Key Notes

June 2004

The Lisbon strategy

Background

In March 2000, the European Council in Lisbon set out a ten-year strategy to make the EU the world's most dynamic and competitive knowledge-based economy characterised by growth, social cohesion, respect for our environment and full employment.

The Lisbon Strategy touches on almost all of the EU's economic, social and environmental activities. The European Commission's annual Spring Report examines the Strategy in detail. The Spring Report is the only document on the agenda of the Spring European Council, where EU Heads of State and Government assess the progress of the strategy and decide future priorities in order to realise the Lisbon targets.

I. What does the European Union do?

The European Union has been implementing the Lisbon strategy for four years and the progress has been important:

More than six millions jobs have been created since 1999. Long term unemployment has dropped from 4% in 1999 to 3% in 2002. The labour market reforms now under way are starting to bear fruit, with unemployment holding up relatively well in the face of slower growth.

Several key markets have been completely or partially opened up to competition: telecommunications, rail freight, postal services, electricity and gas markets. A single European air space will become a reality from this year onwards, enabling delays and congestion in air transport to be reduced.

The knowledge-based economy is becoming a reality, with strong interest take-up in 93% of schools, as well as in business, public administration and households, and thanks to the gradual development of the European Research Area.

The sustainable development approach is being taken more fully into account in policy-making. Several Member States have embarked on reform of their pension systems to cope with the ageing of population. Similarly, Community action is now paying increasingly greater heed to preserve our environment.

The work done over the first four years has enabled some one hundred regulations, directives and programmes to be adopted in different fields but pursuing the Lisbon goals. One of the reasons of the low growth in overall productivity in Europe is the inadequate level of investment. The contribution of information technologies to productivity growth is less than half of that found in the United States, this situation works to the detriment of the priority areas identified by the Lisbon strategy. In this respect the European growth Initiative and the Quick Start Programme, adopted by the European council in December 2003, are a major source of leverage to unlock investment in the infrastructure and knowledge sector.
One of the sectors in which the Lisbon strategy has been implemented on time concerns the financial markets integration. Only a few measures still need to be adopted to meet the European Councils commitment of completing the Action Plan by 2005.

Elimination of fiscal distortions remains a priority to improve company competitiveness. Some progress has been made on this. The Tax package aimed at reducing distortions within the internal market has been adopted. The tax scheme applicable to dividends between parent companies and subsidiaries has been changed so as to eliminate any form of double taxation and fiscal obstacles to cross-border activities.

II. What has the EPP-ED Group achieved ?

The EPP-ED Group has played a leading role in the Parliament when discussing all the legislation concerning the Lisbon process. Every year the EPP-ED Group has urged the Council and the Commission to speed-up the Lisbon strategy. The EPP-ED Group is the group which has shown the strongest willingness to achieve the Lisbon goals on time.

III. Our goals for the next legislative period

The Lisbon strategy's potential lies in both its integrated and targeted approach as regards the policies and reforms to be implemented, with each element reinforcing the others. It is only by adopting this integrated and co-ordinated action to reform that the results can be optimised. The performance of the Member States in transposing the directives related to the Lisbon strategy is bad, on average 58%.

The EPP-ED Group will work in order to take the necessary decisions in three priority areas:

Improving investment in knowledge and networks. To do this, the Member States must commit to implementing the growth initiative through the Quick Start programme and the Investing in research action plan. Investment in education and training must also be stepped up to sustain human capital.

Strengthening the competitiveness of the European economy. The EP-ED Group will concentrate on the proposals needed for greater competitiveness. Integration of the services markets requires rapid progress on the proposal of the framework directive on services. The adoption of the Environmental Technologies Action Plan will be a priority of the EPP-ED Group next legislative term.

The EPP-ED Group will encourage the modernisation of the health care systems and the pensions system in order to make them sustainable.

The mid term review of the Lisbon strategy will take place in 2005. The EPP-ED Group considers that this review should focus on implementation and be based on the post-2006 financial perspectives.

From May 2004 the implementation of the Lisbon strategy will take place in the ten new Member States. The EPP-ED Group considers that the proper implementation in the new countries must be a priority. The enlargement will help stimulate the European economy.

The EPP-ED Group considers vital to maintain a stable macroeconomic framework. Fiscal policies in the Union must continue guided by the Stability and Growth Pact to not jeopardise the Lisbon goals.

Advisor: Christian Scheinert