Maria Joao RODRIGUES

The EU in a globalized world - the lisbon strategy for growth and jobs

A short story

In a globalized world, Europe must redefine its position. This should now be the main purpose of the European integration. This is also the main concern of the European citizens: in a globalized world how can they sustain and improve their living standards?

The choices are now clear between:

• To remain as we are, to protect what we have without changes; but this is becoming unsustainable, for the next generations, for the environment, for the additional investment which is necessary to create more and better jobs;
• Or to change and to adapt to the global challenges. Nevertheless, we can choose either downgrading our Welfare States to give a boost to competitiveness; or investing in knowledge and innovation for growth, building long-term competitive advantages, as well as redesigning our Welfare States to support change;

This last choice was made in Lisbon in the European Council of 2000, with the aim of combining a high level of competitiveness and sustainable growth with more and better jobs. The only way to achieve this is by speeding up the transition to a knowledge intensive economy, redeploying investment and economic growth to new activity areas, equipping people for new skills. When many other countries are trying to do the same, what should make the difference and the comparative advantage of the European way is the quality of life, a concern with social cohesion and environment and the respect for cultural diversity.

Over the last period, the Lisbon strategy was turned into a European agenda with new policy measures for research, innovation, information society, single market, employment, education, social protection and environment. Some were implemented such as connecting schools, companies and public services to Internet, creating one-stop shops for start-ups, launching new research networks, opening the single market for communication, energy and financial services or modernising the employment services. But many other are still waiting regarding innovation, entrepreneurship, better regulation, the single market for services, lifelong learning and the pension systems.

Moreover, the implementation has been very unequal across Member States and the gap between the European Union and the USA, Japan and other emerging economies seems increasing in many areas. Finally, the ageing trends in Europe are leading to an increasing imbalance between the working age population and the elderly, making it harder to sustain our pension and health systems.

In these conditions, a major relaunch of this European strategy took place in 2005:

• The key priorities were clarified. With a stronger focus on growth and jobs, they are now three: knowledge and innovation for growth; making Europe a more attractive area to invest and to work; and more and better jobs with social cohesion;
• A stronger focus is now being put on implementation at national level by launching national reform programmes for growth and jobs for the next three years in all Member States.
• The financial means to implement the Lisbon strategy for growth and jobs were strengthened by improving the Stability and Growth Pact, by reforming the State aids regulations, by launching new instruments of the European Investment Bank and by defining new priorities for the structural funds and the Community budget.

The national reform programmes for growth and jobs for 2006-2008 can represent the largest process ever made in the European Union with the aim of connecting the European and the national policies with the citizens every day life.

More jobs should be created in new areas, by networking between companies and universities, reskilling people, providing better public services, fostering the participation of more people into the labour market, developing better infrastructures for energy, transports and telecommunication and opening the European single market and the external markets, with respect for basic standards in labour, environment and intellectual property.

These national programmes will turn the tool box of the Lisbon strategy in something more tailored, made to each country specific needs. Nevertheless, the outcomes of all this process will depend on the initiatives to be taken by the main actors: not only the governments and local authorities, but also all the civil society stakeholders.

Lisbon Strategy

The Integrated Guidelines for Growth and Jobs

Macroeconomic policies for growth and jobs

• To secure economic stability for sustainable growth;
• To safeguard economic and fiscal sustainability as a basis for increased employment;
• To promote a growth-and employment-orientated and efficient allocation of resources;
• To ensure that wage developments contribute to macroeconomic stability and growth;
• To promote greater coherence between macroeconomic, structural and employment policies;
• To contribute to a dynamic and well-functioning EMU.

Knowledge and innovation -engines of sustainable growth

• To increase and improve investment in R&D, in particular by private business;
• To facilitate all forms of innovation;
• To facilitate the spread and effective use of ICT and build a fully inclusive information society;
• To strengthen the competitive advantages of its industrial base;
• To encourage the sustainable use of resources and strengthen the synergies between environmental protection and growth.

Making Europe a more attractive place to invest and work

• To extend and deepen the Internal Market;
• To ensure open and competitive markets inside and outside Europe and to reap the benefits of globalisation;
• To create a more competitive business environment and encourage private initiative through better regulation;
• To promote a more entrepreneurial culture and create a supportive environment for SMEs;
• To expand and improve European infrastructure and complete priority cross-border projects;

More and better jobs

• To implement employment policies aimed at achieving full employment, improving quality and productivity at work, and strengthening social and territorial cohesion;
• To promote a lifecycle approach to work;
• To ensure inclusive labour markets, enhance work attractiveness and make work pay for job-seekers, including disadvantaged people, and the inactive;
• To improve matching of labour market needs;
• To promote flexibility combined with employment security and reduce labour market segmentation, having due regard to the role of the social partners;
• To ensure employment-friendly labour cost developments and wage-setting mechanisms;
• To expand and improve investment in human capital;
• To adapt education and training systems in response to new competence requirements.

A Brief Chronology

1999

• Preparing a new European strategy

2000

• Defining the Lisbon Strategy and Governance

2001

• Developing the Lisbon Agenda by policy field

2002

• Implementing the Lisbon Agenda
• Involving the accession countries

2003

• Bridging with the Constitutional Treaty

2004

• Adapting the financial means
• Developing the international dimension

2005

• Mid-term review of the Lisbon Strategy
• Preparing the National Reform Programmes
• Preparing the Lisbon Community Programme

2006

• Implementing the National Reform Programmes
• Implementing the Lisbon Community Programme