take into account the combined effects of 
tax and benefits on the income of a person moving from unemployment to work.  
This indicator is one of the agreed Structural indicators (long list) 

97 

 
 
  
 
 
                                                 
Tax wedge on labour cost40:  

1998 

1999 

2000 

2001 

2002 

AT 

BE 

DE 

DK 

ES 

EU15 

FI 

FR 

GR 

IE 

IT 

LU 

NL 

PT 

SE 

UK 

41.5 

51.1 

47.5 

40.4 

35.1 

40.3 

44.0 

42.5 

35.1 

23.4 

44.4 

28.9 

39.2 

30.7 

49.3 

28.5 

41.6 

51.0 

47.0 

41.3 

32.6 

39.1 

42.6 

40.3 

34.3 

21.5 

44.1 

29.5 

40.2 

30.2 

48.7 

25.8 

40.1 

49.9 

46.5 

41.2 

32.8 

38.6 

42.4 

39.6 

34.3 

18.1 

43.3 

30.4 

40.6 

30.4 

47.9 

25.3 

39.7 

49.1 

45.5 

40.6 

33.4 

37.7 

41.0 

38.4 

34.3 

17.3 

42.8 

28.8 

36.8 

29.5 

46.8 

24.5 

39.9 

48.9 

45.9 

40.4 

33.9 

37.8 

40.4 

37.8 

34.3 

16.6 

42.7 

27.3 

37.2 

29.5 

45.9 

24.7 

40 

Ratio of income tax plus employee and employer social contributions including payroll taxes less cash 
benefits divided by the labour costs for a single earner earning 67% of the Average Price Wage. 

98 

 
 
  
 
  
                                                 
SPECIFIC GUIDELINE 10: REGIONAL DISPARITIES 

In  addition,  some  Member  States  have  set  a  target  fort  he  reduction  of  regional  disparities, 
although not specifically required under the Guidelines. 

EL 

FR 

UK 

•  An indicator of regional disparities (no definition provided) should develop from 

today´s 9.6% for Greece to 7% in 2008 (EU-15 at present 11.4%). 

•  The per capita GDP of regions should, by 2008, in no Greek region be less than 

65% of EU average. 

•  The unemployment rate in regions should not exceed by more than 3 percentage 

points the national average. 
•  For 85 deprived city areas: 

(cid:131)  Reduction of number of jobseekers by one third by 2008.  
(cid:131)  Decrease of unemployment levels to those of the surrounding agglomerations. 

•  For the Départments d´outre mer (DOM): 

(cid:131)  Stronger development of commerce than in the mainland. 
(cid:131)  Reduction of disparities in unemployment. 

•  For  the  30  local  authority  districts  with  the  lowest  employment  rates:  bringing 

them closer to the overall UK employment rate. 

99