Council Recommendation on the implementation of Member States' employment policies (2004)

The recommendation sets out the priorities for the implementation of employment policies by the Member States and the social partners. It calls upon them inter alia to increase the adaptability of workers and enterprises; attract more people to the labour market and make work a real option for all; invest more, and more efficiently, in human capital and lifelong learning; and ensure effective implementation of reforms through better governance. For the first time, the Council recommendations are also addressed to the 10 new Member States of the European Union.

ACT

Council Recommendation (EC) No 741/2004 of 14 October 2004 on the implementation of Member States' employment policies [Official Journal L 326 of 29.10.2004]

SUMMARY

The 2004 recommendations stem from scrutiny of the national action plans, analysis of the employment guidelines for the period 2003-2005 and the conclusions of the European Employment Taskforce set out in the joint report for 2003-2004. Employment policies are deployed in line with the recommendations for the broad economic policy guidelines (BEPG).

This report concludes that the Member States and the social partners have given limited responses to the Council recommendations of 22 July 2003. The common priorities of the 2004 recommendations are to:

The new Member States need to further develop their efforts to achieve a new balance between flexibility and security, and to improve the health of the workforce. Stepping up the social dialogue and improving the administrative capacity of public authorities are crucial to achieve full implementation and efficient use of European Social Fund support. The country-specific messages in the Employment Taskforce report provide the basis for implementing the employment guidelines in the new Member States.

COUNTRY-SPECIFIC RECOMMANDATIONS

Belgium | Denmark | Germany | Greece | Spain | France | Ireland | Italy | Luxembourg | Netherlands | Austria | Portugal | Finland | Sweden | United Kingdom | Cyprus | Czech Republic | Estonia | Hungary | Lithuania | Latvia | Malta | Poland | Slovenia | Slovakia

Belgium

The employment rate in Belgium remains far below the Lisbon targets. The employment rate for older workers is amongst the lowest in EU25. The employment rate of non-nationals is strikingly low. Belgium should give immediate priority to:

Denmark

Denmark has employment rates well above the Lisbon employment targets, including for women and older workers. Denmark nevertheless needs to ensure adequate labour supply in the longer term and should as a matter of priority get down to :

Germany

The German employment rate is above the EU average but still below the Lisbon targets. The employment rate for older workers is lagging behind. The employment rate for women exceeds the EU average but is stagnating. Since 2000, employment has been on the decline and unemployment has increased. Long-term unemployment and regional disparities between the eastern and western parts of the country persist. Germany should give immediate priority to:

Greece

Although job creation has increased recently, Greece still has one of the lowest employment rates in the EU, particularly for women. Undeclared work is widespread. Labour productivity remains at low levels. Adult participation in training also remains low, especially given the low educational attainment of the working-age population. In recent years, increased immigration has contributed to labour supply. Greece should give immediate priority to:

Spain

Despite substantial progress between 1997 and 2002, unemployment in Spain remains well above the EU average, while the employment rate remains well below. Addressing regional disparities remains a priority. Female participation and the employment rate of older workers remain particularly low. Moreover, about a third of all workers are still employed under fixed-term contracts. Labour productivity remains at low levels. Overall levels of educational attainment and participation of adults in training remain particularly low. In recent years, increased immigration has contributed to labour supply. Spain should give immediate priority to:

France

In France, the overall employment rate is below the EU average. The employment rate for older workers (55-64) is one of the lowest in the EU. Unemployment remains among the highest in the EU and it is particularly high for young people (15-24). The employment rate of non-nationals is strikingly low, notably for women. The share of fixed-term contracts continues to exceed the EU-15 average, whereas participation of adults in education and training remains just below average. France should give immediate priority to

Ireland

The total employment rate in Ireland has increased from 56,1 % to 65,3 % since 1997 while unemployment has fallen by nearly two-thirds and long-term unemployment from 5,6% to 1,3 %. There is still a significant gap between employment rates for women and men, as well as a high gender pay gap. Labour shortages remain a problem although they are eased by increased immigration. A significant element in Ireland's success is its capacity to attract direct foreign investment. Social partnership, its tax system, a good regulatory environment and investment in human capital are also major factors. Ireland should give immediate priority to:

Italy

Despite weak economic conditions employment growth still continues to be positive and confirms the improvements since 1997. However, the employment rate continues to be one of the lowest in the EU. Female participation and the employment rate of older workers also remain among the lowest in EU25. Unemployment has decreased in recent years, but still stands above the EU15 average. With unemployment at about 5 % in the centre-north, compared to 18 % in the south, addressing regional disparities is a priority. Undeclared work still remains particularly significant, even if the employment situation of 700 000 immigrants has been regularised. Overall levels of educational attainment and participation in training remain particularly low. Italy should give immediate priority to:

Luxembourg

In Luxembourg, the employment rate is close to the EU average but still below the EU target. Unemployment remains low and the long-term unemployment rate is one of the lowest in the EU. However, the new jobs generated by the economic boom of the 1990s were notably taken up by cross-border workers and women, while employment of older workers remained at a very low level. Participation in education and training remains below the EU15 average. Luxembourg should give immediate priority to:

The Netherlands

While the employment rates for women and men well exceed the Lisbon targets, the employment rate of immigrants remains low. The labour market is characterised by an exceptionally high level of part-time work (about 44 % of the workforce), and a high number of people on disability benefits. The employment rate of older workers exceeds the EU average but is still far below the EU target. Unemployment has risen significantly since 2001, although it remains among the lowest in the EU. The Netherlands should give immediate priority to:

Austria

Austria has achieved a high employment rate overall, and a relatively high employment rate for women, in line with the Lisbon targets. Unemployment is amongst the lowest in the EU. Social partnership plays an important role in modernising work organisation, improving labour legislation and ensuring satisfactory wage developments. The employment rate of older workers, however, is particularly low. Employment growth has slowed down and unemployment has started to rise. Participation of adults in education and training is below the EU average. The gender pay gap remains one of the highest in the EU. Austria should give immediate priority to:

Portugal

Portugal is close to achieving the Lisbon target on overall employment and slightly exceeds the employment targets for women and older workers. The recent economic slowdown has caused unemployment to rise, although it remains at a relatively low level by comparison with the EU average. Levels of productivity, overall levels of educational attainment and access to training remain particularly low. Moreover, a significant share of people (more than 20 %) is employed under fixed-term contracts. In recent years, increased immigration has contributed to labour supply. Portugal should give immediate priority to:

Finland

Finland is close to the overall employment rate target and it exceeds the employment rate target for women. It has achieved a high increase in the participation of older workers over the last decade, coming close to the EU target for older workers. The unemployment rate is above the EU average, and is particularly high for young people. Finland should give immediate priority to:

Sweden

Sweden exceeds all EU employment targets including those for women and for older workers. The total unemployment rate stands at about 5 %. Efforts should be maintained to avoid labour supply constraints. In view of the ageing population, there will be a need to sustain labour supply by exploiting potential sources of labour among immigrants, the young and the long-term sick, and by improving incentives to work. Sweden should give immediate priority to:

United Kingdom

The UK exceeds all the employment rate targets, including those for women and for older workers. However, concentrations of economic inactivity, and to a lesser extent unemployment, persist in certain communities and amongst particular groups. Productivity levels, especially as expressed per hour worked, remain comparatively low. This is in part due to the prevalence of low skills amongst the workforce, including insufficient basic skills. The gender pay gap remains one of the widest in the EU. The United Kingdom should give immediate priority to:

PRIORITIES FOR THE NEW MEMBER STATES

Cyprus

The employment rate in Cyprus is well above the EU15 average and the unemployment rate is low. The share of foreign workers, who are often employed on a temporary basis, has increased significantly over the years in response to labour market needs. Cyprus needs to:

Czech Republic

The employment rate in the Czech Republic is slightly above the EU15 average. Unemployment is around the EU15 average but has been slowly increasing since the mid-1990s. The employment rate of older workers is close to the EU average but low, particularly for women, given the early statutory retirement age. There are significant regional imbalances. The Czech Republic needs to:

Estonia

The employment rate in Estonia is a little below the EU15 average. The unemployment rate has decreased over the years but remains higher than the EU average. Moreover, the share of long-term unemployed is high. Estonia is expected to suffer from the decline in the working-age population resulting from demographic change. Estonia needs to:

Hungary

The employment rate in Hungary is low, particularly for the low-skilled, the disadvantaged, women and for older workers. At the same time, unemployment remains well below the EU15 average. This is explained by a low participation rate, i.e. a large inactive population of working age. There are major labour market imbalances between the central and western regions and the rest of the country. Regional and sectoral mobility is low, while skills bottlenecks reflect both a lack of skilled labour and the insufficient responsiveness of education and training systems to labour market needs. Hungary needs to :

Lithuania

The employment rate in Lithuania has risen slightly recently but remains well below the EU15 average. The unemployment rate has decreased significantly but is still well above the EU average. Lithuania needs to:

Latvia

Employment in Latvia has increased quite strongly over the last two years. However, the overall employment rate stands below the EU15 average. Unemployment remains above the EU15 average with wide regional variations. At the same time, labour and skill shortages exist in Riga. Latvia needs to:

Malta

The employment rate in Malta is particularly low compared to EU15 average. The employment rate of older workers is particularly low. The employment rate of women is the lowest in the EU25: only a third of women of working age are in work. Unemployment has increased slightly over the last two years but remains below the EU15 average. Malta needs to:

Poland

The employment rate in Poland is among the lowest in the EU25. The situation on the labour market has deteriorated during the last four years. The employment rates of women, of older workers, of young people and of the low-skilled are particularly low. At about 20 %, the unemployment rate is at its highest level since the start of the economic transformation, and is the highest in EU25. Poland needs to:

Slovenia

The employment rate in Slovenia is slightly below the EU15 average, but is particularly low for older workers. The unemployment rate is well below the EU average. Slovenia needs to:

Slovakia

The overall employment rate in Slovakia remains low compared to the EU15 average. Although it is declining, unemployment is still very high, with a large share of long-term unemployed. The employment rate of women is low and the employment rate of young people, of the low-skilled and of older workers (especially women) is particularly low. There are significant regional imbalances. Slovakia needs to:

RELATED ACTS

Council Recommendation (EC) No 579/2003 of 22 July 2003 on the implementation of Member States' employment policies (2003/579/EC [Official Journal L 197 of 05.08.2003]. The Commission's proposal for employment recommendations is presented in conjunction with the new employment guidelines. The 2003 guidelines include, in particular, three main objectives and 10 structural reform priorities, and call on the Member States to improve governance, the partnership between the different players and the implementation of the process. Drawing on the findings of the joint employment report for 2002, which assesses the action taken at national level, the Commission provides the Member States with specific guidance for implementing the new guidelines and focusing their policy action on the key challenges to be faced. The recommendations have to do mainly with lifelong learning, labour supply and active ageing, gender equality, making work pay, addressing change and promoting adaptability.

Council Recommendation (EC) No 178/2002 of 18 February 2002 on the implementation of Member States' employment policies (2003/579/EC [Official Journal L 60 of 01.03.2002] The 2002 recommendations carry over those proposed by the Council in 2001.

Council Recommendation (EC) No 64/2001 of 19 January 2001 on the implementation of Member States' employment policies [Official Journal L 22 of 24.01.2001] They mainly concerned active and preventive policies aimed at combating youth and long-term unemployment; increasing the supply and demand of labour particularly by reforming tax and benefit systems; a comprehensive strategy for lifelong learning; equal opportunities; combating regional imbalances; partnership between governments and social partners; and the overall policy mix.

Council Recommendation (EC) No 164/2000 of 14 February 2000 on the implementation of Member States' employment policies [Official Journal L 52 of 25.02.2000] These recommendations identify the key labour-market challenges facing the Member States and suggest appropriate lines of action. The main areas of concern are: the effort to combat youth unemployment and long-term unemployment; tax and social benefit reforms; qualifications and lifelong learning; older workers and the extension of working life; the mainstreaming of gender equality and of equal opportunities; the promotion of the services sector; and the social partners and modernisation of labour administration.

Last updated: 21.03.2005