EU "SOCIAL SUMMIT" STRESSES JOBS AND LABOR

UNCLAS SECTION 01 OF 02 BRUSSELS 005619

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TAGS: ELAB EUN USEU BRUSSELS
SUBJECT: EU "SOCIAL SUMMIT" STRESSES JOBS AND LABOR
MARKET FLEXIBILITY

REF: Brussels 5469 (notal)


1. Summary: The Prime Ministers and Employment and
Social Affairs Ministers of the EU Troika (Italy,
Ireland, and the Netherlands) gathered with EU-level
trade union and employers organization leaders
December 11 to review the employment situation in
Europe. The "Social Summit," co-chaired by European
Council President Berlusconi and Commission
President Prodi, heard a presentation by former
Dutch PM Wim Kok in his capacity as head of the
Employment Task Force, which recently underlined the
need to press reforms to boost both employment and
productivity levels in Europe through increased
training and flexibility. Together with the EU
Action for Growth approved by the December 12
European Council, the "Kok report", as it is known,
highlights the gap facing the EU in its efforts to
meet the employment targets set under its "Lisbon
strategy" for turning the Union into the most
competitive economy in the world by 2010 (reftel).
End Summary

EU SOCIAL PARTNERS' VIEWS
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2. Berlusconi told the post-Social Summit press
conference that the Kok report was received
"positively by a very large majority of
participants." He noted that the report called for
solutions to the EU jobs crisis at the level of the
individual Member States. Commission President
Prodi said all participants agreed on the "clear
objectives" of the Kok report, although the
employers and unions had "differences" on the
"instruments" proposed, he said without going into
details. The President of the Union of Industrial
and Employers' Confederations of Europe (UNICE),
Jrgen Strube, expressed hope that the EU Summit
over the weekend would be the "Summit of the Wise,
that will give us a Constitution that will above all
allow business to develop". The Secretary-General
of the European Trade Union Confederation (ETUC),
John Monks, asked for his part for "a strong
Constitution for a strong Europe, and a strong
social Europe."

COMMISSION VIEWS
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3. In his address to the Social Summit, Prodi said
the report clearly showed that reforms were "both
possible and necessary, and that they must be
introduced urgently to support the economic upturn."
Areas for action identified by the report were
"fully consistent with" the European Employment
Guidelines adopted this year. Prodi called for
better dissemination of innovation, more stress on
R&D, developing strategies for dealing with an aging
population, stepping up preventive and active labor-
market policies, more investment in human capital,
and, lastly, more affordable and accessible
childcare. Prodi stressed that "In all these areas,
the Social Partners have a key role to play," and
that the ability of governments to build up "reform
partnerships," as the Report puts it, would be
"crucial for the success" of such policies.

NEXT STEPS
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4. The leaders of the EU-25 in their December 12
European Council meeting subsequently welcomed the
Kok report as well as the outcome of the Social
Summit. Berlusconi used his December 12 press
conference to reiterate his views in favor of
freeing European business, using the image of
"Gulliver being chained by red tape." In its
conclusions, the Summit stressed that, in accordance
with the view of the Task Force, improving the EU's
employment performance in the context of the
Employment Strategy depends on meeting four
essential requirements:

-- Increasing adaptability of workers and
enterprises;

-- Attracting more people to the labor market,
-- More and more effective investment in human
capital;

-- Ensuring effective implementation of reforms
through better governance.


5. The European Council tasked the Commission and
Council to consider the Kok report in preparing
their Joint Employment Report to be submitted by the
to the 2004 Spring European Council. The Report
would also be valuable for the Commission when
preparing its country-specific employment
recommendations next spring. As the EU work program
in the area is directed toward the March European
Council, no concrete results emerged from the
Summit. However, the social partners in a joint
declaration said they were sharing the sense of
urgency conveyed by the Kok report to meet the
Lisbon employment targets.


6. The holding of this three-way Summit reflects
concern expressed by some Member States (France, in
particular) about the current economic and
employment situation in Europe. The upcoming Irish
Presidency and the Commission have already started
to prepare, in consultation with the social
partners, the EU Summit of March 2004 that will
focus on sustainable growth, the aging of the
working population, as well as such concerns raised
in the Kok report as competitiveness and
productivity, social protection and mobility.

FOSTER