Brussels, 24/03/2006 (Agence Europe) - At their meeting on 23 and 24 March ahead of the Spring Summit 2006, expected to be almost exclusively devoted to relaunching the revised Lisbon Strategy (apart from a statement on Belarus and a brief discussion of ETA's ceasefire in Spain), EU heads of state agreed, as expected, on priorities to be implemented by the Member States in their National Reform Programmes by the end of 2007 in order to support economic growth and job creation. With active support from the European Commission, the Austrian Presidency managed to get specific targets included in the final conclusions for energy policy, job creation, cutting red tape for small and medium-sized enterprises, research, cutting unemployment and educating and training young people. In conclusions on an 'Energy Policy for Europe', the Member States have taken on board most of the European Commission's recommendations from the Green Paper on Energy (see separate article).
At a press conference, the President of the European Council, Wolfgang Schussel, said it was a highly successful Spring Summit which had resulted in concrete solutions and ambitious commitments by the Member States for economic growth and employment. He said the economic climate was positive and with the extra measures by Member States and the European Commission, it would be possible to create two million jobs a year by the year 2010. Similar satisfaction was also expressed by the Commission, with Jose Manuel Barroso commenting that everyone had clearly confirmed their pledges in favour of the Lisbon Strategy, which was now up and running again. The twenty-five National Reform Programmes have been set up and the President of the European Commission, Jose Manuel Barroso, said attention would now be focussed on implementing them, with the Commission also playing its part. He said that the European Commission would be meeting with the national coordinators for the Lisbon Strategy next Tuesday. The Commission submitted a series of big initiatives to the European Council on energy policy, knowledge, innovation and research, SMEs and labour markets, most of which had been approved by the ministers, explained Barroso (who celebrated his fiftieth birthday on Thursday). He said the Austrian Presidency had given him a big birthday cake, but the best birthday present was the ambitious Summit conclusions.
In the conclusions document, the European Council expresses delight that all Member States 'have rapidly drawn up their National Reform Programmes (NRPs)… Now that the NRPs are in place, it is essential to maintain momentum by ensuring their effective, timely and comprehensive implementation and if necessary, strengthening of measures agreed in the NRPs.' Accordingly, the European Council 'calls on the Member States to report in Autumn 2006 on the measures taken to implement their NRPs… and for the Commission to pay particular attention, in its report in view of the 2007 Spring European Council on progress towards implementing the NRPs, to the priority actions and to propose any additional measures that might be required.' The following priority areas were agreed upon at the Summit:
A: Investing more in knowledge and innovation. Given the well-known gap between the United States and the EU where the private sector is lagging behind, it is recommended that Member States promote policies and actions aiming 'at the established overall 3% objective by 2010… To provide more and better resources for research and innovation, Member States should refocus their public expenditure on research and innovation as well as promote sector R&D, in particular by improving their mix of support instruments. The European Council calls for the speedy adoption of the 7th Framework Programme for Research and Development' (which still requires agreement on the Financial Perspectives and therefore cannot be adopted before the autumn, Ed.) and the speedy establishment of a new European Research Council. 'Action undertaken under the Research Framework Programme should be better coordinated with other European and national actions to promote public-private partnerships, including intergovernmental initiatives such as Eureka,' explains the conclusions document.
The heads of state called on the European Investment Bank (EIB) to 'support innovation and to reinforce its action in R&D, through a risk-sharing finance facility to be finalised as soon as possible. The European Council expects up to EUR 30 bn in venture capital and guaranteed bank loans to be leveraged by the new financial instruments based on EIB and EU budget cofinancing for the period up to 2013 and private sector involvement.'
As far as facilities for loans of up to ten billion euro are concerned, the amount deducted from the 7th FPRD budget will complicate already difficult budget arbitration. This is money earmarked for joint-financing of pre-industrial research projects which will be held in reserve to guarantee loans granted to companies for development. Member States are once again called on to implement a single European labour market which is open and competitive for researchers, including by overcoming obstacles to their mobility.
The European Council reaffirmed the importance of education and training for the long-term development of the EU's potential from competitiveness, and also for social cohesion. National lifelong leaning strategies should provide all citizens with the compentences and qualifications they need, assisted at Community level by programmes such as Erasmus and Leonardo. To support greater mobility, progress on a European Qualifications Framework (EQF) should also be achieved. Member States are called on to make access to university easier and to remove obstacles to the creation of public-private partnerships with companies.
Heads of state and government consider that the European Institute of Technology (EIT),proposed by the Commission, will be “an important step towards filling the existing gap” along with other actions networking and synergies between excellent research and innovation communities in Europe. The European Research Council should have a guiding role in this context. The Commission is called on to present a proposal by mid-June. Germany stressed that it would not oppose the Institute if it was not a complex, static and rigid entity. The United Kingdom also supports the idea but, before the Commission continues the work, would like to see greater consensus among interested parties. France too backs the project, but Jacques Chirac insisted that there must be concrete proposals on how it would work.
B) Unlocking business potential, especially of SMEs The European Council stresses the importance of creating a more favourable business environment, especially for SMEs, “which are the backbone of the European economy” and which play a determining role in increasing growth and creating higher quality jobs in Europe. The Commission is called on to propose precise arrangements to encourage the growth and development of SMEs and to launch an exercise to measure administrative costs associated with EU rules in specific areas, giving particular attention to SMEs. This exercise should be coordinated with ongoing national initiatives and on the basis of this study, the Commission is invited to put forward options for establishing measurable targets to reduce administrative burdens. The Austrian Presidency included in the conclusions other objectives, with figures, on the environment surrounding SMEs. Member States will have to implement a one-stop shop by 2007 allowing a company to be formed rapidly and simply, the aim being to be able to do so in a week throughout the EU by the end of 2007. Start-up costs should be as low as possible and the recruitment of the first paid employee should not require more than one contact with public administration.
The European Council also welcomes the Commission's intention to consider amending existing State aid rules and simplifying administrative procedures, inter alia by providing for wider block exemptions. European leaders also note the possibility of granting SMEs investment aid and aid for employment up to 15 million euro without the need for notification. They also welcome the Commission's intention to examine the possibility of doubling the amount for the de minimis ceiling.
C) Increasing employment opportunities for priority categories Labour market reforms must seek to increase the participation especially of young people, women, older workers, persons with disabilities and legal migrants and minorities. Here too, the Austrian Presidency managed to include objectives, with figures, in the conclusions, including: - creating at least two million jobs in Europe by 2010; - increasing efforts to limit early school leaving to 10%, so that at least 85% of young people aged 22 have completed their full secondary schooling; - by the end of 2007, every young person leaving school and unemployed, should be offered a job, an apprenticeship, further training or some other measure within six months to encourage his integration into the world of work. The time should be reduced to four months by 2010.
The summit also stresses strategies for “active ageing”, creating incentives for prolonging working lives, gradual retirement, part-time work, improving quality at work. It stresses too that it is time to commit ourselves fully at European level to implementing policies to encourage the employment of women and guarantee a better work-life balance. There should also be an improvement in workers' and companies' ability to adapt. The European Council calls on Member States to pay particular attention to the major challenge of “flexicurity” (balancing flexibility and security) and to pursue, in accordance with their individual labour market situations, reforms in labour market and social policies under an integrated flexicurity approach. The Commission will explore, with Member States and social partners, the development of a set of common principles on flexicurity.
The Summit also noted the Commission's proposal on a European Globalisation Adjustment Fund: Council, Parliament and Commission are invited to take appropriate measures so that the fund becomes operational as soon as possible, preferably before 1 January 2007.
D) Maintaining momentum across the board. Ensuring sound and sustainable public finances. Member States must undertake to pursue public finance consolidation and several of them should launch new ambitious reform programmes for their social security systems. The Commission is invited to overall assessment of the viability of Member State public finance by end 2006. The Summit considers that the fact of belonging to the euro zone calls for policy coordination to ensure “fiscal discipline (…) to cope with asymmetric shocks”. “As president of the Eurogroup, I have called on the European Council to devote this whole paragraph to the eurozone in the context of reform policy implementation”, Luxembourg Prime Minister Jean-Claude Juncker told the press. This “first ever” in the conclusions at the level of Heads of State and Government “enhances the contour of the monetary zone by differentiating it from other Member States”, he said. Also welcoming this initiative, Belgium's prime minister, Guy Verhofstadt, considered it a “good beginning for moving toward the common preparation of a future summit of euro-zone countries, devoted essentially to economic reform”.
The EU Heads of State and Government also call for a final agreement on the REACH package by end 2006 and for the completion of an effective legal framework for protecting intellectual property rights, as well as further progress on simplification and modernisation of the VAT and customs systems, and the promotion of a fully integrated and well-functioning financial market.
On the subject of the “services” directive, the Summit is pleased to note the vote at the EP and awaits with interest the Commission's amended proposal, on 4 April (see related article).