Joint Employment Report (1998)

1) OBJECTIVE

To present the employment situation in the European Union and examine the measures taken by Member States to implement the 1998 Employment Guidelines.

2) COMMUNITY MEASURES

Joint Employment Report 1998 (Part 1).

3) CONTENTS

The Joint Report is in two parts. The first part reports on the start of the Luxembourg process, compares the labour markets of the Member States and takes stock of the implementation of the Employment Guidelines. The second part analyses the employment situation country by country.

Submitted in anticipation of Article 128 of the Treaty of Amsterdam, the Report assesses the quality of the efforts made by each Member State to implement the National Action Plans for Employment (NAPs). However, the Report does not evaluate the impact of the decisions adopted - that will be left to the Joint Employment Report for 1999.

The essential feature of the new employment process is the establishment of clearly measurable and identifiable European and national objectives, in order to improve the transparency and management of employment policies.

Economic context

Employment rose during 1997, with the creation of almost 800 000 jobs. It should rise again by 1.2% in 1998 and 0.9% in 1999, equivalent to the net creation of about 2.8 million jobs over these two years. Unemployment fell from 10.9% in 1996 to 10% at the end of 1998.

These good results for the European economy could, however, be affected by the slow-down in the world economy as a result of the Asian crisis. For this reason, it is vital to deepen and consolidate the European Employment Strategy.

The adoption of the new European Employment Strategy at the Luxembourg summit has borne fruit, notably in the following areas:

• the demonstration of the will of the Member States and other economic players to join in the fight against unemployment;
• the formulation of a strategy containing priority objectives clearly identified at Community level in the 1998 Guidelines;
• the consideration paid to the European strategy by international bodies (G7 meetings in February and May 1998).

However, certain problems and gaps have been identified:

• the deadlines for preparing the NAPs and drawing up the implementation reports have been too short;
• the proliferation of interlocutors has led to an increase in evaluation reports and red tape;
• the absence of comparable data between Member States has made the evaluation and follow-up more difficult.

Despite the short deadlines, the Member States have shown their determination by submitting their National Action Plans from April onwards and the implementation reports in July 1998.

Implementation of the NAPs

All the Member States submitted a report stating how they were going to implement the policy undertakings of the NAPs. Differences between the Member States can be seen at a budgetary level. France and Spain submitted global and detailed estimates of how they were going to fund their NAPs (1.4% of GDP for France and 1.2% for Spain). The estimates of additional expenditure for Belgium, the Netherlands and Luxembourg were 0.7%, 0.55% and 0.35% of GDP respectively. No global estimate was provided by the United Kingdom, Germany, Austria, Portugal, Greece, Sweden or Italy. As for Finland and Denmark, no information on their budget commitments was given in their NAPs.

The Report presents an initial analysis of the implementation of the NAPs with regard to the four priorities adopted in the 1998 Guidelines.

Pillar 1: employability

The Member States have demonstrated a real commitment to combating against long-term unemployment by adopting certain active measures: the Union's operational objectives, such as the offer of a fresh start within six months for unemployed young people or within twelve months for adults and the level of 20% of the unemployed attending training courses, were taken into account in the various NAPs, but significant differences still exist between Member States according to the gravity of their long-term unemployment problem. Accordingly, whilst Denmark, Spain, France, Luxembourg, Portugal, Finland and Sweden took the objectives defined in the Guidelines fully into account, other countries interpreted them more flexibly (Belgium, Ireland, the Netherlands and the UK). Moreover, those States where the principal aim of employment policy is the social reintegration of the long-term unemployed have developed a preventive approach for 1999 without, however, establishing quantified objectives (Italy and Greece).

All the Member States emphasised the need to reduce the proportion of young people who leave the education and basic training systems without a minimum level of qualifications by promoting apprenticeships and all types of work-related training.

It is too early to properly evaluate the progress made in the activation of 20% of the unemployed. Six countries now say that they have reached the 20% target set in the Guidelines (Denmark, Germany, Sweden, Finland, Ireland and the UK), Belgium and the Netherlands have not set precise targets, whilst the other Member States have set a target greater than or equal to 20% (Portugal, Spain, France, Luxembourg, Austria, Italy and Greece).

Pillar 2: entrepreneurship

The Member States agree on the fundamental role of SMEs in job creation. They have taken various initiatives to help SMEs, including the opening of "one-stop offices" by the public authorities for those setting up new businesses (Italy, Portugal, Luxembourg and France), as well as supporting business start-ups and self-employment (Austria, Belgium, the Netherlands, Sweden and Germany) or financial assistance for taking on your first employee (France and Spain).

To these initiatives must be added the will of the Member States to develop new services (France, Germany and Denmark) and high-tech industries (Finland and Austria).

Despite the Member States' claim to be in favour of promoting entrepreneurship, progress in this area has been modest. This situation is due in part to the length of time taken to adopt the corresponding legislative initiatives, the complexity of adjustments to the tax regime and budget difficulties linked to the financial cost of these initiatives.

Pillar 3: adaptability

The organisation of work and working time are being reviewed in many Member States. The Governments and social partners have proposed reforms in this area with a view to improving the organisation of companies and contractual relations to enable them to keep up with developments in society (changes in human resources, development of new skills, life-long training, etc.).

The National Action Plans have allowed this process to be deepened in certain Member States (Germany, Spain, Italy) by encouraging the social partners to be more active and to adopt a more global approach to the modernisation and organisation of work.

New negotiations are planned on, for example, the creation of better conditions for in-house continuing training (France, Luxembourg, Portugal, Spain, Sweden, Finland, Italy, Greece and the Netherlands), working time reduction and reorganisation (France and Luxembourg), and the adaptation of labour legislation to more flexible contracts (Portugal, Finland, Spain, Italy, Luxembourg and Greece).

Pillar 4: equal opportunities

Drawing up and implementing the NAPs has made the Member States aware of the importance of measures aimed at ensuring equal opportunities not only between men and women but also for the benefit of other groups (the disabled, ethnic minorities).

So far, the labour market still has some areas which are mainly male and some which are mainly female, even in Member States where the employment rates for men and women are comparable, e.g. Finland and Sweden. It is also difficult to re-enter the labour market after a period of absence (vocational qualifications may be out-of-date, for instance).

The NAPs have little to say here, with the exception of countries such as Spain, Portugal, Sweden and Austria. The bulk of the measures under this pillar consist of introducing tax breaks to help with the costs of childcare or the creation of extra places in crèches and nurseries.

On the other hand, few measures have been adopted to help people who are dependent as a result of a disability or old age.

National surveillance mechanisms

Most Member States have put in place specific interministerial structures to ensure that the NAPs are monitored and implemented (Portugal, Finland, Belgium, Greece, Spain, Ireland, Luxembourg, Austria and Italy). In certain Member States, the social partners are directly involved in monitoring the programmes (Luxembourg, Spain and Portugal).

Monitoring progress

The Report provides examples of good practices for each pillar, from a list of more than 40 measures proposed by the Member States.

In this context, the production of comparable statistics and indicators between the countries is a key factor for evaluating the measures taken and determining good practices in the Member States.

The Council and the Commission emphasise the efforts made by the Member States to improve their national statistics. Despite everything, more progress is needed to improve the comparability of data, at the level of Community statistics and national statistics, in particular the national unemployment registers (calculation of the flows in and out of unemployment, long-term unemployment, identification of target populations).

The Report contains various indicators relating to the employment situation, common basic and overall performance indicators for each Member State, the European Union, Japan and the United States.