Midterm Review of the Lisbon Strategy The midterm review must ensure that:
  • Everybody focuses on the need for a larger and better-qualified labour force as the key Lisbon objective
  • The strategic goals set in Lisbon are maintained, and priority is given to labour market reforms
  • The European Council confirms its overall responsibility for the Lisbon strategy and demonstrates active ownership of the process
  • The many processes developed since 2000 are simplified and consolidated. Between meetings of the European Council, coordination is the job of a Council of Ministers with a horizontal responsibility.
  • A decision is taken by the European Council to establish an Action Plan for the next five years.
The Lisbon Strategy is an important contribution to sustaining the European welfare state by means of economic, social, regulatory and labour market reforms.

However, the multitude of reports on the implementation of the Lisbon Strategy show that, five years into the process, EU member states are lagging far behind schedule, despite a growing number of processes, objectives and goals all aimed at increasing competitiveness and employment.

Failure to reform and low growth make a vicious circle: a stagnant economy hampers the reform process, and this in turn leads to continued stagnation or insufficient growth. Reforms are needed in each and every member state, reforms which will then benefit all member states because of the economic interdependence of the whole EU area.

The overwhelming and growing number of reports and the fragmentation of the political processes among many sectors, obscure the transparency of that process, leading to a lack of political commitment and a serious implementation gap. The midterm review provides a unique opportunity to create a better and more transparent system of governance.

The European Council and the 25 heads of state and of government play a crucial role in the Lisbon Strategy, as the original initiator both of the process and of the aspects that have been added to the Lisbon Strategy subsequently.

Implementation is divided among many players at European, national and regional level. It is also characterized by a lack of participation and involvement by political and democratic institutions, while coordination among the many different processes is sporadic and lacks both transparency and efficiency.
The Confederation of Danish Employers (DA) finds:

Europe has significant problems delivering on the Lisbon strategy. The reason is not to be found in the goals and objectives; it has to do with inadequacies in national implementation. The objectives must be kept - as the driving force behind cooperation in the European Union - not discarded or diluted.

The labour market is the key element of the Lisbon Strategy. If the EU is to match the US and Asia, reform of the labour market to ensure a bigger and more highly-skilled European labour force.

It is DA's view that only labour market reforms will produce the higher growth which is the final goal of all the initiatives in the Lisbon strategy - and will eventually ensure sustainable economic development in the European economies. The reforms must focus on greater flexibility and mobility and new skills.

High EU-wide growth in employment and productivity requires:

1) A focus on increasing the size of the labour force, as a prerequisite for growth in employment. To achieve this, we have to increase migration from outside countries by workers with the skills that are needed, to introduce incentives discouraging early retirement, and to make work pay.

2) More flexible labour markets, by reforming rigid rules and regulations, for instance on recruitment and lay-offs.

3) An intensified effort to raise the general quality of education - and training in particular - in the EU15, which does badly in international comparisons.

Each specific goal and policy area has to be assessed, and its contribution to the overall Lisbon goal identified, as well as its consequences for other parts of the process.

DA believes the Lisbon Strategy must be mainstreamed in all EU legislation, for there is a tendency for specific EU labour market legislation to weaken or even cancel the positive effects of employment initiatives. The proposed Directive on Agency Work and the Working Time Directive are examples.
Jørgen Bang-Petersen
33 38 94 14
15. december 2004
Report from the High Level Group chaired by Wim Kok