Select Committee on European Scrutiny Twenty-First Report


COM(02) 14
and ADD1 REV1

Commission Communication to the Spring European Council in Barcelona:
The Lisbon Strategy — Making Change Happen; and
Commission Staff Working Paper.

Legal base:
Document originated:15 January 2002
Forwarded to the Council: 17 January 2002
Deposited in Parliament: 14 February 2002
Department:Foreign and Commonwealth Office
Basis of consideration: EM of 26 February 2002
Previous Committee Report: None
To be discussed in Council: Barcelona Spring European Council on 15/16 March
Committee's assessment:Politically important
Committee's decision:Not cleared; further information requested


  6.1  The Lisbon European Council in March 2000 agreed to set a ten-year goal for making the EU a dynamic, competitive economy, sustainable and knowledge-based, enjoying full employment and social cohesion. It was also agreed at Lisbon that future Spring European Councils should evaluate progress and mandate work for the next year, on the basis of a "synthesis" report prepared by the Commission. This is the second annual synthesis report. The Committee cleared the first in March last year[8].

The report

  6.2  The report measures progress towards the strategic goal against a number of agreed indicators relating to employment, innovation, economic reform, social cohesion and the environment. It reaffirms the importance of the objectives set at the Lisbon and Stockholm Europe Councils, welcomes progress made to date, but identifies some key areas where further or faster progress is needed. For the first time, it also reviews progress in implementing the EU sustainable development strategy agreed at the Göteborg European Council. An accompanying staff working paper contains a detailed breakdown of progress made against particular objectives and indicators.

— The delivery gap

  6.3  The broad thrust of the Communication is that most of the policy proposals required to deliver the Lisbon objectives are now on the table, and good progress has been made in a number of areas. But there is a 'delivery gap', caused by the inability of the Council and European Parliament to agree on proposals in certain key areas such as energy liberalisation and financial services. Deadlines for decisions and their implementation are being missed, often in the face of short-term sectoral or political interests. The Commission President, Romano Prodi, highlighted the gap in letters in November 2001 to Heads of State and Government and to the President of the European Parliament. The Commission says that:

    "Those letters identified the issues[9] where progress must be seen before Barcelona.[10]

    "The Members of the European Council must assume responsibility for leadership over their respective governments. They should ensure that their ministers resolve disputes over the detail of individual proposals, rather than accept that missed deadlines are simply replaced by new ones or that they are called upon to sort out the detail of complex proposals. The European Parliament must assume its share of the responsibility for ensuring that the delivery gap is overcome.

    "Where blockages cannot be overcome the real importance and urgency attached to the proposals is called into question. In such cases the Commission will consider withdrawing the proposal it has made. Where the lack of progress, for example for gas and electricity, is harming competition and holding back market integration, the Commission — as it did in the 1990s for telecommunications — will consider adopting legislation to open markets using its powers under the European competition rules."

  6.4  To bridge the delivery gap, the Commission says that the European Council should consider options such as:

    "—  The Council Presidency should make full use of qualified majority voting, where available, to ensure decisions on Lisbon reforms are not held up, particularly in the areas set out in this Report."

— Sustainable development

  6.5  Economic, social and environmental objectives all affect the quality of life. The Lisbon Strategy should ensure that each of these three elements is given appropriate weight when policy is set. The Commission says that it is developing mechanisms for assessing the impact of its proposals for their sustainability and coherence in the long term. It will be especially important over the next 12 to 18 months to improve the coherence of policies on transport and energy. Further opening up of these markets will lower prices but must not remove incentives for individuals and businesses to invest in clean technologies and energy efficiency:

    "This requires the removal of environmentally damaging subsidies and the appropriate use of environmental taxes. In addition, regulators should ensure appropriate market access for renewable sources of energy".

  6.6  The Commission calls for the energy tax directive to be adopted by December 2002 and says that it will bring forward new proposals in 2002 on:

  • transport infrastructure pricing to ensure that the prices for using different modes of transport better reflect their costs to society. It suggests that the revenue raised could be an additional source of support for closing the missing links within Trans-European Networks, particularly for alternatives to road transport;

  • safer transport systems across Europe; and

  • will, in parallel with continuing negotiations on the energy tax directive, review the overall approach to energy taxation and investigate options to move forward on getting energy prices to better reflect their overall cost to society.

— Economic and social cohesion

  6.7  The Commission says that the European social model is helping people back to work, recognising that a job is often the best protection against social exclusion; it combines an affordable system offering a high level of social protection with a focus on social cohesion which is often felt to be lacking in the United States.

  6.8  Under this heading, the Commission calls on the European Council to:

    "—  endorse ongoing work on the impact of ageing on healthcare and care for the elderly in order to strengthen co-operation and exchange of good practice."

— Active labour market policies

  6.9  The Commission says that the employment rate targets must be maintained and effort accelerated to create more and better jobs and to get more people to work. Its view is that measures should be favoured which will help particular groups, such as women and older workers, to enter and remain in the workforce. In 2002 it will present a proposal for the revision of the European Employment Strategy in which it will integrate the Lisbon objectives and targets. It calls on the Member States to indicate how they will contribute to achieving these targets by setting "ambitious but achievable" national targets from 2003 within their National Action Plans for employment. The Employment Guidelines for 2003 should reflect this undertaking.

— Clean technologies

  6.10  The Commission suggests that the development and wider take-up of clean technologies will be important for stimulating growth and employment. Exploiting their full potential will mean that current market barriers to investing in them must be overcome and a favourable business environment created. The Commission says that it will follow the forthcoming report on environmental technologies, by developing an action plan for tackling obstacles to their take-up.

The Commission Staff Working Paper

  6.11  In Section I, the Commission presents a detailed analysis of progress made. In Section II, it provides a number of illustrations of policy developments. Annex 1 shows in chart form new policy and other actions developed at European level in response to the Strategy. It also indicates where proposals are currently pending before Council and the European Parliament and, in the case of adopted measures, the date in which they enter into force. Annex 2 contains a full set of the agreed structural indicators which helped to provide a basis for the assessment. They are available, together with the relevant data and definitions, on the Eurostat web site (, where they are periodically updated. Given the date of publication of the report much of the data available reflects forecasts and estimates for 2001.

The Government's view

  6.12  The Minister for Europe (Mr Peter Hain) says that the report's strong reaffirmation of the importance of the aims and objectives agreed at Lisbon is consistent with the Strategy and is welcome evidence of the Commission's commitment to economic and social reform in the EU. He says that the Government agrees with the bulk of the Commission's analysis. He adds that it is also important that the Commission continue to review those elements of the process within its own control, such as wide consultation before proposals are published.

  6.13  The Minister then comments:

    "The Commission calls for continued progress on 'all fronts' of the Lisbon strategy. But the Communication identifies three broad priority areas where the Barcelona European Council should give fresh impetus: further development of employment policies, with an emphasis on active labour market reforms; integration of financial markets and key 'network industries' such as the energy sector; increasing competitiveness and creating jobs through investment in research, innovation, education and training. These priorities sit well with the Government's objectives for the Barcelona European Council.

    "The report considers also how sustainable development can be addressed through the economic and social reform agenda, in particular through environmental technologies and transport policies. The Government welcomes the emphasis on the need for long-term consistency between policies.

    "Within these broad priority areas, the majority of actions proposed relate to adoption of legislation currently being negotiated (e.g. energy liberalisation), or policies already being pursued by Member States at the national level (e.g. delivery of government services online). Where the Commission indicates a need for new proposals, the Government will need to consider carefully the detail, appropriateness and likely contribution to Lisbon objectives of these proposed measures. These include: transport infrastructure pricing; transport safety; co-operation and exchange of good practice in organisation and delivery of healthcare; tackling obstacles to uptake of environmental technologies."

  6.14  As for the question of subsidiarity, the Minister says that the individual proposals trailed in the Communication will need to be evaluated to ascertain whether they accord with this principle.

Press coverage

  6.15  In a joint article in The Times on 12 March, the Prime Minister Mr. Tony Blair and the Swedish Prime Minister, Goran Persson, stress the need for the EU to modernise its economic structures if it is to "compete successfully with the best in the world and provide a strong foundation for an inclusive society". If the EU was to match the United States in terms of productivity and employment, output would be 40 per cent higher. They call for labour markets to be more flexible, energy markets to be opened up to competition, reform of financial services to proceed at a faster pace, transport networks to be strengthened, the liberalisation of electricity and gas markets and for the Barcelona Summit to commit the EU to a target of achieving the widespread availability of broadband technologies by 2005. In a separate article written by two of its staffers, the paper comments that the Prime Minister, the German Chancellor and other leaders are "expected to bow to political reality and accept the French refusal to commit to a deadline for opening the consumer energy market to competition". They remind readers that presidential elections take place in France in six weeks' time.


  6.16  The report provides a comprehensive and authoritative picture of progress, or lack of it, over the year. Because it has to meet the deadline of the Spring European Council, it is timely, though we need to explore ways of getting it deposited more speedily next year. It also provides useful early warning of Commission thinking on proposals which it believes it should bring forward. The detail in the Staff Working Paper makes it a useful work of reference.

  6.17  The Minister does not comment on the Commission's suggestion that the Presidency should make full use of qualified majority voting to ensure decisions on reforms are not held up We assume that the Council will prefer to attempt to reach consensus on areas of particular political sensitivity for individual Member States, rather than resort to outvoting them. Nevertheless, after the publicity given to this Council as being "a summit about jobs", a failure by the leaders to agree to give greater momentum to the Lisbon reforms will be hard to dismiss lightly.

  6.18  We ask the Minister to write to us after the Barcelona European Council on 15-16 March, informing us of the outcome of the discussions on the Communication and what actions he expects will flow from it.

  6.19  Meanwhile, we shall not clear the document.

8  (22159) 6248/01; see HC 28-x (2000-01), paragraph 14 (28 March 2001). Back

9  The President identified the Community Patent, the pending legislation on public procurement, the proposals on distance marketing of financial services and on UCITs (investment funds), and within the financial Services Action Plan the pending proposals on market abuse, collateral, prospectuses, pension funds, cross-border payments and international accounting standards. (Footnote from Commission Communication). Back

10  From the priority package, progress has been made on all items with the exception of the Community Patent, public procurement, pension funds, and prospectuses. In addition, decisions are urgently needed on the Galileo satellite navigation system and the institutional framework in the Lamfalussy report. (Footnote from Commission Communication). Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 26 March 2002