EU2020: Denmark aims for high employment

In the blog post Denmark: Competitiveness challenges we found slow productivity growth as well as high and rising wage costs among the major hurdles for the future of the Danish economy.

What does the National Reform Programme (NRP) tell us about growth-enhancing structural reforms in Denmark?

The Danish Government's NRP in English:

Denmark's National Reform Programme (May 2011; 67 pages)


Employment rate

The more people work, the more they pay taxes and social contributions. This is good for the budget balance, especially when the demand for social benefits decreases when people move into employment. The ”work first” principle of the Swedish government guides decisions not only on taxes and benefits, but practically every aspect of government policy.

The more successful societies seem able to mobilise more talent than the governments in the less competitive countries. Participation by women and real retirement ages are obvious factors, as are youth, people with an immigration background, the unemployed and various marginal groups.

Denmark is well known for its flexicurity model, but the government of the day promised further reforms in order to reach an employment rate of 80 per cent among 20-64 year olds by 2020 (page 14).

Denmark, like some of the other highly competitive EU member states, targets a clearly higher employment rate than the EU2020 headline target of 75 per cent.

According to Eurostat, the Danish employment rate 76.1 per cent already surpassed the EU end goal in 2010.

The European Union as a whole (EU-27), with an employment rate of 68.6 per cent, has a steep climb ahead of it to reach even the 75 per cent target by 2020.

The Danish NPR offers inspiration based on a constant stream of Initiatives to promote labour supply and employment (Box 2.1, pages 15-16).

The NPR of Denmark (page 17) found that the national efforts were in line with the Annual Growth Survey COM(2011) 11 from the European Commission, where the recommendations to mobilise the labour markets and to create job opportunities are found on the pages 5-7.

However, the AGS found that the European Union as a whole was going to miss the much lower headline goal of 75 per cent on existing trends, so there is a great need for effective labour market reforms in the EU member states.



Ralf Grahn

Europe 2020 strategy: Flagship initiative Youth on the move

Education is at the heart of the Europe 2020 flagship initiative Youth on the move, which aims at improved employability and employment for young EU citizens.



Context



The Europe 2020 strategy puts forward three priorities for growth (smart, sustainable and inclusive), and five headline targets (employment, innovation, climate and energy, education and inclusion).



The Commission has promised and the European Council has called for concrete action in the form of seven flagship initiatives.



Flagship initiative Youth on the move

We are now taking a look at how the European Commission has sketched the flagship initiative Youth on the move, in its policy proposal:



Communication from the Commission: Europe 2020 - A strategy for smart, sustainable and inclusive growth; Brussels, 3.3.2010 COM(2010) 2020 final

The executive summary of the Europe 2020 strategy offers a brief description of what the flagship initiative is about (page 5):

– "Youth on the move" to enhance the performance of education systems and to facilitate the entry of young people to the labour market.

Education, mobility and employment

On page 13, the Commission outlines how the flagship initiative Youth on the move aims to improve education (employability), increase mobility in education and training, and facilitate job market entry for young people. Action is foreseen at EU level and at national level:

The aim is to enhance the performance and international attractiveness of Europe's higher education institutions and raise the overall quality of all levels of education and training in the EU, combining both excellence and equity, by promoting student mobility and trainees' mobility, and improve the employment situation of young people.

At EU level, the Commission will work:

– To integrate and enhance the EU's mobility, university and researchers' programmes (such as Erasmus, Erasmus Mundus, Tempus and Marie Curie) and link them up with national programmes and resources;

– To step up the modernisation agenda of higher education (curricula, governance and financing) including by benchmarking university performance and educational outcomes in a global context;

– To explore ways of promoting entrepreneurship through mobility programmes for young professionals;

– To promote the recognition of non-formal and informal learning;

– To launch a Youth employment framework outlining policies aimed at reducing youth unemployment rates: this should promote, with Member States and social partners, young people's entry into the labour market through apprenticeships, stages or other work experience, including a scheme ("Your first EURES job") aimed at increasing job opportunities for young people by favouring mobility across the EU.

At national level, Member States will need:

– To ensure efficient investment in education and training systems at all levels (pre-school to tertiary);

– To improve educational outcomes, addressing each segment (pre-school, primary, secondary, vocational and tertiary) within an integrated approach, encompassing key competences and aiming at reducing early school leaving;

– To enhance the openness and relevance of education systems by building national qualification frameworks and better gearing learning outcomes towards labour market needs.

– To improve young people's entry into the labour market through integrated action covering i.a guidance, counselling and apprenticeships.

In the overview annex, the flagship initiative Youth on the move is placed under Smart growth and Education (page 32).



Headline target: Education




The European Council meeting 17 June 2010 finalised the headline targets (document EUCO 13/10). The adopted headline targets guide the preparation of the flagship initiatives (and the national reform programmes, NRPs). The approved education target of the Europe 2020 strategy for jobs and growth aims at (in Annex I, page 12 of the conclusions):

- improving education levels, in particular by aiming to reduce school drop-out rates to less than 10% and by increasing the share of 30-34 years old having completed tertiary or equivalent education to at least 40%; [The European Council emphasises the competence of Member States to define and implement quantitative targets in the field of education.]

Youth on the move: To be continued

I intend to look at the preparation and communication of the Europe 2020 flagship initiative Youth on the move in series of blog entries.




Ralf Grahn

EU2020: Five headline targets (European Council 17 June 2010)

Within the wider framework of a new European strategy for jobs and growth, the European Council 17 June 2010 finalised the headline targets of the Europe 2020 strategy (document EUCO 13/10; Annex I, pages 11 to 12).

The five headline targets regarding employment, research and development, climate change and energy, education, and social inclusion and poverty reduction reform are:

- aiming to raise to 75% the employment rate for women and men aged 20-64, including through the greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants;

- improving the conditions for research and development, in particular with the aim of raising combined public and private investment levels in this sector to 3% of GDP; the Commission will elaborate an indicator reflecting R&D and innovation intensity;

- reducing greenhouse gas emissions by 20% compared to 1990 levels; increasing the share of renewables in final energy consumption to 20%; and moving towards a 20% increase in energy efficiency;
the EU is committed to taking a decision to move to a 30% reduction by 2020 compared to 1990 levels as its conditional offer with a view to a global and comprehensive agreement for the period beyond 2012, provided that other developed countries commit themselves to comparable emission reductions and that developing countries contribute adequately according to their responsibilities and respective capabilities;

- improving education levels, in particular by aiming to reduce school drop-out rates to less than 10% and by increasing the share of 30-34 years old having completed tertiary or equivalent education to at least 40%; [The European Council emphasises the competence of Member States to define and implement quantitative targets in the field of education.]

- promoting social inclusion, in particular through the reduction of poverty, by aiming to lift at least 20 million people out of the risk of poverty and exclusion. [The population is defined as the number of persons who are at risk-of-poverty and exclusion according to three indicators (at-risk-of poverty; material deprivation; jobless household), leaving Member States free to set their national targets on the basis of the most appropriate indicators, taking into account their national circumstances and priorities.]

We are going to look at the European Council’s road map from ambitions to arrival.




Ralf Grahn

Europe 2020 strategy background note: Education and social inclusion at European Council 17 June 2010

The previous background blog post ahead of the June European Council referred to three of the headline targets of the Europe 2020 strategy for growth and jobs.




The Spring European Council 25 to 26 March fixed the headline targets for: employment; research and development (R&D); energy and reducing greenhouse gas emissions (document EUCO 7/10).



European Council 17 June 2010 aim


The European Council intends to finalise the Europe 2020 strategy at its meeting 17 June 2010. In particular, this entails setting the indicators and numerical targets concerning the fourth target, education, and the fifth target, social inclusion.



4 Education levels



According to the March European Council, two areas, education and social inclusion, required more preparatory work.

With regard to education levels, the Spring summit agreed to finalise the target in June (point 5(b), page 2):

improving education levels, in particular by aiming to reduce school drop-out rates and by increasing the share of the population having completed tertiary or equivalent education; taking into account the Commission's proposal, the European Council will set the numerical rates of these targets in June 2010;

Education ministers



The Council configuration Education, Youth and Culture on 10 to 11 May 2010 resulted in the following presidency conclusions (document 9456/10, page 11):

"The Council agreed to propose to the European Council in June 2010 the numerical rates of the EU headline targets to improve education levels of the new strategy Europe 2020, building on the two corresponding levels of European average performance ("European benchmarks") approved in the strategic framework for European cooperation in education and training (ET 2020), that is by 2020, the school drop-out rate should be less than 10% and the share of population having completed tertiary or equivalent education should be at least 40%.


In line with their responsibility for their education and training systems, the competence of the member states regarding the setting and implementation of quantitative national targets in the area of education and training is fully maintained. The principles and working methods agreed under the strategic framework for European cooperation in this field play their full role in monitoring progress towards the EU headline targets for education."

5 Social inclusion and poverty reduction



Regarding social inclusion and poverty reduction, the March European Council agreed to finalise the details of the headline goal in June (point 5(b), page 2):

promoting social inclusion, in particular through the reduction of poverty. Further work is needed on appropriate indicators. The European Council will revert to this issue at its June 2010 meeting.

EPSCO Council





The EPSCO Council (Employment, Social Policy, Health and Consumer Affairs) on 7 June 2010 adopted a social inclusion/poverty reduction target and indicators as a contribution to the European Council (document 10828/1/10 REV 1):

• that the quantified target of the Europe 2020 Strategy to promote social inclusion, in particular through the reduction of poverty, be formulated in such a way that it would aim at lifting at least 20 million people from the risk of poverty and exclusion by 2020;

• to accept the three set up indicators established by the Social Protection Committee.

Comment


We have seen two Council formations trying to define improved indicators and numerical targets ahead of the European Council. It is hard for a lay reader to understand how they alter or refine the Commission’s proposal. They look like a communicator’s nightmare.

If Coreper, the GAC, president Herman Van Rompuy or the European Council do not improve on the texts, hopefully someone with communicative skills translates these latest proposals on the summit table into clear and engaging prose, if the European Council wants to (as it tells us) involve national parliaments, social partners, regions and other stakeholders, so as to increase ownership of the Europe 2020 strategy.




Ralf Grahn

Background note Europe 2020 strategy (European Council 17 June 2010)

The previous blog post referred to the European Commission’s proposal on the Europe 2020 strategy for smart, sustainable and inclusive growth.

This entry takes the strategy one step further, by guiding readers to the first decisions taken by the European Council.



Spring European Council



The Spring European Council 25 to 26 March 2010 already endorsed main elements of the new strategy for growth and jobs (document EUCO 7/10).

In accordance with the Commission proposal, the European Council agreed on setting five headline targets, shared objectives for the member states and the EU for the coming decade (point 5(b), page 2):

1. Employment
2. Research and development (R&D)
3. Energy and reducing greenhouse gas emissions
4. Education levels
5. Social inclusion and poverty reduction


We remind our readers of the conclusions regarding the first three headline targets, more or less finally fixed by the European Council.



1 Employment

With regard to the headline target for employment, the European Council concluded:

aiming to bring to 75% the employment rate for women and men aged 20-64, including through the greater participation of youth, older workers and low skilled workers and the better integration of legal migrants;

2 Research and development (R&D)

The European Council’s conclusion on R&D:

improving the conditions for research and development, in particular with the aim of bringing combined public and private investment levels in this sector to 3% of GDP; the Commission will elaborate an indicator reflecting R&D and innovation intensity;

3 Energy and reducing greenhouse gas emissions


With regard to the difficult question of global action against climate change, the European Council reiterated its past 20/20/20 commitments, as well as its conditional willingness to commit itself to a 30 per cent reduction:

reducing greenhouse gas emissions by 20% compared to 1990 levels; increasing the share of renewables in final energy consumption to 20%; and moving towards a 20% increase in energy efficiency;
the EU is committed to take a decision to move to a 30% reduction by 2020 compared to 1990 levels as its conditional offer with a view to a global and comprehensive agreement for the period beyond 2012, provided that other developed countries commit themselves to comparable emission reductions and that developing countries contribute adequately according to their responsibilities and respective capabilities;

In the next blog post we look at the headline targets expressly marked for continued discussion in June.




Ralf Grahn

Background note European Council 17 June 2010: Europe 2020 strategy

As we have seen during the course of several blog entries, the draft agendas and the General Affairs Council (GAC) were not particularly informative. The draft conclusions of the European Council are kept under wraps. A short while ago, the only document (admittedly) submitted to the European Council was the annotated draft agenda from 7 May. No clarifying background notes had been published.

The human, budget and communication resources of the European Union’s institutions must truly be overextended, when they leave it to private citizens to supplement their work by producing background notes for the 17 June 2010 summit of European leaders.



Spring European Council




At the European Council Thursday, 17 June 2010, the heads of state or government will return to the Europe 2020 strategy for jobs and growth.



Commission proposal Europe 2020


Those who want to put matters into perspective can go back to the proposal made by the European Commission:



Communication from the Commission: EUROPE 2020 - A strategy for smart, sustainable and inclusive growth; Brussels, 3.3.2010 COM(2010) 2020 final (35 pages)



Five headline targets proposed

The five headline targets proposed by the Commission for the Europe 2020 strategy were (page 32):

Raise the employment rate of the population aged 20-64 from the current 69% to at least 75%.

Achieve the target of investing 3% of GDP in R&D in particular by improving the conditions for R&D investment by the private sector, and develop a new indicator to track innovation.

Reduce greenhouse gas emissions by at least 20% compared to 1990 levels or by 30% if the conditions are right, increase the share of renewable energy in our final energy consumption to 20%, and achieve a 20% increase in energy efficiency.

Reduce the share of early school leavers to 10% from the current 15% and increase the share of the population aged 30-34 having completed tertiary education from 31% to at least 40%.

Reduce the number of Europeans living below national poverty lines by 25%, lifting 20 million people out of poverty.

The next posts will present agreed headline targets and preparatory work for the Europe 2020 issue at the 17 June 2010 European Council.




Ralf Grahn