Brussels, 19/10/2005 (Agence Europe) - Economic growth on its own does not increase employment. The right mix of employment and active labour market policies is critical to increase employment rates. This was the message conveyed by Vladimir Spidla, European Commissioner for Employment, Social Affairs and Equal Opportunities, on Wednesday, describing to reporters the Commission's new Employment in Europe report, showing that despite low economic growth the EU's employment rate doubled to 0.6% and its unemployment rate stabilised at around 9% in 2004 on the back of key employment reforms introduced under the European Employment Strategy. Spidla said the figures demonstrated that success depended less on where Member States were coming from than on recent policies implemented by national governments. Admitting that the EU unemployment figures are too high, Spidla said the EU had seen unprecedented structural changes (enlargement to the East and a mushrooming of Baby Boom pensioners) and it was taking time for the impact of reform to be felt, but he said: 'These figures show active labour policy has a direct positive effect on employment on the ground'. The report indicates that Member States which have invested in active labour policies see shorter periods of unemployment, vacancies filled more rapidly, higher and better targeted expenditure on training, and salaries being more responsive to market conditions. They have also seen an increase in more flexible working arrangements, such as part-time or fixed-term employment. Spidla added: 'Member States now must keep up the momentum. Although the EU doubled its employment growth rate to 0.6%, this still lags behind the US' rate of 1.1%.' He said successful active labour market policies including youth placement and vocational training had worked in the Netherlands, Denmark, Ireland, Sweden and Belgium, but progress has not been uniform across the EU - neither within nor between countries (particularly between old and new Member States). For example, Spain has made the most progress in reducing earning disparities, while Poland has seen them widen the most. Regional unemployment rates across the EU ranged from 2.4% to 32.8% in 2004.
Other findings from the report: 1) between 1995 and 2004, the sharpest falls in the structural unemployment rates in EU-15 were in the United Kingdom (3%) and in Greece, Spain, France, Italy and Finland (2%). Between 1997 and 2004 the new Member States recorded an increase in structural unemployment (+5.5%) with the worst performances in Lithuania, Poland and Slovakia (+8.5%); 2) long-term unemployment - the sharpest falls (more than 2 percentage points) between 1997 and 2004 were in Spain, Ireland, Italy, Latvia, Hungary and Finland; 3) reforms have made labour markets more efficient; comparing the mid-1980s and 2004, unemployment periods are becoming shorter, and vacancies are being filled more quickly, especially in Denmark, Spain, Ireland, the Netherlands, Hungary and the United Kingdom; 4) some 92 million people were 'inactive' (often out of the labour market due to education, training, not seeking work, family responsibilities or disabilities). The report found that of the 92 million inactive people, at least 14% (or 13 million people) were willing and able to work; 5) a group of 'big five' countries (France, Germany, Italy, Poland and Spain) are still suffering from structural weaknesses such as limited incentives for people to enter or return to the labour market, or barriers to their re-entry. This is largely due to either delays in reforms kicking in or having only introduced limited reforms; 6) overall there is no sign of an increase in earnings inequality in Europe since the 1970s (unlike in the US), but there is a marked difference between EU Member States. Some countries, such as the UK, Poland and Denmark, showed increasing earnings inequalities in the 1990s, while others such as France display the opposite trend; 7) the number of women and older people in work grew again (up 0.7% and 0.8% respectively in 2004) but these figures still fall short of the 2005 Lisbon Strategy targets. Youth unemployment, at 18.7%, is around double the total unemployment level, but this slowed down in 2004. (Employment in Europe Report 2005, the full text version can be found at http: //europa.eu.int/comm/employment_social/emplweb/news/news_en.cfm?id=81).