Commission assesses progress of employment strategy

In September 1999, the European Commission published a package of key documents which complete a full cycle of the European employment strategy process. The draft Joint Employment Report 1999 reviews the progress made in the implementation of the 1999 Employment Guidelines and the impact on the Union's employment performance. The Commission also proposed that the Council of Ministers make a series of recommendations to individual Member States on the implementation of their employment policies, highlighting the areas where the Commission feels that certain - or all - Member States have not yet made sufficient progress in the implementation of the Guidelines. Finally, the Commission issued its draft Guidelines for 2000. As for 1999, these Guidelines emphasise continuity, while stressing that further emphasis should be placed on certain aspects such as adaptability and gender mainstreaming.

In 9 September 1999, the European Commission issued the draft 1999 Joint Employment Report and the draft Employment Guidelinesfor 2000. The former charts the progress made by different Member States in the implementation of the 1999 Employment Guidelines (EU9810130F) and the impact of these measures on the Community's overall employment performance, and when finalised will be submitted by the Commission and the Council of Ministers to the European Council meeting in Helsinki in December 1999. The latter draw on these findings to make recommendations on priorities for EU and Member State employment policies in the coming year. In addition, the Commission proposed that the Council of Ministers make a series of recommendations to individual Member States on the implementation of their employment policies. The aim is both to emphasise the policy areas where Member States need to take further action, and to suggest indicators for the monitoring of any resulting improvements in the labour market situation.

Once the new package of proposals is adopted by the Council, the employment policy coordination process required by Article 128 of the EC Treaty, as amended by the Amsterdam Treaty, will for the first time have completed a full cycle.

Findings of the 1999 Joint Employment Report

Building upon the 1998 findings, the focus of the 1999 Employment Guidelines was on improvements in the area of policies to improve lifelong learning and gender equality. The implementation of the recommendations made in the Guidelines varies from Member State to Member State, but the Commission believes that some significant progress has been made towards improving policy measures under all four "pillars" (employability, entrepreneurship, adaptability and equal opportunities). In general, the Commission, in the 1999 Joint Employment Report, commends the Member States for the efforts taken in implementing the 1999 Guidelines. One of the key messages of the report is that the employment performance of the EU as a whole is improving, with 1.8 million additional jobs having been created. However, there are still some considerable variations between Member States. In addition, long-term unemployment remains persistent and the "gender gap" in unemployment persists. The Commission concludes that progress remains slow in a number of the areas covered by the Guidelines.

Employability

Whilst the majority of countries have taken steps to reduce the number of unemployed young people (aged 15-24), the Commission finds that Greece and Italy have yet to implement fully the 1998 recommendations in this area. Both Belgium and Luxembourg are found still to fall short of the commitments made in their 1998 National Action Plans (NAP) for employment.

The level of emphasis on policies to help reintegrate adult long-term unemployed people is found to vary across the Member States. The Commission states that only the UK and Sweden have adopted a strong policy framework in this area, while in many other countries such policies are still awaiting implementation. Some countries - notably Germany, Belgium, Italy and Greece - are argued still not to have suitable policies in this area. The Commission states that the length of time taken for policy formulation in this area only exacerbates long-term unemployment rates which are already higher than the EU average in some of these countries.

Measures implemented to encourage the participation of older workers in the labour market are found to be largely aimed at retention in the labour market or reintegration. In some countries, the tendency towards early retirement is still very strong because of the attractive nature of early retirement packages. There is a concern that this will serve further to increase public sector expenditure on social support, calling into question the sustainability of the welfare systems of these countries (a problem highlighted in Germany and Luxembourg in particular). Whilst some countries have initiated clear strategies addressing both the demand and the supply side of the labour market (eg Finland's national programme on older workers - FI9708125F), others (Ireland, Italy and Greece) are found to have no clear policies in place to encourage the participation of older workers in the labour market.

Only few countries are found to have used incentives through the tax and benefit system to encourage the greater participation of older workers and of women in the labour market, and the Commission argues that further efforts are required in this area.

In relation to "lifelong learning", which was one of the areas on which the Commission placed emphasis in the 1999 Employment Guidelines, policies are still considered often to be too general to show any clear impact. Similarly there is seen to be a lack of clear Europe-wide actions towards developing the strength and flexibility of EU organisations and the workforce.

Longitudinal data to analyse the time taken for school leavers to find employment cannot satisfactorily be measured until 2000, when a suitable method will be employed. However, in nearly all Member States there is an emphasis on information technology and communication skills and strategies to develop technical and vocational training systems.

The final guideline within the employment "pillar" is aimed at creating a labour market which is open to all. This is targeted at people from ethnic minorities and other disadvantaged groups and individuals. Member States were called upon to ensure that such groups, whilst having specific programmes, also fit into the mainstream preventive and active strategies. It is found, however, that there is a lack of data on these groups in most countries which makes evaluation difficult. With regard to ethnic minority policies, a complication has been each country's interpretation and definition of the term "ethnic minority" - ie visible minorities or non-nationals/non-EU nationals. Overall policy initiatives in this area have been limited.

Entrepreneurship

The Commission finds that in all countries apart from the UK, Denmark and Luxembourg, delays of five weeks or more in order to complete formalities before a business can commence operations are still an obstacle to the start-up of new businesses.

Whilst some progress has been made in relieving the administrative burden facing small and medium-sized enterprises, more work is still seen to be required to enhance local development and job creation. The employment potential of the service sector was given high priority in the Employment Guidelines. However, this is said not to have been fully exploited in Member State actions.

It is argued that taxation systems still need to be rendered more "employment-friendly", despite a large number of Member States having initiated tax reforms to address some of the pressures faced by certain groups in the labour market, notably women and parents. National targets for the reduction of fiscal pressure have been set by only five countries (Belgium, Denmark, Germany, the Netherlands and Finland).

Adaptability

The scope of the guidelines under the adaptability pillar is seen to have been largely under-utilised. In particular, the Commission highlights that there has been little significant work undertaken with social partners within each country in this area. Few countries have addressed the need for more adaptable types of employment contract, with Italy, Spain and the UK being the exceptions. Several Member States have made moves to address financial measures, tax or non-tax, with regard to in-company training.

Equal opportunities

Significant efforts are still seen to be required to improve equal opportunities between men and women. Significant gender differentials continue to persist in employment and unemployment, sectoral and occupation distribution of employment, pay and "parenting".

Gender "mainstreaming" has begun in most countries to varying degrees and equality measures can be seen throughout the pillars, though the degree of success of these policies remains to be seen.

Employment Guidelines for 2000

There is little change in the draft Employment Guidelines for 2000, with the Commission emphasising continuity. Instead, the draft Guidelines foresee a tightening up and clarification of the meaning of some of 1999's Guidelines. It is argued that measures introduced under many of the existing Guidelines need time to take effect and so there have been only slight adjustments to the 1999 Guidelines. The adjustments include:

  • clarification of Guidelines 1 & 2 of the employment pillar, to emphasise that a preventative approach is required towards long-term unemployment. It was felt that the 1999 Guidelines did not stress this point enough;
  • greater emphasis on improving computer literacy to facilitate the transition from school to work. This will include financial support for schools to enable them to purchase computer equipment;
  • to complement the commonly agreed employment indicators, all Member States need to agree on plans in 2000 to ensure that a comparable monitoring system is established throughout the EU. This will enable data to be effectively analysed across the EU;
  • under the entrepreneurship pillar, the Guidelines aim to demonstrate the need for all Member States to exploit fully the role of the public services in identifying opportunities within the local labour market; and
  • the equal opportunities Guidelines have begun to take effect in several countries and it is felt that, whilst there is still considerable work to be done in this areas, countries are beginning to make headway. For 2000 therefore, existing measures will remain and the wording of the Guidelines will be tightened to state clearly why labour market returners face disadvantages, highlighting the need for reintegration into the workplace.

Recommendations

For the first time, the Commission has proposed to the Council of Ministers that it make recommendations to individual Member States on employment policies. The recommendations have been drawn up on the basis of a comparative analysis of Member States' employment performance, and of the major shortcomings in implementing the Employment Guidelines so far, in the light of the conclusions of the Joint Employment Report 1999. The Commission has identified nine priority areas where particular efforts are considered necessary: tackling youth unemployment; preventing long-term unemployment; reforming the tax and benefit systems, with a particular focus on older workers and women; promoting lifelong learning; creating job opportunities in services; reducing the fiscal pressure on labour; modernising work organisation; tackling gender issues in the labour market; and improving indicators and statistics. The outgoing commissioner responsible for employment and social affairs, Pádraig Flynn, said that the: "the issuing of recommendations to individual Member States lends real weight and added value to the European employment strategy. By pinpointing the key problems which need to be addressed per Member State, national efforts can be better targeted on specific priorities."

Commentary

Overall, all EU Member States have made good headway with the 1999 Guidelines, many of which will take time before the results are seen. Comparable analysis tools and indicators will be developed in 2000 and this will help to assess the situation within and across Member States. (Fiona Dearling, ECOTEC Research and Consulting)

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