Communication to the Spring European Council - Working together for growth and jobs - A new start for the Lisbon Strategy - Communication from President Barroso in agreement with Vice-President Verheugen {SEC(2005) 192} {SEC(2005) 193}
Date: 2005-02-02
Institutions: European Commission
Subjects: EU employment policy, EU initiative, European Employment Strategy, action programme, deepening of the European Union, economic and social cohesion, economic policy, investment policy, labour flexibility, research and development, worker adaptability, youth policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.2.2005 
COM(2005) 24 final 

COMMUNICATION TO THE SPRING EUROPEAN COUNCIL 

Working together for growth and jobs  

A new start for the Lisbon Strategy 

Communication from President Barroso 
in agreement with Vice-President Verheugen 

{SEC(2005) 192} 
{SEC(2005) 193} 

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TABLE OF CONTENTS 

Foreword - Growth and jobs: A New Start for the Lisbon Strategy .......................................... 3 

Executive Summary ................................................................................................................... 7 

1. 

2. 

3. 

3.1. 

3.2. 

Growth and jobs centre stage ..................................................................................... 12 

Building a european partnership for growth and employment................................... 14 

Actions to deliver growth and jobs ............................................................................ 15 

A Lisbon Action Programme for the Union and the Member States......................... 15 

Making Europe a more attractive place to invest and work....................................... 16 

3.2.1.  Extend and deepen the Single Market........................................................................ 16 

3.2.2.  Ensure open and competitive markets inside and outside Europe ............................. 18 

3.2.3. 

Improve European and national regulation ................................................................ 18 

3.2.4.  Expand and improve European infrastructure............................................................ 19 

3.3. 

Knowledge and innovation for growth ...................................................................... 20 

3.3.1. 

Increase and improve investment in Research and Development.............................. 20 

3.3.2.  Facilitate innovation, the uptake of ICT and the sustainable use of resources .......... 21 

3.3.3.  Contribute to a strong European industrial base ........................................................ 23 

3.4. 

Creating more and better jobs .................................................................................... 24 

3.4.1.  Attract more people into employment and modernise social protection systems...... 24 

3.4.2. 

Increase the adaptability of workers and enterprises and the flexibility of labour 
markets ....................................................................................................................... 26 

3.4.3. 

Investing more in human capital through better education and skills........................ 26 

3.5. 

The impact on growth and jobs.................................................................................. 28 

4. 

Making the partnership deliver on growth and jobs................................................... 29 

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Foreword 

Growth and jobs: A New Start for the Lisbon Strategy 

Just think what Europe could be. Think of the innate strengths of our enlarged Union. Think 
of  its  untapped  potential  to  create  prosperity  and  offer  opportunity  and  justice  for  all  its 
citizens. Europe can be a beacon of economic, social and environmental progress to the rest of 
the world. 

It  is  in  this  spirit  of  realistic  optimism  that  the  new  European  Commission  has  put  together 
our policy recommendations for the Mid-Term Review of the Lisbon Strategy – our ambitious 
agenda for reform launched by the European Council in March 2000. 

Europeans have every reason to be positive about our economic potential. The successes of 
the second half of the 20th century have left a strong legacy. After half a century of peace we 
have one of the most developed economies in the world united together in a unique political 
Union  of  stable  and  democratic  Member  States.  That  Union  has  created  a  Single  Market 
underpinned  for  participating  members  by  a  single  currency  that  consolidates  economic 
stability  and  deepens  the  potential  of  economic  integration.  We  have  consolidated  a  unique 
participative social model. Our standards of basic education are high and the science base is 
historically  well  developed.  Europe  is  home  to  dynamic  and  innovative  companies  with 
extraordinary  competitive  strength.  At  their  best,  they  are  demonstrating  a  remarkable 
capacity for renewal. We have made more progress towards sustainable development than any 
other region of the world. 

We  have  done  this  by  acting  in  partnership  –  Europe’s  institutions,  government  and 
administrations at  a national, regional and local level, our social  partners, civil society – all 
moving together towards a common goal. 

This legacy represents a substantial down-payment towards the vision that binds us together; 
a vision, confirmed in the Constitution, of ensuring “the sustainable development of Europe 
based  on  balanced  economic  growth  and  price  stability,  a  highly  competitive  social  market 
economy, aiming at full employment and social progress and a high level  of protection  and 
improvement of the quality of the environment”. 

The past 50 years have seen extraordinary progress, but in a changing world Europe cannot 
stand  still.  This  is  why  five  years  ago  Heads  of  State  and  Government  signed  up  to  an 
ambitious programme of change. They committed themselves to making the European Union 
the  most  dynamic  and  competitive  knowledge-based  economy  in  the  world  capable  of 
sustainable  economic  growth  with  more  and  better  jobs  and  greater  social  cohesion,  and 
respect for the environment. 

Today,  we  see  that  progress  has  at  best  been  mixed.  While  many  of  the  fundamental 
conditions are in place for a European renaissance, there has simply not been enough delivery 

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at  European  and  national  level.  This  is  not  just  a  question  of  difficult  economic  conditions 
since  Lisbon  was  launched,  it  also  results  from  a  policy  agenda  which  has  become 
overloaded, failing co-ordination and sometimes conflicting priorities. For some this suggests 
that  we  should  abandon  the  ambition  of  5  years  ago.  The  Commission  does  not  agree.  The 
challenges  we  face  are  even  more  urgent  in  the  face  of  an  ageing  population  and  global 
competition. Unless we reinforce our commitment to meeting them, with a renewed drive and 
focus, our model for European society, our pensions, our quality of life will rapidly be called 
into question.  

The need for urgent action is confirmed by the report from the High Level Group chaired by 
Wim Kok last November. It identifies a daunting challenge. According to Kok, “The Lisbon 
strategy  is  even  more  urgent  today  as  the  growth  gap  with  North  America  and  Asia  has 
widened,  while  Europe  must  meet  the  combined  challenges  of  low  population  growth  and 
ageing.  Time  is  running  out  and  there  can  be  no  room  for  complacency.  Better 
implementation is needed to make up for lost time”. Faced with this challenge Europe needs 
to improve its productivity and employ more people  

On current trends, the potential growth of the European economy will halve over the coming 
decades and reach just over 1% per year.  

Europe’s performance has diverged from that of our competitors in other parts of the world. 
Their  productivity  has  grown  faster  and  they  have  invested  more  in  research  and 
development.  We  have  yet  to  put  in  place  the  structures  needed  to  anticipate  and  manage 
better the changes in our economy and society. And we still need a vision for society which 
can  integrate  both  the  ageing  and  the  young,  particularly  for  the  development  of  our 
workforce,  where  current  dynamics  cast  a  shadow  over  both  long-term  growth  and  social 
cohesion.  

The  Commission  has  risen  to  this  challenge  in  presenting  it  proposals  for  the  Union’s 
Strategic Objectives, ‘renewed growth is vital to prosperity, can bring back full employment 
and  is  the  foundation  of  social  justice  and  opportunity  for  all.  It  is  also  vital  to  Europe’s 
position in the world and Europe’s ability to mobilise the resources that tackle many global 
different challenges’.  

We need a dynamic economy to fuel our wider social and environmental ambitions. This is 
why  the  renewed  Lisbon  Strategy  focuses  on  growth  and  jobs.  In  order  to  do  this  we  must 
ensure that: 

−  Europe is a more attractive place to invest and work 

−  Knowledge and innovation are the beating heart of European growth 

−  We shape the policies allowing our businesses to create more and better jobs 

Making  growth  and  jobs  the  immediate  target  goes  hand  in  hand  with  promoting  social  or 
environmental objectives. The Lisbon Strategy is an essential component of the overarching 
objective  of  sustainable  development  set  out  in  the  Treaty:  improving  welfare  and  living 
conditions  in  a  sustainable  way  for  present  and  future  generations.  Both  Lisbon  and  the 

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Sustainable  Development  Strategy  contribute  to  ensuring  this  goal.  Being  mutually 
reinforcing,  they  target  complementary  actions,  use  different  instruments  and  produce  their 
results in different time frames.  

The  Commission  is  fully  committed  to  sustainable  development  and  to  modernising  and 
advancing  Europe’s  social  model.  Without  more  growth  and  jobs  this  will  not  be  possible. 
Our  Sustainable  Development  Strategy  and  our Social  Agenda  have  been  under  review  and 
proposals, ahead of the Spring European Council, will be presented in the coming weeks. In 
addition,  we  have  to  continue  working  with  our  international  partners  to  address  global 
macro-economic  unbalances,  as  boosting  growth  is  as  beneficial  to  our  partners  as  to  the 
Union. 

“Lisbon”  therefore  requires  immediate  action  and  the  case  for  acting  together  in  Europe  is 
strong.  

The  costs  of  not  doing  so  are  large  and  quantifiable.  The  ‘costs  of  non-Europe’  have  been 
substantiated through a large volume of academic evidence. One can argue with the figures. 
But not achieving “Lisbon” does have a cost. The best evidence can be found in the widening 
gap  of  Europe’s  growth  potential  compared  to  other  economic  partners.  However,  the 
potential  gains  from  wider  and  deeper  economic  integration  in  an  enlarged  Europe  are 
massive.  

This mid-term review sets out how we can help Europe to meet its growth and jobs challenge. 
It  launches  the  idea  of  a  Partnership  for  Growth  and  Jobs,  supported  by  a  Union  Action 
Programme and National Action Programmes containing firm commitments. It builds on three 
central concepts:  

−  First,  Europe’s  actions  need  more  focus.  We  must  concentrate  all  our  efforts  on 
delivering  on  the  ground  policies  that  will  have  greatest  impact.  This  means  keeping 
existing promises, building on the reforms already underway in every Member State and 
launching  new  action  where  it  is  needed  to  keep  us  on  target.  It  requires  a  rigourous 
prioritisation on the part of the Commission and must be anchored in the firm support of 
the European Council and the European Parliament.  

−  Second,  we  have  to  mobilise  support  for  change.  Establishing  broad  and  effective 
ownership  of  the  Lisbon  goals  is  the  best  way  to  ensure  words  are  turned  into  results. 
Everyone  with  a  stake  in  Lisbon’s  success  and  at  every  level  must  be  involved  in 
delivering these reforms. They must become part of national political debate.  

−  Third, we need to simplify and streamline Lisbon. This means clarifying who does what, 
simplify  reporting  and  backing  up  delivery  through  Union  and  National  Lisbon  Action 
Programmes.  There should be an integrated set of Lisbon “guidelines” to frame Member 
State action, backed up by only one report at EU level and only one report at national level 
presenting the progress made. This will significantly reduce the national reporting burden 
placed on Member States.  

All this must be set against the backdrop of wider reforms. Our ambition for change must be 
matched by the necessary resources at both EU and national level.  

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Sound  macroeconomic  conditions  are  essential  to  underpin  a  credible  effort  to  increase 
potential growth and create jobs. The changes proposed to the European Union’s stability and 
growth pact – the rules at EU level that govern national budgetary policies – should further 
stabilise  our  economy,  while  ensuring  that  Member  States  can  play  a  full  role  in  creating 
conditions for long-term growth.  

At a European level, the debate on the future financial framework for the Union up to 2013 
(“the  Financial  Perspectives”)  must  draw  the  consequences  of  our  Lisbon  ambition, 
supporting  Lisbon  priorities  within  the  future  EU  budget.  We  must  provide  the  support  and 
investment a modern, knowledge-economy needs, use our resources in ways which help us to 
adapt to changing economic and social conditions, and operate programmes which provide the 
right  incentives  for  Member  States  to  focus  their  own  national  public  spending  on  Lisbon 
objectives. The Commission’s proposals for the Financial Perspectives reflect these priorities. 

If we can match ambition, resources and good ideas; if we can transform them by the end of 
the decade into lasting change on the ground; and if we can support Lisbon by closing the gap 
on  investment  in  our  economy  and  launching  a  new  drive  for  stronger  cohesion  across  our 
continent then we can bring our Lisbon goals back into sight.  

This is the new start that Europe needs.  

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Executive Summary 

Five years ago the European Union launched an ambitious agenda for reform. Over the last 
year the Commission has been reviewing the progress made. This has led to a vigorous debate 
at  European  and  national  level  amongst  all  those  with  an  interest  in  Lisbon’s  success.  In 
addition,  the  Commission has benefited from the work of the High Level Group chaired by 
Wim Kok, which reported last November. Today, there is general consensus that Europe is far 
from  achieving  the  potential  for  change  that  the  Lisbon  strategy  offers.  While  both  the 
diagnosis and the remedies are not contested, the reality is that not enough progress has been 
made.  

This  Report,  at  the  mid-point  stage  of  Lisbon,  now  sets  out  how  we  can  work  together  for 
Europe’s future and put the Lisbon agenda back on track.  

The renewed Lisbon Strategy – what will change? 

The  Commission  proposes  a  new  start  for  the  Lisbon  Strategy,  focusing  our  efforts  around 
two  principal  tasks  –  delivering  stronger,  lasting  growth  and  creating  more  and  better 
jobs. Meeting the Europe’s growth and jobs challenge is the key to unlocking the resources 
needed to meet our wider economic, social and environmental ambitions; meeting those wider 
goals will anchor the success of our reforms. For this to be possible, sound macroeconomic 
conditions  are  crucial,  in  particular  the  pursuit  of  stability-oriented  macroeconomic  policies 
and of sound budgetary policies.  

I 

Ensuring delivery 

Delivery is the main issue for the Lisbon Strategy at both European and national level. The 
implementation  of  the  reform  agenda  requires  a  renewed  Partnership  for  growth  and 
jobs. 

As  regards  the  EU  level,  the  Commission  will  play  its  central  role  of  initiating  policy  and 
ensuring implementation. 

In parallel, Member States must deliver the agreed backlog of Lisbon reforms. This should 
be  backed  up  by  National  Lisbon  Programmes  –  setting  out  how  they  will  do  this  (see 
governance below). 

II 

A renewed Lisbon Action Programme 

This Report does not attempt to rewrite the Lisbon strategy, but it does identify new actions at 
European  and  national  level  which  will  help  to  see  our  Lisbon  vision  is  achieved.

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A more attractive place to invest and work 

Improve European and national regulation 

(cid:131)  Extend and deepen the internal market 
(cid:131) 
(cid:131)  Ensuring open and competitive markets inside and outside Europe 
(cid:131)  Expand and improve European Infrastructure 

(cid:57)  We must extend and deepen the internal market. Member States must improve 
implementation of existing EU legislation if businesses and consumers are to 
feel  the  full  benefits.  In  a  number  of  Member  States,  key  markets  like 
telecoms, energy and transport are open only on paper – long after the expiry 
of the deadlines to which those Member States have signed up. 

(cid:57)  Key  reforms  are  still  needed  to  complete  the  single  market  and  should  be 
given  specific  attention:  financial  services  markets,  as  well  as  services  in 
general,  the  REACH  proposal,  a  common  consolidated  corporate  tax  base  as 
well as the Community Patent. 

(cid:57)  The regulatory climate must improve. In March the Commission will launch a 
new  regulatory  reform  initiative,  and  we  will  draw  on  outside  expertise  to 
advise  us  on  the  quality  and  methodology  of  how  we  carry  out  impact 
assessments. 

(cid:57)  Competition  rules  must  be  applied  proactively.  This  will  help  to  boost 
consumer  confidence.  Sectoral  screenings  of  the  barriers  to  competition 
will be launched in sectors such as energy, telecoms and financial services. 

(cid:57)  European businesses also need open global markets. The Union will press hard 
for  completion  and  implementation  of  the  Doha  Development  Round,  as 
well as progress on other bilateral and regional economic relationships. 

Knowledge and innovation for growth 

Increase and improve investment in Research and Development 

(cid:131) 
(cid:131)  Faciliate innovation, the uptake of ICT and the sustainable use of resources 
(cid:131)  Contribute to a strong European industrial base 

(cid:57)  Public  authorities  at  all  levels  in  the  Member  States  must  work  to  support 
innovation,  making  a  reality  of  our  vision  of  a  knowledge  society.  The 
information  society, 
Union’s  continued  focus  on  areas  such  as 
biotechnology and eco-innovation should help them to do this.  

the 

(cid:57)  More investment by both the public and private sector spending on research 
and development. At EU level, we need the early adoption by the European 
Parliament and Council of the next Research Framework programme and of 

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a  new  programme  for  competitiveness  and  innovation.  These  will  be 
presented in April. 

(cid:57)  As part of a major reform of State Aid policy starting later this year, Member 
States,  regional  and  other  public  actors  will  have  more  scope  to  support 
research  and  innovation,  particularly  by  the  EU’s  small  and  medium-sized 
businesses.  

(cid:57)  Spreading knowledge through high quality education system is the best way of 
guaranteeing  the  long-term  competitiveness  of  the  Union.  In  particular,  the 
Union must ensure that our universities can compete with the best in the World 
through the completion of the European Higher Education Area.  

(cid:57)  The  Commission  will  propose  the  creation  of  a  “European  Institute  of 

Technology”. 

(cid:57)  The  Commission  will  support  and  encourage  Innovation  Poles  designed  to 
help regional actors bring together the best scientific and business minds with 
the right resources to get ideas from the lab and into the workshop. 

(cid:57)  The  Commission  and  Member  States  must  step  up  their  promotion  of  eco-
innovation which can bring substantial improvements to our quality of life as 
well to growth and jobs, for example in areas such as sustainable resource use, 
climate change and energy efficiency. 

(cid:57)  Partnering  with  industry  will  also  be  fostered  by  European  Technology 
Initiatives,  which  build  on  the  experience  of  the  Galileo  satellite  navigation 
system. The first of these should start to appear in 2007 once the next Research 
Framework Programme is up and running. 

Creating more and better jobs 

(cid:131)  Attract more people into employment and modernise social protection systems  
(cid:131) 
(cid:131) 

Improve the adaptability of workers and enterprises and the flexibility of labour markets  
Investing more in human capital through better education and skills  

(cid:57)  The  Social  Partners  are  invited  to  develop  a  joint  Lisbon  action 
programme  ahead  of  the  Spring  2005  European  Council  identifying  their 
contribution to the Lisbon goals. 

(cid:57)  Member States and the social partners must increase efforts to boost the level 
of  employment  particularly  by  pursuing  active  employment  policies  which 
help  people  in  work  and  provide  incentives  for  them  to  remain  there, 
developing  active  ageing  policies  to  discourage  people  from  leaving  the 
workforce too early, and by modernising social protection systems, so that they 
continue to offer the security needed to help people embrace change. 

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(cid:57)  The future of Europe and the future of the Lisbon Strategy is closely linked to 
young people. The Union and the Member States must ensure that the reforms 
proposed help to give them a first chance in life and equip them with the skills 
needed throughout their lives. The Union also needs to develop its priorities in 
responding to the demographic challenge that we face. 

(cid:57)  Member  States  and  the  social  partners  must  improve  the  adaptability  of  the 
workforce and of businesses as well as the flexibility of labour markets to 
help Europe adjust to restructuring and market changes. 

(cid:57)  In the face of a shrinking labour force, we need a well-developed approach to 
legal migration. The Commission will present a plan before the end of 2005 
on the basis of the on-going public consultation. 

(cid:57)  Europe needs more and better investments into education and training. By 
focusing at European and national level on skills and life-long learning it will 
be  easier  for  people  to  move  to  new  jobs.  This  should  be  backed  up  by  the 
adoption this year of the Life Long Learning Programme at EU level and in 
2006 the presentation of national Life Long Learning strategies by the Member 
States. 

(cid:57)  Europe also needs a more mobile workforce. Mobility within the Union will 
also  be  helped  by  the  early  adoption  of  the  pending  framework  for 
professional  qualifications.  The  Commission  will  make  proposals  during 
2006 to simplify mutual recognition of qualifications. Member States should 
accelerate  the  removal  all  restrictions  on  the  mobility  of  workers  from  the 
countries that have recently joined the Union. 

(cid:57)  Regional  and  local  authorities  should  be  designing  projects  which  take  us 
closer  to  our  Lisbon  ambition.  The  next  generation  of  Structural  Funds 
(including those for rural development) are being reshaped with this in mind – 
focusing on how it can help to deliver growth and jobs at a local level. 

III 

Improving Lisbon governance 

The  governance  of  the  Lisbon  Strategy  needs  radical  improvement  to  make  it  more 
effective  and  more  easily  understood.  Responsibilities  have  been  muddled  between  the 
Union  and  its  Member  States.  There  are  too  many  overlapping  and  bureaucratic  reporting 
procedures and not enough political ownership.  

To clarify what needs to be done and who is responsible the Commission will bring forward a 
Lisbon Action Programme.  

In addition, the Commission is proposing an integrated approach to streamline the existing 
Broad  Economic  Policy  and  Employment  Guidelines,  within  a  new  economic  and 
employment  cycle.  In  future,  an  integrated  set  of  Guidelines  alongside  the  Lisbon  Action 
Programme  will  be  used  to  move  the  reform  agenda  forward.  These  will  cover  macro-
economic  policies,  employment  and  structural  reforms.  In  response,  Member  States  are 

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expected  to  adopt  National  Action  Programmes  for  growth  and  jobs,  backed  up  by 
commitments and targets, after broad discussion at a national level.  

To  bring  all  this  together  Member  States  should  appoint  a  “Mr”  or  “Ms  Lisbon”  at 
government level.  

Reporting will also be simplified. There will be a single Lisbon report at EU and at national 
level  on  the  progress  made.  This  new  reporting  process  will  provide  a  mechanism  through 
which  the  European  Council  and  the  European  Parliament  can  focus  on  key  policy  issues 
without being encumbered by the multitude of sectoral reports which are currently part of the 
annual cycle. 

This  approach  will  make  it  easier  for  the  European  Council  to  give  practical  guidance  each 
spring  and  for  the  Commission  to  play  its  role  of  monitoring  progress  towards  the  Lisbon 
goals, offering encouragement and proposing additional action to keep Lisbon on track. 

* * * 

On this basis, the Commission recommends to the European Council to: 

–  Launch a new Partnership for Growth and Jobs 

–  Endorse the Community Action Programme and call for Member States to establish their 

own National Action Programmes  

–  Approve  the  new  arrangements  for  governance  of  the  Lisbon  Strategy  set  out  in  this 
Report, in order to improve the effectiveness of policy delivery at Community and national 
level and to encourage a real debate and genuine political ownership of our Lisbon goals. 

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1. 

GROWTH AND JOBS CENTRE STAGE 

The Lisbon 
agenda was 
meant to unlock 
Union’s 
potential… 

…but not 
enough progress 
has been made. 

Growth and jobs 
are the next 
great European 
project. 

This requires a 
renewed 
partnership. 

The  Single  Market,  the  euro,  the  recent  enlargement  of  the  Union  show  the 
potential of the Union has to achieve ambitious goals. Over half a century the 
Union has built peace and prosperity. It has taken a changing economic, social and 
political  landscape  in  its  stride.  It  has  done  this  by  setting  common  goals  and 
working 
the  Member  States, 
Governments and civil society, business and citizens. This same dynamism drove 
the  launch  of  the  far-reaching  agenda  for  reform  in  March  2000  at  the  Lisbon 
European  Council.  It  mapped  out  a  path  towards  a  competitive  and  inclusive, 
knowledge-based, economy, offering a European response to the urgent challenges 
our continent faces.  

the  Union  and 

to  achieve 

together 

them; 

Today, we see that combination of economic conditions, international uncertainty, 
slow  progress  in  the  Member  States  and  a  gradual  loss  of  focus  has  allowed 
Lisbon to be blown off course. Yet the challenges if anything have become more 
urgent in the face of global competition and an ageing population; factor which are 
even  more  apparent  today  than  five  years  ago.  This  assessment  is  shared  by  the 
Report  presented  by  the  High  Level  Group  chaired  by  Wim  Kok1.  It  stressed 
Europe’s  insufficient  progress  in  reaching  the  Lisbon  strategy’s  objectives.  In 
response, we need to restore confidence in Europe’s ability to create the conditions 
to  meet  its  objectives.  Europe  can  build  on  its  rich  tradition  and  diversity,  its 
unique social model and draw further strength from its recent enlargement which 
makes it the largest single market and biggest trading block in the world. 

The most important conclusion of the Kok report is that “the promotion of growth 
and employment in Europe is the next great European project”. The Commission 
proposes to refocus the Lisbon agenda on actions that promote growth and jobs in 
a manner that is fully consistent with the objective of sustainable development. 
The actions falling under this strategy should reinforce the Union potential to meet 
and  further  develop  our  environmental  and  social  objectives.  However,  the 
challenge is to define now a strategy that addresses the areas in which Europe is 
not  performing  well  (for  example,  our  stagnant  growth  and  insufficient  job 
creation).  

This  strategy  must  be  taken  forward  through  a  renewed  partnership  between  the 
Member States and the  Union – with the full involvement of the social partners. 
The new Lisbon agenda is necessarily broad but a limited set of policy priorities 
will be central to its success. We must focus on these to ensure the success of the 
whole.  Delivery  will  be  critical  and  improvements  of  the  existing  delivery 
mechanisms  are  urgently  required.  This  calls  for  a  streamlined  and  effective 
working method to implement the strategy which binds together the Union and the 
Member States. For this to be possible, the Lisbon agenda must be owned by all 
stakeholders at EU, national, regional and local level: Members States, European 
citizens,  parliaments,  social  partners  and  civil  society  and  all  Community 
institutions.  They  should  all  contribute  to  construct  Europe’s  future.  After  all, 
everyone  will  benefit  from  the  future  that  the  Lisbon  agenda  is  trying  to  shape. 
The renewed Lisbon strategy is about tapping this potential for our citizens. It is 
about opportunity and a common vision for progress. 

1 

Report  from  the  High  Level  Group  on  the  Lisbon  Strategy,  chaired  by  Wim  Kok,  November  2004, 
http://europa.eu.int/growthandjobs/index_en.htm. 

EN 

12 

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Sound 
macroeconomic 
conditions are 
the starting 
point for 
success. 

Sound macroeconomic conditions and policies 

Sound  macroeconomic  conditions  are  essential  to  underpin  a  credible  effort  to 
increase  potential  growth  and  create  jobs.  In  particular,  the  continued  pursuit  of 
stability-oriented macroeconomic policies and of sound budgetary policies will be 
crucial. Governments must, whilst maintaining or pursuing sound public finances 
maximise the contribution to growth and employment. 

The  changes  proposed  to  the  European  Union’s  stability  and  growth  pact  –  the 
rules at EU level that govern national budgetary policies – should further stabilise 
our economy, while ensuring that Member States  can play a full role in creating 
conditions for long-term growth.  

Productivity and employment 

The  Lisbon  strategy  gives  equal  importance  to  increasing  both  employment  and 
productivity, through enhanced competitiveness. 

More and better 
jobs…. 

Labour  markets  must  be  allowed  to  function  better,  providing  incentives  for 
people to work and for businesses to take them on, and to create more and better 
jobs.  This  will  require  significant  investment  in  human  capital,  and  greater 
adaptability of the workforce in more inclusive labour markets. 

…enhanced 
competitiveness 
through 
productivity 
growth … 

…must go hand 
in hand. 

Open 
international 
markets matter. 

Productivity growth has slowed down markedly in the EU. Reversing this trend is 
the major competitiveness challenge facing the Union. At the same time, we must 
aim  at  lasting  productivity  increases  in  all  key  sectors  of  the  economy.  Together 
with  improving  the  skills  of  the  labour  force,  stronger  investments  and  use  of 
Information  and  Communication  Technologies  (ICTs)  across  the  economy,  a 
healthy  competitive  environment  and  the  right  balance  of  regulation  are  of 
paramount importance to boosting productivity. However, Lisbon’s overburdened 
list  of  policy  objectives  has  obscured  the  importance  of  these  actions  which  can 
drive productivity growth. From now on, structural reforms, through such policies, 
should be pivotal in the renewed Lisbon strategy.  

Productivity growth and increased employment must go hand in hand. We need to 
avoid  the  type  of  jobless  growth  that  has  marred  the  performance  of  the  US 
economy  in  the  past  years.  At  the  same  time,  we  must  bring  the  long  term 
unemployed  and  people  with  relatively  low  skills  back  into  work.  This  might 
impact the speed at which our productivity can improve. The strong emphasis on 
knowledge,  education  and  innovation  in  our  renewed  Lisbon  strategy  will  give 
people the opportunity to climb the productivity ladder and guarantee that overall 
our productivity grows quickly.  

The  opening  of  international  markets  and  the  strong  growth  of  newly 
industrialising economies will make a significant contribution to growth and jobs. 
However, this will only happen if we can ensure a deeper and more rapid process 
of  structural  adjustment  of  our  economy  to  reallocate  resources  to  sectors  where 
Europe  has  a  comparative  advantage.  Facilitating  change  to  more  competitive 
sectors  and  better  quality  jobs  is  therefore  critical  to  the  success  of  the  renewed 
Lisbon strategy. 

EN 

13 

   EN 

 
 
 
Against the backdrop, pushing forward our policy agenda relies on action at both 
Union  and  national  level.  Success  depends  on  shared  responsibilities  and  shared 
ownership. This is why a partnership is indispensable. 

The 
responsibility 
must be shared 
between the EU 
and national 
level. 

2. 

BUILDING A EUROPEAN PARTNERSHIP FOR GROWTH AND EMPLOYMENT 

Growth and jobs – 
the first example 
of our Partnership 
for European 
renewal. 

The  Commission  has  just  recently  proposed  building  a  partnership  for  European 
renewal2. This forms part of the strategic programme for 2005-2009 and is geared 
to enabling the Member States, the European Union and the social partners to work 
together towards the same aim. As already stated, growth and jobs will spearhead 
this  new  partnership.  All  the  input  so  far  clearly  indicates  a  real  determination  to 
work towards this renewed ambition. 

To succeed we 
must take Lisbon 
forward by …. 

The Commission is therefore calling on this March’s European council to relaunch 
the  Lisbon  Strategy  by  way  of  a  European  Partnership  for  jobs  and  growth.  The 
partnership will have one aim and one only: to facilitate and speed up delivery 
of the reforms needed to boost growth and employment. 

It must bring solid added value if it is to produce tangible and swift results: 

…mobilising 
support… 

…spreading 
ownership… 

…and 
strengthening 
priorities. 

(cid:131)  Getting  the  different  players  to  work  together. Mobilisation  and 
collective  effort  are  the  key  elements  of  the  Partnership.  The  challenges 
are common challenges and affect our model of development. We have to 
rise to them together – after all, everyone's individual input is essential to 
ensure  collective  success.  The  scale  of  the  challenges  is  such,  and  our 
economies so interdependent, that no Member State is capable of facing up 
to the task alone.  

(cid:131)  Making sure that these objectives and reforms are taken on board by all 
the various players. The Lisbon Strategy failed to commit the key players 
sufficiently in terms of delivery, particularly at national level. Mobilisation 
is  possible  only  if  the  various  players  feel  that  the  policies  proposed 
concern them, and that they are truly involved in the decision-making and 
implementation process. The Member States should therefore be called on 
to  produce  a  single  national  action  programme  –  following  broad 
consultation  –  and  a  single  national  report  on  the  Lisbon  Strategy  (see 
point 4). 

(cid:131)  Refocusing  efforts  on  priority  and  visible  objectives,  backed  up  by 
tangible  measures  impinging  on  growth  and  jobs.  This  is  fundamental  if 
Lisbon  is  to  succeed.  It  is  by  pinpointing  clear  priorities  and  concrete 
action  that  we  shall  get  people  rallying  behind  it  and  committing 
themselves to it. 

2 

COM(2005) 12, “Strategic objectives 2005-2009. Europe 2010: a partnership for European renewal – 
Prosperity, solidarity and security”.  

EN 

14 

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For  this  partnership  to  deliver  result,  it  requires,  at  a  national  level,  the  full 
commitment of every partner. 

3. 

ACTIONS TO DELIVER GROWTH AND JOBS 

3.1. 

A Lisbon Action Programme for the Union and the Member States 

Three main 
areas… 

At  the  heart  of  the  proposed  partnership  for  growth  and  jobs  is  a  Lisbon  Action 
Programme. It sets out priorities which will help the Union and its Member States 
drive  up  productivity  and  create  more  and  better  jobs.  It  covers  actions  in  three 
main areas:  

(cid:131)  Making Europe a more attractive place to invest and work,  

(cid:131)  Knowledge and innovation for growth,  

(cid:131)  Creating more and better jobs 

…will simplify 
our approach… 

This  provides  a  stronger  focus  for  the  renewed  Lisbon  strategy.  It  gives  a  clearer 
sense of priorities. It responds to the criticisms that Lisbon had too many priorities 
and was too complex for people to really understand what Lisbon was about.  

…setting out who 
does what, by 
when and how we 
will judge 
progress. 

All EU 
Institutions have a 
role to play. 

Member States 
must make firm 
commitments. 

The Lisbon Action Programme – building on the experience of the Internal Market 
Programme  –  identifies  responsibilities,  sets  deadlines  and  measures  progress.  In 
particular,  it  makes  a  clear  distinction  between  actions  at  Member  States  and 
European Union level. The most important actions are presented in this chapter3. 

As  regards  the  EU  level,  the  Commission  will  play  its  central  role  of  initiating 
policy  and  ensuring  implementation.  It  will  do  so  working  closely  with  the 
Parliament and Council, as well as drawing on the expertise of other EU institutions 
such  as  the  European  Economic  and  Social  Committee,  the  Committee  of  the 
Regions or in the financial field the European Investment Bank.  

As  regards  the  national  level,  the  Commission  will  be  a  facilitator  through 
benchmarking, financial support, promotion of social dialogue or by setting up best 
practices.  But  success  on  the  ground  is  where  the  first  phase  of  Lisbon  has  fallen 
down.  This  is  why  the  Commission  is  setting  out  where  Member  States,  taking 
account of their specific situation, are expected to make firm commitments within 
their  own  national  action  programmes.  These  should  cover  concrete  measures, 
including  a  time-table  and  progress  indicators.  The  Commission  will  continue  to 
monitor  and  assess  the  progress  made,  using  the  new  method  of  reporting  and 
coordination described below. 

3 

EN 

SEC(2005) 192,  “Lisbon Action  Plan  incorporating  EU Lisbon  Programme  and  recommendations  for 
actions 
national  Lisbon  Programmes”, 
http://europa.eu.int/growthandjobs/index_en.htm. 

to  Members  States 

inclusion 

their 

for 

in 

15 

   EN 

 
 
 
                                                 
We need a better 
environment for 
our small and 
medium-sized 
businesses. 

We need to extend 
and deepen the 
internal market... 

3.2. 

Making Europe a more attractive place to invest and work 

Boosting growth and jobs requires increasing Europe’s attractiveness as a place to 
invest  and  work.  The  European  Union  and  the  Member  States  must  focus  their 
actions on key levers. 

Action  here  is  of  particular  importance  for  Europe’s  small  and  medium  sized 
businesses  (SMEs)  which  constitute  99%  of  all  enterprises  and  two  third  of 
employment.  There  are  just  too  many  obstacles  to  becoming  an  entrepreneur  or 
starting  a  business,  and,  therefore,  Europe  is  missing  opportunities.  Encouraging 
more  entrepreneurial  initiative  implies  promoting  more  entrepreneurial  attitudes. 
The  balance  between  risk  and  reward  associated  with  entrepreneurship  should  be 
reviewed. The stigma of failure complicates a fresh start and even deters many from 
starting a business in the first place. Finally, in Europe, despite progress during the 
first five years of Lisbon, there is still insufficient risk capital available to start up 
innovative young businesses and current tax rules discourage the retention of profits 
to build up equity. 

3.2.1. 

Extend and deepen the Single Market 

Completing  the  Single  Market,  particularly  in  the  area  of  services,  regulated 
professions, energy, transport, public procurement and financial services remains a 
crucial  task.  Providing  high  quality  services  of  general  interest  to  all  citizens  at 
affordable  prices  is  also  necessary.  A  healthy  and  open  services  sector  is 
increasingly  crucial  to  growth  and  jobs  in  the  European  economy.  The  services 
sector  has  been  responsible  for  almost  all  the  new  jobs  created  in  the  EU  in  the 
period  1997-2002.  Services  now  account  for  70%  of  EU  value  added.  Freeing  up 
the provision of these services will stimulate growth and generate employment. A 
net increase of 600.000 jobs could be achieved if the services sector was freed up. 

These  are  areas  which  can  deliver  a  real  growth  and  job  dividend  and  are  of 
immediate  relevance  for  consumers.  In  many  of  these  areas,  Lisbon  has  already 
delivered much of the legislation, but Member States are letting their businesses and 
citizens down by dragging their feet in implementation and enforcement. 

…spur investment 
and innovation…. 

Removing remaining barriers will create new opportunities for market entrants and 
the resulting competition will spur investment and innovation. This is all the more 
important  against  a  backdrop  of  stagnating  intra-EU  trade  in  goods  and  stalling 
price convergence. 

Making the most 
of services of 
general economic 
interest  

Public services have a central role in an effective and dynamic single market. The 
Commission  published  in  May  2004  a  White  Paper  setting  out  principles 
underpinning EU policies in the area of services of general interest and addressing 
key  issues  such  as  the  interface  with  internal  market,  competition  and  state  aid 
rules, and the selection of the provider and consumer rights. The Commission will 
return to this issue later in 2005.  

EN 

16 

   EN 

 
 
 
 
 
 
…and national 
administrations 
have a central 
role. 

Finally, Member States should ensure that their own regulatory systems are better 
attuned  to  the  needs  of  an  EU-wide  market.  It  is  crucial  to  ensure  and,  where 
necessary,  improve  of  the  role  of  national  administrations  in  providing  the  right 
market  conditions  (e.g.  greater  use  of  on-line  services  (e-government),  tackling 
corruption and fraud). Moreover, much can be done in the area of taxation to make 
the  Single  Market  work  better  and  to  reduce  the  existing  barriers  and  the 
administrative burden for entrepreneurs.  

SINGLE MARKET LEGISLATION 

The Financial Services Action Plan was one of the real success stories 
of  the  first  phase  of  the  Lisbon  Strategy:  legislative  measures  were 
delivered  on  time;  the  European  Institutions  worked  well  together  and 
innovative solutions were found to fill in the detail of the ambitious new 
framework.  What  counts  now  is  to  ensure  the  rules  are  consistently 
applied  across  the  Union.  At  the  same  time,  the  “leftovers”  from  the 
Financial  Services  Action  Plan  should  be  addressed  over  the  coming 
years.  Action  will  be  taken  only  if  broad  consultation  with  interested 
parties and impact assessment demonstrates a clear value-added 

In order to build consensus on the Services Directive and to ensure the 
smooth discussion of this important proposal, the Commission will work 
constructively  with  the  European  Parliament,  the  Council  and  other 
stakeholders  in  the  run  up  to  the  adoption  of  the  first  reading  by  the 
Parliament. We will focus particularly on concerns raised on areas such 
as  the  operation  of  the  country  of  origin  provisions  and  the  potential 
impact for certain sectors.  

On the REACH directive, the Commission stresses the need to arrive at 
a decision which will be consistent with the Lisbon goals as regards the 
competitiveness  of  the  European  industries  and  encouraging  innovation, 
and which will achieve a marked improvement in health and environment 
to  the  benefit  of  Europe’s  citizens.  The  Commission  signals  its 
willingness to cooperate fully with Parliament and with Council in search 
for  pragmatic  solutions  to  key  issues  which  have  emerged  in  the 
examination of REACH in order to improve its workability. 

In  order  to  overcome  the  obstacles  posed  by  25  different  sets  of  rules 
governing  how  companies  are  taxed  when  they  operate  in  several 
Member States, the Commission is taking work forward to try to achieve 
an  agreement  on  a  common  consolidated  corporate  tax  base  and  its 
implementation. This will reduce a significant overhead to doing business 
in  different  countries,  while  leaving  Member  States  free  to  set  the 
corporate tax rate. 

The  Community  Patent  has  become  a  symbol  of  the  Union's 
commitment to a knowledge-driven economy. This remains an important 
proposal  and  rapid  progress  towards  a  workable  solution  that  supports 
innovation must be pursued. 

EN 

17 

   EN 

 
 
 
 
Competition is of 
fundamental 
importance. 

3.2.2. 

Ensure open and competitive markets inside and outside Europe 

Competition is of fundamental importance for the whole partnership for growth and 
jobs.  EU  competition  policy  has  played  a  key  role  in  shaping  European 
competitive markets, which have contributed to increasing productivity. This will 
continue in the enlarged Europe in particular through proactive enforcement and a 
state aid reform regarding innovation, R&D and risk capital. The Commission will, 
therefore,  continue  to  pursue  its  competition  policies,  which  can  also  help  in 
identifying regulatory and other barriers to competition. Enquiries in key sectors, 
like  financial  services  and  energy,  will  be  undertaken  to  ascertain  the  underlying 
reasons why markets do not fully function in such sectors. 

Member States 
must reduce and 
redirect State aid. 

Member  State  should  reduce  and  redirect  State  Aids  to  address  market  failures  in 
sectors  with  a  high  growth  potential  as  well  as  to  stimulate  innovation.  These 
initiatives should clearly target the needs and burdens for small and medium sized 
enterprises. The Commission will launch a major overhaul reform of State aid rules 
during the course of the year (see section 3.3.1). 

EU business also 
needs open global 
markets. 

European  companies  are  facing  more  and  more  international  challenges  and  EU 
trade policy needs to ensure that they can have access to third markets and compete 
on  a  fair  basis  with  clear  rules.  In  summary,  open  markets,  both  in  Europe  and 
globally, are crucial to generating higher growth rates.  

GROWTH AND JOBS: THE GLOBAL DIMENSION 

The  completion  of  an  ambitious  agreement  in  the  DOHA  round, 
therefore, 
fundamental  objective.  This  should  be 
complemented  by  bilateral  and  regional  Free  Trade  Agreements, 
including with Mercosur, the Gulf Co-operation Council. 

remains 

the 

There  should  be  a  fresh  drive  for  regulatory  and  administrative 
convergence at the international level, in particular in transatlantic trade 
relations.  Ensuring  that  standards  converge  as  widely  as  possible  at  the 
international level – whether this is with our major trading partners such 
as the USA or with rapidly growing markets in Asia such as China, India 
and  with  other  countries  in  the  EU  neighbourhood  –  holds  out  the 
potential  for  significant  cost  reductions  and  productivity  growth.  The 
Commission will actively pursue this agenda.  

3.2.3. 

Improve European and national regulation 

The right 
regulatory 
framework helps 
business and 
builds consumer 
confidence. 

Cutting  unnecessary  costs,  removing  obstacles  to  adaptability  and  innovation  and 
more  competition  and  employment  friendly  legislation  will  help  create  more 
conducive  conditions  for  economic  growth  and  improved  productivity.  This 
comprises  measures  such  as  simplification,  well  shaped  legislation  and  efforts  to 
reduce the burden of administrative costs. The right regulatory framework will also 
strengthen  consumer  confidence  and  help  them  contribute  to  growth.  Regulatory 
burdens also disproportionately affect SMEs which usually have limited resources 
to deal with the administration such rules often imply. 

We must remove 
unnecessary 
burdens 

A  new  approach  to  regulation  should  seek  to  remove  burdens  and  cut  red  tape 
unnecessary for reaching the underlying policy objectives. Better Regulation should 
be a cornerstone for decision making at all levels of the Union.  

EN 

18 

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BETTER REGULATION 

Better  regulation  has  a  significant  positive  impact  on  the  framework 
conditions  for  economic  growth,  employment  and  productivity  by 
improving quality of legislation, thereby creating the right incentives for 
business,  cutting  unnecessary  costs  and 
to 
adaptability and innovation.  

removing  obstacles 

Member States should also pursue their own better regulation initiatives, 
notably  in  respect  of  sectors  where  Europe’s  productivity  growth  is 
clearly lagging behind, such as the services sector.  

The  Commission  will  ambitiously  pursue  this  objective  and  launch  a 
major new initiative before the Spring Council, which includes: 

–  Better  assessing  the  effect  of  new  legislative/policy  proposals  on 

competitiveness, also through its Impact Assessment instrument. 

–  Drawing  on  outside  expertise 

to  advise  on 

the  quality  and 

methodology of how to carry out impact assessments. 

–  The  cumulated  burden  of  regulation,  difficult  market  access  and 
insufficient  competitive  pressure  can  hold  back  innovation  in  sectors 
that  have  a  high  growth  potential.  The  Commission  will,  therefore, 
launch a series of sectoral reviews with a view to identifying growth 
and innovation inhibiting obstacles in key sectors. A special attention 
will be given to burdens for small and medium sized enterprises.  

A modern 
infrastructure 
facilitates trade 
and mobility. 

3.2.4. 

Expand and improve European infrastructure  

The Single Market needs to be equipped with modern infrastructure to facilitate 
trade and mobility. Progress here has been disappointingly slow and this now needs 
to  be  addressed.  A  modern  infrastructure  is  an  important  competitiveness 
factor  in  many  enterprise  decisions,  affecting  the  economic  and  social 
attractiveness  of  locations.  It  guarantees  mobility  of  persons,  goods  and  services 
throughout  the  Union.  Also,  infrastructure  investments  especially  in  the  new 
Member States will encourage growth and lead to more convergence, in economic, 
social  and  environmental  terms.  Given  the  long  term  effects  of  infrastructure, 
decisions  should  significantly  contribute  to  sustainability.  Similarly,  fair  and 
efficient systems of infrastructures pricing will serve this objective. 

The opening up of 
energy and other 
network 
industries must be 
fully implemented. 

Finally,  we  need  to  ensure  that  the  opening  to  competition  of  sectors  like 
energy and other network industries, which has already been agreed, is now 
fully implemented on the ground. These measures offer an essential lever for 
ensuring  the  best  use  of  physical  infrastructure  with  both  industry  and 
consumers  enjoying  the  benefits,  wherever  their  location,  of  lower  prices, 
greater choice and a guarantee of high quality services of general interest to 
all citizens. 

EN 

19 

   EN 

 
 
 
EUROPEAN INFRASTRUCTURES 

Modern  transport  and  energy  infrastructures  throughout  the  European  Union 
territory  are  a  prerequisite  for  reaping  the  benefits  of  a  re-invigorated  Lisbon 
strategy.  Member  States  must  deliver  on  their  commitments  to  start  work  on 
45 “quick  start”  cross-border  projects  for  transport  and  energy.  European 
coordination on a project by project basis must be matched by a clear commitment 
on the part of Member States concerned to launch a planning and financing process. 
Member  States  should  report  on  progress  made  as  part  of  their  national  action 
programmes. 

3.3. 

Knowledge and innovation for growth 

Knowledge drives 
productivity 
growth. 

In advanced economies such as the EU, knowledge, meaning R&D, innovation and 
education, is a key driver of productivity growth. Knowledge is a critical factor with 
which Europe can ensure competitiveness in a global world where others compete 
with cheap labour or primary resources.  

We must close the 
EU’s R&D 
investment gap 

3.3.1. 

Increase and improve investment in Research and Development 

The EU, however, still invests about a third less than the USA in R&D. 80% of the 
gap is due to under-investment in research and development from the private sector, 
notable in ICT. The EU is currently spending only 2% of GDP, barely up from the 
level at the time of Lisbon’s launch. We must achieve faster progress towards the 
EU target of 3% of GDP for R&D expenditure. This requires increased and more 
effective  public  expenditure,  more  favourable  framework  conditions  and  powerful 
incentives  for  companies  to  engage  in  innovation  and  R&D,  as  well  as  more 
numerous well trained and motivated researchers. 

MEETING THE 3% R&D TARGET 

Progress towards the Lisbon target for EU research and development 
spending  (3%  GDP  by  2010)  is  largely  in  the  hands  of  Member 
States.  In  their  national  Lisbon  programmes,  Member  states  should 
explain  the  steps  which  will  bring  this  target  in  reach.  Mobilising 
more  business  investment  is  crucial  and  Member  States  should  take 
full advantage of the possibilities that the new State aid framework. 

A  key  building  block  should  also  be  a  co-ordinated  European 
approach  to  improve  the  tax  environment  for  R&D.  This  is  an 
increasingly important factor encouraging business to spend more on 
investment  research  and  development  in  other  countries.  This  will 
primarily be important for the growth of high-tech small and medium 
sized enterprises throughout the Union. 

At  EU  level  the  7th  research  framework  programme  will  aim 
strongly  boost  our  industries’  competitiveness  in  key  technology 
areas  by  pooling  and  strengthening  efforts  across  the  EU  and  by 
leveraging private sector investment. The new framework programme 
will also focus on excellence of the research base through the future 
European Research Council, composed of independent world-class 
scientists, selecting research projects and programmes on the basis of 

EN 

20 

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scientific excellence. 

REVISION OF THE STATE AIDS FRAMEWORK FOR R&D 
AND INNOVATION 

In the context of the overall reform of State aid rules, a revision of 
the  existing  State  Aid  Framework  for  R&D  will  be  brought 
forward with the aim of facilitating access to finance and risk capital 
as well as public financing of R&D and innovation. The Commission 
will present a communication on the future of State Aid policy before 
summer 2005. We need to make it easier to provide financial support 
for  research  and  innovation,  particularly  for  young  and  innovative 
companies.  Today,  limited  access  to  finance  is  one  of  the  biggest 
barriers  to  innovation.  Public  support should be  available  where  the 
spill-overs  for  society  at  large  is  significant,  while  ensuring  that 
competitive conditions are not distorted.  

Universities have 
a crucial role in 
creating and 
spreading 
knowledge. 

3.3.2. 

Facilitate  innovation,  the  uptake  of  ICT  and  the  sustainable  use  of 
resources 

Universities’  contribution  to  the  creation  and  dissemination  of  knowledge 
throughout  the  Union  must  be  reinforced.  The  Commission  will  come  forward 
with  ideas  on  how  to  increase  their  potential  and  quality  in  research,  science  in 
order  to  be  more  attractive  and  build  better  links  with  industry.  The  Commission 
will also propose guidelines to improve their research collaboration and technology 
transfer  with  industry.  It  will  address  the  question  of  how  to  enable  European 
universities  to  compete  internationally.  In  many  ways,  the  existing  approaches  to 
financing, governance and quality are proving inadequate to meet the challenge of 
what has become a global market for academics, students and knowledge itself. 

EU investment 
should play its 
part. 

In  order  to  achieve  greater  synergies  between  research,  structural  and  cohesion 
funding,  we  should  invest  more  in  facilities  for  research  and  innovation,  which 
enable more regions to participate in EU level research activities. 

INNOVATION POLES 

At  a  regional  and  local  level,  we  need  a  greater  focus  on  establishing  innovation 
poles,  bringing  together  high  technology  small  and  medium  sized  enterprises, 
universities  and  the  necessary  business  and  financial  support.  Member  States 
should exploit the opportunities offered by EU regional and social funds to support 
regional  innovation  strategies.  This  is  crucial  to  exploiting  new  “centres  of 
excellence”, promoted in our research program so that we get more ideas out of the 
lab  and  into  workshop.  This  will  be  facilitated  by  strengthened  links  between  the 
regional  funds,  the  research  framework  programme  and  the  new  Competitiveness 
and Innovation Programme. 

National  Lisbon  action  programs  should  provide  a  roadmap  for  such  establishing 
and developing new and existing poles. 

The search for knowledge has always been at the heart of the European adventure. 
It has helped to define our identity and our values, and it is driving force behind our 
future competitiveness. In order to reinforce our commitment to knowledge as a key 
to  growth,  the  Commission  proposes  the  creation  of  a  “European  Institute  of 
Technology”  to  act  as  a  pole  of  attraction  for  the  very  best  minds,  ideas  and 
companies from around the World. The Commission will actively explore with the 

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Member  States  and  public  and  private  stakeholders  on  how  best  to  take  this  idea 
forward. 

Investment in new 
technologies… 

Innovation  is  significantly  affected  by  competition  and  tax  policy,  as  well  as  the 
speed with which new technologies are taken up, especially in the context of rapidly 
changing technology.  

…is crucial to 
push up 
productivity, 
while…. 

More generally, our innovation performance is crucially dependent on strengthening 
investment  and  the  use  of  new  technologies,  particularly  ICTs,  by  both  the 
private  and  public  sectors.  Information  and  Communication  technologies  provide 
the  backbone  for  the  knowledge  economy.  They  account  for  around  half  of  the 
productivity growth in modern economies. However, investments in ICTs in Europe 
have  been  lower  and  later  than  in  the  United  States,  especially  in  service  sectors 
such as transport, retail or financial services.  

i2010: European 
Information 
Society can 
stimulate ICT use 

We must also meet 
resource and 
environmental 
challenges... 

While  the  prime  responsibility  remains  with  business  and  public  administrations 
when  making  their  investment  programmes,  Europe  is  helping.  A  new  initiative  - 
i2010:  European  Information  Society  will  stimulate  the  take-up  of  ICTs,  to 
continue the eEurope agenda which the Lisbon Strategy fostered. It will do this by 
promoting  a  clear, 
for  electronic 
communications and digital services; increased research and innovation in ICTs and 
an Information Society dedicated to inclusion and quality of life.  

stable  and  competitive  environment 

Lasting  success  for  the  Union  depends  on  addressing  a  range  of  resource  and 
environmental  challenges  which  if  left  unchecked  will  act  as  a  brake  on  future 
growth.  This  goes  to  the  heart  of  sustainable  development.  In  contrast  to  Europe, 
many parts of the world see high rates of economic growth combined with rapid rise 
in their population. Europe must rise to this challenge and take the lead in shifting 
towards more sustainable patterns of production and consumption. 

…Eco-innovation 
will hold the key. 

Moreover,  by  getting  more  output  from  given  inputs  innovation  leading  to 
productivity  growth  can  also  make  a  significant  contribution  to  ensuring  that 
economic  growth  is  increasingly  environmentally  sustainable.  This  is  why  eco-
innovations need to be strongly promoted, notably in transport and energy. 

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ECO-INNOVATION 

take  necessary  steps 

its  promotion  of  environmental 
The  Commission  will  step  up 
technologies.  It  will  also 
the 
development of approaches and technologies that allow the EU to make 
the structural changes needed for long term sustainability, for example in 
the  areas  of  sustainable  resource  use,  climate  change  and  energy 
efficiency.  These  are  needed  both  for  use  within  the  EU  and  to  meet 
demand  in  expanding  markets  worldwide.  There  is  significant  potential 
for  economic,  environmental  and  employment 
from 
environmental technologies and energy efficiency.  

to  promote 

synergies 

technology 
These  will  be  supported  by 
dissemination  efforts,  including  leveraging  private  finance  through  the 
European  Investment  Bank,  to  promote  the  development  and  uptake  of 
low carbon technologies.  

increased  research  and 

3.3.3. 

Contribute to a strong European industrial base 

A strong 
industrial base 
can keep us at the 
cutting edge of 
science and 
technology. 

Taking the lead internationally in the field of R&D and innovation creates a first-
mover  advantage  which  can  be  long-lasting,  all  the  more  so  as  technological 
breakthroughs such as our experience with GSM enable Europe to set international 
standards. In order to enhance and sustain an economic and technological leadership 
Europe  must  have  a  strong  industrial  capacity,  particularly  by  exploiting  fully 
its technological potential. We need an integrated and anticipative approach based 
on  market  driven  development  of  industrial  sectors.  The  synergies  from  jointly 
addressing  research,  regulatory  and  financing  challenges  at  the  European  level 
where  for  reasons  of  scale  or  scope  individual  member  states  cannot  succeed  in 
isolation to tackle market failures have not always been fully exploited.  

Galileo and 
aeronautics stand 
as examples of 
where public-
private 
partnerships have 
delivered. 

The  Galileo  project  and  the  aeronautics  are  powerful  examples  of  a  successful 
pooling of European excellence – in both cases bringing significant benefits to the 
European  economy.  Such  approaches,  mobilising  public  private  partnerships, 
should  be  developed  to  tackle  cases  where  the  benefits  for  society  are  larger  than 
those for the private sector: for example, energy from hydrogen. The relaunch of the 
Lisbon  strategy  should  create  the  right  conditions  for  tapping  this  potential  and 
facilitating  the  necessary  structural  change  whilst  working  externally  to  achieve 
open markets. 

EUROPEAN TECHNOLOGY INITIATIVES 

Industrial  competitiveness  can  be  supported  by  setting  up  major 
European  technology  initiatives  mobilising  funding  from  the  Union, 
Member  States  and  industry.  The  next  framework  programme  for 
research  can  drive  this  process,  providing  sufficient  priority.  The 
objective is to tackle market failures and to advance concrete product 
or service developments on the basis of those technologies that are not 
only  fundamental  to  Europe’s  sustainable  development  model,  but  will 
also  contribute  to  industrial  competitiveness.  Their  scale  justifies 
additional  EU  funding,  which  in  turn  will  mobilise  additional  national 
and private funding. The management would be handled through public-

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private partnerships. 

Important examples relate to environment-friendly technologies, such as 
hydrogen  technologies  and  solar  energy.  For  these  projects,  Galileo, 
which  will  create  an  important  market  and  numerous  jobs,  is  a  good 
reference point. Increasing the EU’s ability to transform technology into 
concrete products, markets and jobs is a key for the Lisbon success. 

The  Commission  will  identify  criteria,  themes  and  projects  in  close 
cooperation  with  the  main  stakeholders  (Member  States,  research 
community,  industry,  and  civil  society)  and  report  to  the  European 
Council in June. This process and the subsequent preparation and funding 
phase will take place within the Framework Programme preparation and 
adoption process. 

3.4. 

Creating more and better jobs 

Europe needs 
more and better 
jobs... 

Ensuring prosperity and reducing the risks of social exclusion means doing more to 
give people jobs and make sure they remain in work or education throughout their 
lives. 

…but 
demographics are 
putting our 
employment 
record under 
further pressure. 

We must attract 
more people into 
the labour force… 

…and shape the 
right policies for 

In  a  context  of  rapid  economic  change  and  intense  demographic  ageing,  creating 
more  and  better  jobs  is  not  just  a  political  ambition:  it  is  an  economic  and  social 
necessity. Over the next 50 years Europe will face an unprecedented demographic 
transition. The total working population will decrease in absolute terms on current 
demographic  trends.  Apart  from  the  significant  social  changes  this  transition  will 
bring about, it will also put enormous pressure on our pension and social security 
systems and, if left unchecked, drag down potential growth rates to a paltry 1% per 
year.  In  addition,  the  population  of  some  our  Member  States  could  shrink 
dramatically. The Commission will adopt a green paper to launch a debate on this 
demographic  challenge  in  order  to  identify  which  public  policies  could  be  put  in 
place to address it. 

Finally,  the  Commission  will  propose  to  revise  the  European  Employment 
Strategy  in  2005  as  an  integral  part  of  the  new  Lisbon  Strategy,  building  on  the 
Lisbon Action Plan. 

3.4.1. 

Attract  more  people  into  employment  and  modernise  social  protection 
systems 

While the issue of low birth rates in Europe should be properly addressed as part of 
a  long-term  policy,  raising  employment  levels  is  the  strongest  means  of 
generating growth and promoting socially inclusive economies. The challenge is 
to attract and keep more people in the labour market through active labour market 
policies  and  appropriate  incentives.  Moving  people  from  unemployment  or 
inactivity back to employment and giving incentives to stay longer in the workforce 
all  require  the  modernisation  of  social  protection  systems.  The  huge  potential  of 
women in the labour market remains to be fully exploited. social partners should be 
committed to further eliminate the gender pay gap. 

Action  is  also  needed  for  young  people,  where  Europe  is  still  faced  with  high 
structural  unemployment  and  high  drop  out  rates  from  education  and  for  older 
workers who still start exiting the labour market on a very large scale by the time 
they reach 55 years of age. Moreover, many people find it difficult to combine work 

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both the young 
and for older 
workers. 

with  family  life.  The  provision  of  better  and  affordable  child  care  facilities,  in 
particular,  could  make  an  important  contribution.  Legal  migration  to  avoid 
shortages  of  specific  skills  and  a  mismatch  of  demand  and  supply  in  important 
segments of the labour market also has a key role to play 

EUROPEAN YOUTH INITIATIVE 

In their letter of 29 October 2004, the leaders of France, Germany, Spain 
and Sweden put forward a proposal for a European Pact for Youth which 
concentrates on reducing youth unemployment and facilitating entry into 
the labour market. Finding ways to further combine work and family life 
as a central element of the Initiative. 

The Policy Areas presented in this Communication contain a number of 
measures central to unleashing the potential of young people. They will 
be important elements in the revised European Employment Strategy and 
back-up  by  EU  funding,  notably  through  the  European  Social  Fund. 
Taken  together  these  measures  constitute  a  genuine  European  Youth 
Initiative: 

•  The policy area “Attract more people into employment and modernise 
social  protection  systems”  proposes  measures  to  reduce  youth 
unemployment  such  as  better  vocational 
the 
development  of  apprenticeships,  and  measures  to  ensure  that  young 
unemployed  people  be  given  particular  attention  in  active  labour 
market  policy  measures.  Also  under  this  heading,  actions  aimed  at 
improving facilities for childcare and for elderly and disabled as well 
as  extension  of  parental  leave  for  fathers  will  contribute  to  a  more 
harmonious combination of work and family life. 

training  and 

•  In  the  policy  area  “Increase  investment  in  human  capital  through 
better  education  and  skills”,  several  measures  specifically  target  the 
younger generation and aim at endowing this group with the human 
capital  and  the  skills  needed  in  a  dynamic  knowledge-based 
economy.  Examples  of  such  measures  are 
increase  and 
improvement  in  effectiveness  of  investments  in  education;  the 
reduction of early school leavers and of low achievers; and increased 
participation  in  mathematics,  science,  technology  and  engineering 
studies.  

the 

•  Measures  under  the  heading  “Increase  and  Improve  investment  in 
Research  and  Development”  -  linked  with  the  ability  to  increase  the 
amount  of  human  capital  in  the  economy  -  will  also  benefit  the 
younger generations by opening up new career prospects. 

The 
modernisatio
n 
 of social 
protection 
systems is 
also 
important. 

Member States should modernise social protection systems (most importantly 
pensions  and  health  care  systems)  and  strengthen  their  employment  policies. 
Member States' employment policies should aim at attracting more people into 
employment (notably through tax and benefit reforms to remove unemployment 
and wage traps, improved use of active labour market policies and active ageing 
strategies);  improving  the  adaptability  of  workers  and  enterprises  notably 
through  wage  developments  in  line  with  productivity  growth  and  increased 
investment  in  human  capital.  Increasing  healthy  life  years  will  be  a  crucial 
factor in achieving this objective. 

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Member 
States should 
set national 
targets for 
employment
… 

The  Commission  is  proposing  that  Member  States  fix  national  employment 
rate targets for 2008 and 2010 in their National Lisbon Programmes and that 
they map out which policy instruments they intend to mobilise to reach it. The 
employment guidelines will assist Member States in selecting the most effective 
instruments  and  the  Commission  will,  on  this  basis,  in  its  Strategic  Annual 
Report assess progress. 

…and we 
need the 
support of the 
social 
partners. 

A high degree  
of 
adaptability 
will boost our 
performance 
and help 
people into 
jobs. 

We must 
remove 
barriers to 
mobility. 

More 
 investment  
in education 
 and skills is 
a further 
factor. 

Voluntary  business  initiatives,  in  the  form  of  corporate  social  responsibility 
(CSR) practices, can play a key role in contributing to sustainable development 
while enhancing Europe’s innovative potential and competitiveness.  

Finally,  the  social  partners  are  asked  to  promote  the  integration  of  people 
excluded  from  the  labour  market,  including  young  people.  This  will  not  only 
contribute to the fight against poverty, but also ensure that more people are in 
work. 

3.4.2. 

Increase the adaptability of workers and enterprises and the flexibility 
of labour markets 

In rapidly changing economies, a high degree of adaptability is also vital to 
promote  productivity  growth  and  to  facilitate  job  creation  in  rapidly 
growing  sectors.  Increasingly,  new  firms  and  SMEs  are  major  sources  of  job 
creation  and  growth  in  Europe.  More  flexibility  combined  with  security  will 
require  a  greater  ability  of  workers  and  enterprises  to  anticipate,  trigger  and 
absorb change. Greater adaptability should also contribute to ensuring that wage 
labour cost developments  do not exceed in line with productivity growth over 
the  cycle  and  reflect  the  labour  market  situation.  Given  differences  in  labour 
market institutions and the functioning of labour markets, it is clear that a one–
size-fits-all  policy  would  be  ineffective  and  potentially  counterproductive. 
Member States will themselves have to develop the best policy mix. 

In  order  to  target  specific  problems,  the  Commission  will  make  proposals  to 
remove  obstacles  to  labour  mobility  arising  from  occupational  pension 
schemes  and  work  on  the  co-ordination  of  admission  policy  for  economic 
migrants.  Adoption  of  proposed  legislation  to  further  mobility  in  the 
professions, the adoption of a European Qualifications Framework in 2006 and 
the promotion of equal opportunities (recast proposal) are also of fundamental 
importance. 

3.4.3. 

Investing more in human capital through better education and skills. 

Structural  change,  greater  labour  market  participation  and  productivity  growth 
require a continued investment in a highly skilled and adaptable workforce. 
Economies  endowed  with  a  skilled  labour  force  are  better  able  to  create  and 
make  an  effective  use  of  new  technologies.  Educational  attainment  in  Europe 
falls  short  of  what  might  be  required  to  ensure  that  skills  are  available  in  the 
labour market and that new knowledge is produced that is subsequently diffused 
across  the  economy.  The  emphasis  on  lifelong  learning  and  knowledge  in 
economic life also reflect the realisation that advancing educational attainment 
and skills makes an important contribution to social cohesion. 

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Life long 
learning is a 
priority. 

EU funding  
has a role to 
play. 

The  modernisation  and  reform  of  Europe's  education  and  training  systems  is 
mainly  the  responsibility  of  Member  States.  However,  there  are  certain  key 
actions that must be taken at European level to facilitate and contribute to this 
process. The proposal for a new Lifelong Learning programme, to replace the 
current  generation  of  education  and  training  programmes  from  2007,  must  be 
adopted by the legislator by the end of 2005 in order to allow it's effective and 
timely implementation. It must also be endowed with a budget consistent with 
its aims. Member States must fulfil their commitment to put in place Lifelong 
Learning Strategies by 2006. 

The  Community  will  contribute  to  the  objective  of  more  and  better  jobs  by 
mobilising  its  expenditure  policies.  The  Structural  Funds  are  already  being 
used  and  geared  towards  these  objectives,  but  this  progress  can  only  be 
consolidated through the adoption of the proposals for the new Framework 
post 2007. Adequate funding for these policies which would lever regional and 
national means from the public and the private sector and support the sharing of 
best practices is required. 

DELIVERING LISBON: REFORM OF EU COHESION POLICY AND 
THE ROLE OF THE STRUCTURAL FUNDS 

For  the  next  generation  of  regional  development,  European  Social  Fund  and 
cohesion  programmes,  the  Commission  proposes  a  more  strategic  approach  in 
an  effort  to  ensure  that  their  content  is  targeted  on  growth  and  jobs.  Strategic 
guidelines  will  be  established  at  Community  level by  decision of  the  Council, 
setting  the  framework  for  guidelines  at  the  level  of  each  Member  State  to  be 
negotiated in partnership and taking account of differing national and regional 
needs and circumstances.  

The future regional programmes and the national employment programmes will 
seek  to  target  resources  notably  in  the  less  prosperous  regions  where 
Community resources will be concentrated:  

–  on  developing  more  and  better  jobs  through  investments  in  training  and  in 

the creation of new activities,  

–  by  encouraging  innovation  and  the  growth  of  the  knowledge  economy  by 
reinforcing  research  capacities  and  innovation  networks,  including  the 
exploitation of the new information and communication technologies and,  

–  on improving the attractiveness of regions through infrastructure provision. 

Rural Development policies will also focus more specifically on the creation of 
growth  and  jobs  in  rural  areas.  Full  advantage  needs  to  be  taken  of  the 
possibilities  on  the  internet  and  broadband  communications  to  overcome  the 
disadvantages of location. 

This  should  be  taken  forward  by  Member  States,  in  partnership  with  regions 
and cities. 

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Lisbon 
delivers 
growth in 
medium- and 
longer-term. 

A Single 
Market in 
services could 
add 0.6% to 
GDP and 
increase the 
employment 
rate by 
0.3%... 

…investing in 
knowledge 
and education 
should boost 
our capacity 
to innovate, 
… 

…and the 
right 
approach to 
employment 
could raise 
the 
participation 
rate by 1.5%. 

The mutually 
reinforcing 
nature of 
these 

3.5. 

The impact on growth and jobs 

The policy actions set out in this communication will evolve as Member States 
detail  their  national  action  programmes.  While  it  is  not  possible,  therefore,  to 
provide a comprehensive assessment of the effects of the whole Lisbon Action 
Programme at this stage, it is now widely recognised that the type of measures 
envisaged  in  this  Action  Programme  can  make  an  essential  contribution  to 
increasing the growth potential in the medium- and longer-term4. 

Making Europe a more attractive place to invest and work 

The  Internal  Market  Programme  is  one  of  the  best  examples  of  a  Lisbon-type 
reform leading to a significant impact on growth and employment. For example, 
the completion of a single market in services should lead to an increase in the 
GDP level by 0.6% and of employment level by 0.3% in the medium-term. The 
integration of financial markets could – in the medium to long term – lower the 
cost  of  capital  for  EU  companies  by  about  0.5  percentage  points  and  that  this 
could  bring  about  a  1.1%  rise  in  the  level  of  GDP  and  0.5%  in  the  level  of 
employment in the long run. 

Knowledge and innovation for growth 

Investing in the knowledge should increase the capacity of the EU to innovate 
and  to  produce  and  use  new  technologies.  An  increase  in  the  share  of  R&D 
expenditures in GDP from 1.9% to 3% (in order to reach the Lisbon target by 
2010)  would  result  in  an  increase  of  1.7%  in  the  level  of  GDP  by  2010. 
Investment in human capital is also necessary because highly skilled people are 
the ones who are best equipped to work with the most productive capital and to 
implement  organisational  changes  appropriate  for  the  new  technologies.  An 
increase  by  one  year  in  the  average  education  level  of  the  labour  force  might 
add as much as 0.3 to 0.5 percentage points to the annual EU GDP growth rate. 

Creating more and better jobs 

Finally, the improvement in the employment performance observed in the latest 
years is more significant in those countries that have carried out reforms aimed 
at increasing the participation rate and at better designing active labour market 
policies  and  tax  and  benefit  systems.  Studies  show  that  such  reforms  can 
increase  the  participation  rate  by  1  ½  percentage  points  and  combined  with 
wage moderation, they may result in a 1% reduction in the unemployment rate.  

As  the  above  selection  illustrates,  the  individual  measures  envisaged  in  the 
Lisbon  Action  Programme  would  have  substantial  positive  economic  effects. 
But  the  strategy  is  a  comprehensive  package  of  reforms  which  are  mutually 
reinforcing. The available estimates indicate that it would not be unreasonable 
to  expect  the  full  Lisbon  Action  Programme,  once  all  its  constituent 
components  have  been  implemented,  to  increase  the  current  EU  potential 
growth  rate  bringing  it  closer  to  the  3%  objective.  It  would  also  raise 

4 

See  “The  costs  of  non-Lisbon.  An  issues  paper”,  draft  working  document  of  the  services  of  the 
Commission. 

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28 

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employment by at least some 6 million jobs by 2010. 

individual 
steps means 
that the 
overall 
impact could 
be much 
higher.  

4. 

MAKING THE PARTNERSHIP DELIVER ON GROWTH AND JOBS 

We are revamping 
the way Lisbon is 
delivered, … 

… through a 
single national 
Lisbon 
programme for 
growth and 
jobs,… 

While some progress has been made towards reaching the targets set at the Lisbon 
European  Council  in  2000,  the  overall  picture  is  very  mixed.  The  single  biggest 
the 
challenge  we  are  facing  midway 
implementation deficit. We need to revamp the delivery process which has become 
too complicated and is poorly understood. It generates much paper, but little action. 
Responsibilities between the national and the European level have become blurred. 
Limited ownership is the result  

towards  2010 

therefore, 

to  fix 

is, 

To remedy this, the Commission proposes a complete overhaul of how the renewed 
Lisbon Strategy is implemented:  

•  A  single  National  Action  Programme  for  growth  and  jobs,  adopted  by 
national governments after discussion with their parliaments would help to 
get  ownership  and  legitimacy  at  the  national  level  would  be  strengthened 
through  the  involvement  of  social  partners  and  civil  society  in  the 
preparation  of  a  national  Lisbon  programme.  This  programme  sets  out  the 
reform  actions  and  targets  appropriate  to  the  conditions  prevailing  in  the 
member states. It should be prepared and adopted by governments following 
discussions with their national parliaments.  

…a Mr or Ms 
Lisbon in national 
Governments, 

•  Member States would appoint a Mr or Ms Lisbon at government level 
charged  with  co-ordinating  the  different  elements  of  the  strategy  and 
presenting the Lisbon programme. 

…a single 
reporting 
structure… 

…alongside an 
EU Lisbon 
Programme, and 
…. 

a single 
integrated 
package for 
economic and 
employment co-
ordination.  

•  The national Lisbon programmes for growth and jobs would become the 
major reporting tool on economic and employment measures in the context 
of  the  Lisbon  strategy.  This  will  greatly  simplify  the  myriad  of  existing 
reports  under  the  Open  Method  of  Co-ordination  (OMC),  which  the 
Commission will review. 

•  Priorities for action at Union level have been identified and have been set 
out  in  a  separately  published  in  a  Community  Lisbon  Action  Programme. 
Agreement  on  their  importance  is  sought  to  enable  rapid  progress  with 
decision making and, subsequently, their implementation. 

•  The simplification in reporting structures would be mirrored at EU level by 
integrating in a single package the existing Treaty based economic and 
employment  co-ordination  mechanisms  (under  the  Broad  Economic 
Policy  Guidelines  and  Employment  Guidelines):  this  will  be  done  in  a 
Strategic Annual report which will be published annually in January5. 

5 

SEC(2005) 193, “Delivering on Growth and Jobs: a new and integrated economic and employment co-
ordination cycle in the EU”, http://europa.eu.int/growthandjobs/index_en.htm. 

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29 

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Member States 
must show their 
commitment. 

Member States. Delivery is the Achilles heel of the Lisbon strategy. The proposals 
for  improving  the  delivery  mechanism  could  resolve  many  of  the  difficulties.  But 
they will only work if there is genuine commitment from Member States. 

The European 
Council sets the 
direction… 

…drawing on the 
views of the 
European 
Parliament…  

Clear roles would also be assigned at the European level: 

The European Council would have overall responsibility for guiding the process. 
An integrated approach for adopting guidelines for national programmes for growth 
and  jobs  as  well  as  for  simplified  reporting  by  Member  States  on  implementation 
will allow even stronger guidance from the European Council. 

The  European  Parliament  would  also  be  involved  in  this  process  by  giving  an 
opinion  on  the  Strategic  Annual  report  to  be  taken  into  account  by  the  Council. 
Presidents  of  the  Parliament,  the  Council  and  the  Commission  could  continue  to 
meet  regularly,  including before  the  Spring  European  Council,  to  identify  how  the 
legislative  proposals  related  to  the  Community  Lisbon  Programme  can  be  taken 
forward  in  the  legislative  process.  The  Commission  will  also  inform  the  European 
Parliament  on  a  regular  basis  about  its  analysis  of  progress  made  and  measures 
adopted by the Member States.  

…and the 
Commission 
drives the process 
forward.  

The  Commission  would  support  the  Member  States  in  drawing  up  their  Lisbon 
programmes and will put the necessary structures in place to facilitate this process. It 
would  evaluate  the  targets  and  measures  adopted  by  the  Member  States,  draw 
attention  to  underlying  difficulties  and  use  its  strategic  annual  report  to  ensure  the 
Union  remains  on  track.  This  would  be  complemented  by  the  use  of  its  powers 
under  the  Treaty  to  ensure  correct  transposition  of  legislation  and  that  Member 
States’ Lisbon commitments are kept. 

The Social 
Partners should 
play a special 
role.  

This new 3 year 
cycle starts in 
2005. 

This structures 
our partnership 
and ensures 
change will 
happen. 

The  role  of  the  social  partners  will  also  be  vital.  Their  support  will  be  crucial  in 
areas  such  as  active  labour  market  policies,  life  long  learning  or  anticipating 
restructuring in industrial sectors. Therefore, the Commission invites them to draw 
up their own multi-annual Lisbon programme for growth and jobs using the powers 
granted to them under the Treaty. The regular Tripartite Summit should be dedicated 
to the evaluation of progress made and to the exchange of best practices within the 
Member  States.  The  Partnership  for  growth  and  jobs  is,  therefore,  fully  consistent 
with the ambitions of the partnership for change adopted by the social partners at the 
Tripartite Summit in March 2004.  

This new 3 year cycle would be launched in 2005 with new more general economic 
and  employment  guidelines  being  set,  allowing  member  states  to  tailor  make  their 
national  Lisbon  programmes  to  cater  for  their  national  situations.  A  review  would 
take place in 2008. A detailed overview of the new approach to governance is being 
published separately. 

In summary, the proposals to make the  partnership deliver on growth and jobs are 
based on a clear attribution of responsibilities allowing all actors to take ownership 
of the actions under their responsibility. The new approach clears away the jungle of 
existing  reporting  obligations.  Essentially,  it  shifts  the  focus  from  co-ordination 
through  multi-lateral  discussions  between  25  Member  States  and  the  Commission, 
on individual policy themes (the Open Method of Co-ordination), with a bilateral in 
depth  dialogue  between  the  Commission  and  Member  States  on  a  commitment 
based  national  action  programme.  This  dialogue  is  framed  by  the  existing  Treaty 
based economic and employment policy co-ordination tools – the Broad Economic 

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…allowing us  
to reap the 
benefits of 
coherent action  
in different areas 
and at different 
levels. 

Policy Guidelines and the Employment Guidelines. 

Finally,  this  approach  will  allow  us  to  reap  genuine  synergies  from  action  at  the 
different levels of the partnership and build on complementarities with and between 
the Member States. For example, Member States will be confirming national R&D 
expenditure  targets  in  their  Lisbon  programmes  and  setting  out  the  actions  they 
intend  to  take.  At  Community  level,  a  doubling  of  R&D  expenditure  is  proposed 
under  the  seventh  framework  programme  and  a  number  of  policy  measures  are 
foreseen to facilitate R&D expenditure in the Member States. Based on the national 
Lisbon  programmes,  the  Commission  will,  therefore,  be  able  to  annually  evaluate 
progress towards the 3% of GDP R&D expenditure target for the Union as a whole, 
make  any  necessary  proposals  for  adjusting  policy  instruments,  give  feedback  to 
Member  States  and,  if  necessary,  report  on  serious  difficulties  to  the  European 
Council. 

Informing  people  about Lisbon  is  an important  step  to  creating a  commitment  on 
all levels of government. 

Above all, people 
need to 
understand why 
Lisbon matters.  

The challenge of making the case for reform does not stop with this Report, nor even 
with  the  launch  of  the  partnership  for  growth  and  jobs  at  the  March  European 
Council.  Lisbon’s  ambitious  agenda  of  reform  must  go  together  with  efforts  to 
explain the challenges we face. The case for reform  must be  made and remade, in 
order to capture the sense of urgency and show that that we can offer a response – a 
distinct,  European  response.  But  getting  this  message  across  requires  a  real  and 
sustained effort.  

…and this must 
 be explained at 
EU and national 
level. 

This task must be shared by the European Institutions. But the prime responsibility 
is at the Member States level, where messages can be tuned to national concerns and 
national  debates.  This  must  involve  all  those  with  a  stake  in  Europe’s  success  – 
national  parliaments,  the  regions,  cities  and  rural  communities,  as  well  as  civil 
society. The Commission for its part will be treating this agenda for growth and jobs 
as a central communications priority throughout its mandate. 

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