Politics in the Age of Global Competitiveness

The European Union and

the Lisbon Agenda

EU: Key dates1951 The European coal and Steel Community is established by the six founding

members

1957 The Treaty of Rome establishes the common market

1973 The Community expands to nine members (including UK) and develops its common policies

1979 First direct elections to the European Parliament

1986 Single European Act

1993 Single market completed, Treaty of Maastricht establishes the European Union

2000 The Lisbon Agenda sets the goal of global competitiveness

2002 The Euro is introduced as a common currency (but not for UK)

2004 Ten more countries join the Union

2007 Bulgarian and Romania bring membership to 27 countries

EU Members

1952 Belgium, France, Germany, Italy, Luxembourg, Netherlands

1973 Denmark, Ireland, United Kingdom

1981 Greece

1986 Portugal, Spain

1995 Austria, Finland, Sweden

2004 Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia

2007 Bulgaria, Romania

The Single European Act 1986 Set the framework for the move to the Single

Market Extended Qualified Majority Voting (QMV) to

measures required for single market except for taxation free movement of persons rights and interests of employed persons

Led to establishment of Single Market in 1993

The European Commission

Executive branch of the EU Its job is to uphold the interests of the EU

as a whole represents EU externally reforms EU internally

Initiates policy and ensures implementation Current focus on competitiveness

The Lisbon Agenda

Launched March 2000 “to make the EU the most dynamic and competitive knowledge-driven economy in the world” by 2010

In crisis, relaunched February 2005 by Barroso Commission

“The European Union cannot boost productivity and employment if Member States do not do their part”

The Evidence 2004 average growth of the Euro area 2.2%; US 4.3%,

Japan 4.4%, India 6.4% and China 9%. Since 1996 EU productivity levels behind the US every

year. Labour productivity growth half US levels. Europe not investing enough: investment up by only

1.7% per year against 5.4% per year in the USA. We are not spending enough on R&D: the EU has only

25% the patents per head found in the USA. In the USA 32% have university or similar degree, in

Europe only 19%. USA invests twice as much per student.

Commission President José Manuel Barroso Elected President 2005 Member of Portugal’s Social

Democratic Party As Prime Minister 2002 he

introduced a far reaching programme of financial and structural reforms in Portugal

(Ex-)Commissioner for External Trade

Peter Mandelson Blair ally in New Labour While Secretary of State produced

New Labour Competitiveness White Paper Building the Knowledge-Driven Economy

Article in International Herald Tribune 22 Nov 2007 on trade and competitiveness (on WebCT)

Global Europe: Competing in the World

EU Trade Strategy launched Oct 2006 “A framework for putting trade policy at the

service of EU competitiveness” A strategy for opening new markets abroad for

EU companies to trade And ensuring that European countries are able to

trade fairly in those markets “Europe cannot argue for openness from others

while sheltering behind barriers of our own”

Commissioner for Education, Training, Culture and youth Report on progress in education and

training published October 2007 “Top-quality education and training is

vital if Europe is to develop as a knowledge society and compete effectively in the globalising world economy. Regrettably, this report shows that the Member States need to redouble their efforts to make the EU's education and training meet the challenges of the 21st century”.

Jan Figel

The Evidence The EU has succeeded in meeting the target for mathematics, science, and

technology graduates: over 1 million students should graduate in mathematics, science and technology in 2010, compared to the present (2005) level of 860,000. Best countries: Ireland, France, and Lithuania.

There are still too many early school leavers: In 2006, about six million young people (18-24 years old) left education prematurely in the EU. This needs to drop by two million. Best countries: the Czech Republic (5.5%), Poland (5.6%) and Slovakia (6.4%).

More graduates from upper secondary school are needed: In order to achieve the EU benchmark (85% secondary school completion) an additional 2 million young people would need to finish. Best countries Czech Republic, Poland and Slovakia.

There is insufficient participation in lifelong learning activities by adults: An additional 8 million adults need to participate. Best countries Sweden, Denmark and the UK.

Improvements are needed in literacy levels of fifteen year-olds: About one in every five 15-year-old pupils in the EU is presently a poor reader. To reach the benchmark would need a further 200 000 pupils to improve their standard of reading. Best countries: Finland (5.7%), Ireland (11%) and the Netherlands (11.5%).

The Relaunch March 2005 Spring European Council “A

New Start for the Lisbon Agenda” October 2005: National Reform

Programmes from Member States March 2006 Spring Council Led to the adoption of three-year national

reform programmes

European Commission, 3 Oct

“The relaunch of the Lisbon Strategy in Spring 2005 put Europe back on track to face up to competition as the touchstone for creating growth and jobs in the modern global economy”

“The European Interest: Succeeding in the Age of Globalisation”

Current policy orientations

Agreed at Spring Council 20061. More R&D and Innovation

2. A more dynamic business environment

3. Greater employability and investment in people

4. Energy and climate change

Topic 1: European Employment Strategy

New guidelines agreed 2005 as part of relaunch of Lisbon Agenda

“The guidelines shall be taken into account in the employment policies of the Member States, which shall be reported upon in the national reform programmes” (Council Decision of 12 July 2005, Article 2).

Objectives of guidelines

“The objectives of full employment, job quality, labour productivity and social cohesion must be reflected in clear priorities: to attract and retain more people in employment, increase labour supply and modernise social protection systems; to improve adaptability of workers and enterprises; and to increase investment in human capital through better education and skills”

Guideline 17 Implement employment policies aiming at achieving full

employment, improving quality and productivity at work, and strengthening social and territorial cohesion.

Policies should contribute to achieving an average employment rate for the European Union (EU) of 70 % overall, of at least 60 % for women and of 50 % for older workers (55 to 64) by 2010, and to reduce unemployment and inactivity.

Guideline 19

Ensure inclusive labour markets, enhance work attractiveness, and make work pay for job-seekers, including disadvantaged people, and the inactive through:

job search assistance, guidance and training continual review of the incentives and disincentives

resulting from the tax and benefit systems, including the management and conditionality of benefits and a significant reduction of high marginal effective tax rates.

Guideline 20 Improve matching of labour market needs

through: removing obstacles to mobility for workers

across Europe better anticipation of skill needs, labour

market shortages and bottlenecks appropriate management of economic

migration

Topic 2: Free movement of persons in EU

Fundamental freedom guaranteed by Community law. EU nationals have the right to move to another EU Member

State to take up employment and to establish themselves with their family members.

EU Member States may not discriminate against migrant workers and their families on the basis of their nationality.

EU migrant workers and their families are entitled to equal treatment not only in employment related matters, but also as regards public housing, tax advantages and social advantages.

Removing barriers to mobility between and within Member States is central to the Renewed Lisbon Agenda.

Transitional period 2004-2011 ‘Old’ 15 EU states may limit access to

labour market for seven-year period to 30 April 2011

Ireland, Sweden and UK chose not to do so

UK introduced a Worker Registration Scheme

2006 Spidla Report reviews results

Spidla Report: conclusion

Whatever decision is taken by Member States at this stage, they need to prepare to open their labour markets in order to fulfil their obligations under the treaties. The aim of the transitional measures is to allow them to prepare themselves to achieve this ultimate and irrevocable goal as soon as possible. In this respect, the Commission welcomes the positive experiences of the Member States that have reaped major benefits from successfully opening their labour markets fully to EU8 nationals already during the first phase of the transitional arrangements (p. 15).

Current policies

Employability and investment in people Skilled and unskilled workers “Flexicurity” “Active inclusion” National programmes

Skilled and unskilled workers“Both globalisation and technological change risk increased inequality, opening up the gap between the skilled and the unskilled. The best solution is to help each individual to adapt, by improving the quality and availability of education and training for all ages. As recent studies have underlined, this is not only a matter of increasing investment: the key to increased performance lies in modernising education and training policies. One in six young people leave school with no qualifications – without targeted support, they could be excluded from the knowledge economy, and vulnerable to the changes sparked by globalisation”European Commission, 3 October 2007

“Flexicurity”

“There is a growing interest in "flexicurity." This can help people to manage employment transitions more successfully in times of accelerating economic change. By upgrading their skills, and protecting people rather than particular jobs, it helps people to move into better paid, more satisfying jobs, or even start their own businesses”

Ibid.

Active inclusion

“More attention will also be given to active inclusion and equal opportunities. Adequate social protection should be promoted and the fight against poverty reinforced”

Ibid.

National Programmes“The Commission has proposed common principles for consideration at the December European Council. These would offer Member States a basis to draw on as they work with the national social partners to adapt flexicurity to national circumstances and mainstream this approach into their National Reform Programmes”

Ibid.

The UK goal (2006 Programme)

The future challenge for the Government is to reach its own aspiration of an 80 per cent employment rate. To achieve this, a further 2.5 million people would need to be helped into work. This might include for example

• an extra 1 million Incapacity Benefit recipients in work,

• a further 300,000 lone parents • and 1 million older people.

This requires a welfare reform agenda focused on improving people’s employability and therefore their lives whatever their circumstances.

UK Response: New Deal

The New Deal programmes, delivering tailored intensive support through Jobcentre Plus, are an integral part of the UK’s active labour market policies. Since its launch in 1998, over £3.6 billion has been invested in New Deal programmes. This has helped nearly 1.4 million people into work, including 560,000 young people and 220,000 unemployed adults.

The New Deal has contributed to a fall in long-term unemployment of over three quarters since 1997, providing strong social, economic and fiscal benefits. The New Deal has been particularly successful in tackling long-term and youth unemployment.

The UK’s weak point

The policy areas in the UK National Reform Programme where challenges remain which need to be tackled with the highest priority are: improving basic and intermediate skills compared with other economies; and taking further measures to tackle disadvantage and exclusion in the labour market. Against this background, it is recommended that the UK increase basic and intermediate skills, which is addressed by the recent Leitch review of skills, in order to raise productivity, and further improve employment prospects for the most disadvantaged.

Lisbon Strategy for Jobs and Growth, UK National Reform Programme: Report on Progress, September 2007, p. 27

Examples of stories for the essay

The following slides provide some brief examples of stories of the kind you might use for the essay. There will be more in the next couple of weeks. You can use a maximum of two of these - you must find at least two of your own.

Backlash over Brown’s plans for jobless grows (Guardian, 1 Dec)

“Gordon Brown is facing a growing backlash against Labour's welfare reforms, which will give private companies a greater role in moving the unemployed back to work, as some of Britain's biggest unions join anti-poverty campaigners in a new national campaign against the plans.”

10% of students fail to master maths (Independent, 19 Nov)

“More than 30,000 children are finishing primary school every year with the mathematical ability of a seven-year-old, a report says today. The 11-year-olds are four years behind in maths skills when they arrive at secondary school, despite £2.3bn a year being spent teaching the subject.”

EU threatens drugmakers with anti-trust action (Guardian, 1 Dec)

“Neelie Kroes, Europe's most senior competition official, has attacked drug firms for using the courts to delay or block the development of cheaper generic versions of their medicines, pushing up bills for taxpayers. The competition commissioner said the preliminary results of a year-long investigation into the industry exposed widespread competitive failures.”

Peter Mandelson: The Global Economy: why integration works http://www.berr.gov.uk/aboutus/ministerialteam/Speeches/page48717.html

Speech delivered in Higher School of Economics, Moscow, 23 October 2008

“People see competition get tougher in the global economy, their jobs and industries reinvented through new technologies and the planet threatened, as consumption soars and our climate rises. These are the challenges of globalisation that involve enormous turmoil in people’s lives, but these are changes that we need to respond to. The answer to these challenges is not to question our interdependence, but to strengthen it, regulate it where necessary, and help our people get the skills and knowledge they need to succeed in this new economic reality.”