, competitiveness and employment...

Bulletinof the European Union

Supplement 2/94

Growth, competitiveness and employmentWhite Paper follow-up

Report on Europeand the global information society

Interim report on trans-European networks

Progress report on employment

Extracts of the conclusions of the Presidencyof the Corfu European Council

This document reproduces the employment report onpages 105 - 102 and the Presidency conclusions onpages 126-134. The other two reports are available asseparate documents on AEI-EU.

This report was also published as SEC (94) 951 final3 June 1994

Blank pages not reproduced: 106 and 125.

European Commission

Cataloguing data can be found at the end of this publication

Luxembourg: Office for Official Publications of the European Communities, 1994

ISBN 92-826-8547-

(9 ECSC-EC-EAEC, Brussels Luxembourg, 1994

Reproduction is authorized , except for commercial purposes, provided the source isacknowledged

Printed in Germany

General contents

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Europe and the global information society

Recommendations of the high-level group on the information society to theCorfu European Council (Bangemann group)

Trans-European networks

Interim report of the chairman of the group of personal representatives of theHeads of State or Government to the Corfu European Council(Christophersen group)


Results of Mr Flynn s tour of capitals

Extracts of the conclusions of the Presidency of the Corfu European Council(24 and 25 June 1994)

103

125

I SEC(94) 951 final.

Progress report on employmentResults of Mr Flynn s tour of capitals1

Contents

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Part 1 107

107Introduction

Preliminary conclusions of tour

Union role

108

109

Policy development

Financial support

109

110

Follow-up 111

Part 2 112

112Member State actions: executive summary

Member State actions in detail 115

115Education and training

Flexibility 117

118Work organization

Non-wage labour costs 119

120Public funds

Young people 122

123Developing new employment

105

Part

ntrod uction

This report has been prepared following the Tourof Capitals undertaken by Commissioner Flynnat the request of the College, between Februaryand June, during which discussions have beenheld, at this stage, with 11 national governmentsand the social partners at the national level.

The report also takes into account the reportsreceived from Member States, within the frame-work of the Social Affairs Council, on progressin implementing suggestions of the White Paperand the conclusions of the European Council(December 1993, Brussels) as far as the employ-ment dimension is concerned. It also takes intoaccount the results of discussions with Directors-General of the Member State Ministries, thework of the Economic Policy Committee, andresults received from the Commission s Obser-vatories. The contributions of the social partnershave also been considered. Finally, the reports ofthe European Parliament and of the Economicand Social Committee; and discussions withinthe Council's Standing Committee on Employ-ment have been taken into account.

Employment Trends

At the time of the European Council discussionof the White Paper in December 1993 , unem-ployment had been rising continuously for al-most three years following the downturn ineconomic growth which began in 1990. During1993 output declined for the first time since1975. The recession in output led to a reductionin employment in almost all parts of the Union.

As a result of the general fall in employment andthe continued rise in working-age population, aswell as in the participation of women, unem-

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ployment rose during 1993 in all Member Stateswithout exception. The average rate for theUnion as a whole, including all of Germany, was10.9%. By March 1994, average unemploymenthad reached 11 % in the Union, implying thatoverall, there were almost 17 million people outof work based on Eurostat' labour force surveyfigures. (Registered unemployment in MemberStates totals 18.8 million.

In general, unemployment rose more slowlyduring 1993 and, over the first four months of1994, increased only marginally in the Union asa whole. However, despite the improved outlookfor growth, increasing labour force participationrates mean that, unless efforts to increase theemployment content of growth are strengthenedunemployment is unlikely to fall in the short-term.

Unemployment rates remain particularly highfor young people under 25, averaging over 20%in the Community as a whole in March 1994.Long-term unemployment continues to be aserious problem in most parts of the Union, withan average of 42% of the unemployed havingbeen out of work for one year or more in 1992-although down from 45% in 1991.

substantial reduction in unemployment re~quires that growth remains strong for manyyears, and becomes more employment creating.Growth prospects for 1994 and 1995 have im-proved, but success in translating this into em-ployment growth will require continued, deter-mined, structural adjustment efforts and carefulmacroeconomic management, both actions beingmutually reinforcing.

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Preliminary conclusions of tour

The White Paper strategy is a medium-term one.It cannot be expected to yield short-term suc-cesses, and certainly not to lead to any noticeablereduction in unemployment in a matter ofmonths. Thus, progress needs to be judged at thisstage primarily in terms of trends and changes inpolitical positions, rather than concrete results.

The essential message is clear: all MemberStates, in their different ways, are seeking tointroduce changes to their labour market poli-cies, directly or indirectly related to the WhitePaper s suggestions. Some have now introducedinterdepartmental machinery to pursue the WhitePaper and the Brussels conclusions. The WhitePaper has been carefully examined as a valuablepoint of reference in all Member States, includ~ing by social partners at national level.

However, the urgent need for collective reflec-tion and coordinated action across the wholerange of policies affecting the broad employ-ment environment has not yet been realized. Afragmentary approach is still noticeable. Old andcomplex national regulations still remain inforce in many Member States. The reforms in theemployment systems adopted so far by MemberStates often appear incomplete and it is difficultat this stage to assess their wider impact. MostMember States now recognize, however, theneed to build the long-term social consensus infavour of structural changes especially wherethey affect people s living and working condi-tions.

Member States generally recognize also that thissearch for consensus implies that greater labourmarket efficiency and long-run competitivenessis to be sought, not through a dilution of theEuropean model of social protection, butthrough the adaptation, rationalization and sim-plification of regulations, so as to establish a

better balance between social protection, com-petitiveness and employment creation.

Increased labour market flexibility means differ-ent things to different Member States, and needsto be analysed carefully, as the term ' deregula-

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tion ' is often used with differing connotations.The starting point, for most Member States, is alarge body of laws, regulations or collectivearrangements. Their ending point, in terms of thenature and scale of change required, is, therefore,likely to differ widely even after substantialreview particularly in terms of the degree ofand approach to, change in social protection. Inanalysing these differences between MemberStates, the strong traditions of social partnersinvolvement in many Member States has to betaken carefully into account. In this context,most Member States are concerned about bal-ancing actions to enhance job creation and com-petitiveness with their commitment to maintainand not dismantle social protection.

Most Member States stress the need for a moredynamic contribution from the social partners atlocal and sectoral levels, and a stronger partner-ship between them and public authorities atthose levels. At national level, some MemberStates recognize the importance of buildinggreater complementarity between public policyand contractual negotiations.

At Union level, discussions with the socialpartners have continued within the framework ofthe social dialogue, with a particular focus

White Paper employment issues. The Council'Standing Committee on Employment has alsodiscnssed issues of work organization and work-ing time in a positive way.

Among the social partners at national levelpositive attitudes reflected for instance incertain agreements coexist with reticence tochange. The need for far-reaching reform of theemployment systems has yet to become gener-ally accepted. Greater public awareness andacceptance that there are trade-offs betweensacrifices in the short-term in exchange for thecreation of more jobs will be necessary to ensurethe adoption and implementation of these re-forms.

Major political difficulties have been encoun-tered by governments seeking to undertake re-

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forms in this sense. Resistance from those whofeel threatened by the changes is not compen-sated for by any obvious public support fromthose people who would benefit most, but whoare largely disenfranchised or excluded from thelabour market at present.

The White Paper stresses the need to dramati-cally widen access to work, to widen the conceptof work, and to build a new solidarity. Thatsolidarity has to be based on using productivitygains to create new jobs rather than increaseincomes of those in employment, and to avoidthe burden of change being borne only by thosein the weakest position in society the easiest,but least acceptable, way of increasing access tojobs.

In particular, the White Paper underlines theneed to ensure that progress in achieving equalopportunities is further pursued, particularly inview of the increased participation rates ofwomen, changing family structures and rolesand the need to maximize the potential of all theUnion s human resources. In this respect, in-creased economic growth brings a positive andwelcome improvement to the employment cli-mate. However, there is a danger that it mayoffer an illusion of relief from the pressures forstructural change, rather than being harnessed towork systematically towards the changes re-quired in that better economic environment.

It will be very important to continually bring thatmessage home to the Member States, if a serious

Union role

Policy development

The Union s employment objectives are sup-

ported, at Community level, by policy and actionin the economic, industrial, technological and

scientific fields. Completion of the internal mar-ket, action on research and development, andsupport to small and medium enterprise, have allbrought added value to the Union s efforts tosustain and generate employment.

In recent months, the White Paper and Councilfocus on firm macroeconomic guidelines, the

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reduction in unemployment is to be achievedthroughout the Union. This is particularly impor-tant in view of demographic change, the in-creased public budget pressure it will bring, andthe resultant need for stronger employmentgen-eration. For all these reasons, more attentionneeds to be focused on new jobs and the mostpromising sectors for employment growth.

The need to fundamentally alter, and update, thestructure of incentives which influence the la-bour market is still not adequately recognized.Cooperation across Ministerial boundarieswithin Governments in the development of poli-cies needs to be given greater priority. Furtherorganizational and administrative changes willbe needed if the implementation of the WhitePaper strategy is to be pursued effectively.

It is not only measures which need to be rede-signed, it is also important for Member States toreview the structures through which govern~ments address employment problems. In thiscontext, some Member States have developed, orare in the process of setting up, inter-ministryaction on specific subjects. Also most MemberStates are already decentralizing the delivery oflabour market (including training) measures aspart of a move towards more active targeting ofthose at risk especially the long-term unem-ployed. Some are seeking to integrate services atlocal/regional level instead of the previouslyfragmented range of services available.

trans-European networks, and the exploitation ofnew technologies particularly regarding tele-communication applications and biotechnologies

has further strengthened the ability of theUnion to meet the challenges of competitivenessand job creation. .

All of these advances in policy development andaction are dependent for their success on thequality, creativity and flexibility of the work-force at all levels, which drives the developmentand delivery of the wealth and job creationprocess. In order to maximize the potential of

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this most important component, the Communityfocuses particularly on employment and relatedhuman resource issues through a range of poli-cies and activities.

The responsibility for employment and humanresource development lies with Member States.However, in redesigning national policies andsystems in these fields, in the framework of theWhite Paper and Brussels Council Objectives, itwill be of crucial importance to develop andmaximize the added value of Unionwide actionand mutual support, in order to fully exploit thediversity of Member State experience.

This means looking at the efficiency of differentnational systems in achieving employment ob-jectives. It means looking at the possibilities topick and mix ' different elements of policy fromdifferent national systems. It also means thepursuit of increased compatibility between

Member States' systems, so as to ensure thatthey do not develop in ways which conflict withoverall Union employment objectives or stan~dards, distort conditions of competition, or in~hibit the development of free movement ofpeople within the Union.

In this respect, the increased cooperation be-

tween the Member States and the Commissionwith regard to the White Paper is encouraging,but will need to be pursued much more system-atically during the coming months.

Financial support

Much of what the Community does, in terms offinancial and other resource support, has an

impact on employment, through programmes

and actions as diverse as research and develop-ment, infrastructure investment, education andtraining, and trade agreements.

A number of new developments such as theFourth Framework Programme for research anddevelopment, a range of support mechanisms forsmall and medium enterprise, and such asLe-onardo, with regard to education and training,will strengthen this effort.

A fundamental component of the Union s struc-tural policies

, .

and of its strategy to achieve the

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adjustments necessary for growth, competitive-ness and employment, is its financial support forhuman resource development and labour marketadjustment. Community Support Frameworks,under the Structural Funds, and accounting formore than ECU 40 billion of European SocialFund financing, are currently being negotiatedfor the period 1994-99. (1994- , in the case ofObjectives 2 and 4.

Member State proposals, under Objectives 1 , 3and 4, were ' prepared and presented to theCommission before the White Paper was estab-lished. In the discussions on the Community

Support Frameworks the Commission has, there-fore, promoted a strategic approach based onthree priority themes:

improving access to and quality of educationand initial training, especially through the imple-mentation of 'Youthstart'

increasing competitiveness and preventing

unemployment by adapting the work-force to thechallenge of change through a systematic ap-proach to continuing training, including throughimplementation of 'Adapt'

improving employment opportunities ofthose exposed to long-term unemployment andexclusion, though the development of a packageof measures which form a pathway to reintegra-tion, including through the ' Employment' Com-munity Initiative.

Many Member States have endorsed this ap-proach, but there is a need for them to carefullyreview their strategies for long-term investmentin education and training so that they maycompete effectively on the World stage, strength-ened by a skilled and flexible work-force. Thepriority accorded to investment in human re-sources within the Union s structural policiesneeds to be reaffirmed.

It is essential to ensure that, within the frame-work of subsidiarity and partnership, MemberStates give full attention to these concerns, andthat the Community Support Frameworks whichare now being agreed retain sufficient flexibilityto adapt action and financial efforts as needsunfold with the further implementation of the

White Paper Strategy.

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Follow-upAn important operational lesson of the first sixmonths for governments is that there is a need toreinforce cooperation at national level be-tween the Ministries, agencies and Social part-ners concerned - and between the national leveland the Union level.

Member States, and Employment and . SocialAffairs Ministers in particular, need to identifyspecific objectives and actions, both short andmedium-term, within the framework of theCouncil mandate, in time for examination by theEuropean Council in Essen in December 1994.

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Efforts to develop positive actions for employ-ment in the diverse areas of policy should

continue to be carried out in the specializedCouncils of Mininsters. Improved coordinationof these efforts at Community level will increasetheir efficiency and intensity. In support of thisprocess, the Commission will continue to col-laborate closely with the Member States inmapping the employment situation. In this con-text, the 1994 Employment Report will be issuedin the summer, and a comparative tabular pictureof the situation across the Union is in prepara-tion.

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Part 2

Member State actions: executive summary

The European Council agreed to a series ofpriority actions within the general frameworkdefined in common in the light of the WhitePaper. These were specified as follows:

improving education and training systems.Continuing training is, in particular, to be facili-tated so as to ensure ongoing adjustment of skillsto the needs of competitiveness and to combat-ing unemployment;

improving flexibility within enterprises andon the labour market by removing excessiverigidities resulting from regulation as well asthrough greater mobility;

D examination, at enterprise level, ofeconomi-cally sound formulas for the reorganization work; such measures must not be directed to-wards a general redistribution of work, buttowards internal adjustments compatible with

improved productivity;

targeted reductions in the indirect costs of

labour (statutory contributions), and particularlyof less skilled work, in order to achieve a betterbalance between the costs of the various factorsof production; fiscal measures possibly relating,inter alia to the environment could be one of themeans of offsetting a drop in social contribu-tions , within a general context of stabilizing allstatutory contributions and reducing the tax bur-den;

better use of public funds set aside forcombating unemployment by means of a moreactive policy of information, motivation and

guidance of job-seekers through specializedagencies, whether public or private;

specific measures concerning young peoplewho leave the education system without ad-equate training;

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developing employment in connection withmeeting new requirements linked to the qualityof life and protection of the environment.

All Member States have taken actions in at leastsome of the seven target areas, with the majoritydeveloping actions in most. There are positivesigns in a number of areas notably in seekingto remove bureaucratic obstacles to change, inaddressing problems of regulation, while main-taining minimum standards. Moreover, there isincreased openness, and a willingness amongMember States to discuss common problems andto exchange experience.

In general, Member State actions are still fo-cused on managing unemployment problems

although they recognize the need to addressemployment issues in their wider context and toactively create jobs. More attention needs tofocus on wide-ranging reform of government

actions with respect to the interrelated issues ofsocial protection, taxation and employment, onwhich there has been some useful action targetedon reducing the non-wage costs of the unskilled.

In areas such as those involving financial sy-

stems changes in the incidence of taxation onemployment, or changes in the use of socialprotection funds it is recognized that suchmeasures will take time. However, in that area inparticular, policy will need to ensure thatchanges are pursued rather than allowed to flagin the face of difficulties or reduced pressures.

Education and training

Member States are continuing to sharpen thefocus of their educational and vocational trainingpolicies with a view to improving long-term

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competitiveness, and ensuring a skilled andadaptable labour force. In all Member Statesthere is an emphasis on standards, and in someon a more decentralized delivery and muchgreater involvement of the social partners.

Despite this progress, and despite the wide-spread recognition of the need for lifelong learn-ing, action remains limited as regards continuoustraining. Some financial incentives have beenprovided and some collective agreements domake specific reference to work~force training.However, a more systematic, comprehensiveapproach is needed along the lines proposed inthe White Paper.

As regards meeting the need for new skills, theadoption of new technologies on a more wide-spread basis, diversifying career paths forwomen, and actions to cope with the conse-quences of large scale industrial change, actionis often patchy and localized.

Improving flexibility

Member States have continued to take measuresto introduce greater flexibility into the externallabour market, particularly with regard to em-ployment regulations covering contracts, notablywith regard to part-time work. Redundancy anddismissals ' legislation has been reformed insome Member States where they were particu-larly restrictive.

Employment protection has been increased insome Member States and some areas, in order toprovide better minimum standards, for examplewith respect to maternity rights, part-time workand health and safety.

Some limited steps are being taken to promoteoccupational and geographical mobility, as wellas European-wide information for job-seekers.

Member States continue to encourage wagerestraint flexibility and decentralized negotia-

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tions in their efforts to ensure that real incomegrowth per employee remains below productiv-ity growth, in order to encourage and assistemployment growth.

Most Member States consider that internal .flex-ibility is to be encouraged, within the overall

industrial relations structure, but that it is essen-tially the responsibility of firms.

Work organization

There is considerable activity across the MemberStates in developing new patterns of workingtime as a means of increasing the number of jobsfor a given level of output. In some cases this hasactive government support, in others it is con-tained more in collective or plant level agree-ments. Many large firms are restructuring work-ing time as part of a wider restructuring of theirorganization.

Measures to remove obstacles to part-time work-ing are being taken in most Member Stateswhere they still exist. Schemes contain manydifferent options both to encourage existingemployees, who so wish, to move to part-timeworking, as well as to create new possibilities.However, Member State policies do not alwaysensure of equal treatment of parHime and full-time work in all aspects.

Non-wage labour costs

In order to reduce the relative costs of labour andhence disincentives to recruitment, the WhitePaper recommends. a move away (1 to 2% ofGDP) from labour-based taxes and charges totaxes on non-renewable resources such as en-ergy, capital, consumption, etc. The White paperalso recommends that Member States addressthe current disincentives regarding less skilledworkers ' employment by adjusting taxation sys-tems, especially when the overall effect of taxesand charges is regressive.

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A number of Member States have already intro-duced modifications aimed at reducing the over-all burden of taxes and social charges on labour.This has been done either across the board, ortargeted on young people, the long-term unem-ployed, lower paid or less skilled workers, smalland medium enterprises, or through enterprisesproviding training. Other Member States areconsidering a general lowering of taxes and

charges rather than a restructuring. Certain taxesare very sensitive and divergences are to beavoided between Member States. For instancesome Member States favour increasing VATrevenues when others would rather reduce VATrates for labour intensive sectors.

While there is widespread support for the idea ofreducing non-wage labour costs in order to boostemployment, the difficulties inherent in raisingalternative revenues during a recession areequally evident.

Public funds

There has been an emphasis on improving the

effectiveness of measures to help reintegrate theunemployed, and on making income supportmore conditional on proven action to seek workundergo training or community work.

There is as yet, however, limited use made ofschemes to ' top-up ' low income from employ-ment with income from social transfers, alongthe lines recommended in the White Paper.

Member States have sought to provide bettersupport for the unemployed by developing theservices of public employment agencies, and bylifting restrictions on, or legalizing, private em-ployment agencies, where these were not previ-ously allowed. A number of Member States havedecentralized their employment agency opera-tions, giving greater responsibility to the localand regional level.

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Young people

Over the years, Member States have developed avariety of schemes and programmes to helpyoung people, especially the 10% of youngpeople who leave school each year withoutqualifications, to enter the labour market. Theyinvolve a variety of actions including guidanceand counselling; support for job search; help inattaining numeracy and literacy; and basic train-ing, often linked with workplace experience.

Member States are now tending to move towardsmore comprehensive programmes which inte-grate these activities and which target thosefacing the greatest difficulties. The CommissionWhite Paper proposal for a specific Youths tartprogramme targeted at unqualified young peopleunder 20 seeks to focus and reinforce this trend.

Recognizing the growing importance of skillsthere is also a resurgence of interest in someMember States in apprenticeship trainingschemes. Most Member States are increasing thevocational content of education.

Developing new employment

Most Member States rely on commercially-driven activities, or conventional public servicesas the source of employment creation. Howeversome specific initiatives have been taken in theMember States in order to promote new jobopportunities, notably in local services, and of-ten in the context of the social economy, alongthe lines recommended in the White Paper.

The potential of many other areas of job growththat were identified in the White Paper, such asarts and culture, tourism, and environmentalprotection, where public-private partnerships aregenerally needed to maximize their develop-ment, remain undersupported.

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Moreover, there is little evidence of any moresystematic attempts to monitor employmentgrowth across all types of activity in ways which

Member State actions in detail

Practically all Member States have undertakenextensive labour markets reforms in recent yearseither in the form of new programmes or as partof an ongoing process of review and develop-

ment. Member State progress in pursuing WhitePaper objectives will depend, therefore, on whathas been achieved in recent years, and what isstill in the pipeline, as well as on the content ofrecently announced changes or proposals.

This report presents Member State developmentsunder the seven headings identified by the Eu-ropean Council. However, it is recognized thatat national level, these are generally seen as

elements of integrated actions designed to alterthe overall dimensions and focus of MemberState employment policy systems

, .

and that thereis often overlap between the different elements.

Education and training

All Member States have expressed their deter-mination to improve the quality of education andvocational training, and to sharpen the focus oftheir policies in order to better meet the chal-lenge of long-term competitiveness, and to pro-vide a highly skilled, flexible .and adaptablework-force. All Member States, moreover, un-derline the need to increase awareness thatinvestment in the qualifications of the presentand future work-force is as indispensable asinvestment in capital equipment and infrastruc-ture. Special concern has been expressed bysome Member States about the need for bettercoordination of the policies pursued by Educa-

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could help focus, and maximize, the impact ofpolicy and resource support.

tion and Employment Ministries which generallyhave overlapping responsibilities with regard tovocational training. (Ireland, Spain.

Across the Union, action to improve educationand training systems and improve access tocontinuing training centres around three mainissues: the development of the framework ofvocational training policies; the promotion oflife-long learning; and the need to meet thechallenge of the rapid spread of new technologyand industrial change.

Member States recognize that, while in the pastmeasures have been responses to particular prob-lems such as high unemployment amongstyoung people, increases in long-term unemploy-ment and problems posed by industrial changethere is now a need for a more comprehensivelonger-term strategy, to equip the work-forceeffectively for the single market. Even before theWhite Paper, Member States were in the processof major reforms of their education and trainingsystems which address some of the issues raisedin it.

While systems in the Member States are verydifferent, many of the problems and challengesthey face are the same, which points strongly tothe need for Member States' policies to takeaccount of developments in other parts of theEuropean Union.

There is an overriding concern to improve qual-ity and a variety of' approaches are being usedincluding setting minimum legal standards (Ger-many), targets for qualification levels in thework-force (United Kingdom, France) and thesetting of reference points for policy develop-

ment (Luxembourg). There is also an increasingtrend to decentralize the delivery of training tolocally based structures, and to ensure a greaterinvolvement of the private sector in the process

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(notably in France, Portugal, Denmark, the

Netherlands, Luxembourg, Greece).

Most Member States now emphasize the need toput a higher premium on vocational qualifica-tions, and to place them on a par with academicqualifications within the framework of a unifiednational system of certification, in place ofexisting disparate .certification arr(ingements.Most Member States stress too the need for acloser association of the social partners with thedesign management and delivery of training.Many Member States stressed the need forstronger action on recognition and transparencyof qualifications to promote labour mobility.

So far as continuing training is concerned, allMember States are concerned to improve andextend access and participation, and stress theimportance of in-company training with appro-priate vocational assessment of workers, andalso the links with local and regional authorities,especially in terms of forecasting skill needs andshortages.

The need for lifelong learning is widely recog-nized in Member States. Measures to promotecontinuing training and life-long learning in-clude promoting apprenticeship schemes (UnitedKingdom, Franee, the Netherlands, BelgiumSpain) (see section on young people), legalrights to training leave (Belgium, France),

clauses in collective agreements (the Nether-lands, Denmark, Germany), financial incentives(Belgium, Portugal, United Kingdom) and taxlevies to finance training (France, Greece, Ire-land).

There is some evidence of the introduction of taxincentives to encourage increased investment inhuman resources through tax relief to com-panies, or financial assistance through loans ortax relief for individuals paying for their trainingand also help to small employers to invest indeveloping the skills of their employees (UnitedKingdom). However, no Member State has in-troduced generalized tax or other financial in-centives to firms and individuals along the linesproposed in the White Paper.

Some measures are being taken to encourageindividuals to take responsibility for their owntraining but, in the main, the emphasis rests in a

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more limited sense on occupational guidance topromote choice.

Furthermore, despite efforts to give priority tocontinuing training for the least qualified and theunemployed, and the creation of more incentivesfor this group (Denmark), there is evidence thataccess to continuing training is unequal, withhighly qualified workers in large enterprisesmost likely to benefit. Although this problem iswidely recognized, there remain significant bar-riers for large sections of the work-force toaccess to training. It also remains the case thatdespite a range of measures in Member States topromote equal opportunities, women remain un-derrepresented in certain sectors and at senior

levels of the economy.

At European level, the representatives of thetrade unions have offered to negotiate a collec-tive bargaining agreement so as to .extend accessto and participation in continuing training, andbuild on the previous joint opinions agreedwithin the framework of the social dialogue. Atthis stage, the employers ' representatives havenot taken up this offer.

Some steps are being taken (Denmark, Ger-many) to consider adult education and continu-ing training in its widest sense, in terms of

acquiring key personal and social competencesthat can be effectively used in the workplacealthough this concept is not widely developed.There are some signs (Denmark) of a newapproach to the organization of working lifewith a high degree of alternation between worktraining and leave. Denmark has introduced anambitious job rotation scheme which combinesincentive for education and training breaks foremployees, while increasing job training of un-employed people recruited as substitutes forthose on training leave. Belgium, too, has asuccessful career break scheme. Apart from thismany issues concerning the organization of workand training remain largely unexplored across

the Union.

Almost all Member States have responded posi-tively in the presentation of their CommunitySupport Framework to the opportunity presentedby the new Objective 4 (European Social Fund)to develop new forms of anticipative training tohelp companies plan for structural change.

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As far as the important issue of demand for newskills is concerned all Member States undertakeresearch into likely developments of skill needsincluding at sectoral (France, Spain) and locallevel. However, there appears to be no focus inthis research as to possible sources of new jobs.The use of new technology is becoming estab-lished practice in secondary education, but thereis considerable variation in the way in whichtechnology is transferred to the workplace. Someinitiatives are being taken (Denmark, France),but there is a sense that the potential here has notbeen fully exploited. Policy responses to theneed to adapt to industrial change are beingdeveloped, and range from specific action plans(Germany for the East, Spain, Belgium) to ac-tions to support small firms (Denmark), or moregeneral advice and support measures (United

Kingdom). There remains the key question of assessing theimpact of the reforms and initiatives proposed orin place in Member States. The nature of thesystems and the wide range of interests involvedmean that this can only be done over time.However, work needs to continue to identifyobjectives, as well as qualitative and quantitativedata to assess the effectiveness of policies.

Flexibility

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In the Member State submissions prior to theWhite Paper, a lack of flexibility in Europeanlabour markets was identified as a general prob-lem in terms of the organization of workingtime, pay and mobility, and in terms of thematching of labour supply to the needs of themarket. Member States saw the introduction ofmore flexibility as being centred on the waywork is organized. It was considered that in~creased flexibility should also be reflected in thecollective bargaining rules and systems.

Since the publication of the White Paper, Mem-ber States have continued to take measures

within their own responsibilities to introducegreater flexibility, notably with regard to theexternal labour market. Action has covered leg-islation concerning redundancies and dismissalsand legislation and collective agreements con-cerning the form and content of labour market

contracts, including working time.

In terms of flexibility, Spain is going furthest inthe pursuit of labour market reforms with awide-ranging programme designed to encouragerecruitment by easing the process of labour

market adjustment, and to reduce the segmenta-tion of the market. This includes measures re-garding working time, dismissals regulation, col-lective agreements and the negotiation process.The United Kingdom has followed a deregula-tion policy in this respect for some time, andfurther measures are proposed. The Netherlandsalso plans to relax regulations relating to the

dismissal of staff, while continuing to upholdrecourse to law. In Ireland, a task force on smallbusinesses has recommended changes in regula-tions. This includes measures regarding workingtime, dismissal regulation, collective agreementsand the negotiation process.

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In terms of policy action by the Member Statesin general, however, most emphasis has been puton changes with regard to temporary and perma-nent employment contracts, and to the possibili-ties for undertaking part-time work. Recent meas-ures include: greater flexibility with regard tofIXed-term contracts in Spain, with particularregard to access for unemployed workers over45; the possibility to renew fixed-term contractsand to reduce notice periods for young peopleand the more highly paid in Belgium; the autho-rization of temporary employment agencies in anumber of Member States (see under publicfunds); the extension of incentives to firms

which use part-time workers (France); the abo-lition of some restrictions on part-time work inSpain, including new arrangements with regardto relating hours worked to social security; and acommitment to revise legislation in Ireland. InGermany, a law allowing fixed-term contractsand the ' loan ' of temporary workers for up tonine months between firms is being extendeduntil the year 2000.

In a number of Member States, employmentprotection has been increased by the followingmeasures: longer notice periods in Denmarkimproved rights to information for employees inIreland and the United Kingdom, and in respectof maternity in the United Kingdom, as providedin EC Directives, additional protection in respectof unfair dismissal related to health and safety,and when exercising a statutory right. A recentruling has also extended considerably the pro-tection of part-time workers under United King-dom law.

Some steps have been taken to promote occupa-tional and geographical mobility notably inSpain and Germany where, in the latter, Euro-pean guidance centres have been establishedwith electronic mail facilities, aimed at encour-aging European-wide mobility. Changes in jobclassification systems are proposed in Spain.

As regards internal flexibility, most MemberStates see this as a matter for individual firms.

Many recognize the important contributionwhich can be made by improved educatiOf1 andtraining, and they therefore put emphasis onensuring that such arrangements are made withinthe framework of collective agreements. TheDutch Government intends to focus on improv-ing flexibility by training those with few educa-

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tional qualifications. The Danish Governmentaims to promote internal flexibility through ac-tive labour market policies, in particular throughthe strengthening of education and training. (Seealso Work organization.

Member States continue to encourage wagerestraint flexibility and decentralized negotia-tions in their efforts to ensure that real incomegrowth remains below inflation levels, in orderto encourage and assist employment growth (seealso Non-wage costs section).

Work organization

The White Paper put great emphasis on thepotential employment benefits of more flexiblepatterns of working time, of reduced averageworking hours, and of part-time work (withcertain conditions). Interest across MemberStates in developing new patterns of workingtime as a means of increasing the number of jobsfor a given level of output is widespread, butvariable.

In some Member States, notably BelgiumFrance and Germany, there is strong support atgovernment level. In other Member States, suchas the Netherlands, while governments are posi-tive, they consider that it is more appropriate thatactions are contained in collective agreements orin plant level agreements. The Netherlands, ishowever, proposing a new working hours actwhich would simplify legislation. In the UnitedKingdom and Ireland there is less interest inworking-time reductions, as such, as a policyinstrument, although flexible options alreadyexist and are generally promoted, and Ireland iscommitted to the introduction of a nationalvoluntary scheme on work-sharing.

The issues addressed are varied. In some casesinterest centres on the annualization of workinghours

, .

as in France, where there is a very strong

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debate at all levels on this issue. Various ip.cen-tives for employers to reduce individual workinghours or introduce part-time working are now inplace, or being developed. Belgium has alsointroduced a framework plan which puts theemphasis on choice and experimentation, andwhich outlines eight possible formulas for worksharing. In Germany the emphasis is on thepromotion of part-time work, while safeguardingstandards. The German Government believesthat increased use of part-time arrangements isthe best way of sharing available work.

More generally, many large firms nationaland multinational alike are restructuring theirworking time as part of a much larger restruc~turing within their organizations, with the em~phasis on decentralization. Examples include carmanufacturers in Germany, agreements in theGerman chemical industry and the Dutch retailindustry. One major company has now agreedthat overtime will no longer be paid, but annualworking time will be reduced and additionalstaff recruited.

A particular focus of policy in most MemberStates concerns part-time work

, .

and measures toremove obstacles to part-time working are beingtaken in most Member States where such ob-stacles still exist. These schemes contain manydifferent options both to encourage existingemployees, who so wish, to move to part-timeworking, as well as to create new jobs.

The level of part-time working varies widelyacross the Union, but is generally higher in thenorth. However, in Germany, part-time work hasnot been that high, and while responsibility forthe creation of part-time jobs is seen to lie withfirms, the government is conducting a majorpublicity campaign in order to bring the benefitsof part-time work to the attention of managers.

German law provides protection for part-timeworkers against discrimination and providesother safeguards, for example with regard tounemployment benefits. All posts in the publicservices are, by law, open to part -time worker~~Since 1992 it has been possible to combinepart-time work with a pension. In most MemberStates, equal treatment of part-time and full-timeworkers is not guaranteed however, in relation tosocial security.

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In Spain, part-time working is to be allowed inthe public service and other restrictions on part-time work abolished. Belgium has also intro-duced measures allowing small and mediumenterprises to derogate from specific restrictionson the length of part-time working.

In Italy, solidarity contracts are being used morewidely than before with reduced working hourssubsidised by the cassa integrazione to developpart-time work. A new work-sharing/trainingmeasure in Portugal provides for the temporaryreplacement of employees by unemployedpeople undergoing training. Denmark hasstrengthened and extended its schemes to createpossibilities of leave of absence, as part of abroad drive to upskill the work-force. Best

known is its job rotation programme whichoffers employment possibilities for the long-term unemployed when employees take careerbreaks.

Non-wage labour costs

With regard to the non-wage component oflabour costs, in order to reduce the relative costsof labour and hence disincentives to recruitmentthe White Paper made two recommendations.Firstly, it recommended a move away (1 to 2%of GDP) from labour-based taxes and charges totaxes on non-renewable resources such as en-ergy, capital, consumption, etc. Secondly, it re-commended that Member States address thecurrent disincentives regarding less skilledworkers ' employment by adjusting taxation sys-tems, especially when the overall effect of taxesand charges is regressive.

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A number of Member States have already intro-duced modifications aimed at reducing the over-all burden of taxes and social charges on labour.This has been done either across the board(Luxembourg) or targeted on different categories

young people, long-term unemployed, lowerpaid or less skilled workers, small and mediumenterprises, or through enterprises providingtraining (Belgium, Spain, France, United King-dom).

Similar steps are following in Ireland where thereduction of non-wage costs has been describedas the single most important contribution toreducing the costs of low-skilled work. MostMember States who have pursued these policieshave done so as part of wider labour marketrestructuring plans.

Other countries are showing considerable inter-est in this approach, including in the Nether-

lands, where calculations of the potential in-crease in employment have been made, and newmeasures are coming into effect. Luxembourghas also proposed a reduction in employers

social security contributions.

Other Member States are considering a generallowering of taxes .and charges rather than arestructuring. Certain taxes are very sensitiveand there is a recognition of the need to avoiddivergences between Member States. For in-stance, some Member States favour increasingVAT revenues when other would rather reduceVAT rates for labour-intensive sectors.

Governments have pursued the reduction incharges most rigorously where employmenttaxes are high, most notably in Belgium andFrance. However, the trend is not universal andsome Member States, notably Greece, Denmarkand the United Kingdom, have increased em-ployment-based taxes, or plan to do so, althoughgenerally only to a small degree or in circum-

stances where the tax rates are currently verylow. Differences in policy are, therefore, largelyexplained by the differences in current levels ofemployment taxes (notably employers' socialsecurity contributions) between Member States.

However, there are large differences in initialstarting positions and in financial pressures ongovernment budgets among Member States.Some Member States make provisions for a

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reduction of indirect labour costs: this reductionamounts to 0.4% of GDP (1994) in two casesand between 2 and 3% (long-term) in another. Inthis respect it would be helpful if Member Stateswere to share information and their experience inthis field. This exchange of information andexperience has just begun.

While there is widespread support for the idea ofreducing non-wage labour costs in order to boostemployment, the difficulties inherent in raisingalternative revenues, especially in recession, isequally recognized. The information received sofar makes it difficult to quantify (as a percentageof GDP) the global effects of these measures andeven more difficult to quantify compensatorymeasures (reducing public expenditure, increas-ing tax revenues from non-labour sourcesetc. The absence of sufficient compensationcould lead to increasing public deficits, at leastcyclically.

With regard to the adoption of Eco-taxes as ameans of paying for employment based taxreductions, as recommended in the White PaperMember States are somewhat varied in theirresponse from being generally in favour in thenorthern Member States of the Union particular Denmark, the Netherlands, Belgiumand Germany, to being broadly open, as in

Ireland, and less sure in the south, for example inSpain, although Greece is open to a gradualmove in this direction.

Public funds

The White Paper highlighted four particularissues in terms of the use of public funds

regarding unemployment: the efficiency of la-bour market measures to reintegrate the unem-ployed; the role of the employment services; theneed to restructure national government incomesupport schemes in ways which enable income

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from work to be topped up with income fromsocial security; and the need to widen the con-cept of work in ways which bring more peopleinto the formal labour market.

In terms of improving the effectiveness of meas~ures, emphasis is increasingly being put on earlyintervention in order to avoid unemployedpeople becoming long-term unemployed. Franceand the United Kingdom have actions builtaround interviews with the unemployed, and

schemes to identify options for the unemployedare being strengthened in Denmark and theNetherlands. Germany has launched large scaleschemes aiming to retain jobs in the easternLander.

Personalized counselling is increasingly seen asimportant, especially in northern Member Stateswith emphasis on improving the ability of theunemployed to compete, and to matching themto available jobs.

Member States have sought to provide bettersupport for the unemployed by developing theservices of public employment agencies, and bylegalizing private employment agencies wherethese were not previously allowed in Spainand, later, Laly and Germany. Limited remainingrestrictions on private agencies United King-dom and the Netherlands are also beingabolished.

Many countries have changed, or are changing,the way in which the employment services workwith the introduction of self-service schemeswith closer contacts between the employmentand social security offices and with furtherdevelopment of job club models.

There is still an ongoing debate, however, insome Member States, about the merits of inte-grating employment offices and benefit offices

the advantages of a ' one-stop shop' forclients, as against conflicts of objectives. InFrance, separate employment offices for youngpeople are foreseen.

number of Member States - BelgiumFrance, Spain, Denmark the NetherlandsGreece have promoted a decentralized ap-proach, although the degree of autonomy given

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to the local level can vary widely. In France andDenmark, in particular, emphasis is put on inte-grated local or regional coordination. Improve-ments in employment services in Denmark areconsidered to be due to the involvement of localauthorities.

While it is widely recognized that the costs ofso-called passive measures (income support)outweigh the costs of so-called active measures(training and job creation), by a factor of 2 to 1

in most Member States, there is seen to be onlylimited scope for transfer in the short-termalthough there is something of a tightening up ofexpenditure in a number of cases.

Various steps are being taken, however, to shiftpassive measures of income support into moreactive measures. A number of Member Stateshave experimented with a range of intermediatelabour market models, often initiated at local

level. In Germany, a new instrument, of limitedduration, which activates unemployment ben-efits as wages subsidies has been introduced forthe new Lander, and Denmark has introducedchanges in its unemployment compensation sys-tem which strengthen the rights of the unem-ployed but at the same time encourage theirplacement in various activities. France has vari-ous schemes to encourage companies to take onunemployed people. The Netherlands is alsoconsidering action along these lines. Many is-sues remain to be resolved here, in terms of

acceptability and nature of measures, includingthose of mutual or respective rights and respon-sibilities between government and individualperceptions of support and policing, and cred-ibility with regard to quality of programmes.

There is, as yet, limited use made of schemes totop-up ' income from employment with income

from social transfers, along the lines recom-mended in the White Paper, and which wasintended to expand employment opportunities atthe bottom end of the labour market and escapefrom problems of poverty traps. It is not clearwhether existing, somewhat experimental, meas-ures will be evaluated in ways that will enableMember States to decide whether or not totransform them into mainstream actions. Atpresent, the interaction of systems very oftencreate barriers rather than pathways to employ-ment.

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Young people

Over the years, Member States have developed avariety of schemes and programmes to helpyoung people entering the labour market, and inparticular to help reintegrate the young unem-ployed. They involve guidance .and counselling,support for job search, help in attainingnumeracy and literacy and basic training oftenlinked with workplace experience.

Within this, there is little evidence of specialnew measures designed to eliminate basic illit-eracy, as well as the lack of other basic skills, onthe part of school-Ieavers.

Virtually all Member States, however, havetaken, or are now taking, steps to ensure that allyoung people are offered a sound, broadly-based

. initial vocational training, and most Member

States have welcomed the idea of Youthstart as afurther stimulus to national efforts. A wide-ranging selection of measures targeting youngpeople has been introduced in many MemberStates over the last few years. However, therange of schemes sometimes makes it difficult toperceive how the individual finds his or her waythrough the systems, and some simplificationcould be useful.

More specifically, most Member States haverecently committed themselves to:

revitalize and extend the coverage of theirapprenticeship system, improving quality andstandards, including the work-based component;

review their arrangements for vocationalguidance, though without much evidence of theneed to examine the links between such servicesand employment/placement services, whetherpublic or private;

122

review the training of trainers and instructorsand their qualifications;

D a number have also sought to raise the statusof vocational education in theshools (Belgium,United Kingdom, Spain, Ireland) in particularthrough providing access to further and highereducation through vocational education;

develop further the bridges between theworlds of school and work, including the intro-duction of more opportunities for work experi-ence;

experiment with the introduction of creditsfor young people (having leftfull~time compul-sory education) to choose an approved course;

encourage active partnerships betweenhigher education and industry, including thetwo-way transfer of staff between institutions ofhigher education and companies.

Some Member States have set specific targetsfor increasing the numbers of young people infurther and higher education (Spain, Portugal

United Kingdom) as well as actions to raiseattainment rates before leaving the education

system.

Several Member States (for example, IrelandDenmark) refer to the importance of foreign-language teaching, and the need to encourage aspirit of enterprise among young people so .as todevelop skills to support job creation and eco-nomic development. Most have introduced theuse of technology into the school curriculum.

Member States are now tending to move towardsprogrammes which integrate many of these ac-tivities and which target those facing the greatestdifficulties. More than 5 million young people inthe Union have no formal qualifications; up to10% of young people leave school withoutqualifications each year; and another 10 to 20%enter the labour market with only a lower sec-ondary qualification.

Member States have reacted positively to theCommission White Paper proposal for a specific

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Youthstart programme targeted at unqualifiedyoung people under 20.

All Member States have some form of youthguarantee scheme to help disadvantaged youngpeople, ranging from a loosely connected seriesof separate measures, to a 'guided pathwayapproach. A more comprehensive model is nowemerging.

The first approach has been the most commonencompassing various elements such as:guidance/counselling; support for job search;help in attaining numeracy and literacy; pre-vocational and vocational training, often linkedwith workplace experience; adapted trainingcourses or work -based programmes, but in rela-tively unrelated ways.

The 'guided pathway ' approach has developed inorder to smooth the transition from education totraining to working life by creating structureswith the appropriate capacity: to identify andconnect with the target group of young people;motivate and engage them in developing indi-vidualized plans; provide appropriate access to

all the individual elements that are needed. Anumber of Member State programmes now havefeatures of this approach the Education ForAll initiative (Germany); Youth reach (IrelandLuxembourg); Credit formation individualise(France); Youth work guarantee (the Nether-lands); Youth training (United Kingdom); Theemployment and training organization inFlanders (Belgium).

While such approaches bring greater clarity,there are moves to develop even more compre-hensive systems with a proactive, preventive

approach. In the Netherlands, a broad pro-gramme to prevent drop-out and ensure that aqualification is enjoyed by all was launched in1993.

The Commission White Paper proposal, Youth-start, is aimed along these lines with a view toproviding a stimulus to developing a comprehen-sive Communitywide approach to helping un-qualified young people under 20. Measures pro-posed in the Leonardo programme will alsoprovide support. Youthstart is intended to sup-port schemes built on a range of minimum

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standards, key features of which are ensuring acoherent link with the labour market, recog-

nized, marketable, qualifications and addressingpersonal and institutional barriers to labour mar-ket participation.

With regard to young people leaving schoolingat secondary level, an important trend is theresurgence of interest in Member States in theuse of apprenticeship training schemes (UnitedKingdom, Ireland, Spain, the Netherlands) asadvocated in the White Paper. New efforts arealso being made to develop measures such asrecruitment subsidies (Belgium, France), on-the-job work experience (Italy), and quasi-publicjobs at local level (Denmark).

Developing newemployment

Most Member States rely on commercially-driven activities or conventional public servicesas the source of employment creation. However,many specific initiatives have been taken in theMember States in order to promote the develop-ment of new job opportunities, particularly atlocal level. However, such initiatives vary enor-mously in scale, nature and focus depending,in part, on the perceived role of Member Statesgovernments in relation to the process of em-ployment creation.

However, in all countries, local public authori-ties, non-governmental organizations, regionaltrade union organizations and individuals aredirectly involved in numerous job creationschemes, which aim to respond to new needs aswell as to provide ' employment. Activities in-clude jobs connected with social services (childcare, assistance to the elderly, handicapped per-sons or families, and support for young people indifficulty); the improvement of the quality of life(local public transport, security, housing, the

revitalization of urban areas and communitydevelopment); arts, culture, heritage, tourismand audiovisual activities; and environmental

123


protection (investment in clean-up and wastemanagement, pollution control, water, protectionand maintenance of the countryside).

Measures taken to support such initiatives arevery diversified. Sometimes they may form partof large sectoral policies for example tourismin Ireland and Greece, cultural activities in theUnited Kingdom and France, information tech-nology actions in Spain, Denmark and Ireland,environmental protection in Denmark, Luxem-bourg and Germany, and urban renewal in Por-tugal, Italy, the Netherlands and Belgium. Inother cases, measures may respond to more localconcerns such as housing projects, services topersons, transport, and moves away from insti-tutional care systems.

Some Member States notably France, IrelandGermany, Denmark and Belgium are seekingto promote more local level employment cre-ation, by direct means, including the provision ofvouchers for service jobs for families (Franceand Belgium), and by rural community eco-nomic development actions in tourism and edu-cation (Spain, Greece, Italy).

Important as these actions are in total, theirdiversity and multiplicity often means that theyare less visible and less appreciated than moregrandiose schemes, and their employment andsocial cohesion benefits underestimated. Gov-

124

ernment finance is, however, often involved insuch projects, and local level employment of-fices and training agencies frequently have veryclose contacts with employers and the voluntarysector. Moreover, most Member States have, orhave experimented with in the past, schemes topromote self-employment or very small busi-nesses (for example, France, Belgium, and theUnited Kingdom).

However, since national governments are notalways directly involved in these activities, theirimportance, and the benefits to be gained developing local capacity to engage in these

activities, is not always fully appreciated.

Thus, Member States do not seem to be exploit-ing the potential of these diverse sectors in anystrategic way and systematic action to assess thepotential of these sectors, and to promote em-ployment growth in them, is generally lacking.

In short, local level employment creation activ-ity abounds but the potential, and need, todevelop many of the new areas of job growththat were identified in the White Paper suchas local services, arts and culture, tourism, andenvironmental protection remains to be ex:'ploited, as does the potential for various forms ofpublic-private partnership or social economyactivity.

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Extracts of the conclusions of the Presidencyof the Corfu European Council

(24 and 25 June 1994)

Wh ita P ape r

In December 1993 the European Council inBrussels adopted a plan of action based on theCommission White Paper on a medium-termstrategy for growth, competitiveness and em-ployment. It underlined that a healthy and openeconomy as well as an economy geared tosolidarity were essential prerequisites for thesuccessful implementation of this plan.

Signs of economic recovery are now beingconfirmed and non-inflationary economicgrowth is returning. The European Council con-siders it essential that the improvement in theeconomic situation should not lead to a slacken-ing of efforts to promote structural adjustment inEurope but should instead be exploited to speedup essential reforms, particularly in the field ofemployment, where the situation is still veryworrying.

The successful conclusion of the UruguayRound within the guidelines set out by theEuropean Council has created an internationaltrade policy environment which can provideeffective support for economic recovery and jobcreation. The European Council .calls on theCommunity institutions and Member States todo everything necessary to complete ratificationin time to ensure the entry into force before 1

January 1995. The European Union will play anactive role in efforts to ensure that the newWorld Trade Organization can effectively carryout its task of ensuring observance of the rulesdrawn up jointly and promote progress in com-bating unfair trade conditions. Environmentaland social issues will also have to be discussedin this context.

The European Council on the basis of a reportfrom the President of the Commission had an indepth discussion on the different elements of theAction Plan decided in the Brussels EuropeanCouncil.

The European Council puts particular emphasison the following points which should give newimpetus in the follow-up debate on the WhitePaper.

(i) Encouragement of reforms in MemberStates intended to improve the efficiencyof the systems of employment.

(ii) Specific measures with regard to fullyexploiting the employment potential ofsmall and medium-sized enterprises.

(Hi) Reinforc.

policy.researchcoordination

(iv) Rapid implementation of high prioritytrans-European projects in the field oftransport and energy.

(v) Fully exploiting the possibilities and op-portunities offered by the information so-ciety.

(vi) Encouragement of the new model of sus-tainable development including the envi-ronmental dimension.

1. Improving the employment situationA sound macroeconomic environment is a sinequa non for success in the fight against unem-ployment (see point 5).

The resumption of economic growth will not ofitself suffice to settle the problem of unemploy-

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ment, which requires structural reforms both atthe level of Member States and of the Union.

The European Council considers that increasesin productivity for the rest of this century shouldbe dedicated primarily to investments and jobs.This objective should be implemented in a spirit

127

Extracts of the conclusions of the Presidency of the Corfu European Council

of solidarity and taking special account of thosein society who are in the weakest position. TheEuropean Council stresses the need to maximizethe potential of human resources.

The European Council reviewed, on the basis ofa report from the Commission, the initiativesunder way in the Member States in accordancewith the general objectives defined in December

- 1993. The European Council noted progress inthese areas but considered that the efforts under-taken so far, though appreciable, still fall a longway short of what is necessary. It encouragesMember States in order to win the battle for jobsto take further steps to implement the objectivesset out in December. In particular:

with regard to education and training, theEuropean Council concurs with the Commis-sion s recommendation that a more systematicand comprehensive approach will be needed inmany Member States, in particular with regard tocontinuing training. At the Community level theEuropean Council welcomes the agreement inprinciple by the Council on the two new educa-tion and training programmes (Leonardo andSocrates) and invites the Council and the Euro-pean Parliament to finalize the decisions on thisprogrammf: before the end of the year.

as regards measures to encourage employ-ment, the European Council notes the Commis-sion recommendation concerning the reductionof non-wage labour costs, mainly on the lessskilled. In this framework, the European Councilunderlines that further steps should be pursuedconsistent with the objective of budgetary con-solidation.

Accordingly, the European Council takes note ofthe discussion on the COz/energy tax issues andunderlines the need to ensure that environmentalcosts are better reflected throughout theeconomy.

as regards the promotion of economically

sound formulas for the organization of work, theEuropean Council notes the need to remove

128

obstacles to part-time work and in general topromote new forms of organization of work.

with regard to developing new employmentin connection with meeting new requirementslinked to the quality of life and-protection of theenvironment, the European Council notes that anumber of initiatives have been taken but manyof the new areas of job growth that were identi-fied in the White Paper remain to be exploited.The European Council underlines the impor-tance of the study to be prepared by the Com~mission before the next European Council onthis subject.

with regard to young people, the EuropeanCouncil considers that additional emphasisshould be given to those young people who arefacing the greatest difficulties. It attaches highimportance to ensuring as far as possible thatyoung people can move from education intowork; in this context it welcomes the Commis-sion s Youthstart programme.

To support these efforts the European Councilinvites the Social Affairs Council, the Ecofin

Council and the Commission, on the basis of

information collected by the Commission, tokeep progress in this area under constant review.The Council will report to the European Councilin Essen on national experiences which have hadpositive effects on employment, analysing thereasons for their success, and define appropriatepolicy recommendations for adapting currentpolicies.

Efforts to promote youth employment and tocombat long-term unemployment should begiven particular priority in the work of theCouncil.

Finally the European Council invites the Com-mission to renew its efforts towards assuring thenecessary social dialogue, making full use of thenew possibilities available in the Treaty onEuropean Union and in particular of the provi~sions of the protocol annexed to it.

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2. The internal market, competitiveness and sm~1I andmedium-sized enterprises

The smooth operation of the internal market isessential if the economy is to be competitive anddynamic. This means that the delays in transpos-ing certain important Directives on public con-tracts, insurance, intellectual property arid com-pany law at national level must be remedied.Furthermore, it is essential that the basic prin-ciples of the single market should be extended tothose areas, such as energy and telecommunica-tions, which ate still only partly covered by itwhile ensuring that the public service and townand country requirements in these sectors arealso safeguarded.

The single market is implemented with dueregard to environmental problems. The safe-guard of important national environmental pro-

tection measures shall be secured in this context.

The single market is a fundamental aspect ofCommunity construction but it is not an end inits.elf, as was already pointed out in the conclu-sions of the Rhodes European Council in 1988.It should be used to serve the welfare of all, inaccordance with the tradition of social progressestablished in the h~story of Europe. The policyof the Union, alongside the policies of the

Member States, should foster the affirmation ofthis social dimension. In the view of the MemberStates concerned, the recent agreement in theCouncil under the provisions of the Social Pro-tocol concerning information and consultation ofworkers in multinational enterprises constitutessignificant progress towards the realization ofthis objective. Further advances on the samebasis, including efforts aimed at avoiding socialexclusion, are essential in a society in rapidtransformation. The European Council also wel-comed the recent agreements in the Council onthe protection of young workers as well as thecreation of the agency for health and safety atwork.

Small and medium-sized enterprises make amajor contribution to growth and job .creationand they should be able to benefit more from allthe opportunities offered by the single market.

The European Council welcomed the implemen-

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tationby the Council of its orientations concern-ing interest rate subsidies for SMEs and that theCommission has decided to devote ECU 1 bil-lion for the period 1994-99 for a Communityinitiative programme to help small and medium-sized enterprises adapt to the internal market andto the new competitive environment. It alsonoted with interest the recent Commission ini-tiative for an integrated programme in favour ofsmall and medium-sized enterprises, includingaction to simplify legislation and reduce admin-istrative burdens on such enterprises, and theinitiative of the Portuguese Prime Minister onthe local dimension of the internal market andthe initiatives taken by Ireland in the areas ofsocial partnership and local development. TheEuropean Council considers that local develop~ment initiatives offer considerable potential forreinforcing the economic and social fabric of theEuropean Union and for creating jobs. They arean essential element of the new model of devel-opment mentioned in the White Paper and willhelp to preserve cultural diversity within theUnion. The European Council notes the Com-mission s intention, within the framework of thereport on new potential sources of employmentto be submitted to the European Council in

Essen, to draw up a detailed inventory of thevarious actions at Community level to fosterlocal development and local employment initia-tives, particularly those concerning microenter-prises and handicraft industries. This inventorywill be accompanied by the proposals deemednecessary to enhance the consistency and theeffectiveness of those actions.

Regarding scientific and technological researchthe European Council expects that the recent

decision on the ambitious 1994-99 frameworkprogramme, to which considerable funding has

een allocated, will be followed up withoutdelay by the rapid adoption of specific sectorprogrammes. In this context the information.

sector and biotechnology are of particular impor-tance. It also invites the Council to pursue amore systematic coordination of Community andnational research policies and invites the Com-mission to take any useful initiatives to promotesuch coordination.

129


Lastly, the European Council expressed its con-viction that the elimination of unnecessary legaland administrative burdens on business andmaking Community and national legislation sim-pler are important aspects of improving the

competitiveness of the European economy. Itwelcomes the fact that the Commission is pur-suing its efforts to simplify existing Communitylegislation and will reinforce its costlbenefitexamination of proposed Community legisla-tion. The Commission also intends to launch aprocess of examining the impact of existingCommunity and national legislation on employ-

ment and competitiveness. With regard to theselatter aspects the European Council welcomesthe establishment by the Commission of a groupcomposed of independent persons to assist it inthis task and attaches high importance to itswork.

As regards subsidiarity the Council welcomesthe progress made so far by the Commission inacting on the report of December 1993 and notesthe Commission s undertaking to give a fullreport to Essen.

3. Trans-European networks for transport, energy andenvi ron mental projects

The single market will produce all the expectedpositive effects to benefit citizens and firms onlyif it can rely on effective . trans-European net-works for transport and energy. The EuropeanCouncil welcomed the work achieved so far bythe group chaired by Mr Christophersen inaccordance with the mandate given last Decem-ber.

On the basis of the group s report, the EuropeanCouncil has agreed on a first priority list of major transport projects , set out in Annex I. Asfar as the energy sector is concerned the Euro-pean Council took note of the projects listed inAnnex II and requested the Christophersengroup to continue its work examining in particu-lar their economic viability. The Member Statesinvolved are asked to make every effort toensure that all the transport projects whosepreparation is sufficiently advanced are startedup immediately and that the others are started upas far as possible during 1996 at the latest byaccelerating administrative, regulatory and legalprocedures. The European Council invites theCommission to take all useful initiatives in thisrespect including the convening, where appro-priate, of project seminars aimed at coordinatingthe activities of all parties involved.

The European Council also attaches importanceto the other important transport projects whichare set out in the interim report.

130

The European Council calls on the Christo-phersen group together with the representativesof the acceding States to continue their work onthe basis of the mandate proposed in the groupreport studying further the extension of the

trans-European netWorks to neighbouring coun-tries (in particular to Central and East Europeancountries and to the Mediterranean Basin) and toprepare a final report to the European Council inEssen. It also asks the Christophersen group toexamine the question of relevant netWorks in thefield of the environment.

As regards financing of netWorks, the EuropeanCouncil confirms that measures will be taken, ifproved necessary, in order that priority projectsdo not run into financial obstacles which wouldjeopardize their implementation. It noted the

conclusions of the Ecofin Council and the stud-ies carried out by the Commission. This questionwill continue to be examined by the Christo~phersen group and in the Ecofin Council untilthe Essen European Council, taking account ofthe specific characteristics of each project, theleading role of private funding and the judicioususe of existing Community resources.

The Council will be informed if it appears thatthe achievement of certain projects is threatenedfor financial reasons linked to insufficient prof-itability for example because of the length ofinvestments or environmental constraints. The

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Council will immediately consider with the

Commission and the Em the appropriate re-

4. The information society

The European Council took note of the reportfrom the group of leading figures representingthe industry, operators and users who have beenexamining the various aspects of this questionunder the chairmanship of Mr Bangemann. TheEuropean Council considers that the currentunprecedented technological revolution in thearea of information opens up vast possibilitiesfor economic progress, employment and thequality of life, while simultaneously represent-ing a major challenge. It is primarily up to theprivate sector to respond to this challenge, byevaluating what is at stake and taking the nec-essary initiatives, notably in the matter of financ~ing. The European Council, like the Commis-sion, considers that the Community and itsMember States do however have an importantrole to play in backing up this development bygiving political impetus, creating a clear andstable regulatory framework (notably as regardsaccess to markets, compatibility between net-works, intellectual property rights, data protec-tion and copyright) and by setting an example inareas which come under their aegis. The Euro-pean Council agreed in general with the areas ofapplication set out by the group (teleworking,distance learning, network for universities andresearch centres, telematic services for SMEsroad traffic management, air traffic controlhealth care networks, electronic tendering, ad-ministrative networks and city information high-

sponses, within the limits set by the financialperspectives.

ways). The importance of linguistic and culturalaspects of the information society was alsostressed by the European Council.

The European Council, having noted the find-ings of the Bangemann group, considers that theimportance and complexity of the issues raisedby the new information society justify the settingup of a permanent coordination instrument toensure that the various parties involved, bothpublic and private, are working along the samelines. This coordination instrument, to be set upas soon as possible, should be based on theappointment in each Member States of a personresponsible at ministerial level for coordinatingall aspects of the subject (political, financial andregulatory) with a view inter alia to ensuring acoordinated approach in the Council. The Com-mission will act similarly.

At the level of the Community, the necessaryregulatory framework has to be established assoon as possible. The European Council invitesthe Council and the European Parliament toadopt before the end of the year measures in theareas already covered by ~isting proposals. also invites the Commission to establish as soonas possible a programme covering the remainingmeasures needed at the Community level.

The European Council will assess progress at itsmeeting in Essen.

5. The macroeconomic environment

Regarding major economic trends, the EuropeanCouncil notes first of all that the Member Stateshave broadly followed the guidelines laid downby the European Council in December 1993.Inflation, which is in the process of beingovercome, a return to exchange rate stability andan incipient reduction of public deficits are

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creating a sound basis for future growth andfavouring the convergence of economies to- .wards the criteria laid down in the MaastrichtTreaty for the final stage of EMU. These effortsmust be continued in order to consolidate thefall in short-term interest rates and to reversethe recent upward trend of long-term interest

131


rates, all of which are essential conditions forstimulating investment and creating jobs.

For all these reasons the European Councilendorses the economic policy guidelines con-tained in the report submitted by the Ecofin

132

Council in accordance with Article 103 of theEC Treaty. It invites the Council to finalize theguidelines in the light of the conclusions of thisEuropean Council with regard to the implemen-tation of the White Paper in general.

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Annex I

List of high priority transport projectsadopted by the European Council

Projects Countries involved

High-speed train combined transport north-southBrenner axis Verona Munich Nuremberg Erfurt

Halle!Leipzig Berlin

High-speed train Paris - Brussels - Cologne -Amsterdam ~ LondonThe following sections of the project are includedBelgium: FIB border Brussels Liege - BID borderBrussels ~ B/NL borderUnited Kingdom: London Channel Tunnel AccessNetherlands: B/NL border Rotterdam ~ AmsterdamGermany: Aachen Cologne RhinelMain

High-speed train southMadrid Barcelona Perpignan MontpellierMadrid Vitoria - Dax

High-speed train east

The following sections of the project are included2Paris Metz Strasbourg ~ Appenweier Karlsruhewith junctions to Metz Saarbrucken Mannheimand Metz Luxembourg

Betuwe line: Combined transport/conventional railRotterdam - NLID border Rhine/Ruhr!

High-speed train/combined transport France ItalyLyons Turin

Motorway Patras Greek/Bulgarian bordei-ijointly with the west-east motorway corridor: Via EgnatiaIgoumenitsa Thessaloniki Alexandroupolis Ormenio/Kipi

I/NO

ElFElF

FIDFIDF/L

NLiD

F!I

I Ongoing construction support already provided at Community level.2 The extension to Frankfurt is already under construction; as regards the further extension to Berlin the maturity of the project is

not advanced enough.

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Motorway Lisbon Valladolid PIE

Cork Dublin Belfast Lame Stranraer rail link IRLIUK

Malpensa airport (Milan)

Fixed rail/road link between Denmark and Sweden(0resund fixed link)including access routes

DKiS

Annex

List of energy projects which the EuropeanCouncil has given priority status

France Italy: electricity interconnection

Italy Greece: electricity interconnection (cable)

Denmark: east-west electricity connection (cable)(not eligible for Structural Funds)

Portugal: natural gas network

Greece: natural gas network

Spain Portugal: natural gas interconnections

Spain Portugal: electricity interconnections

Algeria Morocco European Union: gas pipeline

* * *

Russia Belarus Poland European Union: gas pipeline

1 Including the introduction of natural gas in the Extremadura and Galicia regions of Spain.2 This project should also he shortlisted and studied although it has not yet reached the same stage as the other four gas schemes.

134 S. 2/94

European Commission

Growth, competitiveness and employmentWhite Paper follow-up

Report on Europe and the global information society

Interim report on trans-European networks



Supplement 2/94 Bull. EU

Luxembourg: Office for Official Publications of the' European Communities

1994 - 134 pp. - 17.6 x 25.0 cm

ISBN 92-826-8547-

Price (excluding VAT) in Luxembourg: ECU 7

, competitiveness and employment...

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