Introduction

The ETUC has welcomed the Lisbon strategy as heads of governments and states decided five years ago in March 2000. More specifically the ETUC supported the balanced and integrated approach between economic, social and environmental policies. And trade unions welcomed the political commitment to full employment and to more and better jobs and a greater social cohesion.

Some progress has been made but Europe is far from meeting the key objectives. The upcoming Spring Council will seek to relaunch the Lisbon strategy and there is no doubt that a revitalisation of the strategy is necessary. The crucial question is in which direction we will move in the next five years to become the most competitive knowledge based society with more and better jobs, social cohesion and a sustainable environment. The recent debate about a trade-off, even a temporary one, between the economic, social and ecological dimension leads in the wrong direction. Europe cannot face global competition on the basis of low social standards; its future lies on the “high road” of high productivity, high quality and high wages. The reform of the European macro-economic framework is essential. Macro-economic policies should not only be about ‘stabilising’ the economy but also about ‘dynamising’ the economy to turn Europe into its own engine of growth.

On 2 February 2005, the Commission published its report on the review of the Lisbon Strategy, called ‘Working together for growth and jobs. A new start for the Lisbon Strategy’. The Commission’s communication sets out the proposals to correct the Lisbon process with the aim of improving its implementation. Alongside the main communication, several other communications and papers have been published by the Commission. These concern:

Commission staff working document in support of the report from the Commission to the Spring European Council

Lisbon action plan incorporating the EU Lisbon programme and recommendations for actions to member states for inclusion in their national Lisbon programmes

Delivering on growth and jobs: A new and integrated economic and employment co-ordination cycle in the EU

Communication from the Commission on the social agenda

Major trade union concerns

A number of issues which are mentioned in the different documents can be supported and are of great importance to trade unions:

Increased and improved investment in research and development
More investment in modern infrastructure
Consideration of common consolidated corporate tax base
Provisions of high quality services of general interest to all citizens

For the ETUC there is no problem if Europe focuses more on sustainable growth in order to create more and better jobs. And there is no problem if we make all efforts to improve the competitiveness of firms and companies as long as we can keep the three pillars - the economy, the social and the environmental pillar - in balance!

The trade union concerns rest on the fact that a number of important elements are missing and the different texts give too much space for different conclusions and different interpretations. The different documents of the Commission rarely give the impression of a new start to the Lisbon strategy, they are to some extent contradictory and therefore not at all a good example for a better European governance. Most of all the fact that the proposed new Lisbon agenda has been scaled down can be proved by two examples:

(1) The original target of an employment rate of 70% by 2010 is no longer mentioned. The new objective is now to create ‘at least’ 6 million extra jobs, which is a long way off the 22 (or even 25) million jobs that are needed to be created for the 70% employment rate to be achieved. The ‘6 million job figure’ also stands in stark contrast with the fact that the EU 15, in the latter half of the nineties, created no less than 11 million jobs, almost twice the figure the Commission is now putting forward.

(2) The initial objective of a 3% annual growth target is now re-worded into an additional boost of the level of GDP (not the annual average growth rates of GDP!) by 3% by 2010. This implies bringing the (potential) annual growth rate up from 2% now to 2.5%. Again, this is not very spectacular compared to the latter half of the nineties when the economy was growing at an annual average of 2.7%, and this without much of a ‘structural reform’ agenda!

This should not be the new approach of the Commission, therefore the ETUC urges the European Spring Council to make the perspective of the member states on the future of the Lisbon strategy crystal clear in order to avoid any misunderstandings! As the Kok report stated: “Greater focus is required to build a better understanding of why Lisbon is relevant to every person and citizen in Europe”. Workers will not understand if it is all about more business friendly governance without taking their fears into consideration.

Workers and citizens have been hearing the mantra of labour market and welfare reform for years. In fact, when we look at recent European policy making, we observe that Europe has made reform after reform. If we look at the inventory of reforms that have been made over the past ten years in Europe, the list is impressive. Every single action aimed to raise the growth and employment in Europe. So, judging from this list, Europe should by now be the fastest growing region in the world. This obviously is not the case!

Key ETUC demands and perspectives: Strengthening the Lisbon strategy by better implementation and a clear commitment to the economic, social and environmental objectives

For the ETUC, it is clear that the Commission’s proposals for the mid-term review falls short of what is needed. Further clarifications as well as corrections are needed. The ETUC underlines the importance of the objectives of ‘high level of employment’ and ‘high level of social protection’ included in article 2 of the EC Treaty. Furthermore, the EU Constitution in Article I-3 refers to more ambitious Union’s objectives such as ‘highly competitive social market economy, aiming at full employment and social progress’ It is also in this context that the ETUC calls upon all 25 European leaders to provide the necessary improvements at the upcoming Spring Council.

Maintain the Lisbon objectives and the balance

1. Re-establish confidence in the Lisbon agenda. Reassure European workers and citizens that economic, social and environmental Europe is at the core of Europe’s policies! That a social and an environmentally friendly Europe are a force for productivity and innovation, not simply a burden for business.

2. Re-affirm Europe’s commitment to full employment with more and better jobs. Maintain the objective of a high employment rate in total, for women and for older workers (70/60/50) in the medium term.

Strengthen the link of pro active macro-economic policies

3. With the Stability and Growth Pact as it exists at present, Europe is not able to engage in an agenda of innovation. Europe does not have the luxury to wait another five years or so for deficits to be eliminated before investing massively in innovation, research and development and infrastructure. Ensure that the reform of the Stability and Growth Pact is not limited to avoiding a fiscal contraction in a downturn. Also make sure that they provide countries with more scope macroeconomically. Do so by ‘Lisbonising’ the pact and by considering Europe’s innovation gap as an ‘exceptional circumstance’ warranting a temporary deviation from the Stability Pact and the 3% for those Member States investing in the Lisbon priorities of research, training and active labour market policies.

4. Improve the implementation of the European growth initiative and act together by organising a European framework for ‘national recovery plans’ which have to be discussed and approved at the European level.

5. Strengthen economic governance in the euro area. Improve fiscal policy by focussing on the euro area’s average deficit and providing Europe with the necessary budget. Use the macroeconomic dialogue for an in-depth discussion with the ECB on its mandate (price stability and growth), its inflation target and its monetary policy strategy.

6. Define European rules for the corporate tax base and install minimum tax rates to avoid competitive tax dumping. A common tax basis has to be supplemented by a minimum tax rate on profits.

7. Macro-economic policies are an indispensable part of an agenda for growth and jobs. For growth and jobs to materialise there needs to be supply and demand side policies. Acknowledge that wage policies autonomously set up by the social partners with real wage developments consistent with productivity growth will strengthen domestic demand and can contribute to economic growth.

Strengthen Social Europe as a force for productivity and innovation

8. By helping workers to be able to cope with the process of structural change, social Europe is not just a financial burden. Instead, social Europe is at the core of Europe’s competitive advantage and the process of growth and job creation. This is in particular true for investments in learning capacities in general. Investing in learning capacities are essential for innovation and should become a priority in innovation policies. In this respect increased access to lifelong learning for all workers is indispensable. Policies to reconcile working and family life should contribute to ensuring that men and women can participate in the labour market on the same terms.

9. Take the Social Policy Agenda much more on board to make the social dimension visible. Address workers’ fears concerning restructuring and delocalisation by strengthening workers participation. Use all instruments (legislation, social dialogue, open method of coordination and the structural funds) to fight for social cohesion and prevent social dumping

10. Clarify that modernising social protection is about strengthening and improving, not weakening the system of solidarity. State clearly that unemployment benefit reforms should support the unemployed in their search for new jobs and that ‘making work pay’ should be done by providing decent wages.

11. Pressing workers to work long hours is too easy a solution. Bringing more people into jobs, not getting people to work more is the adequate response to the demographic challenges. The improvement of working conditions and the quality of work enables older workers to stay longer at work. The current revision of the working time directive should lead to more, not less control on those employers that force workers to work excessively long hours.

12. A fundamental overhaul of the Bolkestein directive is necessary to avoid a free market of services becoming synonymous with social dumping. Also make sure that a single market for services does not threaten services of general interest.

Strengthen the environmental dimension

13. Recognise the positive contribution of environment policy to growth and employment through the development of environmental technology and eco-innovation as well as sustainable management of natural resources.

14. Strengthen the EU climate change policy in order to achieve the necessary long-term emission reductions, taking into account considerations related to employment and social quality. In this respect the ETUC demands the immediate adoption of proposals for an environmental tax reform and a European framework for transport infrastructure charging policy, which takes account of the social impact whilst providing exemptions for social consumption bands.

15. Adopt the REACH proposal as soon as possible by taking into account ETUC’s demands so that it can help to reduce the risks of occupational diseases caused by dangerous chemicals.

16. Launch a dialogue on how to anticipate and manage change related to sustainable development transition.

Support for the European Youth Initiative

ETUC welcomes the European Youth Initiative within the framework of the Lisbon Strategy. It should allow for more coherent attention to be given to young people and to problems which affect them.

Young people are one of the most vulnerable groups in the labour market, facing higher unemployment rates and having to accept precarious and low paid jobs.

For this reason, the Youth Initiative should be focused on:

fighting against youth unemployment

promoting the quality of youth employment by tackling its precarious nature

improving specific measures to facilitate the sustainable integration of young people in the labour market (transition from school to working life)

promoting high quality initial education for all and vocational education and training as well as access to life long learning.

ETUC believes it is crucial to associate young people, especially young workers, in the different steps of this process. Moreover, ETUC considers that Europe needs a truly inter-generational approach which should be part of the Youth Initiative.

Social partners involvement

Finally the ETUC stresses the importance of involving social partners at national and European level and underlines their capacity to contribute to the implementation of the Lisbon strategy. Lisbon will not be implemented if policies are decided over the heads of workers. Implementation implies ‘ownership’ and ‘ownership’ can only be achieved on the basis of social dialogue at all levels.