DRAFT JOINT EMPLOYMENT REPORT accompanying the Communication from the Commission on Annual Growth Survey 2014
Date: 2013-11-13
Institutions: European Commission
Subjects: EU statistics, dropout, employment statistics, female unemployment, job creation, long-term unemployment, marginalisation, social-security benefit, youth unemployment













EUR-Lex - 52013DC0801 - EN











|



52013DC0801

DRAFT JOINT EMPLOYMENT REPORT accompanying the Communication from the Commission on Annual Growth Survey 2014 /* COM/2013/0801 final */









1.         LABOUR MARKET
AND SOCIAL TRENDS AND CHALLENGES IN THE EUROPEAN UNION[1]
Unemployment
has reached unprecedented levels in the EU-28. While
the unemployment rate decreased by over 2 percentage points between 2003 and
2008, the financial and economic crisis has caused a severe deterioration
(Figure 1). Between 2008 (annual figure) and the second quarter of 2013 the (seasonally
adjusted) unemployment rate in the EU-28 increased from 7.1% to 10.9%.
Developments over time have been more or less similar for different groups on
the labour market, with a few exceptions. First, youth unemployment seems to be
more responsive to the business cycle in general. Second, when the crisis hit
there was a faster rise in unemployment for men than for women, mainly because "male
dominated sectors" were most affected. This is apparent from the larger
jump between 2008 and 2009 for total unemployment than for female unemployment.
As for structural differences, youth, low-skilled workers and third-country
nationals[2] suffer
from much higher unemployment levels. 
Figure 1:
Development of unemployment rates since 2003 in the EU-28, total, youth, older
workers and low-skilled
Note: 2013 figures refer to the second
quarter; figures for 2003 to 2012 are annual data; Source: Eurostat
Unemployment
stopped growing at mid-2013. Since the beginning of 2013,
the unemployment rate has remained quite stable. In September 2013 the total
number of unemployed stood at almost 26.9 million (seasonally adjusted). The
corresponding rate was 11%, unchanged for the sixth consecutive month. Looking
forward, it is still too early to judge whether or not this is the start of a
trend reversal. The trends are not similar across the EU. As compared with September
2012, unemployment increased in 16 Member States (most in EL, CY, IT and NL)
and it fell in 12 countries (strongest in the Baltic states, IE and HU) These
divergences are more or less in line with developments in GDP across Member
States. 
Long-term
unemployment is still rising, due to the long duration
of the crisis. At the end of the second quarter of 2013, long-term unemployment
reached an all-time high of 12.5 million in the EU-28, which is 5% of the
active population. Since 2008 long-term unemployment has roughly doubled, with
increases in nearly all Member States, except DE (where the rate decreased from
4% to 2.5% between 2008 and 2012) and LU (where the rate was stable at around
1.5% over this period). Over the year to the second quarter of 2013 long-term
unemployment as a percentage of total unemployment increased from 45% to 47.1%
in the EU-28 (47.0% and 49.5% for the EA-17). 
Unemployment
is showing a wide and growing divergence between Member States particularly within
the euro area. Since the start of the crisis unemployment has
increased strongly in the south and periphery of the euro area, but much less
so in other Member States. In August 2013 the unemployment rate ranged from
4.9% in AT, 5.2% in DE and 5.9% in LU to 26.6% in ES and 27.6% in EL[3]. With the rates disproportionately high in EL
and ES, unemployment is also considerably above the EU-28 average also for PT, HR
and CY, with rates above 16%. As for unemployment changes, the largest year-on-year
increase (between September 2012 and September 2013) was recorded in CY (+ 4.4
pps). The trend is also relatively negative in NL (but from a low level) and in
IT and to a lesser extent, in BE, BG, HR, LU and SI. 
Youth
unemployment remains at very high levels. In September 2013 youth
unemployment in the EU-28 stood above 23.5%, up by 0.4 percentage points from a
year before but stable over the last six months. There is a wide dispersion
between Member States, with the September 2013 figures ranging from 7.7% in DE
and 8.7% in AT to 56.5% in ES and 57.3% in EL. In recent months the divergence
has stopped growing, but it remains large.
The
proportion of young people not in employment, education or training (NEET) has
continued to increase. Between 2008 and 2011, the NEET rate for
young people aged 15 to 24 increased by 2 percentage points to 12.9%
(Figure 2). In 2012 there was a further increase in the NEET rate at EU level,
but less so than in the years before and not in all Member States (decreases
were recorded in AT, UK, LT, LV, RO and BG). Levels remain high in a great
majority of Member States (LT, MT, PL, FR, BE, EE, SK, UK, PT, HU, LV, CY, HR,
RO, IE, ES, EL, IT, and BG) while the most recent trends (2011-12) in EL and
SI, and to a somewhat lesser extent in IT and HU, are particularly worrying.
NEET rates are somewhat higher for females than for males: in 2012 the rates
were 13.4% and 12.9% respectively (total 13.1%). The NEET phenomenon is mainly
due to an increase in youth unemployment rather than in non-education linked
inactivity.
Figure 2: Total NEET
rate (15-24 age group) in the Member States 
Source: Eurostat 
Early school
leaving levels are gradually going down. Early school-leaving
(ESL) stood at 12.7% in 2012, down from 13.4% a year earlier. ESL remains a
serious problem, as it concerns about 5.5 million people, over 40% of whom are
unemployed. In 2012 in 12 Member States the rate was lower than the Europe 2020
target of 10%. ESL was highest in ES, PT and MT with rates over of 20%. Europe
is making good progress towards the target of achieving a tertiary equivalent
attainment rate of at least 40% by 2020. In 2012 tertiary education
attainment amounted to 35.7%. 
Despite the
crisis, activity rates have further improved in many Member States, mainly
because of increasing activity rates among older workers and women (aged 55-64).
Between 2008 (Q2) and 2013 (Q2) the EU-28 activity rate for the population aged
15-64 went up from 70.7% to 71.9%, although there was considerable
cross-country variation. Activity rates increased most strongly in CZ, MT, LT
and HU, while the largest decreases were witnessed in DK (but from a very high
level), IE and HR.. Although female activity rates have improved over time
there is still a considerable gap as compared with those for men: 12.1
percentage points in the second quarter of 2013 (the corresponding rates for
men and women were at 78% and 65.9% respectively). Gender gaps in activity
rates are particularly high in several Southern EU Member States, such as EL, IT
and PT. Some other countries show high female activity rates but are
characterised by widespread part-time employment for women e.g. in the second
quarter of 2013 in NL (77.3%), in DE (46.5%) and AT (45.6%).
The employment
rate continues to show a negative trend and a strong reversal of the trend
would be needed to reach the Europe 2020 headline target of 75% for men and
women aged 20-64.  Since the onset of the crisis employment rates in the EU-28 have gone
down by almost 2 percentage points, to just 68% by the end of 2012 (Figure 3).
Since then the figures have deteriorated further. Between the second quarters
of 2012 and 2013 employment rates fell by 0.6 pps in the euro area and by 0.42
pps in the EU-28.  
Figure 3:
Development of EU-28 and euro area employment rates with regard to Europe 2020
targets (20-64 age group)
Note: Employment rates for 2000 and 2001
are for EU-27 rather than EU-28; 2013 figures refer to the second quarter;
Source: Eurostat (LFS)
and Europe 2020 targets
"Gains
and losses" in employment during the crisis have not been evenly
distributed. While employment rates for men (20-64) have decreased by
more than 3 percentage points since 2008 (from 77.9% in 2008 to 74.5% in 2012),
female employment went down only marginally and has even increased somewhat
over the last year. Increases have been substantial for older workers (3.3
percentage points since 2008 to reach 48.8% in 2012, with sizeable increases in BE, DE, FR, IT, LU, HU, NL and PL), in
particular women (5.0 percentage points). As for education levels, decreases in
employment have been largest for the lower-skilled and lowest for highly
educated individuals. The employment rate of third-country nationals (20-64) in
the EU-28 declined from 58.5% in 2010 to 56.8% in 2012. As far as employment trends
by sector are concerned, between the second quarters of 2012 and 2013, the
largest losses were recorder in construction (-4.5%), agriculture (-1.5%) and
manufacturing (-1.2%). Increases have been particularly large in ICT (+2.5%). Although
the past five years have been detrimental for permanent employment, the
greatest burden of adjustment fell mainly on temporary jobs (non-renewal).
Finally, full-time employment is in its fourth consecutive year of contraction,
down by 8.3 million (-4.6 %) since the last quarter of 2008. Conversely, there has been steady growth in part time jobs
in recent years, with 2.5 million more since the last quarter of 2008, a rise
of 6.4 %.
Employment growth
is showing cross-country divergence. Figure 4 shows that
experiences have been quite different across Member States and that until the
second quarter of 2012 employment growth was particularly negative in LV, EL,
LT, IE and ES. Since the second quarter of 2012, employment has gone up in the
Baltics and in IE. It deteriorated however in several other countries, in
particular CY, ES, PT and HU. Overall, some "core" euro area
countries (as well as MT) have fared relatively well, while employment has
continued to decline in Southern euro area countries such as IT and ES, confirming
the growing divergence within the euro area as regards unemployment (see above).

Figure 4: Employment
growth (number of persons) since 2008q2, by Member State
Note: 2013q1for HU and HR; Source:
Eurostat (national accounts), DG EMPL calculations
Employment is
likely to improve slightly in the future, mainly as a result of projected GDP
increases. Currently the job vacancy rate stands at roughly
1.5%, which is more or less the average since the end of 2010.[4] Looking forward, over the medium term, several
trends will lead to further job growth, in particular in certain areas. For
instance, technological progress will create jobs in the ICT sector (900,000
unfilled ICT practitioners' vacancies are expected by 2015), while
ageing, despite present constraints in public healthcare budgets, is likely to
increase the demand for health workers and health-related services in the
medium term (in 2012 the total number of persons hired in healthcare
occupations in the EU-27 had already reached almost one million). Furthermore,
the greening of the economy may lead to an increase in green jobs (total numbers
employed have grown from 2.4 million in 2000 and 3.0 million in 2008 and were
estimated to reach 3.4 million in 2012). Other
high-tech-reliant sectors such as the transport industry will also require substantial
hiring of medium- to high-skilled labour force, to accommodate the growth
recorded in aviation and passenger transport and the high percentage of elderly
staff expected to leave the transport sector by 2020.
Employment
dynamics is driven mainly by a fall in the job finding rate. Looking at the underlying dynamics, the fall in the employment rate is
due both to an increase in the job separation rate and a decrease in the job
finding rate, the latter being the more important factor in relative terms
(Figure 5).[5] Between
2008 and 2012 the job finding rate fell in 24 Member States while it increased
in only three (LU, DE and NL). The steepest declines were seen in DK, CY and SI.
Figure 5: Job
finding and job separation rate in the EU-27, annual average 2005-12
Source: Eurostat (LFS), DG
EMPL calculations
Segmentation
on the labour market continues to be considerable. The share of temporary
employees has increased by 0.4 percentage points since 2011, largely reflecting
uncertain economic conditions. This adds to existing high unemployment and/or
low participation rates for certain groups. Youth employment is characterised
by high shares of both temporary and part-time employment, somewhat over 40%
and 30% (of total employment) respectively in 2012. In comparison, in the total
working population the share of temporary and part-time employment was much
lower, at around 14% and 19% respectively in 2012 in the EU-28.. Women are
overrepresented in part-time work. In 2012 the incidence of part-time work for
women was 31.9%, as compared with 8.4% for men, with the NL, UK, DE, AT and BE
all having a share of more than 40% of women working part-time lowering
significantly lowering employment rates measured in full-time equivalents At
the current juncture temporary and part-time jobs, involuntary to some extent,
may contribute to job creation and in the medium to long run they may act as a
stepping stone to permanent and/or full-time contracts (e.g. for youth). Segmentation
can also be seen from persistent gender pay gaps and low transition rates from
less to more protected contractual forms of work. The latter is to the
detriment of groups that typically work on temporary contracts, mainly young
people.
Labour market
matching is poor in several Member States. Although the job vacancy
rate has not changed much over the last three years on average, unemployment has
been on the rise, hinting at deterioration in labour market matching. The
Beveridge curve (Figure 6) shows that structural unemployment has been rising
since around mid-2011. Beveridge curves have deteriorated for most Member
States, with the exception of DE in particular. This overall negative trend is
driven mainly by a growing skills mismatch[6],
indicating that the lack of labour market opportunities associated with the
economic crisis is producing hysteresis effects which need to be counteracted
by investments in human capital and more effective matching.
Figure 6:
Beveridge curve, EU-27, 2008q1- 2013q1
Note: LSI (vertical
axis) stands for "labour shortage indicator", derived from EU
business survey results (% of manufacturing firms pointing to labour shortage
as a factor limiting production); Source: Eurostat
The growing
number of unemployed, the increasing proportion of long-term unemployed and the
resulting decrease in matching efficiency pose serious challenges to active
labour market policies (ALMPs) and public employment services (PES). While some
Member States have increased the funds allocated to ALMPs and PESs, others have
decreased them, with a view to meeting fiscal consolidation targets and aimed
at increasing PES efficiency. Some Member States have also improved working
processes within PESs.
The economic
crisis and its labour market repercussions seems to have impacted on migration
flows in the EU at three different levels: lower migration from
third-countries to the EU (-3.7% between 2010 and 2011), increased migration
from the EU to third-countries (+14% between 2010 and 2011, of which 90% from
ES, UK, FR, IE, PT and CZ, mostly returning  migrants rather than nationals)
and changing patterns as far as migration within the EU (‘intra-EU mobility’)
is concerned. Intra-EU mobility of workers seems to be increasingly driven by
push factors, whereas pull factors dominated before. Overall, despite the
strong increase in mobility from Southern Member States to other EU countries
(e.g. UK and DE) in relative terms, the absolute figures remain relatively low
compared with the size of the labour force (and unemployed segment) in the
Southern EU countries and also with the much larger mobility flows from the eastern
and central Member States, which remain the main countries of origin of those
moving within the EU. 
The supply of
skills is lagging behind changes in skills demand. Several
trends, in particular globalisation and (skill-biased) technological change,
have led to gradual changes in labour demand. The relative demand for
high-skilled workers has generally increased, to the detriment of medium and lower-skilled
workers (‘up-skilling of labour demand’). There has also been a change in the
relative importance of skill types, with both ICT-related skills and 'soft
skills' becoming more important for a large number of occupations. 
Even though over
time average education levels and thereby the ‘quality’ of skill supply have
increased, the skills that workers possess have not kept pace with skills
demand. This is even truer as trends for participation in lifelong learning are
on a negative slope in several Member States, for both men and women. As a
result of such changes in the relative demand for and supply of skills, employment
opportunities for the high-skilled are better than for the medium- and low-skilled.
Labour market forecasts confirm this trend for the coming years[7].
Europe's
growth potential and competitiveness are threatened by structural weaknesses in
its skills base. The recent data[8] suggest
that about 20% of the working age population have only very low skills, and in
some countries (ES, IT) this proportion is even higher. Only few countries (FI,
NL, SE) have a a high proportion of people with very good skills and most
European countries do not come near the top-performing countries outside Europe
(such as Japan or Australia). The data confirm that Europe is not investing
effectively in education and skills, which poses a threat to its mid-term
competitiveness and to the employability of a large proportion of the labour
force. 10 Member States have reduced education expenditure in absolute terms
(DK, IE, EL, ES, IT, CY, HU, PT, SK and UK) and 20 Member States have reduced
the relative share of GDP that they invest in education. 
Wage
developments accommodate rebalancing needs. In the run up to the
crisis considerable external imbalances built up within the EU, and within the
euro area in particular. More recently, the dynamics of unit labour costs have
been supportive of external rebalancing (Figure 7). Moreover, real labour cost
developments are adjusting in line with the various countries' labour market positions.
It is important that wage developments continue to be consistent with the need
to adjust external imbalances and reduce unemployment. If sustained, recent
wage increases in ‘surplus’ countries may strengthen overall aggregate demand.[9] 
Figure 7:
Nominal unit labour cost developments in the euro area
Note:
no quarterly data available for EL; EL cut-off at end 2012; Source: DG EMPL
calculations based on Eurostat
Unit labour cost reductions and wage moderation
have fed only slowly and incompletely into price developments. Partly, this
incomplete pass-through can be explained by simultaneous hikes of indirect
taxes and administered prices due to fiscal consolidation[10]. Nominal unit labour cost reductions in the
face of staggering prices have led to decreases in labour income shares in
several Member States, in particular ES, PT and EL. The resulting increase in
profit margins has not been accompanied by an increase in investments. 
The tax wedge
remains high in many Member States. A high and in some cases
increasing tax wedge, especially for low wage and second income earners,
remains an issue in a considerable number of Member States. To illustrate, in
the case of low wage earners (67% of the average wage), a fall in the tax wedge
between 2008 and 2010 in most countries was followed by an increase in the two
subsequent years in nearly all Member States (with the exception of the UK, NL,
PT, SI and FI). The 2012 levels ranged from 20% or less in MT and IE to more
than 45% in BE, DE, FR and HU. In 2012-2013 personal income tax increases
concentrated on higher income earners, continued in 11 Member States [11].
Changes
in the total tax wedge have been driven mainly by PIT (personal income tax),
where increases can be seen for 19 (out of 26) Member States (Figure 8; NB
single person, no child). Increases in PIT have been particularly large in IE,
HU and EL. Taking PIT and employees continued in 11 Member States social security contributions together, the burden on employees has
increased in 18 Member States, while this is less true for employers (11
countries with increases in the burden). Overall the level of employers' social
security contributions has remained more or less stable in most Member States,
with a few exceptions (notably FR, SK, PL and HU). 
Figure 8:
Change between 2010 and 2012 of the total tax wedge by components (67% of the average
wage, single person, no child)
Note: Data for CY and HR not
available; Source: OECD
Fighting
undeclared work is a challenge in some Member States. Shadow
economic activity and undeclared work have negative implications which affect
macroeconomic objectives as well as the quality and productivity of work and
social cohesion. From a macroeconomic perspective, they decrease tax revenues
(income tax and VAT) and undermine the financing of social security systems.
From a microeconomic perspective, undeclared work and other atypical forms of
employment such as bogus self-employment tend to distort fair competition among
firms, paving the way for social dumping inhibiting the creation of regular
employment with full social protection. It also causes productive
inefficiencies, as informal businesses typically avoid access to formal
services and inputs (e.g. credit) and do not grow. Although fully reliable
figures on the extent of the shadow economy and undeclared work are not readily
available, rough data do indicate that the issue poses a challenge in some
Member States[12].
The
crisis has substantially altered the dynamics of inequality and affected
different sections of the population in different ways. While on
average the S80/S20 ratio[13]
remained stable between 2008 and 2012 in the EU-27, there is a wide dispersion
and growing divergence in inequality between Member States (Figure 9). The
inequality has grown in most of the Southern Member States (ES, EL, IT,
CY) as well as in HR, EE, DK, HU, SK and slightly in IE. Despite recent
improvements, inequality also remains a particular concern in BG, LV, PT and
RO.  
Figure
9: Inequality of income distribution (income quintile share ratio),  2008-12
Source: Eurostat,
EU-SILC. *AT, BE, IE and UK 2011 instead of 2012, 2012 estimated for EU-27 and
EU-28, provisional for IT. 
The
at-risk-of-poverty and social exclusion rate increased significantly, with differences
between Member States also growing. A strong reversal of the trend would be
needed to reach the Europe 2020 headline target of lifting at least 20 million
people out of the risk of poverty or social exclusion.  Between the beginning of the crisis in 2008 and 2012[14], the number of Europeans at-risk-of-poverty
or social exclusion increased by a worrying 8.7 million (excluding HR), to 25.1%
of the EU-28 population in 2012 (Figure 10).While the proportion of the
population at-risk-of-poverty or social exclusion has risen in particular in
those Member States most hit by the economic crisis, a few Member States report
decreasing relative poverty levels. 
Figure
10: Developments in the at-risk-of-poverty or social exclusion rates (AROPE)
2008-12
Source: Eurostat,
EU-SILC. Sorted by AROPE in 2012. 2012 estimated for EU-27 and EU-28,
provisional for IT, *AT, BE, IE and UK 2011 instead of 2012, **HR and EU-28 no
data for 2008,.
There are
substantial differences between age cohorts. The working age
population has been most affected. Poverty and social exclusion among 18-64
year-olds has increased significantly in two thirds of the Member States in
recent years, mainly because of rising levels of jobless or low work intensity
households and in-work poverty. In 2012, approximately 50 million people of
working age lived on less than 60% of the national equivalised median income in
the EU-28, 33.1 million suffered from severe material deprivation, and 30.4
million people aged 18-59 lived in a jobless household. 
Figure 11:
Development of at-risk-of-poverty or social exclusion rates (AROPE) since 2005
in the EU-28, total, children, working-age population and elderly
Source: Eurostat, EU-SILC. EU-27 average for
2005-09; EU-28 average for 2010-12, 2012 estimate.
Older people
(65+) have been relatively less affected as their risk of poverty or social
exclusion has declined in most Member States with women still more affected by
old-age poverty than men. However, the relative improvement results primarily
from pensions being largely unchanged while income levels for the working age
population have stagnated or dropped. 
The risk of
poverty or social exclusion for children has risen since 2008 along with the
worsened situation of their (mostly working-age) parents in more than
20 Member States as compared with 2008but single parent households face a risk
of poverty and social exclusion (EU-28: 47.8% in 2012) that is more than twice
as high as for families with two adults (24.4%). The substantially higher risk
of poverty among single parent households is found across all Member States
ranging from 35% in SI, FI and DK to 78% in BG. Similarly, families with three
or more children face considerably higher risks of poverty or social exclusion
(EU-28: 30.9%) than the population as a whole. Working-age men have been more
directly hit by the deterioration of labour market conditions in the crisis.
Nevertheless, women still face a higher risk of (persistent) poverty or
exclusion than men due to care related periods of inactivity and part-time
work. The risk of poverty and social exclusion in 2012 was much higher (48.8%)
for third-country nationals (aged 18-64) than for the nationals (24.9%).
Overall the gap increased from 21.7 pps in 2010 to 23.9 pps in 2012.
Since 2011,
household disposable incomes have been declining in real terms on average in
the EU and in the euro area. Declines were especially strong (above 5
percentage points cumulated over the two years) in EL, ES, IT, CY, PT, and RO
and more moderate in BE, CZ, DK, HU, NL, SI, and SK. In other countries
household incomes stagnated or increased slightly.
The
stabilising effect of social spending on household incomes lessened after 2010.
During
the 2008-09 recesion, social spending played a significant role in sustaining
household incomes in most EU countries[15], also as a result of
the fiscal stimulus measures put in place to sustain aggregate demand and
contain excessive job shedding, in line with the European Economic Recovery
Plan of November 2008.  Moreover, net social benefits and reduced taxes
contributed positively to the change in gross household disposable income
(GHDI) in 2009 and in the first two quarters of 2010 (Figure 12). From mid-2010
on, the contribution of social benefits to the change in gross household income
lessened. This may have occurred because of the increase in the number of
long-term unemployed losing their entitlements, along with the partial
phasing-out, following some improvement in the economic outlook in a
few Member States, of the measures put in place to counter the crisis.. Finally,
in some Member States the tapering off of the impact of social spending also
reflected improvements in the economic situation and outlook.[16]
Figure
12: Contributions of components to the growth of gross disposable income of
households (GHDI) (EA17 and EU27) 

Source: Eurostat – Sectoral accounts
The
distributional impacts of fiscal consolidation varied substantially across
countries. According to a Euromod study[17], depending
on their design, fiscal consolidation packages impacted differently on high and
low-income households. In a few countries regressive impacts put an additional strain
on the living standards of low-income households in particular. Other Member
States, through more careful attention to the distributional profile of their
fiscal consolidation measures, managed to avoid disproportionate effect on low
income households. Such differences in distributional impacts occurred
independently of the differences in the overall size of the adjustments.
Overall,
after a peak in 2009, social expenditure growth rates have been negative since
2011 (Figure
13).In
the early phase of the crisis (until 2009), the rise in social expenditure was driven
mainly by unemployment expenditure, but also, to a lesser extent, by other functions
(notably pensions and health). Social expenditure growth weakened in 2010,
reflecting a combination of fiscal stimulus measures expiring and the standard
path of phasing out automatic stabilisation in countries experiencing recovery.
Since 2011 (Figure 13) social expenditure declined despite the further
deterioration of the economic and social conditions.[18].
Figure 13: Contributions
to growth in real public social expenditure in EU of cash and in-kind benefits
(2001 – 2012) 
Source: National accounts, DG EMPL calculations; 
The crisis
has also affected the structure of social protection spending. In some countries,
strong increases have occurred in 2009 and 2010[19] in areas (such as pensions and disability)
in which the level of spending was already high and associated with relatively
weaker social or employment outcomes (Figure 14). At the same time, in some
countries the level of spending stagnated or even declined in areas such as
health, social exclusion, housing or family expenditure. 
Figure 14: Cumulative
contribution to total social protection growth in the EU 27 by functions (2007-10)
and Growth in (real) total social protection expenditures in Europe, by
country, 2010 
 
Note: contributions by
function to the overall growth of social expenditure; Source: ESSPROS
In
some Member States, access to healthcare may have become more difficult for
people in vulnerable situations. Together with the effects of the crisis
on incomes reductions in public health spending are likely to affect the
adequacy of access to health care services, notably for low-income groups and people
in vulnerable situations. Figure 15 illustrates the proportion of people in the
lowest income quintile who report unmet health needs because the treatment was 'too
expensive', or because the waiting time was too long or it was too far to
travel. While for the EU-27 as a whole this proportion increased only
moderately from 2008 to 2011 further deterioration from a high level of access
to services was reported for countries such as LV, EL, IT and PL, while
significant increases from low levels were registered in countries such as CY,
BE, FI, FR and SK.    
Figure 15: Unmet
need for health-care, poorest income quintile, 2008-11
Source: Eurostat EU-SILC 2011 
2.         IMPLEMENTING THE EMPLOYMENT GUIDELINES: EMPLOYMENT AND SOCIAL POLICY
REFORMS
This section[20] presents an overview of reforms and
measures introduced by Member States in the past 12 months. The Employment
Guidelines[21] offer stable
policy guidance to Member States on how to respond to employment and social
challenges against the background of current trends and with a view to reaching
the Europe 2020 objectives (as presented in Section 1). The 2013 Annual Growth
Survey set out the priorities and policy guidance for Member States submitting
their National Reform Programmes in the framework of the 2013 European Semester.
The National Reform Programmes were reviewed accordingly and the Council, on
the basis of the Commission's proposals, issued country-specific
recommendations. The Employment and Social Protection Committees review the
Member States' performance and progress in responding to relevant challenges
through the application of the Employment Performance Monitor (EPM) and the
Social Protection Performance Monitor (SPPM). The subsequent policy reforms
will be assessed in the context of the 2014 European Semester. 
The European Social
Fund supports efforts to achieve the Europe 2020 goals through actions to fight
unemployment, with a special focus on youth, offering traineeships and
apprenticeships for re-skilling and up-skilling, education, supporting social
inclusion and administrative capacity building. For the 2014-20 programming
period the close alignment of the ESF and other European Structural and
Investment Funds to the policy priorities of the Europe 2020 Strategy together
with the Funds' results -oriented focus will reinforce their role as financial
pillars of the Strategy. 
Reforms have
been undertaken or are being prepared in all the areas described in the
following sections. However, the degree of progress varies across policy areas
and between Member States. Further efforts are thus needed, even though in many
cases the full effects of the reforms are not yet visible as they typically
take time to materialise. Also the 'value' of reforms cannot typically be
judged in isolation as several reforms may be undertaken at the same time.
Member States should therefore take relevant trade-offs into account when
designing policies and reforms. 
2.1 Employment
Guideline 7: Increasing labour market participation
Member
States continued to reinforce their active labour market policy (ALMP) measures.
Several
Member States increased the financing allocated to ALMP measures for 2013 (CY,
IE, HR, PL, SE), while others lowered them (NL, SI), putting more emphasis on
efficiency. Some Member States took measures to strengthen matching (BE, BG,
ES, LT) and introduced or enhanced profiling of the unemployed (FR). FR created
a National Plan for priority training implemented by the PES: 30.000 jobseekers
receive training in priority, job-rich areas. The UK provides more support for
hard-to-place unemployed people through more tailor-made job search assistance
but will at the same time tighten the requirements for the continued receipt of
jobseekers benefits. In IT, employers who hire recipients of unemployment
benefits are entitled to a contribution worth 50 % of the
remaining subsidy that would have been paid to the employees had they remained
unemployed;
also a database was created to collect information on the services provided
throughout the country. The planned state reform in BE will further regionalise
a number of competences with regard to activation and follow-up of the
unemployed. RO amended its Unemployment Insurance Act by, inter alia,
introducing a new category of unemployed (long-term unemployed) to benefit from
ALMPs, such as the mobility incentive and free assessment of formally or
non-formally acquired competences. In HU, HR, LV and
SI, public works programmes are aimed at bringing the unemployed to the labour
market and providing income support for unemployed people who do not qualify
for unemployment benefits. 
Several
Member States took measures aimed at enhancing the capacity of their public employment
services (PESs), improving their efficiency and effectiveness,
training and/or recruiting job counsellors (CY, CZ, DE, EL, ES, FI, FR, HR, HU,
IE, NL, PL, PT, SI). 
Some
PESs are focused on offering more tailor-made services for the unemployed (SI),
promoting mutual responsibility (NL) and strengthening their cooperation with
other stakeholders (PL), employers and local authorities (HU, PT). In DE, the
intention is to focus on hard-to-place long-term unemployed persons by moving
PES staff from some services for the short-term unemployed. In FR, jobseekers have
been classified in three categories reflecting the difficulties they face in entering
the labour market, with different follow-up methods for each category. In IE, the
Jobpath initiative was designed to increase PES capacity through the
involvement of private third-party contractors, a commitment to double the
number of case workers for the unemployed during 2014 and a merger with the
welfare institutions. In ES and PT, there has been some progress in increasing
the role of private agencies in the development of placement activities. Under
the 2013 European Semester CSRs on ALMPs and/or PES (i.e. enhance quality,
coverage and effectiveness of ALMPs, increase performance of PES, ensure better
targeting or strengthen activation elements and individualised services) have
been issued to 16 Member States (BE, BG, CZ, DE, EE, ES, FR, HU, IT, LT, LU,
LV, RO, SE, SI and SK).
Specific
measures were introduced to bring closer to the labour market the unemployed from
disadvantaged groups, in particular persons with disabilities, the long-term
unemployed and workers with a migrant
background. Several Member States (BG, HU, NL, PT) took measures to
improve the labour market situation of disadvantaged people at large Other
countries have focused efforts on specific target groups.
The situation
on the labour market for persons with disabilities was addressed in several
countries (FI, HU, LT and MT). HU established a new authority and a network to
deliver rehabilitation-related measures and lowered labour costs by reducing
social security contributions. In FI, a new project envisages the appointment
of a personal coordinator providing individually tailored services for
individuals with disabilities. The effect of the project should be multiplied
by other changes: prolonging the duration of part-time work with part-time
sick-leave benefit and easing the criteria for vocational rehabilitation. In
MT, the newly established Job Bridge Centre aims to integrate persons with disability
into employment. In LT, more attention has been paid to supporting the
employment of persons with disabilities by improving funding of social
enterprises.
Many ALMP
measures (as described above) specifically targeted the long-term unemployed.
In addition, IE provided more training and education to the long term
unemployed in order to enhance their employment prospects and started providing
grant payments to enterprises as an incentive to recruit them. The State
Employment Agency in LV provides support for long-term unemployed persons with
addiction problems. DK provided job-openings mostly in public sector
and in particular for the long-term unemployed at risk of losing their
benefits. 
Member States
adopted specific measures to integrate people with a migrant background. DE
adopted a programme promoting the labour market integration of immigrants and
improving their participation in the education and vocational training system.
SE strengthened its ALMP measures for the immigrants by prioritising workplace-based
measures and extending wage subsidies for foreign-born persons. 
Member States
addressed the situation of young people on the labour market with the early introduction
of some elements of the Youth Guarantee. In view of the
deterioration of the situation of young people on the labour market, all Member
States introduced additional measures for this target group. In many cases,
existing measures were extended, boosted financially and embraced a larger
target group. Full, partial and/or sectoral wage subsidies (BE, BG, EL,
HU, FR, IT, PT), the reduction of non-wage labour costs (BE, EL, ES, FR, HR, PT,
SI),
youth internships (BE, CZ, PT), apprenticeships (DK, EL, ES, FI, HU, IT, PT,
SE, UK), work placements (CY, PL, SI), counselling (AT) and public sector
employment opportunities (BG, FR, HU) were the most common instruments used to
promote youth employment. 
A majority of
the Member States are currently drafting their Youth Guarantee Implementation
Schemes to have national Youth Guarantee schemes (YGs), to be operational as of
January 2014; others are expected to submit their plans in spring 2014.
Fully-fledged YGs or some of their components or pilot projects have been
rolled out in the past 12 months (AT, ES, FI, FR, IE, HR, HU, MT, RO, UK). In
FI, the YG was reinforced as of 1 January 2013. In IE, an YG pilot project has
been launched in one of the districts of Dublin, with a view to full
implementation in 2014. RO launched a call for strategic projects worth EUR 10
million and adopted the National Plan for Youth Employment. The UK progressed
with its Youth Contract providing apprenticeships and voluntary work experience
placements. AT introduced Youth Coaching measure designed to help young people
find an education or vocational path that suits their personal needs. The First Job
Guarantee Programme in HU will offer the 100% refund for four months of the
wage bill and social security contributions in respect of new entrants to the
labour market. MT adopted a National Youth Employment Strategy as a comprehensive
framework for the successful integration of young persons into employment and
also appointed an action committee tasked in part with the implementation of
the Youth Guarantee. In FR,  ‘jobs for the future’
are subsidised contracts which aim to train and hire 100,000
young people by the end of 2013 and 150.000 by March 2014, mostly in the public
sector, and
a
pilot project was launched in 10 territories, involving 10.000 young NEETs
facing major difficulties. ES has approved a 2013-16 Strategy for
Entrepreneurship and Youth Employment that includes 100 actions and an overall
budget of over EUR 3.485 billion. 
Member States
promoted measures to boost female employment rates and to reconcile work and
private life by introducing changes to early childhood education and care
(ECEC)[22]
services and revising parental leave regulations. Additional resources
were allocated to ensure that all-day ECEC facilities operate with more
flexible opening hours (DE, FI, HU, MT, PL). The UK announced a new scheme for
tax-free childcare for working families and IE guaranteed additional after-school
places for primary school children from low-income families. DE introduced a
right to childcare for children below the age of three, while guaranteeing
child-rearing benefits. It nevertheless maintained a childcare allowance for
children not using a childcare facility. HU will lower the age for compulsory
education to three as from 2014. HR introduced compulsory pre-school
education and changed its legislation on non-standard forms of childcare
provision[23]. EE
amended its parental benefit act.
To facilitate
the reconciliation of family and work obligations, Member States introduced
changes relating to more flexible working hours for wage earners (LU), measures
to help students with children (CZ), tax-free premiums (DK) and the promotion
of gender equality through empowerment, mainstreaming and training (EE). 
Some Member
States extended (paid) parental leave (LU, MT, PL, UK). In DK and MT,
self-employed parents were granted equal (vis-à-vis employed parents) rights to
a parental leave. New measures in EE and PL were aimed at encouraging fathers
to take paternity leave. New rules were introduced in FR, granting six months
of parental leave to the second parent. AT reformed its childcare leave
regulation to facilitate a better work-life balance of parents living in
non-traditional family forms and to simplify the use of existing models. HR
harmonised its Law on Maternity and Parental Benefits with the EU’s acquis
communautaire.. 
Employment-promoting
initiatives also addressed barriers to longer working lives. Several
Member States took measures to boost the employment rate among older workers
(AT, BE, CZ, FI, PL, SI), e.g. through the adoption of specific measures,
action plans or ageing strategies (CZ, FI, PL). These included using part-time
work (AT), on-the-job training (SI), introducing comprehensive
trainings/e-training for PES employees in improving services for unemployed people
over 50 years old (PL) and providing incentives to
employers to hire older workers (AT, ES, PT). BE promoted measures to encourage
people to work past retirement age by obliging companies
with more than 20 employees to set yearly plans for keeping or increasing
the number of employees over 45 years old and raised the age threshold for
exemption from active job searching from 58 to 60 years. In March 2013, ES
adopted a royal decree law to allow compatibility between pension and work, and
to discourage collective dismissals of employees over 50 in large companies. Regarding
the labour market participation, CSR issued this year highlighted challenges
regarding labour market participation of women (11 Member States: AT, CZ, DE,
EE, HU, IT, MT, NL, PL, SK and UK):, keeping people longer in the labour market
and enhancing older workers’ employment (15 Member States: AT, BE, BG, CZ, ES,
FI, FR, LT, LU, MT, NL, PL, RO, SI and SK) and boosting youth employment
perspectives (22 Member States: AT, BE, BG, CZ, DE, DK, EE, ES, FI, FR, HU, IT,
LT, LU, LV, MT, PL, RO, SE, SI, SK and UK).  
Several
Member States have made changes to the level of minimum or public wages. The
majority of Member States have taken policy measures in the area of wages. Some
countries have recorded increases in the minimum wage (CZ,  EE, FR, HR, HU, LT,
PL, SI, RO). On the other hand, minimum wages have been lowered (EL) or frozen
in others (PT). Public wages have also been frozen or lowered in several cases;
wage freezes in the public sector have been extended in several Member States
(ES, IT NL, PT) while cuts have been applied in other countries (CY, EL, HR,
IE, SI). Conversely, DK is allowing very modest public sector salary increases.
RO took measures to restore the salaries of public employees to their June 2010
levels. 
Member
States addressed wage-setting mechanisms, including wage indexation, and
collective bargaining processes. Wage
indexation has been (temporarily) suspended or amended in a few Member States
(CY, ES, LU). IT adapted its wage bargaining framework to take better account of
developments at the local and sectorial level. In ES social partners reached an
agreement on wage moderation in 2012-14, limiting wage increases and linking
them to growth in Spain’s GDP and to euro zone inflation. In BE, after
unsuccessful negotiations between social partners on a new inter-professional
collective agreement, the government has set the wage norm (the amount by which
labour costs are allowed to increase above inflation) at 0% for 2013 and 2014. The
CSRs adopted in July 2013 highlight the Member States (BE, DE, FI, FR, IT, LU,
SI) for which wage developments remains a challenge. 
Many
Member States took tax measures to promote job creation. Several
countries (CZ, DK, LV, MT, NL, RO, SK and UK) continue to promote public
investment programmes and/or investment incentives to help create jobs, even
though fiscal constraints are tight. Tax measures have been taken in various
countries (BE, ES, FI, FR, HU, LV, MT and UK) to promote job creation. Nearly
all Member States introduced new measures or initiatives (or strengthened
existing ones) to stimulate private investment in R&D and innovation. At
the same time a vast majority of Member States introduced grants for SMEs or
intermediate sized enterprises.  
The tax wedge
is still quite high in many Member States, but only a few countries have taken
steps to address this problem, also in light of the limited fiscal margin. In
order to support labour demand, EE and HR decreased rates of social security
contributions paid by employees and employers while BE, HU and PT cut rates for
special groups. In PT financial support is given to employers who hire older unemployed
people (45+ years) by reimbursement of 75% to 100% of the social security
contribution paid by the employer. FR introduced a new tax credit for
competitiveness and employment that will allow a labour cost reduction. On the
labour supply side, LV reduced its personal income tax rate to 24%. In BE, the ‘workbonus’
is designed to increase the take-home salary of the low-paid, thus reducing
unemployment and low-wage traps. In general CSRs issued this year focused on lowering
the tax burden on low-wage earners (AT, DE, HU, LV and HU) and lowering tax
burden and social contributions on all workers (BE, CZ, DE, FR, IT, NL).
A
number of Member States have continued to support initiatives exploring job-rich
sectors (CZ, FI, LU, MT, NL, RO). The government in LU continues with its
strategy of investing in promising new economic sectors and has set up a
committee for identifying new niche sectors with job growth potential. In CZ, a
major ESF-funded programme ‘New Green for Savings’ opened its first call in
mid-2013. RO is planning to cover more of the IT sector with fiscal incentives
(i.e. tax exemptions). Nevertheless, integrated policy frameworks linking green
growth and employment exist in only a small number of countries (EL, FR, AT,
PT, FI), while in others progress is being made towards the introduction of a
more comprehensive policy response (BG, IE, ES, LU, MT, HR). There are still
many Member States which continue to address green growth with a range of
separate instruments and policies (eg. CZ, LT, LT, SI)[24]. 
Some
Member States used employer subsidies and promoted entrepreneurship. Employer
subsidies were often used to create labour demand (LV, ES at regional level, NL
and SI). Member States took some further measures to promote business creation
and self-employment. Some countries continued or started to offer subsidies to
start up entrepreneurship by the unemployed (BG, CZ, PL, SI) while ES offered reductions
in social security contributions reductions for boosting self-employment and
also supported the hiring of certain groups, such as persons with disabilities
and young people. AT improved the social security system for the self-employed.
PT introduced a measure supporting hiring by start-up enterprises. Some Member
States (IT, LT, PL, SI) focused on boosting entrepreneurship among young
people. IT supports self-employment projects developed by young people in the Southern
regions, especially in the non-profit sector. Other countries (AT, PL and LT)
are focusing on reducing red tape and improving the business environment to
strengthen job creation. CY provides assistance to micro, small and
medium-sized enterprises by supplying them with technical support. To attract
foreign investment, CZ prepared a ‘Welcome Package’ aimied at easing and
speeding up the entry and employment of non-EU nationals involved in major
investments. 
Additional
measures are taken to address the issue of undeclared work. In the area
of undeclared work, some Member States strengthened their punitive measures
(BE, CZ, EL, ES, FR, LV, NL, SK), while others offered some incentives to
declare employment (EL, HR, LT, SI). BE and CZ focused on combating false
self-employment while FR and SK put more emphasis on the inspection of illicit
work. LT introduced service cheques to facilitate a simplified, flexible form
of employment in agriculture and forestry. EL promoted the use of the ‘'labour voucher’',
i.e. an employment coupon with an alternative type of insurance mainly
for domestic staff and people employed in agriculture and healthcare. LV
strengthened legislation to combat tax fraud and pressed ahead with the
implementation of its Plan of Measures to Combat the Grey Economy and Ensure
Fair Competition.
Many Member
States continued to introduce changes to their employment protection
legislation (EPL). In FR the law on securing employment, adopted in
June 2013, introduced a wider access to complementary health insurance,
creation of an individual training account, rights for securing mobility and
for career guidance, simplification of collective dismissal and more
flexibility in difficult economic situation through agreements to maintain
employment. In SI the new reform envisages the simplification of procedures and
reducing administrative barriers, increasing flexibility in the labour market,
incentives for indefinite period contracts and disincentives for fixed-term
contracts. BE is harmonising EPL for blue and white-collar workers and increased flexibility of the working time regulation. In
HR, the first phase of the Labour Law changes, completed in June 2013 focused, inter
alia, on harmonisation with the Directive on the establishment of a
European Works Council and on some elements of fixed-term contracts. In EE, the
civil service reform brought considerable changes to the employment relations
and working conditions in the public sector, bringing them more into line with
those in the private sector. Several Member States took measures to increase
labour code flexibility, through the use of fixed-term contracts (CZ, for
seasonal jobs in agriculture and construction), extension of short-term work
(DE, from six to 12 months), shortening the mandatory time breaks between
fixed-term contracts with the same employer (IT), extending working time
periods and using flexible working hours (PL). Some countries made changes to
pay or allowances for flexible contracts (DE for temporary agency workers in
several new sectors, AT for short-term work). Thus, the balance between flexibility
and security has been shifted in several Member States.. In total, five out of
seven countries that received a CSR to reform EPL in 2013 were recommended to
tackle segmentation (ES, IT, SI, FR, and PL). In LT and NL, relaxing
legislation on fixed-term contracts and dismissal protection would favour
higher employment participation and labour market fluidity. 
2.2
Employment Guideline 8: Developing a skilled workforce
Improving skills supply and promoting adult learning became a
priority in several Member States. Many Member
States introduced measures aimed at improving skills supply and promoting adult
learning. MT and BG enhanced the employability of unemployed or low-paid
persons through training while AT focused on the low and medium qualified by
introducing favourable changes to the system of education. PL adopted its Human
Capital Strategy 2020. In LV, a new re-immigration plan, aimed at encouraging
the return of skilled workers and professionals, will offer labour market
information, Latvian language courses, and support for children of returnees to
participate in the education system. 
In
some countries (CZ, IE, MT, NL), the new measures have focused on specific
sectors with high job-rich potential or particularly hit by the crisis. MT
supports graduates with skills for which there is a lack of supply by reimbursing
education expenses and IE focused on reskilling graduates to take advantage of
expanding job opportunities in the ICT sector. To enrich the labour pool with
required skills, two Member States (AT and DE) amended regulations concerning
the access of third-country nationals to employment. A great number of Member
States have introduced or plan to introduce in 2013 new or strengthened
measures to maintain or increase human resources in STEM (Science, Technology,
Engineering and Mathematics).
Many Member States introduced measures that facilitate school to
work transitions. A considerable number of Member
States (AT, BE, CZ, ES, FI, IT, PT, RO, SE, UK) sought to improve school-to-work
transitions by developing traineeships and apprenticeships and by strengthening
relevant institutions. PT reformed its dual apprenticeship system, extended the
length of the traineeship and broadened access to all qualification levels. RO
promoted professional training for higher education graduates. In the UK
employers will be able to design their own apprenticeships according to their
specific needs and a new traineeships programme was introduced to provide young
people lacking the skills and experience required by the labour market with a
tailor-made package of support to enable them to take up apprenticeships or
other jobs. In BE, unskilled young people can do a full-time three to six month
internship in a company, non-profit organisation or public service. As part of
the Youth Guarantee, FI is making apprenticeship training more accessible and
attractive both for trainees and employers. IT simplified the employer's duties
regarding the provision of training for apprentices and earmarked resources to
activate traineeships for NEETs living in disadvantaged areas as well as for
tertiary students. SE is rolling out ‘vocational introduction jobs’ for young
people aged 15-24 who lack previous experience of the specific profession, with
15-25% of their working time being devoted to unpaid education and training. ES
developed a training and apprenticeship contract and established the basis for
dual vocational training. CZ created a National Catalogue of Internships.
2.3 Employment Guideline 9: Improving quality of education and
training systems
Several Member States focused on improving vocational education
and training systems (VET) to better reflect the needs
of the labour market (DK, EE, EL, ES, HU, IE, LV, PL, SE, SK). Some countries laid
foundations or revised their dual vocational education systems accordingly (EE,
EL, ES, HU, SK). In EE, the new Vocational Education Institutions Act will
apply a new structure of VET study programmes. In EL, the Secondary Education
Restructuring Act lays the foundations for changes in vocational
education such as restructuring curricula and upgrading the role of the Labour
Force Employment Organisation in setting up apprenticeship schemes. SE
strengthened its system by increasing the allowances paid to employers for
taking on apprentices. DK introduced apprenticeship-centres to their vocational
schools and
IE established a new education and training authority (SOLAS). CY
established post-secondary VET institutes as well as an evening technical and
vocational school of secondary education. 
Member States have implemented qualification frameworks, to better
link general education, vocational education and training, and higher
education, and to improve the transparency of qualifications across borders.
Since late 2012, five more countries (BG, DE, IT, PL, SI) have not only
developed a national qualifications framework but also linked it to the
European Qualifications framework, bringing the overall number of Member States
who have done so to 20. CZ, DK, EE, FR, IE, LT started issuing qualifications
with explicit references to an EQF level.
Relevant changes were introduced to tertiary education systems in
many Member States. Reforms of the higher education
system are taking place in AT, EE, EL, FR, HU, PL, PT and LV. The reform in AT is
aimed at increasing the proportion of active students and the rate of completion
of studies, reducing dropouts and shortening average course duration. In EE, a
reform gives
the higher education institution more guidance on the basis of the needs of the
labour market and in close cooperation with employers and related ministries,
as to how many study places to make available in various study fields. EL
consolidated the network of technical institutes and universities. PL guaranteed
financial support for realising innovative university curricula in strategic
sectors and LV proposed several reforms for increasing the quality and
competitiveness of its higher education. Broadening access to professional and
technical bachelor qualifications, reducing dropouts at the bachelor level,
reinforcing practical experience in the curricula, reforming teachers training
and boosting strategic development towards digital modes of learning are key
objectives of the recent FR reform. Several Member States changed the system of
grants and/or tuitions (DE, DK, EE, FR, HU, PL). 
Several Member States took measures to improve their primary and
secondary education system (AT, BE, BG, CZ, DK, EE, EL, ES, FR,
LU, MT, NL, PL, PT, SE, SK). A few addressed the challenges with more
comprehensive reforms while others focused on the quality of teaching and
curricula or on early school leavers. In EE, the recently adopted Basic School
and Upper Secondary School Act clarifies the responsibilities of the state and
local municipalities in the organisation of general education and seeks to
improve the upper secondary school network. MT continued
to strengthen general education by the introduction of the new National
Curriculum Framework. DK agreed a reform of primary and secondary education, to
be implemented as of the 2014-15 school year, which involves more hours for
core subjects (e.g. Danish, Maths and English) and more emphasis on practical
training. Once finally adopted, the new secondary education reform in LU will seek
to deliver a system that is more competence-orientated, dynamic and flexible. CZ
and SK introduced new measures in relation to school inspections and school
performance. PT is developing a comprehensive monitoring tool to evaluate the
results and impact of education policies. In
order to improve the performance of schools and teachers PL is introducing
changes to the Teacher's Charter as of 2014: shortening paid holidays and
long-term sick leave, and focusing training resources on courses directly addressing
schools’ needs. PL also lowered its official school entry age from seven to
six; school attendance at this age will be compulsory as from 2014.
BG and MT set up measures aimed at reducing the numbers of
early-school leavers while AT focused on tackling unexcused school absenteeism
as a means of eventually improving educational outcomes, especially for
disadvantaged young people. To speed up the integration of low educated persons
into the labour market, SE introduced three-month study motivation courses, to
be delivered by high schools. 
2.4
Employment Guideline 10: Promoting social inclusion and combating poverty
While some
Member States have improved benefits addressing child poverty, others have restricted access to or reduced benefits. In response
to growing concerns about the effects of increasing numbers of children
affected by poverty, measures to address child
poverty have been stepped up in some Member States, including through a
comprehensive national action plan in BE. In EE, the needs-based family
allowance reform was partly implemented from July 2013 (with increased
allowances planned for 2015). In LV, in order to support poorer families,
minimum monthly parental benefits, childcare benefits and childcare benefit
supplements for children born in multiple births were increased, including for
parents without social insurance, and the personal income tax allowance for
dependents was increased. Recent trends of increased conditionality or cuts to
benefits have also continued, for example in countries implementing a
tightening of eligibility or freezing or reducing the level of income support
measures (EL, ES, SI, UK). This has contributed to the weakening of the
stabilising effect of social spending on household incomes.
Similarly
mixed signs are found in access to early childhood education and care. Some Member
States (DE, FR, HU, LV, PL, UK) took initiatives
aimed at extending child enrolment in ECEC as part of their strategies
to improve opportunities for children. DE introduced
the right to childcare for the under threes, FR’s reform aims, by means of an
appropriate pedagogical approach, to raise the participation rate of two to
three year old and PL plans to expand the list of companies able to
apply for funding from the state budget for the establishment and operation
costs of care institutions. In addition PL adopted a new regulation in July
2013 under which as of September 2015 every four- year-old will have a right to
participate in pre-school education and as of September 2017 every three-year-old
will have a guaranteed place in pre-school education. Other countries (HR,
LV and UK) took steps to improve the affordability of ECEC services. In LV, local governments now co-finance the cost of the enrolment
in private facilities of children from one to four years in cases where there
is a waiting list for public facilities. HR introduced a law on nannies which
aims to improve access to childcare. Various Member States have also taken
measures to strengthen child protection in their welfare systems (DK, ES, FI,
PL, SE). 
Rebalancing
time in work and retirement is a key theme in pension initiatives as almost
everywhere the pensionable age is being raised and gender equalised. Responding to
the demographic challenges for pension provision, Member States increasingly
recognise the need to ensure longer working lives to offset longevity growth.
Over the past year, various Member States adopted or accelerated an increase of
the pensionable age for women and/or men. In total, 23 of 28 MS have now legislated
current or future increases of the pensionable age. In many cases, the increase
is accompanied by a (gradual) equalisation of pensionable ages for men and
women (CZ, EE, EL, HR, IT, LT, MT, PL, SI, SK, UK). However, more efforts are
warranted to tackle other main drivers of the gender pension gap, in particular
career interruptions and low-work intensity.
More
countries are also taking the crucial step of linking pension age to longevity
growth. Having
first raised the pensionable age to cover earlier increases in longevity a
growing number of countries have opted to introduce an explicit link between
the pensionable age and future gains in life expectancy (CY, DK, EL, IT, NL,
SK). Yet several Member States have serious reservations about this idea. Some
argue that first they need to reduce the current gap between the effective and
the pensionable age. Others see the idea of a pensionable age that
automatically moves upward with the rise in life expectancy as too novel. 
In order to
curb early exit, most Member States have taken steps to restrict access to
early retirement. The main reform measures in this respect are
stricter eligibility conditions for early pensions (minimum age, contribution
record and benefit level), increased penalties for early exit and stronger
focus on activation measures. In particular, many countries are restricting
access to widely-used pathways to early retirement such as prolonged
unemployment benefits (e.g. ES) or invalidity benefits (e.g. AT, BE, DK). Still
in some Member States (AT, BE, BG, HR, LU, MT, RO, SI) early exit options still
tend to undermine the adequacy and sustainability of pensions and reduce
employment and growth.
Many Member
States are opening routes for people to prolong their working lives and improve
pension entitlements by deferring retirement. In 2012, BG and the UK
abolished provisions on default retirement. In FR, the age at which private
employers can send a worker into retirement without his/her consent has been
raised from 65 to 70. Many pension systems include incentives for working
beyond pensionable age (ES), such as higher pension accrual rates or a pension
bonus in the event of delayed retirement (FI and FR). More countries are
relaxing rules to allow pension benefits to be combined with work-related
income (BE, ES, NL and SI). Importantly, some countries are increasingly
underpinning pension reforms with active ageing measures in work places and
labour markets (e.g. BE, FR, SI, SK). However, in this area efforts in this
area are still far too limited and uncoordinated. If pension reforms are to
succeed Member States will need to greatly expand and intensify measures to
enable and encourage women and men to work to higher ages.
In response
to fiscal pressures, countries are reviewing healthcare expenditure and seeking
ways to improve value for money while better instruments for cost containment
are introduced. Several
Member States have undertaken or launched structural reforms of their
healthcare systems (AT, BG, CY, EL, ES, FI, HR, HU, LT, UK). BG is in
the process of introducing a new hospital care pricing model based on the use
of diagnosis-related groups. The new Health and Social Care Act will bring
major changes to the NHS in the UK (England) with effects on who makes
decisions about the commissioning of services and the way money is spent. A
number of Member States introduced or are planning to introduce measures to
contain the rising costs of health expenditure (AT, BE, CY, DE, EL, ES, FR, HR,
HU, IE, NL, PT). AT, BE and FR focused on capping the overall level of
healthcare expenditure growth. PT introduced new rules for pricing generics and
for prescription by International Non-proprietary Name (INN), thereby promoting
the use of generic medicines and the least costly available products. A variety
of measures have been taken to improve health service delivery, many of them
further developing e-Health (AT, BE, BG, DK, ES, HU, LT, LT, LV, MT, PL, PT,
SE, SI, SK, UK). ES is introducing a new legal framework defining clinical
management models applicable to all centres of the National Health System. AT adopted
an Electronic Health Record Act aimed at improving the continuum of care and
the information flow of healthcare providers. Given the important challenge they
face regarding health-care, some Member States have stepped up their efforts
yet it is still too early to assess whether these have been effective. 
It remains
necessary to find new ways of tackling staff shortages and securing access to
healthcare for all calls for further measures. Some Member States are substantially
investing in the healthcare workforce (BG, DE, HU, MT, PL, SK). HU increased
the wages of 90,000 health professionals. DE aims to address the lack of
healthcare professionals in rural areas. Enhancing access to healthcare
services remained a priority for several Member States (DK, EL, FI, FR, LU,
LV). LU introduced a 'third party payer' system for insured persons officially
declared to be in an economically vulnerable situation by the competent Social
Office. EL is setting-up a temporary system of health vouchers ensuring that uninsured
citizens have access to primary healthcare services.  
Whilst
long-term care services are often affected by budget constraints countries are also
taking steps to secure a better organisation of such social services. Some Member
States (BG, SI) adopted national strategies based on an integrated approach and
enhancing the provision of quality social services, including long-term care.
In SI, the National Programme of Social Protection (2013-20) defines
qualitative and quantitative goals for the development of social systems in
general and social services in particular. FI adopted a reform of its long-term
care system strengthening the role of rehabilitation services and giving a
clear priority to home care over residential services. In several Member States
underdevelopment of formal LTC provisions remains a major impediment to female
employment and growth as well as protection against dependency in old age.  
Increased efforts
to contain or reduce adult poverty include major overhauls of social assistance
systems. A number of Member States are introducing or
strengthening activating measures as part of their policy to better address
adult poverty (see section on labour market participation). Reforms of the
social assistance system are planned or in progress in a number of MSs (LT, CY,
DK, EL, HR, IT, PL and RO). In 2012, LT launched the cash social
assistance reform to increase work incentives, strengthen the links between
social assistance and activation measures and better targeting and enhance the
cooperation between local employment offices and municipalities. IT is
implementing a reform of the main means-testing mechanism. The provision is
intended to increase the targeting ability of the instrument and the fair
distribution of fiscal relief and social benefits. IT also launched a ‘new
social card’ pilot project- a minimum income scheme to be connected later to
activation policies. As part of its reforms of the social assistance system, CY
is also planning to introduce a guaranteed minimum income scheme (GMI) (which
will actually replace the existing public assistance scheme). EL is planning to
launch a pilot programme to introduce a minimum income scheme in the country.
Some Member States (BE, EE, ES, HU, MT, UK) have taken steps towards
administrative simplification. Despite the efforts, much remains to be done at
Member States level to reach the right mix of adequate income support,
inclusive labour markets and access to services.
Member States
introduced special inclusion programmes for people in situations of particular
disadvantages and for people affected by
homelessness and housing exclusion. Many
Member States have rethought or developed their National Roma Integration
Strategies or integrated sets of policy measures in concrete terms, in
particular by seeking to organise dialogue (AT, BE, BG, CZ, DK, EE, EL, ES, FI,
FR, HU, IE, IT, LV, NL, RO, SE, SI, UK). To efficiently confront homelessness, LU launched an integrated,
non-criminalising, housing-led homelessness strategy with a focus on
prevention, reducing long-term homelessness and improving access to housing and
quality social services by homeless people. Several Member States (ES, FR, SK)
have introduced measures to increase affordable social and rental housing for
low-income households or fight segregation (HU). NL introduced income-dependent
rent increases in the social housing sector, and in BE rent subsidies are
offered to those who have been on the social housing waiting list for a long
time. 
3. SCOREBOARD OF KEY EMPLOYMENT AND SOCIAL
INDICATORS 
In
the Communication on Strengthening the Social Dimension of the Economic and
Monetary Union (EMU)[25] the
Commission proposed a scoreboard of key employment and social indicators to be used
in the draft Joint Employment Report. The scoreboard consists of five headline
indicators: the unemployment rate (15-74 age group); the NEET rate in
conjunction with the youth unemployment rate (15-24 age group); real gross
household disposable income; the at-risk-of-poverty rate (15-64 age group) and
income inequalities (S80/S20 ratio). The scoreboard ensures greater visibility
and makes it easier to identify of major employment and social trends [26] that may affect the good functioning of the
EMU and may warrant a closer follow-up within the European Semester[27]. The October 2013 European Council
concluded that the use of an employment and social scoreboard in the Joint
Employment Report and of employment and social indicators along the lines
proposed by the Commission should be pursued, following appropriate work in the
relevant Committees, for decision by the Council in December with the objective
of using these new instruments as early as the 2014 European Semester[28].
In
the event of an economic shock, there is a risk of employment and social
problems developing within the monetary union in the absence of implementation
of effective policy responses and thereby resulting in persistent disparities and
deterioration in the economic fundamentals of the European Union as a whole. The
main channels through which severe employment and social problems spill over on
other Member States are internal trade, erosion of human capital resulting in
deterioration of long-term international competitiveness conditions.. It is
hence in the interest of all Member States to ensure that employment and social
challenges are addressed in a timely and effective manner[29].
The analysis
in this section is based on five headline indicators introduced in the above Communication[30]. The reading of the scoreboard should not
be mechanical and a more detailed interpretation of it should build on existing
tools (the Employment Performance Monitor (EPM), the Social Protection
Performance Monitor (SPPM), the Joint Assessment Framework (JAF) and agreed
datasets like the European Labour Force Survey and EU Statistics on Income and Living
Conditions[31]. 
The
divergences highlighted by this new scoreboard and the ways to tackle negative
trends and disturbing levels of employment and social problems will be further
analysed during the 2014 European Semester through an even more detailed
application of additional indicators, including in the multilateral
surveillance process and during the preparation of country-specific
recommendations. 
What follows
in the subsequent subsections is an overview of recent divergent socio-economic
trends within the European Union, identifying the most noteworthy developments
in individual countries per each of the five indicators. Finally, tables are
provided in Annex with an overview of the situation per indicator in all EU
Member States as well as an overview of the key employment challenges as
identified in the EPM and the social trends to watch from the SPPM. 
Potentially worrying
key employment and social developments and levels leading to divergences across
the EU and warranting further analysis and possibly stronger policy response could
be detected along three dimensions:
·       
For
each Member State, the change in the indicator in a certain year as compared with
earlier periods in time (historical trend);
·       
For
each Member State, the difference from the EU and the euro zone average rates
in the same year (providing a snapshot of existing employment and social
disparities);
·       
The
change in the indicator between two consecutive years in each Member State
relative to the change at the EU and euro zone levels (indicative of the
dynamics of socio-economic convergence/divergence).  
3.1. Unemployment
rate - change and level
The
gap that appeared between the unemployment rates for the 'North and core' and
the 'South and periphery' of the euro area[32],
has been growing at an alarming pace since 2008, and now reaches 10.2
percentage points (pp), against 1.7 pp between the North and periphery of
non-EA countries. In the mid-2000s, the currency union indirectly contributed
to convergence in unemployment rates across its Member States, notably due to
the increases in demand associated with the large capital inflows into the 'peripheral'
countries after the introduction of the euro. However, the financial and
economic crisis has unleashed divergence in unemployment rates on a much larger
scale, partly due to the slow deleveraging process and the uncertainty around
the recovery prospects of the 'periphery' which also translated into high
borrowing costs within these countries. 
Figure
I: Unemployment rates (15-74 age group) by groups of euro area (EA) and non-EA
Member States since 2000
Source:
Eurostat (LFS), DG EMPL calculations; weighted averages
As seen from
figures in the tables in annex, there are five Member States (HR, CY, EL, PT
and ES) where the unemployment situation is most alarming. In these countries
the unemployment rate is far above the EU and EA averages. Also the increase in
unemployment has been relatively fast, as compared with historical trends and
with other Member States (i.e. divergence). Departing from different starting
points, IT, the NL and SI are experiencing unemployment rates that are not
extreme in terms of their levels but have increased significantly in recent years.

3.2.
Youth unemployment rate and NEET rate (young people not in education,
employment or training) - change and level
In the South
and periphery of the euro area youth unemployment increased substantially from
2008 onwards, to reach a rate of over 40% in 2012. In contrast, in the North/core
of the EA rates have remained more or less stable, so that by 2012 the gap
between the two groups of Member States had grown to more than 25 percentage
points. Developments in the remaining Member States have also been negative,
but less so than in the South/periphery. The average rate of people not in
employment, education or training (NEETs) aged 15-24 reached 19% in the South
and periphery of the euro area, against 9.2% in the North/core, and the gap
between these two groups of countries keeps increasing, following a similar
pattern to that of unemployment trends. Youth unemployment and inactivity are
of particular concern given their scarring effects on the future employability
and productivity of the people in question. The present divergence in youth
unemployment and NEET rates threatens to fuel an even greater divergence in
socio-economic fundamentals across the currency union and the EU over the
longer term.
Figure IIa: Youth unemployment rates (age group 15-24 age group)
by groups of euro area (EA) and non-EA Member States since 2007
Source:
Eurostat, statistics on education and training, DG EMPL calculations; weighted
averages
Figure
IIb: NEET rates (age group 15-24) by groups of euro area (EA) and non-EA Member
States since 2007
Source:
Eurostat, statistics on education and training, DG EMPL calculations; weighted
averages
Reading the figures from the scoreboard (tables
in annex), the situation for young people is alarming in several Member States.
As for youth unemployment, both levels and trends are worrying in CY, EL, ES, IT,
PT and HR. In SI and to a lesser extent BE, it is the trends rather than the levels
that give rise to concern while the opposite holds for SK (high youth
unemployment rate). As regards the NEET rates both the level and trends are
worrisome in EL and IT. In BG, IE and ES it is the level that stands out, while
for CY, LU, HU, PT and SI it is the recent trend. 
3.3.
Real change in gross disposable income of households
During the crisis years,
household incomes (as measured by the growth rate of real gross household
disposable income) in the North and central part of the euro area kept
increasing, though at a reduced pace (except for the year 2010), while in the
peripheral countries stagnated in real terms or declined after 2009. Household
incomes have primarily been affected by the reduction of market incomes and the
weakening of automatic stabilisers over time. In addition, fiscal tightening -
concentrated in Southern/peripheral EA countries - has affected employment and
changes to the tax and benefits systems and cuts in public sector wages have
led to significant reductions in the level of real household incomes. This may
have contributed to the widening divergence within the euro area.
Figure
III: Real change in gross household disposable income (GHDI) by groups of EA
and non-EA Member States since 2002
Source:
Eurostat, National accounts, DG EMPL calculations; weighted averages 
There is both
a wide dispersion and growing divergence between Member States in the evolution of gross household disposable income in real
terms. Looking at 2012 data no less than 11 Member States have
experienced significant negative developments in gross household disposable incomes:
EL has experienced a year-on-year decrease of nearly 10% and CY one of more
than 8%. The declines in IT, HU, NL, PT, RO (data for 2011), SI, and ES, hover
between 3% and 5% while DK and SK experienced a drop of around 1-2%. Such
year-on-year decreases are particularly noteworthy, given that for several
decades, real GHDI used to steadily if mildly rise across Europe due to
economic growth or short-term automatic stabilisation in the event of
downturns, with any year-on-year decreases thus being rather exceptional.
3.4
At-risk-of-poverty rate of working age population – change and level;
At-risk of
poverty rates (AROP) are on the rise in many Member States. They have increased
significantly since 2008 in the South and periphery of the EU, both in EA and
non-EA countries. This increase came on top of already high poverty risk
levels. Since 2009 AROP rates have also increased in Member States in the North
and core of the euro area, albeit from a much lower level. The extended period
of negative or close to zero GDP growth, rising long-term unemployment and the
weakening over time of automatic stabilisers have now impacted on poverty risks
in these countries as well.
Figure IV:
At-risk-of-poverty rates in working age (15-64) by groups of EA and non-EA Member
States since 2004[33]
Source:
Eurostat, EU-SILC, DG EMPL calculations; weighted averages - years refer to
income year
Member
States experiencing trends of increasing at-risk-of-poverty rates between 2010
and 2011 include BG, EE, ES, FR, IT, HU, RO and SK. EL, LV and LT have very
high levels of people at-risk-of-poverty as compared with the EMU average,
without significantly increasing trends during this time period. Particularly
worrisome are developments in ES and RO as they display both high poverty levels
and a trend of significant increases of poverty over a short period of time. 
3.5.
Inequalities (S80/S20 ratio) – change and level[34]
Income
inequality is growing across and within Member States,pParticularly in the South
and periphery of the EU. These are also the Member States that witnessed the
largest increases in unemployment. In many countries, the crisis has
intensified the long-term trends of wage polarisation and labour market
segmentation, which together with less redistributive tax and benefit systems
have fuelled rising inequalities. High levels of unemployment (with the largest
increases at the bottom of the labour market) and in some cases the impact of
fiscal consolidation[35] also explain the significant increases
in inequalities observed in the countries most affected by the jobs crisis. 
Figure
V: Inequality (S80/S20 measure) by groups of EA and non-EA Member States since
2005
Source:
Eurostat, EU-SILC, DG EMPL calculations; weighted averages - years refer to
income year
There is a
wide dispersion and growing divergence in inequality (S80/S20 ratio) between
Member States. Looking at 2011 data, BG figures along all three dimensions:
year-on-year change, distance from EMU average and the change between two
consecutive years in a Member State relative to the change at EU/EA level. EE,
EL, IT and HU stand out for the annual change (deterioration of the inequality
ratio between 0,3 and 0,5 points) while RO, LV and ES stand out for their
divergence from the EA average (increase of the inequality ratio by 1,2 point
or more). 
 
Annex
1: Scoreboard of key employment and social indicators
with EU and
Eurozone averages as reference points 
   || Unemployment rate || Youth unemployment || Real growth in gross household disposable income || At-risk-of-poverty rate || Inequalities - S80/S20 
   || Youth UR || NEETs 
   || Y-Y change (S1/2012-S1/2013) || Distance from EU average || Y-Y for MS to Y-Y for EU || Y-Y change (S1/2012-S1/2013) || Distance from EU average || Y-Y for MS to Y-Y for EU || Y-Y change (2011-2012) || Distance from EU average || Y-Y for MS to Y-Y for EU || Y-Y change (2011-2012) || Y-Y for MS to Y-Y for EU || Y-Y change (2010-2011) || Distance from EU average || Y-Y for MS to Y-Y for EU || Y-Y change (2010-2011) || Distance from EU average || Y-Y for MS to Y-Y for EU 
 EU-27 || 0,6 || 0,0 || 0,0 || 0,6 || 0,0 || 0,0 || 0,3 || 0,0 || 0,0 || -0,9 || 0,0 || 0,8 || 0,0 || 0,0 || 0,0 || 0,0 || 0,0 
 EA-17 || 0,9 || 1,2 || 0,4 || 1,4 || 0,6 || 0,7 || 0,6 || 0,0 || 0,3 || -1,7 || -0,7 || 1,0 || 0,2 || 0,2 || 0,1 || 0,0 || 0,1 
 BE || 1,0 || -2,5 || 0,4 || 3,3 || 0,0 || 2,6 || 0,5 || -0,9 || 0,2 || -0,4 || 0,5 || 0,8 || -3,1 || 0,0 || 0,0 || -1,1 || 0,0 
 BG || 0,8 || 2,0 || 0,2 || -0,1 || 5,1 || -0,8 || -0,3 || 8,3 || -0,6 || : || : || 2,2 || 2,2 || 1,4 || 0,6 || 1,5 || 0,6 
 CZ || 0,3 || -3,8 || -0,4 || -0,6 || -4,4 || -1,3 || 0,6 || -4,3 || 0,3 || 0,3 || 1,2 || 1,0 || -6,9 || 0,2 || 0,0 || -1,5 || 0,0 
 DK || -0,8 || -4,0 || -1,4 || -2,3 || -10,9 || -3,0 || 0,3 || -6,6 || 0,0 || -0,9 || 0,0 || 0,2 || -2,9 || -0,6 || 0,0 || -0,6 || 0,0 
 DE || -0,2 || -5,6 || -0,8 || -0,3 || -15,5 || -0,9 || 0,2 || -5,5 || -0,1 || 0,7 || 1,6 || 0,8 || 0,4 || 0,0 || 0,0 || -0,5 || 0,0 
 EE || -1,7 || -2,2 || -2,3 || -4,0 || -5,3 || -4,7 || 0,7 || -0,7 || 0,4 || 2,4 || 3,3 || 2,4 || 2,0 || 1,6 || 0,3 || 0,3 || 0,3 
 IE || -1,2 || 2,9 || -1,8 || -3,2 || 4,9 || -3,8 || -0,1 || 5,5 || -0,4 || 5,7 || 6,7 || 0,5 || -0,9 || -0,3 || -0,1 || -0,4 || -0,1 
 EL || 4,1 || 16,1 || 3,5 || 6,1 || 36,1 || 5,5 || 2,9 || 7,1 || 2,6 || -9,6 || -8,7 || 1,0 || 4,0 || 0,2 || 0,4 || 1,0 || 0,4 
 ES || 2,2 || 15,5 || 1,6 || 3,9 || 32,2 || 3,3 || 0,3 || 5,6 || 0,0 || -5,2 || -4,2 || 1,5 || 4,5 || 0,7 || -0,1 || 2,1 || -0,1 
 FR || 0,8 || -0,1 || 0,2 || 2,1 || 2,4 || 1,4 || 0,2 || -1,0 || -0,1 || -0,3 || 0,6 || 1,1 || -2,5 || 0,3 || 0,1 || -0,4 || 0,1 
 HR || 1,9 || 6,1 || 1,3 || 12,2 || 28,1 || 11,5 || 1 || 3,5 || 0,7 || : || : || 0,7 || 3,1 || -0,1 || -0,2 || 0,4 || -0,2 
 IT || 1,7 || 1,1 || 1,1 || 4,5 || 15,6 || 3,8 || 1,3 || 7,9 || 1,0 || -4,5 || -3,6 || 1,6 || 2,5 || 0,8 || 0,4 || 0,6 || 0,4 
 CY || 4,3 || 4,3 || 3,7 || 11,2 || 13,8 || 10,5 || 1,4 || 2,8 || 1,1 || -8,0 || -7,0 || -0,4 || -4,5 || -1,2 || -0,2 || -0,7 || -0,2 
 LV || -3,6 || 1,1 || -4,2 || -8,2 || -2,2 || -8,9 || -1,1 || 1,7 || -1,4 || 4,9 || 5,8 || -0,3 || 4,2 || -1,1 || -0,3 || 1,6 || -0,3 
 LT || -1,5 || 1,4 || -2,1 || -5,5 || -0,6 || -6,1 || -0,4 || -2,1 || -0,7 || : || : || -1,6 || 4,2 || -2,4 || -1,5 || 0,8 || -1,5 
 LU || 0,6 || -5,3 || 0,0 || 0,2 || -4,7 || -0,4 || 1,2 || -7,3 || 0,9 || : || : || -0,8 || -2,9 || -1,6 || -0,1 || -1,0 || -0,1 
 HU || -0,4 || -0,3 || -1,0 || 0,5 || 4,9 || -0,1 || 1,4 || 1,5 || 1,1 || -3,0 || -2,0 || 1,7 || -2,4 || 0,9 || 0,5 || -1,1 || 0,5 
 MT || 0,1 || -4,4 || -0,5 || -0,5 || -9,5 || -1,2 || 0,5 || -2,1 || 0,2 || : || : || 0,2 || -2,9 || -0,6 || -0,2 || -0,9 || -0,2 
 NL || 1,4 || -4,5 || 0,8 || 1,4 || -12,7 || 0,7 || 0,5 || -8,9 || 0,2 || -3,1 || -2,2 || 0,4 || -5,5 || -0,4 || 0,1 || -1,2 || 0,1 
 AT || 0,6 || -6,1 || 0,0 || 0,0 || -14,6 || -0,6 || -0,4 || -6,7 || -0,7 || 1,4 || 2,3 || 0,3 || -5,0 || -0,5 || 0,1 || -1,2 || 0,1 
 PL || 0,6 || -0,4 || 0,0 || 1,1 || 3,8 || 0,4 || 0,2 || -1,4 || -0,1 || 0,4 || 1,4 || 0,2 || 1,1 || -0,6 || 0,0 || 0,0 || 0,0 
 PT || 2,1 || 6,4 || 1,5 || 3,6 || 16,6 || 3,0 || 1,4 || 0,9 || 1,1 || -3,0 || -2,1 || 0,5 || 0,2 || -0,3 || 0,1 || 0,7 || 0,1 
 RO || 0,1 || -3,7 || -0,5 || -0,3 || -0,1 || -0,9 || -0,6 || 3,6 || -0,9 || -4,3* || -4,2* || 1,8 || 5,0 || 1,0 || 0,2 || 1,2 || 0,2 
 SI || 2,3 || -0,3 || 1,7 || 5,3 || 0,1 || 4,6 || 2,2 || -3,9 || 1,9 || -3,8 || -2,9 || 0,7 || -4,3 || -0,1 || 0,1 || -1,5 || 0,1 
 SK || 0,4 || 3,3 || -0,2 || 0,4 || 10,5 || -0,3 || 0 || 0,6 || -0,3 || -2,3 || -1,4 || 1,2 || -3,6 || 0,4 || 0,0 || -1,2 || 0,0 
 FI || 0,4 || -2,8 || -0,2 || 1,1 || -3,3 || 0,4 || 0,2 || -4,6 || -0,1 || 0,3 || 1,2 || 0,5 || -3,2 || -0,3 || 0,1 || -1,3 || 0,1 
 SE || 0,3 || -2,9 || -0,4 || 1,1 || 0,8 || 0,4 || 0,3 || -5,4 || 0,0 || 2,9 || 3,9 || 0,6 || -3,5 || -0,2 || 0,1 || -1,4 || 0,1 
 UK || -0,3 || -3,2 || -0,9 || -0,6 || -2,5 || -1,3 || -0,3 || 0,8 || -0,6 || 2,2 || 3,1 || -0,8 || -1,9 || -1,6 || -0,1 || 0,3 || -0,1 
* The latest data for RO for real growth in GHDI
available for 2010-11

   || Unemployment Rate || Youth unemployment || Real growth in gross household disposable income || At-risk-of-poverty rate || Inequalities - S80/S20 
   || Youth UR || NEETs 
   || Y-Y change (S1/2012-S1/2013) || Distance from EA average || Y-Y for MS to Y-Y for EA || Y-Y change (S1/2012-S1/2013) || Distance from EA average || Y-Y for MS to Y-Y for EA || Y-Y change (2011-2012) || Distance from EA average || Y-Y for MS to Y-Y for EA || Y-Y change (2011-2012) || Y-Y for MS to Y-Y for EA || Y-Y change (2010-2011) || Distance from EA average || Y-Y for MS to Y-Y for EA || Y-Y change (2010-2011) || Distance from EA average || Y-Y for MS to Y-Y for EA 
 EU-27 || 0,6 || -1,2 || -0,4 || 0,6 || -0,6 || -0,7 || 0,3 || 0 || -0,3 || -0,9 || 0,7 || 0,8 || -0,2 || -0,2 || 0,0 || 0,0 || -0,1 
 EA- 17 || 0,9 || 0,0 || 0,0 || 1,4 || 0,0 || 0,0 || 0,6 || 0 || 0 || -1,7 || 0,0 || 1,0 || 0,0 || 0,0 || 0,1 || 0,0 || 0,0 
 BE || 1,0 || -3,7 || 0,0 || 3,3 || -0,7 || 1,9 || 0,5 || -0,9 || -0,1 || -0,4 || 1,3 || 0,8 || -3,3 || -0,2 || 0,0 || -1,1 || -0,1 
 BG || 0,8 || 0,9 || -0,1 || -0,1 || 4,5 || -1,5 || -0,3 || 8,3 || -0,9 || : || : || 2,2 || 2,0 || 1,2 || 0,6 || 1,5 || 0,5 
 CZ || 0,3 || -5,0 || -0,7 || -0,6 || -5,0 || -2,0 || 0,6 || -4,3 || 0 || 0,3 || 2,0 || 1,0 || -7,1 || 0,0 || 0,0 || -1,5 || -0,1 
 DK || -0,8 || -5,1 || -1,7 || -2,3 || -11,6 || -3,7 || 0,3 || -6,6 || -0,3 || -0,9 || 0,7 || 0,2 || -3,1 || -0,8 || 0,0 || -0,6 || -0,1 
 DE || -0,2 || -6,7 || -1,1 || -0,3 || -16,2 || -1,7 || 0,2 || -5,5 || -0,4 || 0,7 || 2,3 || 0,8 || 0,2 || -0,2 || 0,0 || -0,5 || -0,1 
 EE || -1,7 || -3,4 || -2,6 || -4,0 || -5,9 || -5,4 || 0,7 || -0,7 || 0,1 || 2,4 || 4,0 || 2,4 || 1,8 || 1,4 || 0,3 || 0,3 || 0,2 
 IE || -1,2 || 1,7 || -2,2 || -3,2 || 4,2 || -4,5 || -0,1 || 5,5 || -0,7 || 5,7 || 7,4 || 0,5 || -1,1 || -0,5 || -0,1 || -0,4 || -0,2 
 EL || 4,1 || 15,0 || 3,2 || 6,1 || 35,4 || 4,7 || 2,9 || 7,1 || 2,3 || -9,6 || -7,9 || 1,0 || 3,8 || 0,0 || 0,4 || 1,0 || 0,3 
 ES || 2,2 || 14,4 || 1,2 || 3,9 || 31,6 || 2,6 || 0,3 || 5,6 || -0,3 || -5,2 || -3,5 || 1,5 || 4,3 || 0,5 || -0,1 || 1,8 || -0,2 
 FR || 0,8 || -1,3 || -0,2 || 2,1 || 1,8 || 0,7 || 0,2 || -1 || -0,4 || -0,3 || 1,3 || 1,1 || -2,7 || 0,1 || 0,1 || -0,4 || 0,0 
 HR || 1,9 || 4,9 || 0,9 || 12,2 || 27,5 || 10,8 || 1 || 3,5 || 0,4 || : || : || 0,7 || 2,9 || -0,3 || -0,2 || 0,4 || -0,3 
 IT || 1,7 || -0,1 || 0,8 || 4,5 || 14,9 || 3,1 || 1,3 || 7,9 || 0,7 || -4,5 || -2,8 || 1,6 || 2,3 || 0,6 || 0,4 || 0,6 || 0,3 
 CY || 4,3 || 3,2 || 3,4 || 11,2 || 13,1 || 9,8 || 1,4 || 2,8 || 0,8 || -8,0 || -6,3 || -0,4 || -4,7 || -1,4 || -0,2 || -0,7 || -0,3 
 LV || -3,6 || -0,1 || -4,5 || -8,2 || -2,8 || -9,6 || -1,1 || 1,7 || -1,7 || 4,9 || 6,6 || -0,3 || 4,0 || -1,3 || -0,3 || 1,6 || -0,4 
 LT || -1,5 || 0,2 || -2,5 || -5,5 || -1,3 || -6,8 || -0,4 || -2,1 || -1 || : || : || -1,6 || 4,0 || -2,6 || -1,5 || 0,8 || -1,6 
 LU || 0,6 || -6,5 || -0,4 || 0,2 || -5,4 || -1,2 || 1,2 || -7,3 || 0,6 || : || : || -0,8 || -3,1 || -1,8 || -0,1 || -1,0 || -0,2 
 HU || -0,4 || -1,4 || -1,4 || 0,5 || 4,3 || -0,9 || 1,4 || 1,5 || 0,8 || -3,0 || -1,3 || 1,7 || -2,6 || 0,7 || 0,5 || -1,1 || 0,4 
 MT || 0,1 || -5,6 || -0,9 || -0,5 || -10,1 || -1,9 || 0,5 || -2,1 || -0,1 || : || : || 0,2 || -3,1 || -0,8 || -0,2 || -0,9 || -0,3 
 NL || 1,4 || -5,6 || 0,4 || 1,4 || -13,3 || 0,0 || 0,5 || -8,9 || -0,1 || -3,1 || -1,4 || 0,4 || -5,7 || -0,6 || 0,1 || -1,2 || 0,0 
 AT || 0,6 || -7,3 || -0,4 || 0,0 || -15,2 || -1,4 || -0,4 || -6,7 || -1 || 1,4 || 3,1 || 0,3 || -5,2 || -0,7 || 0,1 || -1,2 || 0,0 
 PL || 0,6 || -1,5 || -0,3 || 1,1 || 3,2 || -0,3 || 0,2 || -1,4 || -0,4 || 0,4 || 2,1 || 0,2 || 0,9 || -0,8 || 0,0 || 0,0 || -0,1 
 PT || 2,1 || 5,3 || 1,2 || 3,6 || 16,0 || 2,3 || 1,4 || 0,9 || 0,8 || -3,0 || -1,3 || 0,5 || 0,0 || -0,5 || 0,1 || 0,7 || 0,0 
 RO || 0,1 || -4,8 || -0,9 || -0,3 || -0,8 || -1,6 || -0,6 || 3,6 || -1,2 || -4,3* || -4,0* || 1,8 || 4,8 || 0,8 || 0,2 || 1,2 || 0,1 
 SI || 2,3 || -1,5 || 1,4 || 5,3 || -0,5 || 3,9 || 2,2 || -3,9 || 1,6 || -3,8 || -2,2 || 0,7 || -4,5 || -0,3 || 0,1 || -1,5 || 0,0 
 SK || 0,4 || 2,1 || -0,6 || 0,4 || 9,9 || -1,0 || 0 || 0,6 || -0,6 || -2,3 || -0,6 || 1,2 || -3,8 || 0,2 || 0,0 || -1,2 || -0,1 
 FI || 0,4 || -4,0 || -0,5 || 1,1 || -3,9 || -0,3 || 0,2 || -4,6 || -0,4 || 0,3 || 2,0 || 0,5 || -3,4 || -0,5 || 0,1 || -1,3 || 0,0 
 SE || 0,3 || -4,0 || -0,7 || 1,1 || 0,1 || -0,3 || 0,3 || -5,4 || -0,3 || 2,9 || 4,6 || 0,6 || -3,7 || -0,4 || 0,1 || -1,4 || 0,0 
 UK || -0,3 || -4,3 || -1,3 || -0,6 || -3,1 || -2,0 || -0,3 || 0,8 || -0,9 || 2,2 || 3,9 || -0,8 || -2,1 || -1,8 || -0,1 || 0,3 || -0,2 
* The latest data for RO for real growth in GHDI
available for 2010-11
Annex 2: Summary overview of Key
Employment Challenges and particularly good labour market outcomes according to
the Employment Performance Monitor (C=challenge; G=good labour market
outcome) – adopted in June 2013[36]. 
Annex
3: Summary overview of the ‘social trends to watch’ as identified by the Social
Protection Performance Monitor[37]
- adopted in
Jan 2013.
 || 
Note: The social trends to watch for
2010-11, identified by deterioration in more than 1/3 of MS, are highlighted in
red in the table to the right.
[1] This section partly builds on
the detailed analysis presented in "EU Employment and Social Situation,
Quarterly Review", March 2013. For details in the area of education,
training and skills, cf the 2013 edition of the Education and Training Monitor.
[2] The unemployment rate of
third-country nationals reached 21.3% in 2012 compared to 20.0% in 2011 - and
14.4% 2008.
[3] Data for EL only available
until July.
[4] According to the latest Vacancy Monitor,
the professions with the highest growth in employees after personal care
workers in health services were software applications developers and analysts,
administrative and specialised secretaries, mining, manufacturing and
construction supervisors, and primary school and early childhood teachers.
[5] The job finding rate is defined as the
ratio between the number of people starting new jobs and those who are
unemployed. The job separation rate is the ratio of the number of people who
left their jobs to the number of people in employment.
[6] "Labour Market Developments in
Europe, 2013", European Commission.
[7] For instance "Future Skills
Supply and Demand in Europe", Cedefop.
[8] In October 2013, the OECD and
Commission released the outcome of a new Survey on Adult Skills (PIAAC),
European Commission, OECD.
[9] See e.g. "Is Aggregate
Demand Wage-Led or Profit-Led? National and Global Effects", International
Labour Office, Conditions of Work and Employment Series No. 40, Geneva, 2012.
[10] See Quarterly Report on
the Euro Area, European Commission, Volume 12, No. 3, 2013.
[11] Source: Garnier et al.
(2103): Recent Reforms of Tax Systems in the EU: Good and Bad News. Taxation
paper, 39. European Commission
[12] See e.g. Eurofound
(2013), Tackling Undeclared Work in 27 European Union Member States and
Norway: Approaches and Measures Since 2008, Eurofound, Dublin; Hazans, M.
(2011), Informal Workers Across Europe, Research Paper 5912, World Bank,
Washington DC.  
[13] The income quintile share ratio or the
S80/S20 ratio is a measure of the inequality of income distribution. It is
calculated as the ratio of total income received by the 20 % of the population
with the highest income (the top quintile) to that received by the 20 % of the
population with the lowest income (the bottom quintile). All incomes are
compiled as equivalised
disposable
incomes.
[14] The latest EU-SILC figures
include Eurostat estimates for the EU-28 and EU-27 for 2012 (results for AT,
BE, IE and UK are missing). The SILC reference data 2012 refer to the income
year 2011.
[15]
See Employment and social developments in Europe 2012, European
Commission  
[16]
Ibid 
[17] See EUROMOD Working Paper 2/13 Avram, Figari, Leventi,
Levy, Navicke, Matsaganis, Militaru, Paulus, Rastringina, Sutherland: The Distributional Effects of Fiscal
Consolidation in Nine Countries. A new version of the paper is to be presented
soon. In the nine countries reviewed by the study, the impact of household
income-based measures (e.g. changes to the tax and benefits systems and cuts in
wages taken between 2007 and mid-2012) varied from 1.6% of pre-crisis
disposable income in IT and 1.9% in UK to 9.1% in LV and 11.6% in EL.
[18] See EU Employment and social situation, Quarterly Review
March 2013. Analysis shows that the downwards adjustment of social expenditure
observed since 2011 appears more pronounced in comparison to similar episodes
of recession over the past three decades.
[19] 2011 data available soon
[20] This section gives an update
of the situation as presented in the previous Joint Employment Report and due
to space limitations, is not exhaustive and does not aim to report on all
reforms and policy measures. 
[21] Council Decision 2010/707/EU of
21 October 2012 on guidelines for the employment policies of the Member States.

[22] The term early childhood
education and care refers to all forms of care and education from birth to the
start of primary schooling.
[23] See additional reporting on this issue
in the section on social inclusion.
[24] Promoting green jobs
throughout the crisis: a handbook of best practices in Europe, European Employment
Observatory 2013
[25] COM(2013) 690.
[26] The scoreboard as included in this version of the draft Joint
Employment Report may be updated in December 2013 once the new wave of annual
social data is available.  
[27] As
part of the draft Joint Employment Report, based on Article 148 TFEU and
feeding into the European Semester process, the scoreboard covers all EU Member
States and comparisons are thus made with the EU average. In some cases,
statistical deviations from the EA average might also be relevant. As set out
in the Commission’s Blueprint for a deep and genuine economic and monetary
union, coordination and surveillance of employment and social policies should
be reinforced within the EMU governance, and convergence in these areas should
be promoted. 
[28] Conclusions of the European
Council, 24/25 October 2013.
[29] For the detailed overview of
spill-over effects of employment and social developments beyond border see: EU
Employment and Social Situation. Quarterly Review, September 2013, available
at: http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=1974&furtherNews=yes
[30] The Commission is open to considering possible refinements
of the scoreboard in future editions, based on on-going technical discussions in
the Employment and Social Protection Committees and reactions from the European
Parliament, social partners and other stakeholders.
[31]
COM(2013) 690,
page 6.
[32] Definition of areas:
North and core of EA: AT, BE, DE, FI, FR, LU, NL; South and periphery of EA:
EE, EL, ES, IE, IT, CY, MT, PT, SI, SK; Non EA – North: CZ, DK, PL, SE, UK; Non
EA - South and periphery: BG, HR, LV, LT, HU, RO.
[33] For
the at-risk-of poverty rate, the income reference year is the calendar year
prior to the survey year (i.e. 2010) except for UK (survey year) and IE (12
months preceding the survey). The same applies to the inequalities (S80/S20
ratio) indicator.
[34] The ratio between the incomes of the 20%
of the population with the highest incomes and the incomes of the 20% with
lowest incomes.
[35] See EUROMOD Working Paper
2/13.
[36]
http://register.consilium.europa.eu/pdf/en/13/st10/st10373-re01.en13.pdf
[37]
ec.europa.eu/social/BlobServlet?docId=9235&langId=en