European and External Relations Committee

Meeting date: Tuesday, March 16, 2010

Official Report 367KB pdf

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Europe 2020 Inquiry

I welcome, from Brussels via video link, Tonnie De Koster, who is team leader in the strategic objective prosperity unit of the European Commission. Thank you for joining us today.

The committee will recall that we recently heard evidence from a selection of Scottish stakeholders on the Europe 2020 strategy. Today provides us with an opportunity to find out a little more about how the Commission intends to take forward proposals for the strategy. We will hear from the Scottish Government at our next meeting.

Before we move to questions, I want to check that everything is okay. Can you hear us in Brussels, Mr De Koster?

We can hear you perfectly well, thank you.

Good. I understand that you intend to make some opening remarks, after which the committee will move to questions. You have the floor.

Let us try again.

Another criticism is that perhaps the consultation document paid insufficient regard to the role of the regions. What role does the Commission see for the regions in delivering the Europe 2020 policy?

Let me first explain that a consultation document has necessarily to be short. You cannot unveil everything that you intend to do in a consultation document. Its fundamental role is to set out the main ideas and allow everybody to pronounce on them so that we get contributions that reflect the profound thinking of the stakeholders, of which we can take account in defining the new strategy.

The role of regions is clearly present in the Commission’s proposals for the new strategy that we issued on 3 March. There is also a clear objective to increase territorial cohesion. As I said previously, there is a critical role for regions in defining and implementing the strategy. We need to be clear about that. In most of our member states, a large chunk of the areas that are covered by this kind of structural reform agenda fall within the competence of regions. That in itself is a response to your question. How can we undertake those structural reforms if we do not involve those who are responsible for them? In our proposals we set out an important role for the regions. We are extending the partnership that we have between those at EU and national level to a partnership that involves all those within the member state who are crucial to this agenda: regions, communities, social partners and civil society. The agenda is not something that we can or would like to impose from Brussels. We are pointing to examples of good practice in this area—there are quite a few around. The interest that the Scottish Parliament has shown in the topic, through the committee’s debate today and its previous debates, is proof of how important the strategy is to the regions.

I was going to bring in Michael Matheson, but Patricia Ferguson may speak first.

We want to get in as many questions as possible, but I am conscious that we are running a bit short of time. I thank Mr De Koster for explaining matters so thoroughly, but we may need slightly shorter answers.

11:00

Again, the short answer is that they will play a very important role. We think that the target needs to be owned by both sides of the social partners. One often finds that the European countries where structural reforms have been undertaken successfully are those where there has been close involvement of the social partners early on, even at the stage of problem analysis, so that there is a shared assessment of where the problem lies and of what type of reforms need to be undertaken. The social partners will play an important role. We are already working closely with the European Economic and Social Committee, with which we have been involved in regular contact and debate.

You are right to point towards the flagship platform against poverty initiative, which should underpin the objective to reduce poverty. In addition, the new skills for new jobs initiative includes an important component that is about continuing to introduce the principle of flexicurity. At the European level, agreement has already been achieved between the social partners on the definition of flexicurity and how it should be implemented in the various member states.

Good morning. I want to ask about the “three mutually reinforcing priorities” that are outlined in your presentation. Do any of the priorities have a higher priority than the others? Would you care to rank the three priorities?

I am also conscious of the danger that member states may choose to drop one or more of the priorities when implementing them at member state level. Does the Commission perhaps need to look at introducing binding targets as part of the EU 2020 strategy to ensure that member states work towards the targets that the Commission has set?

First, I do not think that there is a hierarchy in the priorities. They are interlinked.

Secondly, we are currently in the phase of discussing, negotiating on and preparing for the decisions that will be made at the spring European Council next week. At this juncture, not all 27 member states are ready to agree to the five targets that the Commission has proposed. The discussions are still preliminary, as the decisions will be taken by the heads of state and of Government. We like the fact that the strategy is not pre-cooked and that the heads of state and of Government will themselves decide on the matter, because we recognise the European Council’s steering role. We in the Commission hope that President Barroso will make the case for all five targets that have been proposed and we hope that we will obtain the agreement of all 27 member states on them.

On whether the targets could be binding, I do not think that we necessarily have the competence through the Lisbon treaty to make binding targets in areas such as education or poverty, which are at best issues of mixed competence, but which are probably issues over which the EU has little competence. By the way, one of the strengths of this type of agenda—as has been the case with the Lisbon strategy—is that it provides a comprehensive and logical agenda that covers not only areas of Community competence but many areas where there is little or no Community competence. We are able to act in an integrated and coherent way without fighting over issues of competence. Binding targets would be legally very difficult and would not necessarily take us much further. At the end of the day, the strategy needs to be a partnership and—if I may put the matter in simple terms—is not something that we can impose, or would like to impose, from Brussels.

I think that the targets need to remain realistic. They set the direction and the objective. At the end of the day, it is not a question of achieving the targets to the second digit after the comma; it is more important that we get movement in the direction of the targets. It would not necessarily be good regularly to revisit the level of the targets, unless we needed to revise them upwards because we had already achieved them.

You are right about the 20/20/20 targets—I should perhaps clarify that two of those are in effect binding targets, on which legal instruments have been agreed at European level. Our proposed objective is to have thematic monitoring at least once a year at the level of the European Commission, whereby the Commission might present what progress the European Union in its totality is making towards reaching those targets and how individual member states are performing. The European Council would then have a discussion based on those themes and, where necessary, might take the necessary additional measures to be able to meet the targets.

I want to ask about skills. It has been suggested by a witness from the Scottish Government’s skills development agency, Skills Development Scotland, that the strategy

“views skills as almost temporary—they get people between jobs or take them to other learning.”

However, Skills Development Scotland

“would like skills to be represented as much more lifelong, important and vital for social and career mobility and to be used far more effectively”.—[Official Report, European and External Relations Committee, 23 February 2010; c 1416.]

Do you think that more needs to be done, in developing the EU 2020 strategy, to ensure that there is a clearer focus on lifelong learning than happened under the Lisbon strategy? You have been clear about the importance of education, but I want you to talk specifically about skills in relation to social and career mobility.

Thank you for giving evidence to the committee, Mr De Koster. Unfortunately, we have run out of time. Later this morning, the committee will deliberate on a number of the points that you and committee members have raised. We hope to conclude our inquiry in a month or two and draft a report. It sounds to me as though there is still much to play for in terms of the detail under the headline targets. I hope that we will be able to submit our report to the European Commission as part of the substantive discussion to be had in the next few months.

Thank you. My name is Tonnie De Koster and I work in the secretariat-general of the Commission, which is the service that directly supports President Barroso. I am in charge of the Europe 2020 strategy.

I am sorry, Mr De Koster, but we cannot hear you terribly clearly. Is it possible for us to have the sound a little louder? We will take a moment to check the connection.

10:34 Meeting suspended.

10:35 On resuming—

Thank you very much. Your opening remarks have answered quite a few of the questions that we intended to put to you, but perhaps I can invite you to expand on one or two areas. You ended on a point about ownership, which is important. This committee has taken a range of evidence from Scottish stakeholders on the EU 2020 strategy. One of the major criticisms that has been made is that there has been insufficient consultation to date with social partners, civil society and the regions. In particular, it is felt that the timescale that was imposed in the initial consultation document meant that many partners could not respond to the Commission’s initial proposals. Perhaps you can expand on that and say where we go from here. I take it from what you said that there will be opportunities ahead. I hope that that is so, because the committee would like to participate in the process and reflect to you Scottish stakeholders’ concerns. Perhaps you can say a bit more about how you can ensure ownership among stakeholders through the focus that the European Council will take this time round. Many have said that the Lisbon policy failed because member states’ Governments lacked ownership of it. Can you expand on those points, please?

Good morning, Mr De Koster. As the convener said, we have had a number of evidence sessions at which witnesses have given their views specifically on the consultation document. Why was there such a short timescale for responses to the consultation document?

I acknowledge that the period was relatively short, but it is important to take into account the fact that, over quite an extensive period—a year or a year and a half—we have worked in the first instance with member states and national Lisbon co-ordinators to prepare the new strategy. With the help of the French presidency, we discussed with key stakeholders on several occasions how the new strategy should look. Through our contacts—unfortunately, they are mostly here in Brussels—we have had the privilege of making them aware of the important challenges ahead and of the direction that the discussion is taking.

That said, the consultation period was somewhat shorter than usual. It came at a bit of an odd time, and included the Christmas and new year period, but that was because we were trying to convey a sense of urgency about it. President Barroso did that with heads of state and Governments. It is not business as usual; we are confronting what is surely the most significant economic crisis since the second world war. Responses need to come in quickly. We hear clearly from our citizens that they expect us to be capable of providing solutions rapidly at European level. That explains the urgency and the necessity to move quickly.

Did you say “binding targets”?

Yes. I asked whether the targets should be binding.

Behind the targets are the flagship initiatives, but time does not allow us to go into detail on those today. The Commission will make its proposals once the strategy is adopted; as of June, you can expect those agendas to be presented. The critical one is the agenda for new skills and new jobs, the detail of which is provided in the Commission’s proposal for the EU 2020 strategy. Behind that is the idea that we need to consider all the stages of life—it is not just about secondary and tertiary education; it is also about lifelong learning and ensuring that we have a policy for pre-school education. All the stages of life are important and must be addressed through a coherent set of actions.

On lifelong learning, we must go way beyond what we did in the Lisbon strategy. A lot of attention is paid to lifelong learning but, frankly, we are not performing extremely well on that in the European Union. Is our sub-target for it—which is 12 per cent, if I remember correctly—really ambitious? I doubt it, and even that target is not being met. We must make an effort in relation to the definition of lifelong learning and ensure that we work on incentives for employers and employees to invest in lifelong learning. Another important element of the policies that we need to work on as part of the flagship initiative is ensuring that the skills that we acquire meet the requirements of the labour market. Importantly, within that, we must anticipate the labour market’s needs.

We will have to be quiet at our end so that we can hear you, but we will manage.

I am directly responsible for what was called the Lisbon strategy and is now the Europe 2020 strategy. With me is my colleague Jean-François Poisson, who works with me on these topics.

I thank the committee for the honour of being able to attend the meeting by videolink. You will have received a presentation, which is way too extensive to present now, but it will be useful background material.

It is important to sketch the context for the new strategy that we are proposing. First, the strategy is conceived as a crisis exit strategy, which goes beyond simply an exit in fiscal terms. Secondly, it puts forward a vision of where the European Union should be in 10 years’ time, starting with the recognition that the current crisis will have affected immensely the world that will come after it. We will emerge from the crisis in a very different situation, and the challenge ahead of us is to ensure that Europe is prepared for that.

We start from a position in which the recovery is still fragile, although we are seeing the first signs of it. In particular, unemployment is still on the rise, so we need to be cautious. We must acknowledge that the challenges that the European Union faced before the crisis in relation to ageing, the productivity gap and climate change will still be with us in the decade to come, and that, due to the crisis, we need to take a series of additional challenges into account. First, we have lost an important bit of growth potential; secondly, there is high and rising unemployment; and thirdly—last but not least—our fiscal room for manoeuvre will be extremely limited in the years to come.

In that context, it is important to take the international dimension into account and consider where Europe stands in comparison to the rest of the world. That gives us a sense of urgency, and we want to convey the message that it is necessary for Europe to move towards better and stronger economic policy co-ordination. We can see that the competition from developed and emerging economies around us is increasingly fierce.

If we do not take action, we would, at best, risk the prospect of a decade of sluggish recovery, or even a “lost decade”, as you will see from the third slide in the handout that you have received. We think that such a scenario is unacceptable, and we propose to take action to ensure that we recover and return to growth, although not the same type of growth as we witnessed before the crisis. We seek growth that is more sustainable in economic terms—avoiding speculative bubbles—and in ecological and social terms.

To achieve that, the EU is including three objectives in its proposals for the EU 2020 strategy. The first is to focus on what we call smart growth, in the sense of developing an economy that is based on knowledge, education, research and development, and innovation. The second is to achieve sustainable greener growth by tapping into the potential of new green technologies and ensuring that our economy, services and products are more efficient in terms of energy and resource. The third is to have more inclusive growth that aims at fostering a high-employment economy to ensure stronger social and territorial cohesion within the EU.

To measure our progress towards achieving those three thematic priorities, the Commission proposes to set a limited number of headline targets for the EU as a whole and ensure that they are translated into national targets. A set of interrelated targets will give an overview of the main features of the proposed strategy.

First, we need to ensure that we raise EU employment to 75 per cent of those aged between 20 and 64.

Secondly, we must increase investment in R and D to 3 per cent of the EU’s gross domestic product. That target does not come out of the blue—it is based on international comparisons. For example, the comparable R and D percentage is 2.7 per cent in the US, 3.4 per cent in Japan and over 4 per cent in Korea. We need to compete with those countries if we want the EU to move up the value chain. The 3 per cent target for R and D is therefore critical, but we must recognise that it is very much about ensuring that we create the conditions for increased private investment in R and D.

Thirdly, we propose to integrate in the new strategy the so-called 20/20/20 climate change and energy targets, which have already been approved at EU level.

Fourthly, in a knowledge-based economy it is of course critical to invest in education. Again, international comparison shows that we are not doing terribly well in, for example, the rate of early school leavers. Currently, 17 per cent of the population leaves secondary school without a qualification. We think that that percentage needs to be reduced to at least 10 per cent. We propose also to raise to 40 per cent the number of people who come on to the labour market with a tertiary degree. Finally, we propose to reduce by 20 million the number of people who are at risk of poverty.

To achieve all that, the Commission proposes to launch seven flagship initiatives with both an EU and a national component. I cannot go into the detail of the initiatives, but a table on the handout in front of you gives an overview of them. They are comprehensive agendas, for which we intend to set priorities for action at the European level, whether that is legislative or non-legislative action, or using all the instruments available through European programmes or the EU budget. There is also a very important national component. Again, we need to ensure that the two levels work together.

10:45



Taking a brief step backwards to the Lisbon strategy, our assessment is that the glass is half full in that regard rather than half empty or entirely empty, as the media often like to present it. We think that much has been achieved in creating consensus across the EU on the direction of reforms. However, there has clearly been a delivery gap, which is due to the fact that implementation of the structural reform agendas across the 27 member states is rather diverse. I say that because, in devising the new strategy, it is critical to consider how we should adapt our objectives to the new political and economic context that I just described, as well as how to deliver the new strategy—what we call governance, in terrible Brussels jargon. Clearly, the problems that arose with the Lisbon strategy were lack of political ownership by member states and insufficient involvement of their regions, local levels and social partners. All that must be tackled.

It is important to ensure more ownership at European level. To achieve that, we envisage a lead role for the European Council in which heads of state and Governments will take responsibility for the implementation of the new strategy in both the definition phase and the implementation phase. To do that, we propose to hold regular thematic discussions at the level of the European Council, based on a monitoring that the Commission will do. The monitoring will ensure that we also benchmark the EU against the rest of the world. In order to raise ownership in the period ahead it is also critical in both the definition phase and the implementation phase to ensure that regions, local levels and, ultimately, social partners and civil society are very involved.

I will stop there. I apologise for speaking at some length.

Sure. First, I thank you very much for the important contributions to the consultation that we received. I accept that the consultation period was short. Despite that, we received a significant number of contributions from all over Europe. It is important, and comforting to us, that those contributions do not just come from here in Brussels but from capitals of member states, regional capitals and industrial and social players at national and regional level. It is critical that we maintain such activism in the years to come.



You are right that the first step in defining the new strategy and how it works on the ground is to ensure that it is adopted at the European Council. We hope that that will happen next week when the Council meets in Brussels. Thereafter, there will be the important phase of translating the European targets, which we hope that the Council will adopt next week, into national targets. The Commission will conduct that process together with member states. It is important that there is also a process within member states that allows for regions and stakeholders to be involved and to be players in it.

Please understand that we cannot impose this from Brussels—it needs to happen within member states. We are, of course, calling for strong involvement from the regions, but it is ultimately up to member states to decide how they organise themselves.

Subsequent to the setting of the national targets, there will be the definition of so-called bottlenecks. We will be looking, country by country, at the main challenges ahead in meeting the national targets. Ideally, that should take place before June.

The third stage, which is what has happened with the Lisbon strategy over the past few years, is to ensure that each of the 27 member states presents a national reform programme—a Europe 2020 programme—that indicates what measures it will take to meet its targets, to what timescale and with what budgets, and how it will involve all the stakeholders. We hope that those elements will be part of the national reform programmes. When all that is decided, the Commission will issue guidance to member states on the structure and the points on which to focus in those reform programmes.

There is another important phase. In order to increase ownership, it would be extremely useful throughout the whole implementation phase of the new strategy to do what the European Council does and organise thematic debates about the main themes of the new strategy and look at how member states or regions are progressing.

I will pass you to my colleague Patricia Ferguson.

Good morning, Mr De Koster. Can you expand a little on what role the Commission envisages for the EU’s social partners in delivering the EU 2020 strategy? Will the social partners have a specific role in any particular element of the strategy, such as the reduction in poverty target that you mentioned in your presentation? I would be interested to hear more information on that.

Good morning. Will there be any flexibility within the targets? There is already flexibility in the 20/20/20 targets, which might become 20/20/30 if the conditions are right. Might we see a mid-term review of the targets if the environment changes?

Thank you for allowing me the honour of speaking to the committee. I look forward to reading your report and hope that we can give evidence again or continue our dialogue on the strategy as we move ahead with its definition and implementation.

I suspend the proceedings for a few minutes to allow a change of witnesses in Brussels.

11:14 Meeting suspended.

11:22 On resuming—