The European Employment Strategyand the Europan Semester

Federico LucidiDG Employment, Social Affairs and Inclusion

Outline of the presentation

1. The EES and EU2020 Strategy

2. The European Semester

3. An overview of 2015 CSRs

The European Employment Strategy

• The EES was introduced in 1997 by the Amsterdam Treaty

• Its aim is the creation of more and better jobs throughout Europe

• It now constitutes part of the Europe 2020 Strategy, and is implemented through the European Semester

Treaty-based Objectives

MS and the Union shall […] develop a coordinated strategy for employment:

• To promote a skilled, trained and adaptable workforce…

• …and labour markets responsive to economic change

• To achieve full employment, social progress, a high level of protection

(art. 145, TUE)

Competences – who does what?

• Full respect of national competences on employment policy;

• Member States define and implement their national policies…

• …and coordinate with each other within the Council at European level

• The Commission encourages cooperation of MS, supports their common action, and intervenes to complement their action if necessary

Europe 2020 strategy

• Launched in 2010

• Smart, sustainable and inclusive growth

• 5 headline targets + 7 flagship initiatives

• European Semester, enhanced by the Six-Pack (2011) and the Two-Pack (2013)

• Mid-term review of EU2020 in March 2014

The EU2020 targets

• Employment rate should be at 75% (2014: 69,2%)

• Share of early school leavers should be under 10% (2014: 11.1%)

• Goal of 40% of younger generation having tertiary degree or diploma (2014: 37.9%)

• 20 million fewer people at risk of poverty or social exclusion (since 2010, the number of AROPE has risen by 6 million. 24.8% of the EU-28 population)

European Semester - milestones

• Integrated guidelines including Employment guidelines, proposed by the Commission and adopted by the Council

• Annual Growth Survey (AGS) and Alert Mechanism Report (AMR), presented by the Commission (November)

• Joint Employment Report (JER) including a Scoreboard of key employment and social indicators (November)

• Country Reports, published by the Commission (February)

• National Reform Programmes (NRPs), submitted by Member States (April)

• Country-Specific Recommendations, proposed by the Commission (May) and adopted by the Council (June-July)

2015 AGS - A coordinated approach

• Investment deficit and protracted employment and social challenges

• Impact of an improved employment and social situation on potential GDP growth.

Employment in the AGS 2015

Emphasis on: • Entrepreneurship • Investment in skills• Job creation• Mobility

… presenting a shift towards harnessing the conditions for business to create new employment

2015 new approach – Streamlining and focus on structural reforms

• "We should not waste the opportunity of this economic recovery. I call on Member States to profit from the momentum and deliver on structural reforms that help those left behind get back into the labour market"

M. Thyssen, EMPL Commissioner

• The European Semester 2015 focuses on the structural reforms that are most essential for those left behind during the crisis to get back in the labour market

2015 Making it happen: the European Semester

Chapeau Communication:• First signs economic recovery, but unequal over Member States• Reform is taking place, but impact takes time• Challenge to keep reform drive on track

• Economic tailwinds are breathing extra vitality into an otherwise mild cyclical upswing

• EU GDP growth expected at 1.8% this year, 2.1% next

• Labour markets are slowly improving• EU unemployment down to 9.2% next year

• HICP inflation to recover later this year • Set to increase from 0.1% this year to 1.5% in 2016

• The fiscal outlook continues to improve• Deficit at 2.5% this year and debt on decreasing path

• But policy has to address the underlying weaknesses• Overcome the pre-crisis imbalances and the legacy of the crisis• Boost investment• Re-build the medium-term growth potential

Employment relevant 2015 CSRs

1. Skills, education and training

2. Youth

3. Protection of the vulnerable

4. Extending working life

5. Female LM participation

6. Health care systems

7. Labour taxation and shadow economy

8. ALMPs

9. LM segmentation and EPL

10. Wages and competitiveness

1.The role of education and training Unemployment rate by educational attainment

Early school leaving: MT, RO

Access to education/E&T for vulnerable groups: AT, BG, CZ, HU, RO, SK

Educational outcomes: HU, LT,MT, SK, UK

Higher education reform: CZ, LV

Teachers' training / attractivenessof profession: CZ, HU, IT, MT, SK

LM relevance of education/ skill mismatch: BE, EE, FI, IT, LT, UK

VET, apprenticeships, work-basedlearning: EE, LV, IT, UK

Cooperation of educationwith private sector: UK Source: Eurostat

2. Youth

2015 CSRs target mainly:

Youth employment: IT, BG, ES, FI, PT, RO

Reach out to NEETs: BG, PT, RO

YG: Member States made considerable progress but steps are needed towards its full implementation

3. Protection of the vulnerable

Poverty and exclusion on the rise in two third of the MS

Effectiveness of social transfers:ES, HR

Adequacy/ coverage of unemployment benefits/ social assistance, link to activation: FR, HU, IE, HR, LT, LV, RO Childhood poverty: IEDisabled: EE

At-risk-of poverty and social exclusion

4. Extending working livesDuration of working life (years, 2012) and employment rate of older workers (%, 2013)

Source: Eurostat

2015 CSRs target mainly on:

1. Restricting access to early retirementFI, HR, LU

2. Adjust statutory retirement age to life expectancy:AT, BE, LU, MT

3. Actively enhance older workers' employabilityAT, BG, FI, SI

4. Harmonisation of retirement age men and women:AT, RO

5. Sustainability/adequacy pension system:AT, PT, SI, LT, FR, HR

5. Female labour market participation

Gaps between male and female full-time equivalent employment rates in 2014

Source: Eurostat

Need for family support services:AT, CZ, EE, IE, RO, SK, UK

6. Healthcare and long-term care

2015 CSRs focus mainly on:

1. Healthcare: BG, CZ, ES, FI, HR, IE, LV, RO, SI, SK

2. Long-term care: AT, SI

Source: Eurostat, OECD, WHO

Public healthcare expenditure as % of GDP, 2012

7. Tax wedge remains high for low income earners

Tax wedge and tax disincentives for low income earners: AT, BE, (EE), CZ, DE, FR, HU, LT, LV

Source: Eurostat

8. ALMPs and employment services

Long-term unemployment (%, left scale, 2012) and activation support (LMP participants per 100 persons wanting to work, right scale, 2011)

Source: Eurostat, LMP database

2015 CSRs target mainly:

1. Enhance quality, coverage, targeting and effectiveness of ALMP: BE, HU, IT, PT, RO, SK

2. PES performance: ES, IT, PT, RO

3. Improve employability: EE, FI, LT, LV, SI

9. Employment protection and labour market segmentation

Source: European Commission

Share of temporary contracts (2013) and transition from temporary to permanent (2012)

2015 CSRs target mainly:

1. Labour market segmentation: DE, FR, IT, PL

2. Employment protection legislation: FR, IT

RO EE BG SK MT DK AT IE ITEU28 FI SI CY PT PL

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% share temp workers (2012) transitions temp to perm job (2012)

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10. Wages and competitiveness

2015 CSRs target mainly:

1. Wage setting, development, indexation and flexibility: BE, ES, FI, FR, HR, IT, LU, PT

2. Minimum wages, incl. not detrimental to job creation: BG, FR, PT, RO, SI

Unit labour costs in deficit and surplus countries, euro-area groups weighted averages, y-o-y % change

*Surplus countries are: BE, DE, LU, NL, AT, FI Source: Eurostat