Commission working document - Consultation on the future "EU 2020" strategy
Date: 2009-11-24
Institutions: European Commission
Subjects: competitiveness, economic and social cohesion, economic growth, economic recession, education, innovation, knowledge economy, labour market, public finance, sustainable development

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 24.11.2009 
COM(2009)647 final 

COMMISSION WORKING DOCUMENT 

CONSULTATION ON THE FUTURE "EU 2020" STRATEGY 

EN 

   EN 

 
 
 
  
COMMISSION WORKING DOCUMENT 

CONSULTATION ON THE FUTURE "EU 2020" STRATEGY 

(Text with EEA relevance) 

This is a time of deep transformation for Europe 

The worst economic and financial crisis in decades has hit Europe hard with a sharp economic 
contraction. The unemployment rate is set to rise to double digit figures in 2010, a level not 
seen for a decade.  

Collective  action  to  save  the  financial  system  and  to  boost  demand  and  confidence  through 
public  intervention  has  helped  to  prevent  an  economic  meltdown.  However,  the  crisis  has 
weakened  our  resilience.  The  EU  now  needs  to  make  a  stronger  effort  to  work  together  to 
make a successful exit from the crisis and to shape the next generation of public policies in a 
very different set of circumstances.  

The  exit  from  the  crisis  should  be  the  point  of  entry  into  a  new  sustainable  social  market 
economy, a smarter, greener economy, where our prosperity will come from innovation and 
from using resources better, and where the key input will be knowledge. These new drivers 
should help us tap into new sources of sustainable growth and create new jobs to offset the 
higher level of unemployment our societies are likely to face in the coming years. However, 
we will only succeed if we design and implement a bold policy response. Otherwise the risk is 
a  period  of  low  growth  which  can  only  make  it  harder  for  Europe  to  tackle  the  major 
challenges we face today. 

Delivering  this  sustainable  growth  requires  agreement  to  an  agenda  that  puts  people  and 
responsibility  first.  The  efforts  of  a  decade  which  resulted  in  a  reduction  of  unemployment 
from 12% to 7% in the EU risk being undone by the crisis. We need new sources of growth to 
replace the jobs lost in the crisis. 

This new approach needs to take advantage of a world of globalisation and interdependence 
which  the  crisis  has  underlined  still  further.  The  EU  needs  to  work  both  at  home  an  in 
international  fora  like  the  G20  to  seize  the  new  opportunities  essential  to  reach  our  2020 
objectives.  

EU 2020 is being designed as the successor to the current Lisbon Strategy, which has been the 
EU's reform strategy for the last decade and has helped the EU to weather the storm of the 
recent crisis. EU 2020 builds on its achievements as a partnership for growth and job creation, 
and renewing it to meet new challenges. It also draws on the benefits that have flowed from 
the  coordinated  response  to  the  crisis  in  the  European  Economic  Recovery  Plan.  The 
Commission  considers  that  EU  2020  should  focus  on  key  policy  areas  where  collaboration 
between  EU  and  Member  States  can  deliver  the  best  results,  and  on  improved  delivery 
through better use of the instruments at hand. 

The  purpose  of  this  consultation  paper  is  to  seek  the  views  of  the  other  Institutions  and 
stakeholders on a new approach. The Commission intends to adopt a formal Communication 
addressed to the Spring European Council early in 2010. The successful delivery of the 2020 

EN 

2 

   EN 

 
 
vision  relies  on  a  partnership  for  progress,  combining  Member  States'  commitment  to  take 
action at national level, and the harnessing of Community instruments to make the most of the 
potential at EU level. In its Communication, the Commission will therefore set out both the 
action  it  considers  needs  to  be  taken  at  national  level,  and  the  detailed  proposals  for  action 
that it will propose at Community level. 

Recognising constraints and facing new challenges 

A  successful  EU  2020  strategy  must  be  built  on  a  good  analysis  of  the  constraints  facing 
policy  makers  in  the  coming  years,  and  on  the  correct  identification  of  the  challenges  to  be 
tackled. 

The  financial  and  economic  crisis  has  taken  a  heavy  toll  on  public  finances,  businesses, 
employment  and  households.  At  all  levels,  public  policy  makers  will  have  to  find  ways  of 
triggering  economic  dynamism  with  limited  budgetary  margin  for  manoeuvre.  As  public 
sector  deficits  are  brought  back  under  control,  public  expenditure  needs  to  be  reshaped  in 
ways that enable us to reach the 2020 vision. Cutting spending in forward-looking areas such 
as education and research would make this more difficult to achieve. 

In developing a new vision and direction for EU policy, we need to recognise that conserving 
energy,  natural  resources  and  raw  materials,  using  them  more  efficiently  and  increasing 
productivity  will  be  the  key  drivers  of  the  future  competitiveness  of  our  industry  and  our 
economies.  

We  also  need  to  recognise  the  challenge  presented  by  European  demography:  even  prior  to 
the  crisis,  the  change  in  our  demography,  with  a  lower  proportion  of  young  people  in  the 
overall population, was expected to result in a substantially reduced potential growth by 2020. 
The  crisis  has  exacerbated  the  long-term  social  challenges  Europe  faces  today,  such  as  the 
integration  of  an  increasing  immigrant  population,  social  exclusion  and  child  poverty,  and 
solidarity  between  generations  in  the  context  of  an  ageing  society.  In  order  to  meet  these 
challenges,  employment  rates  of  both  men  and  women  will  have  to  rise  rapidly  and  social 
protection systems will have to be modernised so that they provide an affordable response to 
the future needs of our society.  

This  implies  that  new  policies  must  demonstrably  contribute  to  social  cohesion,  tackling 
unemployment and fostering social inclusion while securing well performing labour markets. 
This  requires  rethinking  education  systems  and  labour  markets,  enhancing  mobility  and 
boosting Europe’s dynamism to unleash our innovative and creative potential.  

to  make 

The  challenge  of  becoming  a  smarter,  greener  economy  will  require  increased  policy 
coordination 
the  economy  more  competitive.  Our  social,  economic  and 
environmental objectives must go hand in hand if we are to deliver on our thematic priorities 
for 2020. In this paper, the Commission is seeking views on how the EU can set its priorities 
in  a  ten  year  horizon  that  will  allow  the  EU  and  national  levels  to  work  together  to  move 
beyond  the  current  crisis  and  to  mobilise  new  sources  of  growth,  ensuring  social  and 
territorial cohesion, in line with the basic principles of the new Lisbon Treaty. 

Key priorities for EU 2020 

To  achieve  a  sustainable  social  market  economy,  a  smarter  and  greener  economy,  Europe 
needs to promote key, agreed priorities and to work on delivering them over several years. No 

EN 

3 

   EN 

 
single Member State can successfully address these challenges alone. Nor is EU policy simply 
the addition of 27 national policies. By acting together on a common vision, we can make the 
whole  more  than  the  sum  of  its  parts.  This  is  an  agenda  for  all  Member  States,  large  and 
small,  old  and  new,  highly  developed  and  still  developing:  the  enlarged  EU  consists  of 
different  levels  of  development  and  therefore  different  needs.  But  the  EU  2020  vision  is 
relevant  to  all  of  them  and  can  be  adapted  to  different  starting  points  and  different  national 
specificities so as to promote growth for all.  

Huge opportunities exist for people and for businesses if they are equipped to take them. The 
Commission's  aim  is  for  Europe  to  lead,  compete  and  prosper  as  a  knowledge-based, 
connected, greener and more inclusive economy, growing fast and sustainably, creating high 
levels of employment and social progress. To achieve this, Europe needs a strengthened and 
competitive industrial base, a modern service sector and a thriving agriculture, rural economy, 
and maritime sector. As ‘first mover’ in building this society of the future, Europe can derive 
important  benefits  by  developing  competitive,  innovative  products,  rolling  out  the 
infrastructures of the future, entering new markets and creating new, high-quality jobs.  

But  the  benefits  go  much  wider.  A  Europe  that  is  open  to  the  world  will  continue  to  be  a 
model for others to follow, projecting its values and fostering stronger labour, environmental, 
and  safety  standards  around  the  globe.  In  this  way,  the  EU  can  show  global  leadership  in 
demonstrating that – with the right policy framework in place and making full use of the new 
actors  and  structures  offered  by  the  Lisbon  Treaty  –  it  is  possible  to  combine  the  openness 
needed to ensure ongoing economic dynamism with respect for the social and environmental 
concerns of our citizens. 

The Commission considers that the key drivers of EU 2020 should be thematic, focused on 
the following priorities: 

(1) 

(2) 

(3) 

Creating value by basing growth on knowledge. Opportunity and social cohesion will 
be  enhanced  in  a  world  where  innovation  makes  the  difference  in  both  products  and 
processes, harnessing the potential of education, research and of the digital economy; 

Empowering  people  in  inclusive  societies.  The  acquisition  of  new  skills,  fostering 
creativity and innovation, the development of entrepreneurship and a smooth transition 
between  jobs  will  be  crucial  in  a  world  which  will  offer  more  jobs  in  exchange  for 
greater adaptability;  

Creating  a  competitive,  connected  and  greener  economy.  The  EU  should  compete 
more  effectively  and  increase  its  productivity  by  a  lower  and  more  efficient 
consumption  of  non-renewable  energy  and  resources  in  a  world  of  high  energy  and 
resources prices, and greater competition for energy and resources. This will stimulate 
growth  and  help  meet  our  environmental  goals.  It  will  benefit  all  sectors  of  the 
economy,  from  traditional  manufacturing  to  new  hi-tech  start  ups.  Upgrading  and 
inter-connecting  infrastructure,  reducing  administrative  burden  and  accelerating  the 
market uptake of innovations will equally contribute to this goal. 

These priorities will guide EU policy making inside the EU and externally. The promotion of 
international  co-operation  and  multilateral  governance,  including  efficient,  fair  and  rules 
based  international  trade  and  finance  systems,  will  be  an  integral  part  of  EU  2020.  The 
Commission  is  seeking  views  on  the  following  priorities  which  it  considers  to  be  the  key 
drivers of EU 2020. 

EN 

4 

   EN 

 
1. 

Creating value by basing growth on knowledge 

Knowledge  is  the  engine  for  sustainable  growth.  In  a  fast-changing  world,  what  makes  the 
difference is education and research, innovation and creativity.  

Strengthening education is one of the most effective ways of fighting inequality and poverty. 
The high number of low achievers in basic skills (reading, mathematics and science) needs to 
be addressed urgently to enhance the employability of young people and  to bring them into 
the world of work after school. Preventing early school leaving reduces future exclusion from 
the labour market and the threat of future social exclusion. A greater emphasis on vulnerable 
groups, gender equality and social cohesion is needed to ensure that no one is excluded from 
knowledge.  

Europe  has  some  of  the  best  universities  in  the  world.  But  our  ambition  should  be  to  have 
many  more  and  turn  them  into  a  true  engine  for  knowledge  and  growth.  This  will  not  only 
require  investment  but  also  reforms  and  where necessary consolidation, closer co-operation, 
including  with  business,  and  a  more  open  attitude  to  change.  To  assist  in  this  process  of 
change,  European  universities  should  be  benchmarked  against  the  best  universities  in  the 
world.  Raising  the  quality  of  Europe's  universities  and  of  their  research  should  go  hand  in 
hand  with  greater  mobility  of  students  to  acquire  new  knowledge  and  languages,  gaining 
experience  living  and  studying  abroad  and  building  networks.  A  new  phase  in  the  existing 
programmes Erasmus, Leonardo and Erasmus Mundus should be considered, complemented 
by national initiatives, giving all young people in Europe the possibility to spend part of their 
educational pathway in other Member States. 

An efficient, effective and well-resourced European Research Area is an indispensible part of 
the EU 2020 vision. The EU needs to increase its research efforts by pooling resources, jointly 
developing major research infrastructures across the EU and raising research quality to world-
leading standards. It also needs to maximise and accelerate the practical benefits of research 
for Europe's businesses and SMEs - including through major public-private partnerships. The 
attractiveness and performance of Europe as a research location also depends on creating an 
internal market and attractive career prospects for researchers. The way forward is a research 
partnership between the EU and Member States which maximises synergy with other policy 
areas  especially  innovation  and  education.  The  EU  needs  to  provide  more  attractive 
framework  conditions  for  innovation  and  creativity,  including  through  incentives  for  the 
growth  of  knowledge-based  firms.  Access  to  credit  is  a  particular  problem,  not  only  in  the 
aftermath of the crisis but because some new sources of growth such as the creative industries 
need new types of financing adapted to their business models. Innovative firms should be able 
to  have  access  to  pooled  public  and  private  sources  of  growth  capital,  for  example  venture 
capital;  this  needs  to  be  coupled  with  administrative  simplification  and  technical  support  to 
promote the incubation and growth of small innovative firms. 

A well-functioning system of intellectual property rights, which allows for efficient and cost-
effective protection, enables innovative business start-ups, provides authors with a transparent 
management  of  their  rights,  and  helps  universities  and  research  institutions  to  raise  capital 
through  the  commercialisation  of  their  ideas  and  inventions  is  needed  to  develop  the 
creativity, knowledge and research capacity in Europe. 

Building on its strengths in technology and knowledge, Europe should tap fully the potential 
of the digital economy. The digital economy offers great opportunities for SMEs, both in the 
production and services sectors, in their own right and as suppliers to larger companies. New 

EN 

5 

   EN 

 
innovative start-ups generate new, often high value jobs right across the EU. They can play an 
important role in regional development. That is why an ambitious European Digital Agenda 
that  takes  concrete  steps  towards  the  completion  of  an  Online  Single  Market  will  be  a  key 
element in Europe's sustainable economic recovery and social development. The productivity 
gains involved will stimulate innovation and creativity; make government services easier and 
more  efficient  to  deliver,  and  increase  the  opportunities  for  participation  and  democratic 
expression. Internet access is becoming necessary for citizens to play a full part in daily life. 
Europe  needs  effective  policies  on  digital  inclusion  and  skills,  and  to  encourage  active 
participation and expression over the net. 

The  aim  for  2020  is  to  achieve  a  genuine  European  Knowledge  Area,  underpinned  by  a 
world-class  knowledge  infrastructure,  in  which  all  actors  (students,  teachers,  researchers, 
education and research institutions and enterprises) benefit from the free circulation of people, 
knowledge and technology (the 5th freedom). 

2. 

Empowering people in inclusive societies 

In the post-crisis economy, many of the jobs that have been destroyed will not be replaced. 
The transformation of the EU into a smarter, greener, more competitive economy will boost 
new job creation and respond to high levels of unemployment. But while this transition takes 
place,  major  efforts  will  be  essential  to  prevent  people  falling  out  of  the  system,  being 
excluded, and to ensure social cohesion. In fact, new patterns are emerging where there are 
several  entries  in  and  exits  from  the  labour  market  during  a  working  life,  instead  of  the 
traditional sequence (education, work, and retirement), offering more opportunities to people. 
This requires  a  framework  to  organise these transitions and support  them, possibly building 
on  some  of  the  measures  adopted  during  the  crisis  (e.g.  short  time  work  combined  with 
training).  

New jobs requiring new skills will be created. Transition between jobs, between training and 
jobs will have to be managed. This is where flexicurity should be deployed to the full. The 
challenge is to find the best way to enhance on the one hand, the flexibility of labour markets 
both  on  work  organisation  and  on  labour  relations,  and  on  the  other  hand,  the  security 
provided by lifelong learning and appropriate social protection. Life long learning needs to be 
much more accessible and universities should be more open to non-typical learners.  

Skills  are  the  key  element  for  Europe's  economic  and  productivity  growth  and  for  job 
creation.  Life  long  learning  is  the  key  element  to  ensure  good  transition  between  jobs  and 
occupations, and in avoiding long-term unemployment leading to loss of human capital. The 
digital  economy  also  offers  new  opportunities  for  distance  learning  as  part  of  a  lifelong 
approach  to  learning  and  for  forms  of  communication  that  are  changing  the  world  of  work, 
shrinking distances and making long distance work a real possibility in an increasing number 
of jobs. 

Ensuring that our workers have the skills to contribute to the knowledge-based economy is a 
necessary, but not sufficient condition. Supply and demand need to be matched better. Labour 
mobility must be promoted to ensure that people can take up new opportunities by moving to 
where  their  skills  are  most  needed.  We  should  look  ahead  and  match  future  skills  better  to 
future needs, particularly for new types of jobs such as "green" jobs and other growth areas, 
such  as  in  the  health  sector.  Finally,  despite  its  substantial  contribution  to  growth,  the 
potential  of  migration  is  not  fully  factored  into  policy  making  at  EU  or  national  level. 

EN 

6 

   EN 

 
Employment rates of immigrants can be improved, particularly for specific categories such as 
immigrants with low levels of education, women and those recently arrived.  

Having a job is probably the best safeguard against poverty and exclusion. But alone it does 
not  secure  a  reduction  in  poverty  levels  or  social  inclusion.  Modern  social  security  and 
pension systems, adapted to the crisis and to the ageing of the European population, will be 
needed to provide an adequate level of income support and coverage to those temporarily out 
of work. Tackling inefficient labour market segmentation is also one way of enhancing social 
justice. 

In order to create more jobs, a more entrepreneurial culture needs to take hold in Europe, with 
a  more  positive  attitude  towards  risk-taking  and  a  capacity  to  innovate.  Self-employment 
should  become  a  real  option  for  those  who  may  have  recently  lost  their  job.  But  this  will 
require  removing  disincentives,  such  as  the  unequal  treatment  of  the  self-employed  under 
most  social  security  systems  and  disincentives  to  move  to  other  Member  States  because  of 
lack of portability of social and pension rights.  

The aim for 2020 is more jobs, higher employment rates of the working age population, better 
jobs, with higher quality and increased productivity, and fairness, security and opportunities, 
through a real chance for everyone to enter in the labour market, create new companies, and 
manage  labour  market  transitions  through  modern  and  financially  sustainable  social  and 
welfare systems.  

3. 

Creating a competitive, connected and greener economy 

Europe  needs  to  remain  competitive  in  the  future  world  of  relatively  high  energy  prices, 
carbon  constraints  and  significantly  greater  resource  competition.  More  efficient  use  of 
resources,  including  energy,  and  the  application  of  new,  greener  technologies  will  stimulate 
growth, create new jobs and services and help the EU both to maintain a strong manufacturing 
base and a vibrant services sector and to meet its environmental and climate goals . Securing 
well  functioning  product,  services  and  labour  markets  are  a  pre-condition  for  success. 
Greening the economy is not only about the creation of new industries. It is just as important 
to  accelerate  the  modernisation  of  Europe's  existing  industrial  sectors,  many  of  which  will 
already be restructuring in the wake of the crisis. Achieving these objectives will be essential 
if the EU is to compete in a world where all countries will be looking for solutions to these 
challenges. 

This  means  using  the  material  inputs  in  the  economy  more  efficiently,  becoming  more 
productive  by  reducing  pressure  on  resources.  This  means  shifting  our  economy,  through 
targeted regulation (e.g. promoting energy-efficient products and systems), through emission 
trading,  tax  reform,  through  grants,  subsidies  and  loans,  through  public  investment  and 
procurement policies, and through targeting our research and innovation budgets to this end.  

Upgrading and inter-connecting infrastructures and ensuring effective competition of network 
industries in the single market is key, to improve competitiveness and at the same time deliver 
tangible  benefits  for  consumers.  It  is  crucial  that  Europe  invests  in  sustainable  high-speed 
networks. Europe needs 100% broadband coverage as soon as possible, and needs to achieve 
the roll-out of high speed internet through a massive programme of investment fibre networks 
and wireless broadband.  

EN 

7 

   EN 

 
Together  with  the  roll-out  of  high  speed  internet,  the  development  of  smart,  upgraded 
including 
transport  and  energy 
decarbonisation,  transport  safety,  energy  security,  and  the  competitiveness  of  our  network 
economy.  

infrastructures  contributes 

to  multiple  objectives 

A rethink of transport policy will be needed in order to achieve such a comprehensive shift. 
Better integration of transport networks, developing alternatives to road transport, promoting 
clean  technologies,  and  upgrading  infrastructure  will  be  essential  elements.  Big  European 
projects such as Galileo, GMES, and smart road, rail (ERTMS), and air traffic management 
(SESAR) will play a key role in the integration of transport networks.  

By 2030 the EU will have to replace half of its existing electricity plants. If we take the right 
strategic investment decisions now, two third of our electricity generation could be both low 
carbon and more secure by the early 2020s. In this context, the development of a European 
electricity super-grid will enable a considerable increase in the share of renewable electricity 
and  decentralised  generation.  Improving  energy  efficiency  will  also  be  vital  as  it  is  the 
cheapest way to reduce emissions and, at the same time, to increase the energy independence 
of Europe. 

Because of its important contribution to growth and jobs creation, and to the development of 
innovation, a fresh approach to industrial policy is necessary to support industry by putting 
the  emphasis  on  sustainability,  innovation  and  the  human  skills  needed  to  keep  the  EU 
industry  competitive  in  world  markets.  Stable  and  foreseeable  framework  conditions  should 
help  industry  tackle  the  competitive  challenges  of  the  future.  In  the  aftermath  of  the  crisis, 
firms in several sectors will need to tackle structural excess capacities and the EU will need to 
facilitate  restructuring  in  a  socially  acceptable  way  whilst  maintaining  a  level  playing  field. 
This  calls  for  an  integrated  industrial  policy  that  promotes  competitive  market  mechanisms 
and  develops  new  sources  of  sustainable  growth  with  an  emphasis  on  innovation  capacity, 
eco-innovation, new enabling technologies and skills. This transformation will also provide an 
opportunity to improve the regulatory environment, increase territorial cohesion and promote 
better  conditions  for  entrepreneurship,  foster  the  development  of  SMEs  and  support  their 
growth potential and internationalisation. 

In a period of industrial restructuring, state aid policy will play a key role in supporting the 
transition to a smarter, greener economy. The state aid rules have been overhauled in recent 
years.  European  companies  have  increased  productivity  and  reaped  economies  of  scale  by 
taking up the opportunities offered by the Single Market – now that adjustment is needed in 
some sectors the Commission will be attentive to ensuring that the Single Market continues to 
be the basis of EU growth and to combating the risk of national retrenchment.  

The aim for 2020 is to meet our agreed objectives on climate change and energy, strengthen 
our industrial base, fully unlock the potential of SMEs, and respond to the needs of the future, 
by raising productivity and reducing pressure on resources.  

Making it happen: starting with a successful exit from the crisis 

The  first  task  for  the  EU  is  obviously  to  make  a  successful  exit  from  the  crisis,  promoting 
overall  exit  strategies  designed  to  secure  balanced  and  sustainable  growth  and  sound  fiscal 
policies.  The  recession  and  financial  strains  have  had  a  bigger  impact  on  those  countries 
which were already suffering from major imbalances or policy weaknesses at the onset of the 

EN 

8 

   EN 

 
crisis.  This  diverse  situation  calls  for  a  differentiated  response,  raising  co-ordination  issues. 
The  spill-over  effects  of  the  different  responses  across  countries  and  policy  areas  call  for 
effective coordination in the EU. In particular, a level playing field needs to be preserved in 
the financial and business sectors, and macroeconomic spill-over effects should be considered 
in the EU coordinated exit strategy. 

Financial  resources  have  come  under  pressure  as  a  result  of  the  crisis.  The  remaining 
problems  in  the  financial  system  therefore  need to  be  solved  swiftly  in  order  to  support  the 
recovery.  Access  to  credit  and  efficient  financial  market  supervision  will  be  crucial  for  the 
recovery and the transition to the value economy will depend on the availability of capital to 
finance innovation. New priorities need to be reflected in budgetary policies.  

The key challenge is how to balance the continued need for fiscal support to demand in the 
short  run  with  the  need  to  restore  sustainable  public  finances  and  macroeconomic  stability. 
There  is  a  risk  that  the  recovery  will  be  slow,  and  will  not  generate  sufficient  employment 
growth to bring down high unemployment levels. 

Making it happen: Harnessing existing instruments in a new approach  

To  make  a  successful  exit  from  the  crisis  and  deliver  our  EU  2020  objectives,  the 
Commission  considers  that  we  need  a  strategy  for  convergence  and  integration  which 
recognises more explicitly the advanced interdependence of the EU:  

–  Interdependence  between  Member  States  in  the  form  of  (positive  or  negative)  spill-over 

effects of national actions, particularly in the Euro-zone; 

–  Interdependence  between  different  levels  of  government  (EU,  Member  States,  regions, 

social partners - multi-layer governance); 

–  Interdependence  between  different  policies,  between  policies  and  instruments  and  the 

importance of policy integration to deliver the overall objectives; 

–  Interdependence at global level – none of our Member States is large enough to keep pace 

with the emerging economies or to undertake this transformation alone. 

The  challenge  of  becoming  a  sustainable  social  market  economy,  i.e.  an  inclusive,  smarter, 
greener  economy,  will  require  increased  policy  co-ordination,  better  synergies  through 
effective subsidiarity, and strengthened partnership between the EU and Member States in the 
design  and  delivery  of  public  policies.  The  integration  of  different  policy  instruments  is 
necessary,  linking  institutional  reforms,  better  regulation,  new  initiatives  and  public 
investment. 

(cid:190) 

Fully exploiting the single market 

The framework of the single market gives us the size and the scale necessary to achieve these 
objectives. It is the central tool which ensures that citizens reap real benefits from increased 
competition and that companies operate on a level playing field – provided that the rules of 
the single market are correctly implemented, including in sectoral policies. But the EU is still 
not  tapping  all  the  benefits  of  its  single  market,  conceived  more  than  twenty  years  ago: 
obstacles  to  cross-border  activity  remain,  which  in  turn  reduce  consumer  choice,  price 
competition and potential productivity. To gear the single market to serve the EU 2020 goals, 

EN 

9 

   EN 

 
the  EU  needs  well  functioning  markets  where  competition  and  consumer  access  stimulate 
growth  and  innovation.  Empowering  people  also  means  making  markets  work  for  people. 
Citizens  must  be  empowered  to  play  a  full  part  in  the  single  market.  This  requires 
strengthening  their  ability  and  confidence  to  buy  goods  and  services  cross-border,  in 
particular on-line. 

The single market has evolved considerably since its original launch. It was conceived before 
the arrival of Internet, before ICT became the one of the main drivers of growth and before 
services  became  such  a  dominant  part  of  the  European  economy.  The  emergence  of  new 
services  (e.g.  on-line  services,  such  as  e-health)  shows  huge  potential.  The  Commission 
considers  that  to  achieve  the  EU  2020  priorities,  there  is  a  pressing  need  to  overcome  the 
fragmentation that currently blocks the flow of on-line content and access for consumers and 
companies,  and  that  the  single  market  should  be  updated  to  respond  to  the  demands  of 
tomorrow's economy. 

(cid:190) 

Setting EU 2020 in a global context 

This  new  agenda  is  set  in  the  context  of  globalisation  which  will  remain  one  of  the  main 
drivers  for  European  dynamism  in  the  next  decade.  The  EU  is  not  alone  in  recognising  the 
opportunities  of  a  smart  and  green  economy  for  enhanced  competitiveness  and  prosperity; 
other  countries  have  identified  similar  priorities  and  are  investing  massively  in  green 
technologies,  ICT  and  smart  grids.  To  stay  ahead,  the  EU  needs  to  be  quick  in  seizing 
opportunities and in anticipating and adapting to future trends. The crisis has underlined the 
extent of interdependence in the European and global economies. To reach our objectives for 
2020, we must act decisively in the G20 and international  forums  to  promote  the  principles 
underlying the sustainable social market economy in the global context.  

International trade is one of the motors of growth, employment and investment in the EU. We 
should  act  both  under  the  WTO  and  via  bilateral  cooperation  to  ensure  that  barriers  to 
international flows of trade and investment are reduced, and to promote open and rules-based 
global  trade.  We  should  also  deepen  our  economic and political relations with  key strategic 
partners,  placing  particular  emphasis  on  market  access,  access  to  energy  and  raw  materials, 
and progress on environmental and social objectives. 

(cid:190) 

Supporting growth through full use of the Stability and Growth Pact 

The  Stability  and  Growth  Pact,  in  conjunction  with  other  multilateral  surveillance 
instruments,  will  play  an  important  role  in  guiding  budgetary  policies  to  achieve  fiscal 
consolidation  and  at  the  same  time  delivering  the  budgetary  means  to  achieve  sustainable 
growth  and  jobs.  While  consolidating  public  finances,  Member  States  will  need  to  redirect 
public  expenditure  towards  the  thematic  objectives  of  EU  2020  so  that  the  necessary 
investments in Europe's future can be made. At a time of important fiscal constraints, it is all 
the  more  important  to  invest  scarce  resources  in  sustainable  growth.  Investments  and 
structural reforms designed to deliver a smarter, connected and greener economy will generate 
more revenues and will ease the consolidation of public finances.  

At  the  same  time,  achieving  a  major  transformation  cannot  be  done  without  investment  in 
people and productive capacity. To develop the potential of the economy, structural reforms 
should  be  fully  implemented  to  create  new  sources  of  growth.  A  reinforced  structural 
reform agenda based on measures that raise potential growth and enhance productivity will 

EN 

10 

   EN 

 
also  benefit  from  coordination  at  EU  level,  in  design  and  implementation,  not  least  to  fully 
exploit the functioning of the single market. 

Even in a time of necessary fiscal consolidation, the Stability and Growth Pact allows room 
for  investing  in  the  future.  This  includes  prioritising  investments  in  R&D  and  new 
technologies,  in  innovation, in high-quality education and skills development,  and  in  'smart' 
networks; this means combining investments with modernising existing structures, including 
enhancing the efficiency of public administration and by regulatory reform.  

(cid:190)  Reflecting political priorities in our public budgets 

Once agreed, these new priorities need to be reflected in budgetary policies. The Commission 
intends to take them up in the budget review it will publish next year and in its proposals for 
the next multi-annual financial framework. Similarly, Member States should also review their 
public  expenditures  to  improve  quality  and  efficiency  and,  despite  important  fiscal 
constraints,  find  room  to  invest  in  sustainable  growth.  At  the  same  time,  new  financing 
models  (such  as  PPPs,  leveraging  EU  or  EIB  funding)  also  need  to  be  explored  to  pool 
resources between the public and the private sectors and maximise impacts. 

(cid:190) 

Establishing clear governance to make the new strategy effective. 

The  strategy  will  be  pursued  through  a  partnership  approach  to  deliver  a  limited  set  of  key 
objectives. Only through partnership can its specific actions and objectives be achieved since 
action  is  essential  at  the  EU,  national  and  regional  levels,  and  the  interplay  between  these 
levels which will allow the strategy to deliver its full potential. On the Council side, the focal 
point of the future strategy should be the European Council since it is the body which ensures 
the integration of policies, and manages the interdependence between Member States and the 
EU.  Drawing  on  the  new  provisions  of  the  Lisbon  Treaty,  it  should  therefore  steer  the 
strategy,  making  the  key  decisions  and  setting  the  objectives.  Council  formations  like  the 
ECOFIN  Council  as  well  as  the  relevant  thematic  Councils  would  then  implement  these 
decisions  in  an  integrated  way,  each  acting  within  its  area  of  competence  to  deliver  on  the 
longer term goals of the EU 2020 vision.  

The Commission would like to see the European Parliament play a significantly greater role 
in the new governance structure. Beyond its traditional role on the employment and integrated 
guidelines, Parliament could be encouraged to express views on the EU 2020 strategy before 
the Spring European Council.  

The EU 2020 vision will need the active support of stakeholders such as the social partners 
and civil society. Its take up across all the regions of the EU will also be crucial to its success 
and the Commission would like to see national parliaments taking a particular interest in this 
new strategy as it is developed.  

The Spring European Council in 2010 should set the strategy on its course for the next 5 years 
on  the  basis  of  a  Commission  proposal  to  be  tabled  in  early  2010.  The  European  Council 
should fix a small number of headline objectives, and define the corresponding policy actions 
to  be  pursued  at  EU  and  Member  State  level  in  partnership.  The  European  Council's 
conclusions, with the corresponding orientations for EU and Member States policies, would 
thus become anchor for the integrated guidelines provided for under the Treaty.  

EN 

11 

   EN 

 
For each of these objectives, Member States would be invited to set national objectives for 5 
years corresponding to their different situations and their starting points. The Commission and 
the European Council will monitor progress every year in Member States and at EU level. 

Comments 

The Commission invites comments and suggestions on the ideas outlined in this paper. They 
should be sent to EU2020@ec.europa.eu by 15 January 2010. 
The  contributions  received  will  be  published  on  the  internet,  unless  the  author  objects  to 
publication of the personal data on the grounds that such publication would harm his or her 
legitimate  interests.  In  this  case  the  contribution  may  be  published  in  an  anonymous  form. 
Professional  organisations  responding  to  this  consultation  are  encouraged,  if  they  have  not 
already  done  so,  to  register  in  the  Commission's  Register  for  Interest  Representatives 
(http://ec.europa.eu/transparency/regrin/).  This  Register  was  set  up  in  the  framework  of  the 
European  Transparency  Initiative  with  a  view  to  provide  the  Commission  and  the  public  at 
large with information about the objectives, funding and structures of interest representatives.  

EN 

12 

   EN