The Lisbon Special European Council (March 2000): Towards a Europe of Innovation and Knowledge

The aim of the Lisbon Special European Council of 23-24 March 2000 was to invigorate the Community's policies, against the backdrop of the most promising economic climate for a generation in the Member States. It was therefore fitting to take long-term measures on the basis of this outlook.

Two recent developments are profoundly changing the economy and society. Globalisation means that Europe must set the pace in all the sectors where competition is intensifying. The sudden arrival and growing importance of information and communication technologies (ICT) in professional and private life call for a radical overhaul of the education system in Europe and guaranteed lifelong learning opportunities

The Lisbon European Council therefore endeavoured to issue guidelines for exploiting the potential offered by the new economy, in order to eradicate the scourge of unemployment, amongst other aims. As the Cardiff, Cologne and Luxembourg processes together provide a range of suitable instruments, no new processes were considered necessary in Lisbon. On the contrary, it is through the strategy of adapting and strengthening the existing processes that the potential for economic growth, job creation and social cohesion can best develop - for example by providing the European Union with reliable data to compare between the Member States, so that appropriate measures can be taken.

Thanks to a favourable economic outlook, full employment seemed tangible in 2000. However, owing to the economic slowdown and structural problems in the Member States, the European Union is still lagging behind as regards this objective. The weaknesses of the European labour market continue to create difficulties:

• the insufficient number of jobs being created in the services sector, even though this is by far the most important in terms of employment;
• significant regional imbalances, particularly since enlargement in 2004;
• a high rate of long-term unemployment;
• labour supply does not match demand, which is quite often the case in periods of economic recovery;
• a shortage of women participating in the labour market;
• European demographic trends, in particular an ageing population.

All these weaknesses can be rectified, as long as the resources are made available. Now that the economic recovery has provided more room for manoeuvre, it is time to prepare for the technological and social challenges ahead. Not only must these challenges be faced, but they must also serve as a springboard towards achieving the objective of full employment.

The technological challenge

Information and communication technologies (ICT) represent both a major challenge and a significant opportunity for job creation. The Commission intends to improve the quality and quantity of jobs in the European Union in the short and medium term through the impact of ICT. The communication of June 2005 entitled " i2010 - A European Information Society for growth and employment " sets out the overall policy guidelines. In a more general context, it is important to make sure that this information society is accessible to all, regardless of social category, race, religion or gender. This digital economy, with the potential to improve quality of life, is an important factor in improving competitiveness and in job creation.

Even so, it is vital to ensure that this economic and social transition - however fast it occurs - does not leave certain categories of citizen behind and that the fruits of growth are distributed equitably. This is the aim of initiatives such as the Commission's " eEurope " initiative, which also puts the emphasis on increasing economic productivity and improving the quality and accessibility of services for the benefit of all European citizens, based on a fast infrastructure (broadband) with secure Internet access available to as many people as possible.

A knowledge-based society

If people arriving on the labour market are to participate in the knowledge economy, their level of education must be sufficiently high. The inverse relationship between level of education and rate of unemployment is becoming more pronounced. Europe must raise the educational level of school-leavers.

Teaching and research should be better coordinated at European level. This can be achieved by creating networks of national and joint research programmes.

Only by making the resources available will Europe be able to develop the job creation opportunities offered by ICT. It has been estimated that, between 2000 and 2010, half of all new jobs in Europe will be related directly or indirectly to information technologies, like those jobs already created by the EU's comparative advantage in mobile telephony.

Making Europe more competitive

If Europe is to become the world's most competitive economic area, it is also important to improve research conditions and create a more favourable climate for entrepreneurship, in particular by reducing the administrative costs associated with bureaucracy.

In addition to administrative simplification, the Commission also wishes to see a real spirit of entrepreneurship developing in Europe

The completion of the internal market is another priority arising from the Lisbon summit of 2000 and remains a priority in 2005. In its conclusions, the European Council called, inter alia, for the Member States, the Council and the Commission to do their utmost to achieve liberalisation in specific sectors (gas, electricity, postal services, transport, etc.). The Commission has also prepared a strategy for the internal market 2003-2006, focusing on specific objectives. This forms part of the integrated guidelines 2005-2008.

Integration of the financial markets and coordination of macroeconomic policies

The potential of the euro must provide an opportunity to integrate the European financial markets. As emphasised in the Commission communication " Risk capital: A key to job creation in the European Union ", the risk capital markets are vital for the development of SMEs. The conclusions of the European Council demonstrate the need for a strict timetable so that a plan of action for the financial markets can be in operation by 2005.

With regard to economic policies, the priority is still macroeconomic stability, as defined in the Stability and Growth Pact, integrating the objectives of growth and employment. The transition to a knowledge economy calls for structural policies to play a more important role than before.

Modernising and strengthening the European social model

In its contribution to the preparations for the Lisbon European Council, the Commission emphasised that the European social model includes resources to support the transition to a knowledge economy. Social integration will be promoted by encouraging work, guaranteeing viable pension schemes - at a time when the European population is described as "ageing" - and guaranteeing social stability.

The Commission, in promoting social inclusion, has accorded these objectives the utmost importance. It has been very active in combating racism and xenophobia, in promoting equality of opportunity between men and women and in its measures to help the disabled.

Five years after the launch of the Lisbon strategy, the Commission is taking stock of the progress achieved under this strategy. The communication entitled " Working together for growth and jobs - A new start for the Lisbon Strategy" proposes, in particular, a simplified coordination process accompanied by a concentration of efforts on the national action plans (NAPs).

Last updated: 13.12.2005