Commission notes encouraging progress in application of Broad Economic Policy Guidelines by Member States - Mitigated report on transition towards knowledge-based society

Brussels, 07/03/2001 (Agence Europe) - On Wednesday, the European Commission adopted its report assessing the implementation, during the year 2000, of the Broad Economic Policy Guidelines (BEPG). The report is accompanied by a working document recapitulating progress achieved by each Member State in application of BEPG 2000. It notes the framework improvements that need to be made to support growth, one of the highest of the decade, and employment, in a context of price stability. It stresses that the macroeconomic policy mix in the euro zone has been without tensions. It deplores, however, the fact that the Member States have not seized the chance offered by strong economic growth to enhance their underlying fiscal position, and encourages them to pursue the process of budgetary consolidation and economic reform. In a press release, the European Commission notes that the process of economic reform and gradual transition towards a knowledge-based society have allowed the potential for economic growth and employment to be developed. It warned Member States, however, that there is still much to be done if the ambitious targets set for the European economy by the European Council of Lisbon are to be achieved. In this context, Commissioner Pedro Solbes, responsible for economic and monetary affairs, stresses that multilateral surveillance, or peer pressure, encourages best practices and gives incentive to decision-makers not to ease up their efforts. The report is the first stage in the annual exercise of the broad guidelines and is addressed to the European Council of Stockholm which will set the priorities for the year 2001. One Commission official declared that the next BEPGs should be better targeted, depending on the situation of each Member State.

The assessment report sets out the areas where the results were good, average or disappointing.

Good progress was made in: 1) implementation of taxation in favour of growth and employment. For the first time since 1970, tax pressure has fallen in many countries (Belgium, Denmark, Germany, Spain, Greece, France, Italy, Austria, Finland and Sweden); 2) the transposition of the legislation relating to the Internal Market (except in Greece, France and Portugal), to competition policy and to the liberalisation of telecommunications, while there is still much to be done for liberalisation of the energy sector (Belgium, Greece, Germany, France, Austria, Portugal and the Netherlands); 3) application of active and preventive measures for combating youth and long term unemployment (except in Belgium, Greece and Italy), with increased attention to the encouragement of lifelong learning, even though there is much to be done regarding mobility and flexibility. Progress is average in the reform on pensions, where greater effort appears necessary in several countries (Belgium, France, Greece, Spain, Italy and Portugal) and in fields such as public procurement, State aid, administrative reform and the reduction of the administrative burden that weighs on the business world. The transition towards the economy based on knowledge, one of the pillars of the European Council of Lisbon, appears in the category of average progress made. The Commission considers that, even though several countries have introduced measures of encouragement to strengthen both training and research and development (Germany, Greece, Spain, Ireland, Netherlands, Austria, Portugal, and the United Kingdom), the relationship between science and industry remains one of the structural weaknesses of Europe, mainly in the commercialisation of the research effort. The Commission reaffirms that improved skills in information technologies is needed in Europe. Furthermore, progress has been made in the financial integration process, mainly in the development of the venture capital market (Belgium, France, Italy, Sweden), although very little has been done to counter the impact of bankruptcies and insolvency procedures. The European Executive expresses its disappointment in four areas: 1) control of government spending (except in the Netherlands, the United Kingdom, Finland, Sweden and France); 2) the opening of the transport market (mainly in Belgium, Germany, Greece, France, Austria and Sweden) and the liberalisation of the postal sector for nearly all countries; 3) reform of the social allocation system; 4) the adjustment of labour costs to the productivity differentials according to the different regions, which are sometimes significant and give rise to regional disparities in the rates of unemployment (such is the case in Belgium, Greece, Germany, Spain, Italy and Finland).