Winners and losers

The European economy is in a phase of improvement; unemployment is falling; inflation is under control. Some progress has also been made in terms of “social inclusion”, even if “much still remains to be done”. Reforms are needed to the labour market and to welfare, “exploiting the recovery”. These are some of the conclusions drawn by the EU in its review of performances in industry and trade, in the run up to the spring summit of heads of state and of government, traditionally devoted to economic questions. SUMMIT IN BRUSSELS. The summit is due to be held in Brussels on 8-9 March, and will be followed by the eagerly awaited informal summit in Berlin on 25 March to celebrate the 50th anniversary of the Treaties of Rome and the dawn of European integration, which began and was reinforced on the basis of the economic sectors. No political leader will want to spoil the forthcoming festivity: so the spring summit ought to take its cue from the positive results of the single market and formally adopt recommendations for each country in terms of the Lisbon Strategy (competitiveness based on knowledge, research, employment and social cohesion). The Barroso Commission has long worked on preparations for the meeting and in recent months has presented various reports on progress in “convergence”: from the one in December to those in recent days on employment and social protection. The German Presidency of the Council will chair the summit and ask for further steps to be taken “together” on the internal market, energy, the “external dimension” of competitiveness, liberalization of services and patents. SUSTAINED GROWTH. “The European economy has registered particularly positive results in 2006 and ought to maintain a sustained rate of growth in 2007”, says JOAQUÍN ALMUNIA , Commissioner for Economic and Monetary Affairs. He will bring to the March summit the so-called “intermediate projections” (including the autumn and spring data) of the economic situation. According to the Spanish politician, the current situation “reflects a greater robustness of the European economy and proves that the reforms already implemented merited the effort made”. “The result – says Almunia – is that the Union is creating more jobs” and unemployment “has fallen to its lowest level for over a decade”. But he warns: “We must avoid repeating the errors of the past and exploit these favourable periods to continue along the path of the improvement of public finances and of structural reforms”. According to the Executive’s data, “the economic growth of the EU ought to maintain a sustained rate in 2007, with a growth estimated at 2.7% in the EU-27 and 2.4% in the Eurozone”. CREATING JOBS. Almunia’s fellow Commissioner VLADIMÍR ŠPIDLA shares this upbeat view of the EU’s performance. In a double report drawn up for the summit, concerning employment and social inclusion, he writes: “The reforms of the labour market are bearing fruit, but if Europe wants to respond effectively to the challenges posed to globalization and the rapid decline of the working population, it must aim at ‘flexi-security’: workers must be able to shift from one job to another with ease and without fears”. So reforms are needed that combine flexibility with security and “need to be carried through in a positive economic phase like that before us”. The Commission confirms that overall unemployment is declining (with a rate comprised between 8 and 9%). The responsible Commissioner explains: “The rate of the employment of elderly workers has risen from 41% in 2004 to 42.5% in 2005, but much still remains to be done to reach the objective of 50% in 2010”. On the downside, the widespread practice of a “labour blackmarket” in confirmed; moreover, “youth, the disabled and migrant workers still remain excluded from the labour market”. According to the Lisbon Agenda, the EU countries ought overall to create a further 22 million jobs by 2010, an objective called “ambitious but possible”. RISK OF POVERTY. Špidla however does not limit his remarks to economic issues. In the “Joint Report on Social Protection and Inclusion” he tackles questions concerning the welfare state. For example he affirms: “The member states must act on various levels to meet their commitment to reduce child poverty, by facilitating the participation of parents in the labour market, and improving access to education and decent housing”. This report also analyses “the priorities and progress realized in terms of inclusion, pensions and healthcare”; at the same time it underlines that “major problems still remain to be solved” in the 27, with particular regard to the countries of recent accession. The Czech Commissioner adds: “The recent reforms that aim at making national systems financially and socially more sustainable are encouraging, but many questions still need to be solved. The facts are clear: 16% of Europeans are at risk of poverty and 10% live in families without a job”.