Commission calls on countries to improve quality and quantity of employment and strengthen conditions for productivity

Brussels, 24/04/2002 (Agence Europe) - On Wednesday, the European Commission adopted its Communication on the Broad Economic Policy Guidelines (BEPGs) of Member States and the Community in 2002. The services of Commissioner Pedro Solbes place special emphasis on the need to maintain salary increases in nominal terms "compatible" not only with the goal of price stability, but also with the level of growth in labour productivity, this in order to preserve, if not improve, the competitiveness of the European economy. The Commission's recommendation has thus been forwarded to the different Council formations. Once examined in June by the Heads of State and Government, the BEPGs 2002 will be definitively adopted by the EcoFin Council.

The Commission recommends to Member States making efforts in four areas:

• Safeguarding macroeconomic stability: in the BEPGs 2002, the Commission again urges countries to "redouble efforts" to attain, in 2004 at the latest, budget positions close to a balance or a surplus. To arrive at a healthy budget position or maintain one, "tax reforms must be financed appropriately and be accompanied, if need be, by a reduction in public spending", the Commission writes, also calling on the social partners not to "stray from the reasonable path on which they are engaged regarding wages".
• Improving the quality and quantity of employment, increasing the level of labour activity and remedying the persistent unemployment: although the vigorous creation of employment we have seen since 1997 reflects the pursuit of wage moderation and the success of ongoing reforms on the labour market, human resources remain largely underused in the EU", says the Commission, calling on countries to lower labour costs and adapt allowance and contribution systems, to ensure that "work pays". Other recommendations call for the abolition of obstacles to geographic and professional mobility, and greater flexibility for real wages and increased effectiveness of active labour market policies. So a to encourage the unemployed to find work, Member States should, according to the Commission: - gradually abolish early-retirement systems; increase the supply of reception centres for children and other dependants; - promote the organisation of flexible work, including by providing for part-time formulae for education and training; - and improve job possibilities.
• Strengthening conditions for high productivity growth: According to the Commission, investment and innovation will benefit from a more competitive environment that is conducive to enterprise, stimulated by structural reforms of the products markets (continuation of the integration of the energy and communications networks throughout Europe), of the capital markets (setting up of action plans for financial services, venture-capital and cross-border financial monitoring), the labour markets (more efficient public tendering and investment in education and training etc.).
• Promoting sustainable development in the interest of current and future generations: Member States will be encouraged to make more use of economic instruments like taxation and insurance/liability schemes, which are a way to implement the polluter-pays principle more consistently. Reform of pension and healthcare is also outlined to place them on a "sound financial footing"; similarly, measures for increasing the effective retirement age (for instance restricting access to early retirement programmes) and promoting greater reliance on funding as well as actuarial fairness.

As in previous years, this document also includes new guidelines for each Member States. Belgium is called on to limit public spending and re-launch the process for greater budgetary health in 2003; continue reforms of taxation and public services, increase labour market mobility and increase the participation of women in the job market, increase competition in the gas and electricity markets; reduce competition distortion created by public companies in the services sector at a local and regional levels. Denmark is called on to: monitor its freeze on taxation, lower taxes at work (for low and average incomes); finish the liberalisation of the electricity and gas markets. As well as well recited comments on the public deficit, Germany is called on to: reform its health care systems, taxation and services reform; improve programmes for activating greater efficiency in the labour market; develop aid for job seekers; improved measures for fighting long-term unemployment, promote institutions and collective negotiation systems that take into account the link between salary drift and conditions in the labour market; make work contracts more flexible and remove obstacles to women's participation in the labour market; lower taxes for using distribution networks on gas and electricity markets; reform of the primary and secondary school teaching systems; increase the level of transposing Community legislation in the internal market. Greece is called on to "urgently" reform pensions and improve education and training. Spain: reduce current public spending; take new measures for reforming how wages are calculated (taking regional differences more into account); reduce obstacles to worker mobility (highlighting accommodation and regional allocation systems); reduce the role of the traditional players in the telecommunications and energy markets. France: to pay attention to its public deficit by limiting rises in the cost of its public administration; complete overhaul of its pensions system; consolidate reforms of taxation and services; monitor closely the 35 hour week and take measures against any damaging effects.