European Scrutiny Committee Contents


25 Lisbon Strategy and economic recovery

(a)

(30417)

5981/09

+ ADD 1

COM(09) 34



(b)

(30431)


Implementation of the Lisbon Strategy structural reforms in the context of the European Economic Recovery Plan — Annual country assessments: Recommendation for a Council Recommendation on the 2009 update of the broad guidelines for the economic polices of the Member States and the Community and on the implementation of Member States' employment policies

Implementation of the Lisbon Strategy Structural Reforms in the context of the European Economic Recovery Plan: Annual Country Assessments — a detailed overview of progress made with the implementation of the Lisbon Strategy reforms in Member States in 2008

Legal base(a) Articles 99(2) and 128(4) EC; —; QMV

(b) —

Document originated(a) 28 January 2009

(b) —

Deposited in Parliament(a) 6 February 2009

(b) 12 February 2009

DepartmentHM Treasury
Basis of considerationTwo EMs of 16 February 2009
Previous Committee ReportNone
To be discussed in CouncilThe Joint Employment Report at the Employment and Social Policy Council of 9 March 2009, the documents generally at the European Council of 19-20 March 2009
Committee's assessmentPolitically important
Committee's decisionCleared

Background

25.1 The Lisbon Strategy for Growth and Jobs is the economic reform strategy for the Community. It was launched in 2000, relaunched in 2005 with a sharper focus on growth and jobs and is due to come to an end in 2010. The strategy is largely delivered through Member State level policies, but there is a Community Lisbon Programme designed to complement these policies. At the relaunch in 2005 it was agreed that the Lisbon Strategy should be governed in three-year cycles. The second cycle runs from 2008 — 2010 and in December 2007 the Commission proposed for this cycle a revised Community Lisbon Programme with ten objectives. [90]

25.2 Each year the Commission proposes a Recommendation, as part of its annual country assessment in the framework of the Lisbon Strategy, which takes into account the Strategy's Integrated Guidelines, the priorities identified by the European Council during 2006-08 and the National Reform Programmes adopted by each Member State. The Recommendation requires endorsement by the European Council and then adoption by the Council.

25.3 On 16 December 2008 the Commission announced[91] a package to help implement the European Economic Recovery Plan[92] and reinforce the Lisbon Strategy. The elements of the package were an implementation report on the Community Lisbon Programme,[93] a draft Regulation to amend the legislation governing the European Globalisation Fund,[94] Communications on cohesion policy,[95] education and training,[96] and market access for exporters[97] and Commission staff working documents about the single market.[98]

25.4 Normally the Commission's annual Lisbon Strategy package would have included assessments and recommendations on Member States' progress in implementing the strategy and a thematic review of implementation in the macro-, microeconomic and employment areas. In launching the December 2008 package the Commission announced that these remaining elements would be adopted early in 2009.

The documents

25.5 These documents are those foreshadowed by the Commission. The main part of document (a) is inter-related with document (c) and together they concern the Commission's assessments and recommendations on Member States' progress in implementing the Lisbon Strategy. They contain:

  • a Recommendation for a Council Recommendation on the 2009 update of the broad guidelines for the economic policies of the Member States and the Community and on the implementation of Member State's employment policies. When adopted, the Recommendation will update the existing Recommendation adopted by the Council in 2008; and
  • a detailed overview of progress made with the implementation of the Lisbon Strategy reforms in Member States. This is a Commission paper that supports the formal Recommendation with information on reforms taken by Member States and progress made until the end of 2008.

The Exchequer Secretary to the Treasury (Angela Eagle), in her first Explanatory Memorandum, helpfully summarises, from both documents, the Commission's recommendations and assessments for each Member State and for the eurozone Member States collectively. We annex that summary.

25.6 The Addendum to document (a) is the Commission's thematic review of implementation of the Lisbon Strategy in the macro-, microeconomic and employment areas. It is divided into three sections, the first two of which look at progress within the macro- and micro-economy and how the European Economic Recovery Plan can support the Lisbon Strategy in the current economic climate. The third section is the draft Joint Employment Report, reviewing the current situation and re-emphasising the priorities highlighted within the agreed Strategy Employment Guidelines.

25.7 On macro-economic challenges the Commission says that:

  • since 2005 consolidation of public finances has been considerable, with deficits being reduced markedly in virtually all Member States and debt to GDP ratios declining, unemployment has come down considerably and the overall employment rate has been growing strongly, on average by about 1% annually, and productivity growth has improved somewhat in the recent period, although no structural narrowing of the gap with the USA can be observed;
  • it predicts a strong contraction of GDP of 1.9% for the eurozone and 1.8% for the Community as a whole and investment, a key driving force in the previous upturn, is set to slump in 2009, reflecting the impact of multiple shocks — weakening demand, a marked drop in investor confidence, tighter financing conditions and a reduction in credit availability; and
  • clearly the underlying structural challenges facing the Community as regards growth and jobs remain valid, in the current climate Member States will need to prioritise structural reforms with the aim of enhancing potential growth and it will be crucial that Member States revert to fiscal consolidation when the crisis ends.

25.8 On the European Economic Recovery Plan response the Commission says that:

  • the plan, the Community's response to the economic and financial market crisis, is aimed to help mitigate the impact of the financial market crisis on the real economy;
  • the plan consists of two pillars — the first is a fiscal stimulus package to boost demand, whilst fully respecting the Stability and Growth Pact, the second outlines a number of short-term actions designed to provide support consistent with Member States' long-term challenges, notably to accelerate transformation of the Community into a low-carbon, knowledge-intensive economy as well as the sustainability of public finances grounded in the Lisbon Strategy;
  • it has carried out some preliminary model simulations of the effect of the coordinated approach foreseen by the plan; and
  • its findings underline the potential for large and immediate benefits for all Member States of a package combining a strong fiscal stimulus with ambitious structural reforms, that fiscal policy is a powerful instrument in supporting short-run economic activity, that the design of the fiscal stimulus and the choice of appropriate fiscal measures matter, that there are benefits from including structural reforms in an integrated response to the economic slowdown and that there are merits in tailoring recovery programmes to starting conditions at Member State level.

25.9 In relation to micro-economic challenges the Commission says that:

  • the most important source of future growth will be total factor productivity, which is generated by intangible factors such as technical progress or organisational innovation rather than increased use of inputs, such as capital; and
  • the relaunched Lisbon Strategy supports this view and has concentrated on achieving progress in research and innovation, competition, climate change and other environment issues, the regulatory environment and entrepreneurship and SMEs.

The Commission assesses progress achieved so far and challenges faced in these policy areas, saying:

on knowledge and innovation
  • the Community's research and development intensity in 2006 stood at 1.84% of GDP, with little or no progress since 2000. Most Member States are converging to the EU-27 average in terms of their innovation performance, however, the innovation gap between the Community, the US and Japan still remains significant but is narrowing;
  • a persistent challenge to innovation systems in many Member States is the relative lack of high growth enterprises, which are known to make a proportionally higher contribution to job generation and economic growth. This may be related to the relative fragmentation of venture capital markets in the Community or the relative lack of propensity to internationalisation of many Community SMEs;
  • creating more favourable framework conditions for private research and development investment and the growth of research intensive sectors remain key objectives in building a knowledge-based economy — demand — side measures, such as using public procurement to stimulate innovative products and services and tax incentives for consumers, can be used to stimulate the uptake of innovative products;
on energy, climate change and sustainable use of resources
  • the Community is on track to reach its Kyoto climate change targets. The most recent projections indicate that by 2010 total EU-27 greenhouse gas emissions will be about 10.1% below base-year levels;
  • use of renewable energy has increased over the last years, however, Member States need to accelerate their policy responses — in particular, they must truly liberalise their energy markets and facilitate market entry of new, competitive SMEs generating renewable energy;
  • Member States should also focus on fostering green public procurement to ensure a rapid take-up of green products and services;
on making the Community a more attractive place to invest and work
  • measures to address the effects of the financial crisis on the real economy are being announced and in the micro-economic sphere the concentration is around two targets — to facilitate access to credit for SMEs and to bring forward or increase public investment in infrastructures. Many Member States are also including investments in research and development and energy efficiency;
  • in the area of SME policy several initiatives are underway which include integrating the "think small first" principle in policy making, ensuring that starting up a business anywhere in the Community can be done within three days at no cost, enhancing access to finance and facilitating better access to public procurement; and
  • implementing the Services Directive to facilitate cross-border services, introducing competition in network industries, particularly in areas such as unbundling and clearly mandated and independent regulatory authorities with adequate levels of resources, continuing to improve the business environment by leaner, more efficient and well thought-of-legislation and increasing investment in infrastructure, especially transport, will provide an additional stimulus to the economy.

25.10 For the draft Joint Employment Report the Commission says that:

  • structural unemployment continued to decrease to 7.6% in 2008 and now stands significantly lower than in 2000;
  • its Interim Economic Report of January 2009 suggests that employment is expected to decrease by about 2% in the Community in 2009-2010, while unemployment is currently expected to increase by as much as 2.5 % points in the next two years, to reach up to 9.5% by 2010;
  • in the current climate, but also in view of the need to continue with structural reforms in the medium term, employment policy should focus on two priorities — implementing integrated flexicurity[99] pathways and better skills matching and upgrading;
  • flexicurity measures should focus on four key areas particularly in the short- and medium-term — harmonisation of temporary and permanent contractual arrangements, prioritising active labour market policies such as job subsidies, adoption of effective lifelong learning systems which reduce skill-mismatches of the unemployed and modernising social security systems which reduce unemployment or inactivity traps; and
  • in the medium and longer run, ensuring a better match between the supply of skills and labour market demand is crucial — this can be achieved through establishing a better link between education, training and employment systems and better anticipation and forecasting of skills needs.

The Government's view

25.11 In relation to the Commission's assessments and recommendations on Member States' progress in implementing the Lisbon Strategy the Minister tells us, in her first Explanatory Memorandum, that the Government has consistently supported the use of country-specific recommendations under the Treaty and in the framework of the Lisbon Strategy for Growth and Jobs, saying that they take appropriate account of national circumstances, when the Council recommends domestic structural reforms necessary for enhancing the competitiveness and productivity of the economies of Member States.

25.12 The Minister comments further that:

  • in the current economic downturn, Member States need to maintain their commitment to structural reforms in the medium to longer term in line with the Lisbon Strategy, since this is a critical element in the Community's overall response to current economic developments;
  • pursuing implementation of structural reforms as in the suggested recommendations will help in building resilience and responsiveness in the future;
  • the Government broadly agrees with the Commission's proposed Council Recommendation addressed to other Member States and collectively to eurozone Member States;
  • it broadly agrees with the Commission's proposed Council Recommendation that the UK, "ensures a sustainable fiscal position in the medium-term, including through fiscal consolidation measures geared towards enhancing the quality of the public finances; and, continues to implement plans to substantially improve skill levels and establish an integrated approach to employment and skills in order to raise productivity and increase opportunities for the disadvantaged"; and
  • it will seek minor factual clarifications in the introductory text as appropriate before the Recommendation is adopted by the Council.

25.13 The Minister then recapitulates Government policy relevant to aspects of the proposed Recommendation:

  • as regards fiscal policy, the plans set out in the 2008 Pre-Budget Report for a sustained fiscal consolidation from 2010-11, when the economy is expected to be recovering and able to support a reduction in borrowing, are consistent with the objective of ensuring the sustainability of the public finances over the medium term;
  • as regards skills and employment, the December 2008 White Paper "Raising Expectations and increasing support: reforming welfare for the future", setting out plans for an empowering welfare state based on personalised conditionality to ensure no one is written off and further implementation of the Leitch review, particularly through the developing work of the new UK Commission for Employment and Skills;
  • as regards housing supply, a number of steps already taken to help ensure that the effect of the global financial disruption on the UK mortgage and housing markets is minimized, with such work continuing, and in addition to maximising support of the housing market in the short-term, maintaining focus on the long-term need for more housing; and
  • as regards research and development and innovation, implementation of the recommendations of the Sainsbury review of Science and Innovation, publication of the "Innovation Nation" White Paper, progress on implementing the White Paper's recommendations, a range of innovation activities as in the Annual Innovation Report and continuing close review of the responsibilities of and resources available to the Technology Strategy Board, in assisting development and implementation of research and development and innovation policies.

25.14 In her second Explanatory Memorandum, on the Commission's assessment of implementation of the Lisbon Strategy in the macro-, microeconomic and employment areas, the Minister says that the Government:

  • broadly welcomes the Commission's assessment of implementation of Lisbon Strategy, showing considerable progress in a number of areas — including increasing productivity growth, narrowing the innovation gap between the Community and the US and Japan, movement towards reaching the Kyoto target, reducing administrative burdens, supporting SMEs and promoting competition;
  • agrees, however, with the Commission's call to continue implementing structural reforms in the four priority areas previously identified by the European Council — employment, business potential, energy and infrastructure and knowledge and innovation;
  • thinks a commitment to economic reform in the medium to long term forms a crucial part of the Community's overall response to the economic downturn and will be important for building future resilience and growth;
  • shares the Commission's view that measures to address challenges in the short-term should be consistent with the longer-term agenda embedded in the Lisbon Strategy and with openness and free trade, flexicurity and dynamic competition;
  • supports particular calls for progress in implementing the Services Directive, introducing competition in network industries, improving the business environment for SMEs and promoting the continued development of green technology;
  • welcomes the Commission's recognition of UK progress to date, with its references to the role the UK has played in promoting the Better Regulation agenda, supporting entrepreneurship education programmes, encouraging energy efficiency initiatives and bringing forward infrastructure investment to stimulate the economy, which the Commission believes is key to securing long-term growth and prosperity;
  • supports the main messages in the Joint Employment Report on the importance, in both short and longer term, of helping people manage employment transitions, improving skill levels and continuing with structural reforms;
  • notes that the Commission's conclusion that, in the context of flexicurity, there should be a particular focus on the most disadvantaged, is in line with the Government's welfare reform set out in the White Paper ""Raising Expectations and increasing support: reforming welfare for the future"; and
  • thinks the declaration that action on skills is crucial to limiting long-term unemployment and to improving future adaptability is commensurate with Government policy development, particularly through the work of the UK Commission for Employment and Skills.

Conclusion

25.15 These documents usefully summarise the present situation in relation to the Lisbon Strategy and the economic crisis and the Commission's suggestions as to the immediate fiscal and economic policies of the Member States. Although we have no questions to raise, whilst clearing the documents we draw them to the attention of the House.

Annex: The Government's summary of the Commission's recommendations and assessments for each Member State and for the eurozone Member States collectively.

"Belgium: in the Recommendation for a Council Recommendation, the Commission suggests that Belgium should pursue the implementation of structural reforms in the areas of the tax burden on labour; competition in gas and electricity markets; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Belgium: long-term sustainability of public finances, R&D performance, and Belgium's wage development in relation to its neighbours.

"Bulgaria: in the Recommendation for a Council Recommendation, the Commission suggests that Bulgaria should pursue the implementation of structural reforms in the areas of the efficiency and effectiveness of public administration; fiscal policy; cutting red tape; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Bulgaria: long-term sustainability of public finances, effective powers of the competition and other regulatory authorities, R&D performance, undeclared work; adult participation in training, and energy efficiency.

"Czech Republic: in the Recommendation for a Council Recommendation, the Commission suggests that the Czech Republic should pursue the implementation of structural reforms in the areas of the long-term sustainability of public finances, pension & healthcare reforms; R&D performance; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for the Czech Republic: the protection and enforcement of intellectual property rights, ICT, access to finance for innovative companies, implementation and application of EU legislation; position of disadvantaged groups on the labour market, gender pay gap, and regional labour market mobility.

"Denmark: in the Recommendation for a Council Recommendation, the Commission makes no suggestions for Denmark. However, in its more detailed overview of progress, the Commission suggests that the following challenges remain important for Denmark: labour market participation and hours worked, incentives to work, maintain older workers in employment and improve the integration of people with a migrant background into the labour market; primary and secondary education, competition, and the Kyoto target for greenhouse gas emission reductions.

"Germany: in the Recommendation for a Council Recommendation, the Commission suggests that Germany should pursue the implementation of structural reforms in the areas of competition in services; and, the efficiency and effectiveness of job placement services and integration of low-skilled and long-term unemployed into labour market. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Germany: the long-term fiscal sustainability of public finances, competition in the gas and electricity networks, one-stop-shops, and the outcome of the education system, especially those with a migrant background.

"Estonia: in the Recommendation for a Council Recommendation, the Commission suggests that Estonia should pursue the implementation of structural reforms in the areas of labour law and the efficiency of public employment services. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Estonia: macro-economic stability and inflation, through adequate structural reforms and determined fiscal policy; external competitiveness; translation of R&D results into innovative services or products; launching the new immunity and leniency programme and strengthening competition enforcement; active labour market policies and the supply of skilled labour.

"Ireland: in the Recommendation for a Council Recommendation, the Commission suggests that Ireland should pursue the implementation of structural reforms in the areas of fiscal sustainability and medium-term growth. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Ireland: pension arrangements, investment in energy and transport infrastructure, foster competition in the retailing sector, childcare infrastructure, labour market integration of disadvantaged groups, and training support to older and low-skilled workers.

"Greece: in the Recommendation for a Council Recommendation, the Commission suggests that Greece should pursue the implementation of structural reforms in the areas of fiscal consolidation; competition in professional services; the reform of public administration; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Greece: one-stop-shops and start-up times, competition in professional services, solid and water waste management, female participation in employment, and a coherent active ageing strategy.

"Spain: in the Recommendation for a Council Recommendation, the Commission suggests that Spain should pursue the implementation of structural reforms in the areas of employment and skills; the implementation of education reforms; and, competition in services and electricity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Spain: pension and healthcare reforms, greenhouse gas emissions, attractiveness of part-time work, and integrate immigrants into the labour market.

"France: in the Recommendation for a Council Recommendation, the Commission suggests that France should pursue the implementation of structural reforms in the areas of budgetary consolidation and debt reduction; competition in network industries, professions & services; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for France: better regulation policies, participation of older workers, and making work pay.

"Italy: in the Recommendation for a Council Recommendation, the Commission suggests that Italy should pursue the implementation of structural reforms in the areas of fiscal consolidation; competition in product and services markets; productivity through education; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Italy: R&D efficiency and spending, greenhouse gas emissions, quality of regulation, the effectiveness and efficiency of public administration, infrastructure, labour market participation of women, employment of older workers, and alignment of wage and productivity developments.

"Cyprus: in the Recommendation for a Council Recommendation, the Commission suggests that Cyprus should pursue the implementation of structural reforms in the area of lifelong learning. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Cyprus: health care reform, current account developments, gender pay gap; competition in professional services; private sector R&D, and broadband.

"Latvia: in the Recommendation for a Council Recommendation, the Commission suggests that Latvia should pursue the implementation of structural reforms in the areas of fiscal policy; wage moderation; flexicurity; and R&D&I policy integration. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Latvia: the regulatory environment, financial incentives to work, and take-up of ICT.

"Lithuania: in the Recommendation for a Council Recommendation, the Commission suggests that Lithuania should pursue the implementation of structural reforms in the areas of fiscal policy; external competitiveness and wage developments; reform of the R&D&I system; and, reform of education and training systems. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Lithuania: better regulation, regional labour mobility, availability of childcare, and occupational health and safety.

"Luxembourg: in the Recommendation for a Council Recommendation, the Commission makes no suggestions for Luxembourg. However, in its more detailed overview of progress, the Commission suggests that the following challenges remain important for Luxembourg: pension system reform, early school leaving, unemployment amongst the young, strengthening competitive markets, transposition of EU legislation, and greenhouse gas emissions.

"Hungary: in the Recommendation for a Council Recommendation, the Commission suggests that Hungary should pursue the implementation of structural reforms in the areas of deficit and debt reduction; the reform of public administration, healthcare, pension and education systems to ensure long-term sustainability; active labour market policies; and, skills. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Hungary: R&D performance, state aids, the regulatory environment, incentives to work and to remain in the labour market, the employment and social services system, and undeclared work.

"Malta: in the Recommendation for a Council Recommendation, the Commission suggests that Malta should pursue the implementation of structural reforms in the areas of strengthening competition; and, attracting more people (particularly women and older workers) into the labour market. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Malta: fiscal consolidation, healthcare reform, regulatory environment, diversify its energy dependence, educational attainment and early school leaving, and lifelong learning.

"The Netherlands: in the Recommendation for a Council Recommendation, the Commission suggests that the Netherlands should pursue the implementation of structural reforms in the area of improving the labour supply of women, older workers and disadvantaged groups to raise hours worked. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, R&D performance also remains an important challenge for the Netherlands.

"Austria: in the Recommendation for a Council Recommendation, the Commission suggests that Austria should pursue the implementation of structural reforms in the area of improving incentives for older workers and education outcomes for disadvantaged youth. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Austria: fiscal adjustment; supply of skilled workers at all levels, competition in services, in particular professional services and the retail sector; emission reduction policies; and female labour market participation.

"Poland: in the Recommendation for a Council Recommendation, the Commission suggests that Poland should pursue the implementation of structural reforms in the areas of budgetary discipline; reform of public research sector; energy and transport infrastructure investment; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Poland: competition in network industries, the business environment, transposition of internal market legislation, education and training systems, and childcare facilities.

"Portugal: in the Recommendation for a Council Recommendation, the Commission suggests that Portugal should pursue the implementation of structural reforms in the areas of the quality of public finances for growth and competitiveness; the efficiency of education and training systems relevant to labour market needs; and, the modernisation of employment protection legislation. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Portugal: unit labour cost developments, long-term fiscal sustainability, continued implementation of the technological plan, the liberalisation of the energy sector; regulatory environment, and social cohesion.

"Romania: in the Recommendation for a Council Recommendation, the Commission suggests that Romania should pursue the implementation of structural reforms in the areas of strengthening the efficiency, effectiveness and independence of public administration; fiscal policy; reducing administrative procedures and delays; and, education and training systems relevant to labour market. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Romania: the long-term sustainability of public finances, R&D performance, infrastructure, public employment services, and energy efficiency.

"Slovenia: in the Recommendation for a Council Recommendation, the Commission suggests that Slovenia should pursue the implementation of structural reforms in the areas of the reform of the pension system and promotion of active ageing; and, countering labour market segmentation and reviewing employment protection legislation. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Slovenia: wage growth in excess of productivity improvements, competition in the services sector, the national research and innovation strategy, energy efficiency, the link between the education system and the labour market, and the system of social transfers and the tax wedge on low paid.

"Slovakia: in the Recommendation for a Council Recommendation, the Commission suggests that Slovakia should pursue the implementation of structural reforms in the areas of fiscal consolidation, including the reallocation of resources to R&D&I; a comprehensive better regulation strategy; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for Slovakia: broadband infrastructure and ICT take-up, competition, in particular in the gas and electricity; and gender pay and employment gaps.

"Finland: in the Recommendation for a Council Recommendation, the Commission makes no suggestions for Finland. However, in its more detailed overview of progress, the Commission suggests that the following challenges remain important for Finland: competition in services, energy efficiency, and the mismatch between labour supply and demand, with a particular emphasis on increasing the participation of the young, migrants and the low skilled.

"Sweden: in the Recommendation for a Council Recommendation, the Commission makes no suggestions for Sweden. However, in its more detailed overview of progress, the Commission suggests that the following challenges remain important for Sweden: recent reforms to increase work incentives, youth unemployment, the employment rate of people with a migrant background, and to reintegration of people on sickness-related schemes.

"United Kingdom: in the Recommendation for a Council Recommendation, the Commission suggests that the United Kingdom should pursue the implementation of structural reforms in the areas of medium-term fiscal sustainability; and, the implementation of plans to improve skill levels and establish an integrated approach to employment and skills. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for the United Kingdom: R&D intensity and increasing housing supply in order to meet medium- to long-term demand pressures.

"Euro Area Member States: in the Recommendation for a Council Recommendation, the Commission suggests that the Euro Area Member States should pursue the implementation of structural reforms in the areas of the implementation of EU financial services legislation and crisis prevention cooperation; fiscal sustainability; improving the quality of public finances; and, flexicurity. In its more detailed overview of progress, the Commission suggests that, alongside the Recommendation, the following challenges also remain important for the Euro Area Member States: sustainability of public finances and their contribution to growth, competition in product markets, especially in the energy sector and retail services in order to curb inflationary pressure, stability and integration on financial markets, flexicurity on labour markets in accordance with the agreed common principles and more labour mobility in order to foster labour market adjustment and adequate wage developments in line with productivity developments with a view to price stability, employment and competitiveness."





90   (29288) 16752/07: see HC 16-ix (2007-08), chapter 18 (23 January 2008) and HC 16-xix (2007-08), chapter 11 (23 April 2008). Back

91   See http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1987&format=HTML&aged=&language=EN&gui Language=en . Back

92   (30213) 16097/08: see HC 19-i (2008-09), chapter 4 (10 December 2009) and HC Deb, 20 January 2009, cols. 626-53. Back

93   (30305) 17358/08: see HC 19-v (2008-09), chapter 10 (28 January 2009). Back

94   (30321) 5005/09 + ADDs 1-2: see HC 19-vi (2008-09), chapter 11 (4 February 2009). Back

95   (30318) 17582/08: see HC 19-vi (2008-09), chapter 16 (4 February 2009). Back

96   (30310) 17535 + ADDs 1-2: see HC 19-vii (2008-09), chapter 10 (11 February 2009). Back

97   (30317) 17581/08: see HC 19-vii (2008-09), chapter 6 (11 February 2009). Back

98   (30316) 17569/08 and (30315) 17568/08: see HC 19-vi (2008-09), chapters 15 and 16 (4 February 2009). Back

99   Flexicurity is defined by the Commission as a policy strategy to enhance, at the same time and in a deliberate way, the flexibility of labour markets, work organisations and labour relations on the one hand, and security - employment security and income security - on the other. Back


 
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