Communication from the Commission to the Council - Draft Joint Employment Report 2004/2005 {SEC(2005)67}
Date: 2005-01-27
Institutions: European Commission
Subjects: EU Member State, EU employment policy, employment statistics, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.01.2005 
COM(2005)13 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

Draft Joint Employment Report 2004/2005 

{SEC(2005)67} 

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EXECUTIVE SUMMARY 

This  draft  Joint  Employment  Report  (JER)  is  part  of  the  "implementation  package"  and 
accompanies  the  Commission's  2005  Spring  Report  in  view  of  the  mid-term  review  of  the 
Lisbon Strategy. It is in response to the invitation to the Council and the Commission by the 
2004  Spring  European  Council  to  present  a  concise  report  on  the  implementation  of  the 
European Employment Guidelines and Council Recommendations for its 2005 meeting.  

Past labour market reforms have strengthened the resilience of employment to the economic 
slowdown. Catching up factors have also played a role in raising labour productivity in some 
relatively  poorer  Member  States.  Otherwise,  there  has  been  recently  little  progress  towards 
the three objectives of the European Employment Strategy (EES), namely: full employment; 
improving quality and productivity at work; strengthening social cohesion and inclusion. 

•  The  overall  employment  rate  has  stagnated  at  63%,  despite  continuing increases 
for women and recently also for older workers. The Lisbon target of 70% by 2010 
looks  increasingly  challenging.  The  employment  rate  of  older  workers,  which 
climbed  to  just  over  40%  in  2003  has  the  largest  distance  to  bridge  towards  the 
50% target for 2010, whereas progress towards the female employment rate target 
of 60% has slowed. 

•  Labour  productivity  growth  has  fallen  dramatically.  It  is  urgent  to  reverse  this 
trend.  Progress  in  improving  quality  in  work  is  mixed.  The  synergies  between 
quality in work and productivity are not fully exploited.  

•  The  economic  slowdown  has  raised  the  profile  of  social  inclusion  problems  and 
enlargement  has  increased  the  complexity  and  diversity  of  situations  across  the 
EU,  especially  in  national  and  regional  employment  and  unemployment 
performances. 

The ability of the EU to boost employment and productivity growth simultaneously will rely 
on further structural reforms not just in the labour market but also in the services, product and 
financial markets. It is currently constrained by low domestic demand and the macroeconomic 
adjustments relating to global imbalances. 

As regards the labour market, accelerating labour productivity and raising, in particular, the 
employment  rate  of  older  workers  are  crucial.  This  report  confirms  the  conclusions  of  the 
Employment Taskforce report that action must focus on four priorities: increasing adaptability 
of workers and enterprises; attracting more people to enter and remain in the labour market; 
investing  more  and  more  effectively  in  human  capital  and  lifelong  learning;  and  ensuring 
effective implementation of reforms through better governance.  

An  assessment  of  policy  responses  by  Member  States  which  were  addressed  specific 
recommendations is made. It does not reflect an assessment of the overall policies or systems 
in the relevant areas. 

In  addressing  the  Employment  Guidelines  and  Recommendations,  the  strongest  policy 
responses by the Member States are: 

•  The financial incentives element of making work pay 

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•  Reforming public employment services 

•  Designing and reviewing lifelong learning strategies 

•  Facilitating business creation and development 

There are also significant responses to:  

•  Ensuring employment-friendly wages and other labour costs 

•  Promoting flexibility combined with security in the labour market, although risks 

of segmentation are still present 

•  Promoting childcare and other care services to increase female participation 

•  Strengthening active labour market policies, although the efforts seem insufficient 

with rising unemployment, especially of young people 

•  Addressing the situation of disadvantaged people in the labour market 

Much weaker policy responses are: 

•  Developing active ageing strategies 

•  Improving  the  level,  effectiveness  and  sharing  of  investment  in  human  capital, 
including reducing early school-leaving and increasing participation in training of 
the low-skilled 

•  Addressing the gender pay gap 

•  Tackling undeclared work 

•  Anticipating and managing economic restructuring 

The gap must be bridged between the employment priorities at EU level and implementation 
in the Member States. It is vital that governments share ownership of EU objectives and foster 
public conviction in the need to translate EU commitments into action at national and local 
level.  Partnerships  for  reforms,  national  targets  and  appropriate  financial  backing  are 
essential. 

The National Action Plans for Employment (NAPs) must achieve greater political legitimacy 
and be an integral part of the decision-making process. The response of many new Member 
States  is  clearly  encouraging.  The  transparency  and  visibility  of  the  NAPs  need  to  be 
enhanced further to serve mutual learning, both within Member States and across the EU. 

The  EES  plays  the  leading  role  in  the  implementation  of  the  employment  objectives  of  the 
Lisbon  Strategy.  This  needs  to  be  made  more  visible.  The  mid-term  review  provides  an 
opportunity to raise its profile at all levels, to simplify the coordination process and to achieve 
greater focus on implementation. 

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1. 

THE ROLE OF THE 2004/2005 JOINT EMPLOYMENT REPORT 

Following the 2003/2004 Joint Employment Report (JER) and the report of the Employment 
Taskforcei, the 2004 Spring European Council called for real progress in the implementation 
of the European Employment Strategy (EES). The European Council announced its intention 
to  review  progress  and  requested  a  concise  report  for  its  meeting  in  2005.  The  High  Level 
Group  on  the  Lisbon  Strategy  underlined  the  need  to  focus  on  the  implementation  of  the 
Recommendations. 

The National Action Plans for Employment (NAPs) submitted in Autumn 2004, based on the 
Employment Guidelines and Recommendations, constitute the main input to this report. For 
the first time, the Member States which joined the European Union on 1st May 2004 presented 
a NAP. The Commission Staff Working Paper which accompanies this report provides a more 
detailed assessment of progress in employment performances and policy implementation.  

This report is an integral part of the Commission's "implementation package", also comprising 
the  Implementation  Reports  on  the  Broad  Economic  Policy  Guidelines  and  the  Internal 
Market Strategy, which will contribute to the mid-term review of the Lisbon Strategy in 2005. 

2. 

ECONOMIC CONTEXT AND PROGRESS TOWARDS THE EU EMPLOYMENT OBJECTIVES 

Within the framework of the EES, Member States are committed to foster three overarching 
and interrelated objectives in a balanced manner: full employment; quality and productivity at 
work; social cohesion and inclusion.  

Following a period of favourable economic growth over 1997-2001, the performances of the 
labour  market  were  affected  by  the  slowdown;  progress  towards  the  EU  employment 
objectives has slowed downii. An economic recovery is essential but will not suffice. Europe's 
underlying  economic  potential  depends  on  its  ability  to  boost  employment  and  productivity 
growth  simultaneously.  This  will  rely  on  further  structural  reforms  not  just  in  the  labour 
market but also in the services, product and financial markets.  

Improving  the  functioning  of  the  labour  market,  raising  quality  at  work,  addressing  social 
exclusion and tackling regional disparities are essential to attract and maintain more people in 
employment and to accelerate productivity. The EU must step up its efforts and fully exploit 
the synergies between the three EU employment objectives, as well as between the EES and 
action in the field of social inclusion. 

ACHIEVING FULL EMPLOYMENT  

To  meet  the  EU  employment  rate  target  of  70%  in  2010,  Europe  still  needs  to  create  more 
than  22  million  jobs.  The  EU  will  miss  the  intermediate  employment  rate  target  for  2005 
(67%) and, without much more positive trends, the 2010 target will not be achieved. 

As a result of the prolonged economic downturn, the increase in the overall employment rate 
has come to a standstill, with the rate in the EU25 stagnating at 63% in 2003 (55% for women 
and  40%  for  older  workers).  However,  past  labour  market  reforms  have  strengthened  the 
resilience of employment. In net terms, no jobs were lost in the recent downturn within EU15, 
while  more  than  3  million  jobs  disappeared  in  the  1992-1993  recession.  The  new  Member 
States achieved reasonably strong economic growth over the last years, but this continues to 

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be  driven  by  strong  productivity  increases,  while  employment  growth  was  very  modest  or 
negative.  

Pace of progress 
since 1997 

Rates  
in 2003 (%) 

Table 1. Overall employment rates 

Low 

Close to average 

High  

> 70 

65-70 

< 65 

DK 

SE, UK 

NL 

AT, CY, DE, PT 

FI, IE 

CZ, EE, LT, 
MT, PL, SI, SK 

BE, EL, FR, LU, 
LV 

ES, HU, IT 

The employment rate for women continued to improve in 2003 but progress has slowed. To 
reach the target of at least 60%, the average annual increases seen in the female employment 
rate since 1997 must be maintained each year up until 2010.  

Pace of progress 
since 1997 

Rates  
in 2003 

(%) 

Table 2. Female employment rates 

Low 

Close to average 

High  

> 60 

DK 

AT, FI, PT, SE, 
UK 

CY, NL 

55-60 

< 55 

CZ, EE, LT, SI 

DE, FR, LV 

IE 

MT, PL, SK 

BE, EL HU 

ES, IT, LU 

Despite visible progress, the target of an employment rate of 50% for older workers is far off. 
Without  a  spectacular  increase  in  this  rate,  the  overall  70%  employment  rate  target  will 
remain unattainable. 

Table 3. Employment rates of older workers (55-64) 

Pace of progress 
since 1997 

Rates  
in 2003  (%) 

Low 

Close to average 

High  

> 50 

40-50 

< 40 

CY, EE 

PT, SE 

DK, UK 

EL 

CZ, ES, LT  

FI, IE, LV, NL 

AT, DE, PL, SI, 
SK 

BE, IT, LU, MT 

FR, HU  

Economic recovery has gained momentum for the EU but employment growth was subdued 
in  2004,  and  prospects  for  2005  remain  modest.  The  return  to  higher  employment  growth  - 
like  economic  growth  -  will  crucially  depend  on  developments  in  internal  and  external 
demand, with the imbalances in the US economy acting as a possible brake. 

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IMPROVING QUALITY AND PRODUCTIVITY AT WORK  

Whereas  labour  productivity  growth  is  essential  for  the  EU's  competitiveness  and  for  its 
capacity  to  generate  sustainable  growth,  it  has  fallen  dramatically  in  the  EU15.  In  the  early 
1990s,  the  EU  outperformed  the  US  but  the  situation  has  reversed  since  the  mid-1990s. 
Whereas the US was able to combine strong employment and productivity growth, in the EU, 
the rise in employment is combined with a drop in productivity growth. The entry of workers 
in  sectors  with  lower  levels  of  productivity  may  have  played  a  role  but  the  slowdown  in 
productivity  suggests  broader  underlying  difficulties  of  the  EU  economies  to  foster  and 
absorb innovation. 

Table 4. GDP, employment and labour productivity growth (annual averages) 

1990-1996 

1997-2000 

2001-2003 

EU15 

US  

EU15 

1. GDP 

2. Employment 

1.5 

-0.4 

3. Labour Productivity (per worker) 

  1.9 

4. Hourly Labour Productivity 

 2.2 

3 

1.6 

1.7 

1.3 

3.2 

 1.9 

 1.3 

 1.9 

US 

4.1 

2.1 

2.0 

1.4 

EU15 

1.0 

0.4 

0.6 

1.1 

US 

2.5 

0.5 

2.9 

3.3 

Productivity levels and dynamics vary considerably across the EU, with a clear catching up in 
the new Member States. 

Table 5. Labour productivity growth and levels (per person employed) 

Average annual growth rate of 
real GDP per person 

employed (1997-2003) 

GDP per 
person employed at ppp 
in 2003 (EU25= 100) 

≥ 110 

75-110 

50-75 

≤ 50 

Low  

Median  

High  

IT 

AT, FI, BE, FR, 
LU, NL 

IE 

ES 

DE, DK, SE, UK 

CY, EL, MT 

PT 

CZ, HU, PL, SI, 
SK 

EE, LV, LT 

While  there  is  a  positive  link  between  productivity  and  quality  in  work,  recent  progress  in 
improving quality in work has been mixed. Transition patterns within the labour market and 
the  extent  of  undeclared  work  vary  a  lot,  with  evidence  of  segmentation  in  many  Member 
States.  There  are  big  differences  between  the  average  earnings  of  men  and  women;  the 
average gender pay gap has remained at 16% for several years. Low participation of adults in 
training is a concern and those people most in need (the low-skilled, older workers and SME 
workers) are the least likely to receive it. Though decreasing, the number of accidents at work 
remains high and progress is uneven.  

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STRENGTHENING SOCIAL COHESION AND INCLUSION 

With the economic downturn, unemployment has increased moderately. After a steady decline 
since  1997,  long-term  unemployment  has  also  increased  and  there  are  worrying  signs  of 
deteriorating job prospects for the young, the low-skilled and other vulnerable groups, such as 
disabled people, immigrants and minorities, who face compounded disadvantages, including 
risks of discrimination.  

These  trends  should  be  countered  with  a  renewed  emphasis  on  the  integration  of  people 
excluded  from  the  labour  market,  in  particular  through  policies  combining  active  labour 
market policies, safety nets and access to social services. 

While  a  job  is  the  best  safeguard  against  social  exclusion,  around  1/4  of  people  at  risk  of 
poverty in the EU-25 have a job. Promoting access to quality employment, including access to 
training, and an income that enables full participation in employment and society, is key for 
social inclusion. 

Enlargement  has  made  the  challenge  of  cohesion  more  acute.  Regional  employment  and 
unemployment disparities remain widespread, with very high rates of unemployment in many 
regions.  Regions  with  low  levels  of  employment  also  tend  to  be  the  ones  with  lower 
productivity levels.  

3. 

IMPLEMENTATION OF THE GUIDELINES AND RECOMMENDATIONS 

The  2004  Council  Recommendations  were  structured  around  the  four  priorities  for  action 
identified  by  the  Employment  Taskforce.  This  section  presents  a  summary  of  the  most 
important  recent  developments.  Annex  1  of  this  report  summarises  the  assessment  of  the 
policy response of each Member State to the Recommendations. The assessment relates to the 
implementation of specific recommendations under each category addressed to each Member 
State. It does not reflect an assessment of overall policy or systems in the relevant category. 

3.1 

INCREASING ADAPTABILITY OF WORKERS AND ENTERPRISES  

Promoting flexibility combined with security in the labour market  

Increasingly, Member States seek to promote a balance between flexibility and security, often 
through  discussion  with  social  partners.  Adapting  working  time  is  used  to  better  reflect 
company  and  individual  needs.  Modernising  work  organisation  is  highlighted  in  FI  and  SE. 
However, labour market segmentation is not significantly addressed across the EU and major 
differences exist between types of contracts, occupational status and age groups. In particular, 
a lot remains to be done to improve work organisation, facilitate mobility and labour market 
transitions, especially for young people.  

Ten Member States received a specific recommendation on the modernisation of labour law. 
Most of the new Member States are introducing more working time and contractual diversity. 
Raising the attractiveness of part-time work is increasingly seen as a priority, but still remains 
underused. The implementation of the labour code reform in PT opens the possibility to better 
control  fixed  term  contracts  and  self  employment.  The  high  share  of  fixed-term  contracts 
needs to be addressed through social dialogue in ES in the near future, by adjusting levels of 
protection in standard jobs to make them more attractive. IT still needs to implement major 

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parts of reforms aimed at preventing and tackling labour market segmentation. Policy action 
has only begun in FR. 

Three  Member  States  received  a  specific  recommendation  on  the  modernisation  of  work 
organisation  and  the  dissemination  of  innovation.  This  remains  a  considerable  challenge, 
particularly  for  SMEs.  The  involvement  of  the  social  partners  is  essential  for  genuine 
progress.  Reporting  on  action  taken  to  improve  working  conditions  is  generally  weak, 
although  the  setting  of  national  targets  for  health  and  safety  and  reductions  in  accidents  at 
workiii is welcome.  

Facilitating business development  

Member  States  displayed  overall  a  good  response  to  improve  their  business  environment, 
concentrating  on  reducing  administrative  and  regulatory  obstacles  for  setting  up  new  firms, 
with less attention being given to business expansion and sustainability. DK, NL and SE have 
worked together on measuring the administrative burden of regulations.  

Ten Member States received a specific recommendation. The development of one-stop shops, 
on-line services and business advisory support is progressing, but poor access to finance and 
low investment in innovation and R&D remain significant constraints. Therefore, despite the 
fact that most Member States have adopted measures to promote entrepreneurship, as well as 
self-employment,  their  performance  needs  to  be  improved.  Moreover,  the  priority  given  to 
reducing  administrative  burdens  has  to  be  fully  implemented,  in  particular  by  easing  the 
procedures for the hiring of staff. 

Ensuring employment-friendly labour costs 

In  2003/2004,  overall  wage  developments  were  broadly  in  line  with  productivity 
developments and price stability in the medium term, and efforts were sustained to reduce or 
maintain non-wage labour costs. 

Nine  Member  States  received  a  specific  recommendation  on  wage  developments  and  wage 
bargaining systems. Some positive steps are noticeable in countries which received a country 
specific  recommendation,  but  progress  should  be  monitored.  Despite  the  call  to  review  the 
wage-setting mechanisms, no major initiatives are reported in ES and IT, where responsibility 
is  shifted  to  social  partners.  In  DE,  the  flexibility  allowed  in  collective  agreements  is 
increasingly being used to address the issue.  

Fourteen  Member  States  received  a  specific  recommendation  to  reduce  non-wage  labour 
costs,  especially  for  low-wage  earners.  Most  have  taken  steps,  in  particular  as  regards 
employer  social  security  contributions.  Progress  nevertheless  remains  limited,  notably  in 
many of the new Member States. 

Anticipating and managing economic restructuring 

The  need  for  a  positive  management  of  restructuring,  especially  for  collective  lay-offs,  is 
highlighted in many NAPs, but much more needs to be done. Steps are taken to improve the 
capacity  of  public  authorities  to  anticipate  and  respond  in  a  coordinated  manner.  In  SI,  the 
establishment  of  "labour  funds"  is  designed  to  offer  services  for  workers  at  risk  of 
redundancy. 

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Five  Member  States  received  a  specific  recommendation.  BE,  FR  and  PT  have  called  upon 
the  social  partners,  with  varying  degrees  of  success,  to  implement  effective  mechanisms  at 
sectoral and local levels.  

Transforming undeclared work into regular employment 

Efforts to transform undeclared work into regular employment are patchy. FR demonstrates a 
particular effort to better document the nature of undeclared work. 

Eight  Member  States  received  a  specific  recommendation.  Initial  progress  is  reported  in  IT 
and LV. The low priority given to this issue in many of the new Member States is a concern.  

3.2 

ATTRACTING  MORE  PEOPLE  TO  ENTER  AND  REMAIN  ON  THE  LABOUR  MARKET: 
MAKING WORK A REAL OPTION FOR ALL 

Strengthen active labour market policies (ALMP) 

Progress in the provision of preventative services for the unemployed is mixed. Ten Member 
States meet the 25% target for activation of the long-term unemployediv, although in AT, DK, 
DE,  FR,  UK,  SIv  a  lower  proportion  participated  in  an  active  measure  than  last  year.  Ten 
Member States fail to provide comparative datavi. 

Twenty  Member  States  received  a  recommendation  to  modernise  the  public  employment 
services (PES) and improve access to ALMPs, also to facilitate integration of disadvantaged 
people  and  improve  occupational  and  geographic  mobility.  PES  are  being  reformed  but  the 
response  is  uneven  for  ALMPs.  This  is  particularly  worrying  in  a  context  of  rising 
unemployment, especially of young people. 

Making work pay 

There  has  been  a  significant  policy  response  across  Member  States  but  the  outcomes  are 
mixed.    Many  are  committed  to  improve  the  combined  impact  of  taxes  and  benefits  on 
employment and their link with activation. There is also a more visible commitment to tackle 
the issue of working poor through in-work benefits and rises in minimum wages. Improving 
work incentives in benefit systems, including eligibility rules and related financial incentives 
(such as transportand housing costs), are less forcefully addressed.  

Fifteen Member States received a specific recommendation. Most of them have taken steps. 
For  a  number  of  new  ones,  progress  is  essential  to  reduce  undeclared  work.  For  others,  the 
focus is placed on reform of sickness and disability benefit systems. 

Increasing the participation of women  

The employment rate for women is increasing, and the provision of childcare and other care 
services  has  improved.  The  gender  pay  gap  remains  stubbornly  high  and  weakly  addressed. 
National targets exist in half of the Member Statesvii. A gender mainstreaming policy is only 
visible in SE. 

Seven Member States received a specific recommendation. Gender gaps in employment and 
unemployment  are  largely  neglected  as  objectives.  Although  the  gender  pay  gap  is  widely 
recognised as a serious problem, new concrete targets and action are rare. The reconciliation 

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of work and private life receives widespread attention but the equal sharing of responsibilities 
between women and men is overlooked. 

Building comprehensive active ageing strategies 

Despite some progress, the EU is falling far short of the 2010 employment rate target for older 
workers  and  policies  are  below  expectations.  The  employment  rate  in  the  EU  now  exceeds 
40% but it remains stubbornly low in many Member States, especially for women. 

Most Member States received a specific recommendation. There are efforts to define national 
active  ageing  strategiesviii  but  action  often  relies  on  piecemeal  measures  in  the  area  of  tax-
benefit  and  pension  reforms  discouraging  early  retirement  rather  than  on  increasing 
employability  and  participation  throughout  the  lifecycle,  including  young  people.  There 
seems to be a high degree of reliance on the impact of pension reforms (FR, IT). Moreover, 
the  commitment  of  some  Member  States  was  essentially  limited  to  proposals  for  tripartite 
social dialogue (BE, LU).  

Promoting the integration of immigrants and people at a disadvantage  

The  potential  of  migrants  and  disadvantaged  people,  such  as  minorities  and  the  disabled,  is 
still insufficiently recognised and exclusion from the labour market remains an issue.  

Six  Member  States  received  a  specific  recommendation.  Some  Member  States  have 
developed  strategies  to  increase  labour  participation  of  all  underrepresented  groups  in  the 
labour  market.  Specific  policies  for  the  integration  of  migrants  and  minorities  are  being 
developed with a focus on assimilation and access to the labour market, including language 
training,  literacy  programmes  or  vocational  guidance.  The  burden,  however,  is  often  placed 
on individuals to adapt. The Roma or migrants for example often seem to be portrayed largely 
responsible for their own situation.  

3.3 

INVESTING  MORE  AND  MORE  EFFECTIVELY  IN  HUMAN  CAPITAL  AND  LIFELONG 
LEARNING 

Developing lifelong learning strategies and investment in human capital 

The EU does not deliver the "increased investment in human resources" called for. The NAPs 
provide little systematic information on levels or efficiency of resources. Public investment in 
this area only shows a very slight increase (5.1% GDP for EU15). This varies from 8.5% in 
DK to 3.9% in EL and LU.  

SE,  FI  and  DK  deliver  performance  as  measured  by  the  EU  benchmarks,  and  commit  to 
investment levels, well above the EU average. The converse is also true. Member States with 
poor  performance  tend  to  invest  lower  levels  and  have  under-developed  strategies  to  raise 
human capital. 

While  there  is  recognition  that  actors  must  share  responsibility,  no  Member  States 
demonstrate  a  truly  comprehensive  approach.  Some  adopt  a  levy  approach  to  encourage 
employers  (particularly  for  SMEs)  to  invest.  Sectors  funds  are  also  used  (BE,  IT,  NL).  Tax 
reform is considered in other Member States (EE, IE, SK, UK).  

Many Member States received a specific recommendation. Action is still largely in the design 
and  development  stage.  It  is  important  to  move  more  rapidly  to  implementation  as  most  of 

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them still need to put in place systems and capacities to deliver lifelong learning opportunities 
for all.  

Broadening participation in, and supply of, education and training 

The  target  set  for  the  EU  for  2010  that  85%  of  22  year  olds  should  have  completed  upper 
secondary level education represents a major challenge. The EU average (76.7% in 2003) has 
hardly progressed since 2000. Wide disparities exist, with rates ranging from 94.1% in SK to 
43% in MT. Completion rates are also very low in ES, IT, LU and PT. 

Despite encouraging recent progress, the 2010 objective of a 12.5% rate of adult participation 
in  lifelong  learning  will  require  continued  efforts.  Further  policy  reforms  are  needed  to 
encourage  participation  in  most  Member  States.  Participation  rates  have  seen  a  steady 
increase  since  2001  (7.9%)  to  the  current  level  of  9.3%  (2003).  However,  participation 
remains  particularly  low  in  CZ,  EL,  IT,  LT,  MT,  PT  and  SK  and  varies  widely  by  age  and 
attainment level.  

A  systematic  commitment  to  address  the  situation  of  disadvantaged  people  is  missing.  The 
case of SE is a notable exception, where municipalities are obliged to offer upper secondary 
education  to  all  young  people  up  to  the  age  of  20.  After  that  age,  they  can  obtain 
qualifications in adult education, with all employees entitled to study leave.  

Twenty  Member  States  received  a  specific  recommendation.  CY  is  reforming  its 
apprenticeship scheme. Faced with a lack of apprenticeship places, DE concluded a national 
agreement with industry to ensure that all young people who apply for vocational training get 
a place and HU announced a major increase in funding for adult education. 

Reducing the number of pupils leaving school early 

Despite  recognition  of  the  importance  of  the  issue,  action  is  often  piecemeal.  Most  policies 
consist  of  special  measures  to  support  the  most  vulnerable  students  outside  the  mainstream 
education and training system.  

Seventeen Member States received a specific recommendation. The proportion of early school 
leaversix  decreased  slightly  to  15.9%  in  2003,  well  above  the  2010  target  of  10%.  In  seven 
Member  Statesx  rates  have  increased  since  2002.  Progress  towards  the  EU  target  depends 
critically  on  progress  in  ES,  IT,  MT  and  PT,  which  levels  are  significantly  above  the  EU 
average.  Significant  falls  occurred  in  the  Member  States  with  the  highest  rates,  notably  PT 
and MT (with levels still above 40%).  

3.4 

ENSURING  EFFECTIVE 
GOVERNANCE 

Building reform partnerships 

IMPLEMENTATION  OF  REFORMS  THROUGH  BETTER 

The  delivery  of  the  Lisbon  Strategy  and  of  the  EES  requires  coordinated  action  and  public 
conviction over a fuller reform agenda, in particular as regards the management of economic 
change. The European Council called on Member States to establish partnerships for reforms. 
While partnership approaches exist in many Member States, IE was the only one to cite the 
establishment of reform partnerships in its NAP.  

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Promoting the role and visibility of National Action Plans 

To  have  impact,  NAPs  need  political  legitimacy.  The  involvement  of  parliaments  is 
insufficient, as they play hardly any role in the approval procedure, with the notable exception 
of  MT.  This  low  profile  may  be  one  reason  why  NAPs  do  not  receive  significant  input  or 
support from civil society.  

The  NAPs  are  mostly  summing-up  reports.  They  do,  however,  receive  a  higher  profile  in 
many  of  the  new  Member  States  where  they  tend  to  be  more  forward-looking  and  play  a 
central role in the policy cycle. They must become attractive and accessible for dissemination 
(e.g. BE).  

Defining national commitments and targets 

Member  States  were  recommended  to  define  national  targets  to  reflect  those  agreed  at  EU 
level.  There  have  been  some  positive  steps  in  2004  with  ES  and  seven  of  the  new  Member 
States  setting  national  employment  targets  xi.  Less  than  half  set  targets  to  increase  the 
employment rate for older workers. Exit age targets already existed in FR, FI and PT and CY 
set a new target. More Member States have set targets for improving levels of human capital.  

Adequacy, transparency and cost-effectiveness in the allocation of financial resources 

Reforms must be backed by adequate financial means and effective use of public funds. The 
provision  of  information  in  the  NAPs  is  insufficient.  It  should  include  actual  expenditure, 
allocated budgets and prognoses for main measures.  

About half of the Member States provide some comparable data on ALMP expenditure and, 
to  a  lesser  extent,  on  human  resource  investmentxii.  DK  and  CY  give  a  reasonable  picture 
based on national data. A few Member Statesxiii provide financial data split by Guideline. The 
role of the European Social Fund (ESF) is highlighted but reporting is uneven.  

Developing more effective mutual learning 

Mutual  learning  and  shared  expertise  serve  to  enrich  policy-making.  Some  Member  States 
compare their employment performances with the EU average and others' performances. The 
NAPs seldom quote examples of policies inspired by others' experiences. The new EU mutual 
learning programme provides an opportunity to strengthen this key element.  

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 i  

ii  

iii  
iv  
v  
vi 
vii  
viii  
ix  

x  
xi  
xii  
xiii  

see 

European 

Commission 

the  2004  National  Actions  Plans 

The  Joint  Employment  Report  (JER)  examines  how  Member  States  are  progressing  in  the  implementation  of 
Employment Guidelines and Recommendations adopted on the basis of Article 128 of the Treaty. All the documents 
related to the European Employment Strategy, including the report of the Employment Taskforce, the EU Guidelines 
and  Recommendations  and 
for  Employment  are  accessible  at: 
http://europa.eu.int/comm/employment_social/employment_strategy/index_en.htm  
For  a  detailed  analysis  of  recent  trends  and  performances  of  the  EU  labour  market,  see  European  Commission 
"Employment in Europe 2004"  
(http://europa.eu.int/comm/employment_social/employment_analysis/employ_en.htm).  For  latest  macro-economic 
updates, 
2004" 
(http://europa.eu.int/comm/economy_finance/publications/european_economy/forecasts_en.htm).  The  source  and 
methodology  for  the  tables  presented  in  this  report  are  described  in  the  accompanying  Commission  Staff  Working 
Paper. 
 DK, CY, EL, FR, LV, PT and UK 
BE, DE, ES, FI, IT, LU, LV, SE, UK, and FR (on the basis of figures for 2002). 
The figure for SI is subject to be confirmed 
CY, CZ, EE, IE, MT, NL, PL, PT, SI, SK  
AT, CY, EE, ES, FR, HU, IE, IT, LT, LV, PL, PT (EL has not confirmed the target set in its 2003 NAP) 
CY, CZ, EE, FI, FR, LV, NL, PT, UK  
The  percentage  of  18-24  year  olds  having  achieved  lower  secondary  education  or  less  and  not  attending  further 
education or training leaving. 
BE, CZ, CY, DE, DK, ES, FR 
CY, EE, HU, LT, LV, SI, SK  
AT, BE, DE, EE, FI, FR, HU, IE, IT, LT, LV, PT, SE  
BE, ES, HU, IE, PL 

"Economic 

Forecasts 

Autumn 

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