Europe 2020 Strategy

A NEW EUROPEAN STRATEGY FOR JOBS AND GROWTH

European Commission

Where Europe stands now ?

The crisis has reversed much of the progress achieved since 2000 and exposed Europe’s structural weaknesses : – Sluggish structural growth – Productivity gap – High unemployment – Levels of debt and limited fiscal room The economic situation is gradually improving, but: – Recovery is still fragile – Global challenges intensify: competition from developed and emerging economies, global finance, climate change and pressure on resources European Commission

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Economic Pressure (1/2)

European Commission

Economic Pressure (2/2)

European Commission

Some lessons from the crisis

•

Never waste a good crisis!

•

Lesson No 1 = interdependence

 EU steer needs to be ex ante  Need for early warning and early action  Monitoring and reporting •

Lesson No 2 = economic union

 Goes with currency union  Divergences not sustainable long term European Commission

Why a European strategy?

● The crisis showed that our economies are closely inter-linked • If we want to counter the crisis and weigh globally, we must act in a more coordinated way • In addition, the crisis in Greece has more than ever underlined the

interdependences in the eurozone area

• Only the EU gives us the critical mass to have

impact:

- Activate all policy areas and levers in an integrated way - Exchange of best practices European Commission

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Europe 2020: EU after the crisis

• Europe needs to be back on track : our short term priority is a successful exit from the crisis • Whilst taking a long-term vision: where Europe should be in 2020 – no time to waste to face challenges • Therefore, a new strategy “Europe 2020” to return to

growth, but a new type of growth

- smart, sustainable and inclusive growth - translating into high employment and social & territorial cohesion European Commission

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Europe 2020: a holistic approach

• Fiscal consolidation • Structural reforms: transformation of our economies to create new growth and jobs • Robust and safe financial sector European Commission

Europe 2020: delivering reforms

• 3 thematic priorities • 5 EU headline targets – translated into national ones • 7 flagship initiatives – EU & national action • Mobilising existing EU instruments: • Single market • External dimension • Stability and Growth Pact (SGP) • EU and national Budgets & new financing instruments European Commission

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Europe 2020: 3 interlinked priorities

1.) Smart growth

: developing an economy based on knowledge and innovation

2.) Sustainable growth

: promoting a more efficient, greener and more competitive economy

3.) Inclusive growth

: fostering a high-employment economy delivering social and territorial cohesion European Commission

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Europe 2020: 5 EU headline targets ( to be translated into national targets)

By 2020: • 75 % employment rate (% of population aged 20-64 years) • 3% investment in R&D (% of EU’s GDP) • “20/20/20” climate/energy targets met (incl. 30% emissions reduction if conditions are right) • Less than 10% school drop-out rates and at least 40% of the population aged 30 34 having completed tertiary or equivalent education; • Lifting at least 20 million people out of the risk of poverty or exclusion European Commission

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Example of R&D draft targets

European Commission *Note: no targets for IE, NL and UK Source: European Commission

EU tools in support of Europe 2020

EU monitoring and guidance

Macro, thematic and fiscal surveillance Annual Growth Survey Annual policy guidance

EU flagship initiatives

New Industrial Policy

( Oct. 2010)

Digital Agenda

(May 2010)

New Skills and Jobs

(Nov. 2010)

Youth on the Move

(Sept. 2010)

Platform against Poverty

(Dec. 2010)

Innovation Union

(Oct. 2010)

Resource Efficiency

(Jan. 2011)

EU levers for growth and jobs

Single market European Commission Trade and external policies EU financial support

Europe 2020: A stronger governance architecture

• The European Council at the center of the strategy • A « European Semester » for economic policy coordination: simultanous submission by Member States of NRP/SCP • A robust monitoring process by the Commission/Council: annual growth survey, country specific recommandations and policy warnings European Commission

A new architecture for policy coordination

European Commission

Annual policy cycle (as of 2011) June July January February March April May

European Commission

Annual Growth Survey

Council of Ministers European Parliament European Council

Debate & orientations Debate & orientations Annual economic & social summit

Member States

Adoption of National Reform Programmes (NRPs) & Stability and Convergence Programmes (SCPs) Policy guidance including possible recommendations Finalisation & adoption of guidance Autumn: Peer review at EU level Endorsement of guidance Autumn: Decisions at national level European Commission

Europe 2020: towards a successful implementation

• Commission issued 7 flagships in 2010 • Commission issued Annual Growth Survey January • Member States submitted National Reform Programmes by April • Commission issued Country Specific Recommendations on 7 June • European Council endorsed Country Specific Recommendations on 24 June European Commission

Annual Growth Survey 2011 (1/3)

Macro-economic stability

1. Implementing a rigorous fiscal consolidation 2. Correcting macro-economic imbalances 3. Ensuring stability of the financial sector European Commission

Annual Growth Survey 2011 (2/3)

Structural reforms for higher employment

4. Making work more attractive 5. Reforming pensions systems 6. Getting the unemployed back to work 7. Balancing security and flexibility in labour European Commission

Annual Growth Survey 2011 (3/3)

Frontloading growth

8. Tapping the potential of the Single Market 9. Attracting private capital to finance growth 10. Creating cost-effective access to energy European Commission

Country Recommandations

On public finances: • sustainability of public finances: greater ambition needed • More needs to be done to reform the structure of tax systems and to protect growth-enhancing expenditure items • fiscal measures for reduction in budget deficits not specific European Commission Secretariat-General

Country Recommandations

On labour markets: • Boost labour force participation: – retirement age, early retirement – childcare • Combat structural unemployment and integrate vulnerable groups: – payroll taxes – active labour-market policies • Reduce youth unemployment and early school leaving: – labour contracts – links between education and employment • Ensure that wages correspond to productivity European Commission Secretariat-General

Country Recommandations

On structural reforms: • Business environment: – excessive regulatory constraints – making it easier to start a business – facilitating access to finance, especially for SMEs • Services sector: – Services Directive – competition and regulatory frameworks in network industries • R&D and innovation: – incentives for private R&D investments – matching R&D and innovation with business needs European Commission Secretariat-General

Thank you

For more information and documents: www.ec.europa.eu/europe2020 European Commission