The ''Europe 2020'' strategy for growth and employment

The global financial and economic crisis could have a lasting effect on the European Union's potential growth, if no structural action is taken, namely to resolve the labour productivity gap with its main competitors. Given its cyclical nature, recovery alone cannot provide the impetus for leading the EU back to the pre-crisis economic situation and absorb the deficit accumulated. To avoid stagnation, unsustainable debt trends, accumulated imbalances and ensure its competitiveness, the EU needs to accelerate the consolidation of its public finances, the reform of its financial sector and to frontload structural reforms.

The ''Europe 2020'' strategy for the decade 2011-2020, proposed by the Commission on 3 March 2010 [COM/2010/2020] and adopted by the European Council on 26 March 2010, identifies three priorities, which are mutually reinforcing and offer a vision of Europe's social market economy for the 21st century:

* smart growth – developing an economy based on knowledge and innovation;

* sustainable growth – promoting a more resource efficient, greener and more competitive economy; and

* inclusive growth – fostering a high-employment economy delivering economic, social and territorial cohesion.

The ''Europe 2020'' strategy sets five headline targets that should be translated into national targets and should be attained to boost growth and employment of the Member States of the European Union:

raise the employment rate of the population aged 20–64 from 69% in 2010 to at least 75% in 2020 [see section 13.3.2];

achieve the target of investing 3% of GDP in R&D in particular by improving the conditions for R&D investment by the private sector and by launching ''European Innovation Partnerships'' between the EU and national levels;

meet the "20/20/20" climate/energy targets, i.e. reduce greenhouse gas emissions by at least 20% compared to 1990 levels (or by 30% if there is international agreement), increase the share of renewable energy in final energy consumption to 20%, and achieve a 20% increase in energy efficiency [see section 16.3.4];

reduce the share of early school leavers from 15% in 2010 to 10% in 2020 and increase the share of the population aged 30–34 having completed tertiary education from 31% to at least 40%; and

reduce the number of Europeans living below national poverty lines by 25%, lifting 20 million people out of poverty.

The targets are representative of the three priorities of smart, sustainable and inclusive growth but they are not exhaustive: a wide range of actions at national, EU and international levels will be necessary to underpin them. The Commission has put forward seven flagship initiatives to catalyse progress under each priority theme:

1. "Innovation Union" aiming to re-focus R&D and innovation policy on the challenges facing Union society, such as climate change, energy and resource efficiency, health and demographic change, while ensuring that innovative ideas can be turned into products and services that create growth and jobs. At EU level, the Commission will work to:

* complete the European Research Area, to develop a strategic research agenda focused on challenges such as energy security, transport, climate change and resource efficiency, health and ageing, environmentally-friendly production methods and land management;

* improve framework conditions for business to innovate;

* launch 'European Innovation Partnerships' between the EU and national levels;

* strengthen and further develop the role of EU instruments to support innovation facilitate access to funding, particularly for SMEs and to bring in innovative incentive mechanisms linked to the carbon market;

* promote knowledge partnerships and strengthen links between education, business, research and innovation.

2. "Youth on the move" aiming to enhance the performance and international attractiveness of Europe's higher education institutions and raise the overall quality of all levels of education and training in the EU, combining both excellence and equity, by promoting student mobility and trainees' mobility, and improve the employment situation of young people. At EU level, the Commission will work to:

* integrate and enhance the EU's mobility, university and researchers' programmes and link them up with national programmes and resources;

* step up the modernisation agenda of higher education;

* promote entrepreneurship through mobility programmes for young professionals;

* promote the recognition of non-formal and informal learning;

* launch a Youth employment framework outlining policies aimed at reducing youth unemployment rates.

3. "A digital agenda for Europe" aiming to deliver sustainable economic and social benefits from a Digital Single Market based on fast and ultra fast internet and interoperable applications, with broadband access for all by 2013, access for all to much higher internet speeds (30 Mbps or above) by 2020, and 50% or more of European households subscribing to internet connections above 100 Mbps. At EU level, the Commission will work to:

* provide a stable legal framework, stimulating investments in an open and competitive high speed internet infrastructure;

* develop an efficient spectrum policy;

* facilitate the use of the EU's structural funds in pursuit of this agenda;

* create a true single market for online content and services;

* reform the research and innovation funds and increase support in the field of ICTs;

* promote internet access and take-up by all European citizens.

4. "Resource efficient Europe" aiming to help decouple economic growth from the use of resources and energy, support the shift towards a low carbon economy with the use of renewable energy sources, reduce CO2 emissions, enhance competitiveness and promote greater energy security. At EU level, the Commission will work to:

* mobilise EU financial instruments (e.g. rural development, structural funds, R&D framework programme, TENs, EIB);

* enhance a framework for the use of market-based instruments;

* modernise and decarbonise the transport sector thereby contributing to increased competitiveness;

* accelerate the implementation of strategic projects with high European added value;

* complete the internal energy market and implement the strategic energy technologies (SET) plan;

* upgrade Europe's networks, including Trans European Energy Networks, towards a European supergrid;

* implement a revised Energy Efficiency Action Plan and promote a substantial programme in resource efficiency;

* establish a vision of structural and technological changes required to move to a low carbon, resource efficient and climate resilient economy by 2050.

5. "An industrial policy for the globalisation era" aiming at a framework for a modern industrial policy, to support entrepreneurship, to guide and help industry to become fit to meet new challenges, to promote the competitiveness of Europe’s primary, manufacturing and service industries and help them seize the opportunities of globalisation and of the green economy. At EU level, the Commission will work to:

* establish an industrial policy creating the best environment to maintain and develop a strong, competitive and diversified industrial base in Europe;

* develop a horizontal approach to industrial policy combining different policy instruments;

* improve the business environment, especially for SMEs;

* promote the restructuring of sectors in difficulty towards future oriented activities;

* promote technologies and production methods that reduce natural resource use;

* develop an effective space policy to provide the tools to address some of the key global challenges;

* enhance the competitiveness of the European tourism sector;

* support the transition of service and manufacturing sectors to greater resource efficiency, including more effective recycling.

6. "An agenda for new skills and jobs" to modernise labour markets ensuring the sustainability of European social models, empowering people through the acquisition of new skills so as to adapt to new conditions and potential career shifts, reduce unemployment and raise labour productivity. At EU level, the Commission will work to:

* define and implement the second phase of the flexicurity agenda;

* adapt the legislative framework, in line with 'smart' regulation principles;

* facilitate and promote intra-EU labour mobility and better match labour supply with demand;

* strengthen the capacity of social partners and make full use of the problem-solving potential of social dialogue at all levels;

* give a strong impetus to the strategic framework for cooperation in education and training involving all stakeholders;

* develop a common language and operational tool for education/training and work: a European Skills, Competences and Occupations framework (ESCO).

7. "European platform against poverty" to ensure social and territorial cohesion such that the benefits of growth and jobs are widely shared and people experiencing poverty and social exclusion are enabled to live in dignity and take an active part in society. At EU level, the Commission will work to:

* transform the open method of coordination on social exclusion and social protection into a platform for cooperation and take concrete action, including through targeted support from the structural funds, notably the ESF;

* design and implement programmes to promote social innovation for the most vulnerable and develop a new agenda for migrants' integration;

* undertake an assessment of the adequacy and sustainability of social protection and pension systems, and identify ways to ensure better access to health care systems.

Implementing these initiatives is a shared responsibility, and action will be required at all levels: EU institutions and organisations, Member States, local and regional authorities. If fully implemented, this strategy will help the EU come out stronger from the crisis and turn into a smart, sustainable and inclusive economy delivering high levels of employment, productivity, competitiveness and social cohesion. This will deliver the competitive social market economy of the twenty first century, boosting confidence of market actors, companies and citizens alike.

To ensure that the commitments are translated into effective action on the ground, the governance methods will be reinforced. The Commission will monitor progress. Reporting and evaluation under both Europe 2020 and the Stability and Growth Pact (SGP) will be carried out simultaneously (while remaining distinct instruments) to improve coherence. This will allow both strategies to pursue similar reform objectives while remaining as separate instruments.

In fact, in January 2011 the Commission launched the first European Semester of ex-ante policy co-ordination anchored in the Europe 2020 strategy [See EU economic governance].

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