FLEXIBILITY THE ROUTE TO FULL EMPLOYMENT

Europe needs even more radical reform if it is to tackle high unemployment and achieve sustained growth, the Chancellor, Gordon Brown, will say in a report to EU Finance Ministers today.

Gordon Brown tells Finance Ministers:

“Europe must create 21 million new jobs to meet the target for 2010 – and yet unemployment is still rising. So I will tell colleagues today that there is no security without change and that greater flexibility is an essential route to greater employment”.

Presenting a report to today’s meeting of European Finance Ministers on the progress of the Lisbon Agenda, the Chancellor outlined four urgent priorities to break down barriers to economic growth and employment:

break down regulatory barriers for business with the Four Presidencies initiative insisting on a new competitiveness test for all new regulation;
achieve greater flexibility in labour market employment policies so that we equip Europe’s peoples with the jobs and skills to compete in the new global economy;
set a new and more urgent timetable for concrete and credible reforms to complete the Single Market with specific deadlines; and
break down the barriers to better trading relationships with the United States and the rest of the world.

Gordon Brown said:

“Starting today, Europe must commit itself to radical new reforms, becoming more flexible and outward-looking, creating the jobs, growth and prosperity our citizens deserve and expect.

And in Britain, we will be coming forward in the Pre Budget Report with the measures needed to boost enterprise, raise productivity and make our economy more flexible.”

Details

European Finance Ministers will today debate Wim Kok’s mid-term review of Europe’s progress against the Lisbon agenda. The Treasury’s submission to Wim Kok’s review highlights the key steps needed to give renewed stimulus to growth and reform in Europe, including:

action to refocus reform on jobs and productivity, by streamlining the existing 102 Lisbon benchmarks and focusing on core headline targets;
annual Lisbon scorecards and commitments ranking Member States’ progress with economic reform and setting out European leaders plans for reforms in the year ahead;
further regulatory reform, building on the January 2004 Four Presidency Initiative (Ireland, Netherlands, United Kingdom and Luxembourg), to reduce the burden of new and existing legislation on enterprising and innovative businesses;
reform of state aid, ending the use of aid to create national champions and protect declining industries from competition, and further flexibility for Member States to promote enterprise and innovation;
urgent reform of labour markets, with all Member States implementing the detailed recommendations of the November 2003 European Employment Taskforce report;
further steps to create a dynamic and competitive Single Market, through liberalisation in services and a more effective competition policy that ensures real gains for businesses and consumers;
taking action to promote innovation and enterprise; and
trade and investment liberalisation, with strong EU leadership in multilateral trade negotiations and further action to build a stronger transatlantic economic relationship.

The latest employment figures for 2003 released in today’s Labour Force Survey show what has been achieved in some EU Member States and the challenges facing others.

Employment Rate		Unemployment Rate
Denmark	75.1	Luxembourg	3.7
Netherlands	73.5	Netherlands	3.8
Sweden	72.9	Austria	4.1
United Kingdom	71.8	Cyprus	4.4
Cyprus	69.2	Ireland	4.6
Austria	69.2	United Kingdom	5.0
Finland	67.7	Denmark	5.6
Portugal	67.2	Sweden	5.6
Ireland	65.4	Hungary	5.8
Germany	65.0	Portugal	6.3
Czech Republic	64.7	Slovenia	6.5

France	63.2	Czech Republic	7.8
Estonia	62.9	Belgium	8.1
Luxembourg	62.7	Malta	8.2
Slovenia	62.6	Italy	8.6
Latvia	61.8	Finland	9.0
Lithuania	61.1	Greece	9.3
Spain	59.7	France	9.4
Belgium	59.6	Germany	9.6
Greece	57.8	Estonia	10.1
Slovak Republic	57.7	Latvia	10.5
Hungary	57.0	Spain	11.3
Italy	56.1	Lithuania	12.7
Malta	54.2	Slovak Republic	17.1
Poland	51.2	Poland	19.2

Notes for editors

1. In March 2000, at the Lisbon European Council, Europe’s leaders committed themselves to a ten year programme of reform to make the European Union “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.”

2. Following agreement by EU Heads of State and Government at the March 2004 European Council, an independent high-level group under the Chairmanship of Mr Wim Kok, former Prime Minister of the Netherlands, has been established to provide a mid-term review of progress towards the Lisbon goal. The group’s remit is to make proposals to give renewed stimulus to the Lisbon strategy. It will report to the Commission and the Member States by 1 November 2004.

3. The Treasury has recently forwarded a submission to Wim Kok as a contribution to the work of the high-level group. This submission is intended to accompany the recent analysis published by the Treasury in February 2004 in Advancing long-term prosperity: Economic Reform in an enlarged Europe. Both are available on the Treasury website.

4. Wim Kok was also chair of the European Employment Taskforce which reported in November 2003 on the need for labour market reform in Europe. That report, Jobs, jobs, jobs : Creating more employment in Europe, is available on the European Commission website.

5. Media enquiries should be addressed to the Treasury press office on 020 7270 5238

6. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk.

7. This press release and other Treasury publications and information are available on the Treasury website at www.hm-treasury.gov.uk. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.