Brussels, 09/03/2004 (Agence Europe) - On Tuesday in Brussels, the Economy and Finance Ministers of the EU adopted the document of the main guidelines for economic policy for 2004, which the European Council of 25 and 26 March will take as its inspiration for its conclusions on the relaunch of the Lisbon strategy (see EUROPE of 6 March 2004, p.8). The only modification to be made to the draft text as drawn up by the Economic Policy Committee (EPC) and of the Economic and Financial Committee (EFC) concerns increasing retirement age, by request of France.
The Ecofin Council defines the objectives according to three well-known themes of the broad economic policy guidelines:
Promoting growth: The Ecofin Council pointed out that the economic upturn, which started in the second half of 2003, should intensify this year. It feels that growth of GDP could reach 2% in 2004 and nearly 2.5% in 2005. For investment and innovation, the Ministers called upon the Member States to improve conditions and incentive measures to boost competition and guarantee the existence of efficient teaching and training mechanisms. This would help to encourage businesses to invest effectively in research and development. The Council underlines the fact that efforts must be redoubled to strengthen links between public research bodies and industry, improve intellectual property regimes and increase capital invested.
In terms of competitiveness, the Council welcomed the initiative launched recently by Ireland, the Netherlands, Luxembourg and the United Kingdom to encourage improved regulations during their four successive Presidencies, and approved the idea of deciding on an action plan to move this exercise forward in the year to come. The Council welcomed the proposed directive on services, and believes there must be agreement on this text within the planned timescale. In order to boost enterprise policies and get the most out of entrepreneurs enjoying success in the EU, the Commission is called upon to present proposals on the creation of a system to select "European enterprise centres".
Increasing the flexibility of employment markets: Along the lines of the proposals of the "Employment Task Force", the Ecofin Council believes that each Member State should undertake to implement measures to: -reinforce the flexibility of employment markets (to give a free rein to job creation, by changing salary negotiation mechanisms); -modernise the idea of job security; -reform services and tax regimes.
Ensuring the viability of public finances: The Council pointed out that "few Member States have kept their budgetary situation close to the balance or in surplus in 2003" and that "the long-term viability of public finances is only certain in about half" of the Fifteen. In this context, the Council recommends that the Member States respect their commitments in the coming years in terms of budgetary cleansing to achieve, in the medium term, the situation close to the equilibrium or in surplus, and "put the ratio of indebtedness back on a downwards slope". Furthermore, Member States are called upon to "anticipate the financial consequences of the ageing population by reducing public debt and reinforcing reforms in the fields of employment, health and pensions. According to the document, the Member States should plan to reinforce measures to encourage workers to remain in employment, and employers to recruit and keep hold of older workers. The Member States are also called upon to continue gradually to increase the effective age of retirement in the EU, in line with the conclusions of the Barcelona European Council. France has thus made sure that what was already in the Barcelona conclusions is not repeated, i.e. the objective of gradually increasing retirement age by around five years by 2010.
Ahead of the European Council, Ministers also adopted conclusions on national contributions to the European growth initiative. The Ecofin Council invited Member States to co-ordinate initiatives implemented at national and European level with the European growth initiative, in order to guarantee their complementary nature and the best use of resources, and to take account of the priorities of this initiative when they draw up their national budgets for 2005. The Commission is called upon to continue to follow the implementation of national measures, and to report back on progress made at the European Council of December 2004.