Since March 2000, the EU has formulated its policies in line with the ambitious objectives of the so-called Lisbon Strategy, which sets a framework for action until 2010. Lisbon aims specifically for economic as well as social and environmental renewal. The Strategy seeks to increase European competitiveness, not on the basis of social dumping but by investing in a knowledge-based and highly productive society.

By the mid-term in 2005, it was already clear that results were disappointing and that the EU would have great difficulty, for example, in reaching the Lisbon target of a 70% employment rate. At the 2005 Spring European Council meeting, EU leaders carried out a review of progress.

The ETUC has always supported the Lisbon Strategy, but believes crucial opportunities have been missed to reinforce the European social model. The Confederation warned policy-makers not to use the mid-term review to ‘simplify’ the Lisbon Strategy by reducing it to a narrow agenda of structural reform and competitiveness, which would be seen as an attack on workers’ rights and protection, inevitably resulting in less, not more, support for Lisbon.

What is the Lisbon Strategy?

When the European Council met in Lisbon, Portugal, in March 2000, EU leaders adopted a ten-year programme aimed at revitalising growth and sustainable development across the EU.
They noted the challenges Europe was facing from globalisation, an ageing population, and the emergence of a worldwide information society. They resolved that economic and social reforms had to take place in the context of “a positive strategy which combines competitiveness and social cohesion”, and reaffirmed that the European social model, with its developed systems of social protection, must underpin the strategy.

The Union “set itself a new strategic goal for the next decade: to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.”

This was to be achieved through a range of policies including a sound macroeconomic policy mix that is conducive to high growth, completing the internal market, investing in people and combating social exclusion. EU leaders pledged to aim for full employment in Europe, in a society accommodating the personal choices of women and men.

The Lisbon Strategy sets specific targets:

 An overall employment rate of 70% by 2010

 An employment rate for women of over 60%

 An employment rate of 50% among older workers

 Annual economic growth around 3%

The Council also adopted the open method of coordination between Member States, at different levels of decision-making, as a means to achieve these ends.

Progress so far

In May 2004, as the Lisbon Strategy neared its halfway point, the European Commission (acting on the conclusions of the March 2004 European Council) set up a High-Level Group of Independent Experts chaired by former Netherlands Prime Minister Wim Kok, to make an independent assessment of progress. The 13 experts represented the different stakeholders in the strategy. The group met six times and submitted its report, Facing the Challenge, to the Commission and Council on 3 and 4 November 2004. Its aim was to prepare for the European Council’s mid-term review in March 2005.
It concluded that the EU was very unlikely to meet its 2010 goals, chiefly due to a lack of determined political action. It highlighted an overloaded agenda, poor coordination, and conflicting priorities. It also pointed out that structural reform has become a codeword for deregulation and weakening workers’ rights, and noted that policies should, instead, help workers to address structural change (investing in skills and productivity instead of deregulating labour markets). It also underlined the vital importance of aggregate demand management to exploit fully Europe’s growth potential, and argued that the Stability Pact was an obstacle to this.

Furthermore, the Kok Report stressed the importance of sustaining the European social model, and advised against copying the US system of minimal social welfare. The High Level Group’s proposals focused on the need to communicate better with EU citizens, and obtain their support for the reform process - something the ETUC has repeatedly emphasised. Importantly, the report stressed the role that social dialogue and the social partners, both at national and European level, can play in delivering the Lisbon objectives of high non- inflationary growth, more and better jobs and strong social cohesion.

The ETUC’s view - clear and consistent

From the outset, the ETUC has welcomed the Lisbon Strategy and called for it to be implemented effectively.

In a Declaration of June 2000 - just three months after the Strategy was agreed - the ETUC Executive Committee called on the European Council in Feira to stick to decisions made in Lisbon, and in particular to work towards a return to full employment in Europe and more and better jobs.

The ETUC has consistently argued in favour of the “balanced and integrated nature” of the Lisbon Strategy, emphasising that “the search for a new dynamism in the European economy must be undertaken without endangering the basic elements of the European social model”. [1]

A month after the terrorist attacks of 9/11, in October 2001, the Executive Committee declared that trade union wage negotiators would continue to play their part to support the Strategy if monetary and budgetary authorities brought it back on track.

But as the European economy slowed, the ETUC in March 2002 expressed its concern that several EU governments, along with European employers, were “arguing simply for market deregulation, structural reform and yet more labour flexibility. This unilateral approach contradicts the balanced integrated nature of the Lisbon Strategy, and stresses economic reforms to the exclusion of social and environmental needs.” It stressed the important role of the social partners, and that the European social dialogue and collective bargaining were essential to achieving success.

By March 2003, the shortcomings in delivery were clearly apparent. The ETUC called for the strategy to be revitalised, and warned again against moves to dismantle the social model.

The Executive Committee drew attention in particular to the failure to balance the three policy strands, with economic objectives taking priority over social and environmental progress. It called for:

 monetary policy to be more growth and employment-friendly;

 a coordinated budget stimulus equivalent to at least 1% of GDP;

 reform of the Stability and Growth Pact to promote sustainable development;

 reinforcement of the European Employment Strategy and more investment in people, promoting equal opportunities, lifelong learning, health and safety, and support for unemployed, younger and older workers.

In May 2003, the 10th ETUC Congress took place in Prague, and delegates expressed their deep concern about Europe’s economic and social situation. They called for
the ECB to reduce interest rates to stimulate growth;
the EU to agree a package of emergency measures including investment in training, research and development, and environmental technologies.

Before the EU’s Spring Summit, in March 2004, the Executive Committee again called for a stronger social pillar to the Strategy, welcoming the Irish EU Presidency’s emphasis on social partnership as a crucial ingredient of success, and its proposal for a European Partnership for Change promoting innovation, productivity, social cohesion and stronger social dialogue.

The ETUC welcomed the Kok report’s support for the European social model, while regretting that it prioritised growth and employment at the expense of promoting social cohesion and sustainable development.

In December 2004, the ETUC Executive Committee adopted a comprehensive resolution with key demands for the Strategy’s mid-term review. These included
massive investment in positive labour market policies such as:
Increased access to lifelong learning
Better social benefit regimes, supporting unemployed and excluded people
Policies to reconcile work and family life
Action to fight discrimination.

The ETUC urged policy-makers to draw up a European Social Investment Action Plan to help workers confront the challenges of delocalisation, restructuring and globalisation.

It also called for macroeconomic reform to stimulate demand and support growth by implementing a monetary policy that also has high growth (and not only low inflation) as its policy focus, by making the Growth and Stability Pact more flexible, and by urging the European Investment Bank to make full use of its lending options. Above all, the ETUC insisted that social dumping, longer working hours and wage cuts must play no part in the second phase of the Lisbon Agenda.
Furthermore, the ETUC underlined the growth, employment and competitiveness benefits to be gained from a coordinated European investment programme in sustainable development (including renewable energy, clean production technologies and social housing).

In February 2005, European Commission President José Manuel Barroso announced the relaunch of the Lisbon Strategy as a Partnership for Growth and Jobs, simplifying targets and reporting procedures, and with a single National Reform Programme (NRP) for each country.

In response, the ETUC warned that it was on the alert for signs that EU targets on social policy and the environment were taking a back seat, in the push to make Europe more business-friendly.

In its preliminary assessment of the first round of NRPs in 2006, the ETUC found major shortcomings: an excessive emphasis on labour market flexibility and competition, and neglect of the social dimension.

The ETUC’s central message has always been that the European social dimension, comprising social dialogue, collective bargaining, workers’ protection and participation is not a drag on competitiveness and economic efficiency but, on the contrary, an essential stimulus to innovation, productivity and sustainable growth. In order to implement the Lisbon Strategy, the European social model must be recognised as a productive factor

Useful links: European Commission: