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The European Employment Strategy and the Europan Semester Federico Lucidi DG Employment, Social Affairs and Inclusion Outline of the presentation 1. The EES and EU2020 Strategy 2. The European Semester 3. An overview of 2015 CSRs The European Employment Strategy The EES was introduced in 1997 by the Amsterdam Treaty Its aim is the creation of more and better jobs throughout Europe It now constitutes part of the Europe 2020 Strategy, and is implemented through the European Semester

Treaty-based Objectives MS and the Union shall [] develop a coordinated strategy for employment: To promote a skilled, trained and adaptable workforce and labour markets responsive to economic change To achieve full employment, social progress, a high level of protection (art. 145, TUE) Competences who does what? Full respect of national competences on employment policy; Member States define and implement their national policies and coordinate with each other within the Council

at European level The Commission encourages cooperation of MS, supports their common action, and intervenes to complement their action if necessary Europe 2020 strategy Launched in 2010 Smart, sustainable and inclusive growth 5 headline targets + 7 flagship initiatives European Semester, enhanced by the Six-Pack (2011) and the Two-Pack (2013) Mid-term review of EU2020 in March 2014 The EU2020 targets Employment rate should be at 75% (2014: 69,2%)

Share of early school leavers should be under 10% (2014: 11.1%) Goal of 40% of younger generation having tertiary degree or diploma (2014: 37.9%) 20 million fewer people at risk of poverty or social exclusion (since 2010, the number of AROPE has risen by 6 million. 24.8% of the EU-28 population) European Semester - milestones

Integrated guidelines including Employment guidelines, proposed by the Commission and adopted by the Council Annual Growth Survey (AGS) and Alert Mechanism Report (AMR), presented by the Commission (November) Joint Employment Report (JER) including a Scoreboard of key employment and social indicators (November) Country Reports, published by the Commission (February)

National Reform Programmes (NRPs), submitted by Member States (April) Country-Specific Recommendations, proposed by the Commission (May) and adopted by the Council (June-July) 2015 AGS - A coordinated approach Investment deficit and protracted employment and social challenges Impact of an improved employment and social situation on potential GDP growth. Employment in the AGS 2015 Emphasis on:

Entrepreneurship Investment in skills Job creation Mobility presenting a shift towards harnessing the conditions for business to create new employment 2015 new approach Streamlining and focus on structural reforms "We should not waste the opportunity of this economic recovery. I call on Member States to profit from the momentum and deliver on structural reforms that help

those left behind get back into the labour market" M. Thyssen, EMPL Commissioner The European Semester 2015 focuses on the structural reforms that are most essential for those left behind during the crisis to get back in the labour market 2015 Making it happen: the European Semester Chapeau Communication: First signs economic recovery, but unequal over Member States Reform is taking place, but impact takes time Challenge to keep reform drive on track

Economic tailwinds are breathing extra vitality into an otherwise mild cyclical upswing Labour markets are slowly improving Set to increase from 0.1% this year to 1.5% in 2016 The fiscal outlook continues to improve

EU unemployment down to 9.2% next year HICP inflation to recover later this year EU GDP growth expected at 1.8% this year, 2.1% next Deficit at 2.5% this year and debt on decreasing path But policy has to address the underlying weaknesses Overcome the pre-crisis imbalances and the legacy of the crisis

Boost investment Re-build the medium-term growth potential Employment relevant 2015 CSRs 1. Skills, education and training 2. Youth 3. Protection of the vulnerable 4. Extending working life 5. Female LM participation 6. Health care systems 7. Labour taxation and shadow economy 8. ALMPs 9. LM segmentation and EPL 10.Wages and competitiveness 1.The role of education and training Unemployment rate by educational attainment Early school leaving: MT, RO

Access to education/E&T for vulnerable groups: AT, BG, CZ, HU, RO, SK Educational outcomes: HU, LT, MT, SK, UK Higher education reform: CZ, LV Teachers' training / attractiveness of profession: CZ, HU, IT, MT, SK LM relevance of education/ skill mismatch: BE, EE, FI, IT, LT, UK VET, apprenticeships, work-based learning: EE, LV, IT, UK Cooperation of education with private sector: UK Source: Eurostat 2. Youth

2015 CSRs target mainly: Youth employment: IT, BG, ES, FI, PT, RO Reach out to NEETs: BG, PT, RO YG: Member States made considerable progress but steps are needed towards its full implementation 3. Protection of the vulnerable At-risk-of poverty and social exclusion Poverty and exclusion on the rise in two third of the MS Effectiveness of social transfers: ES, HR Adequacy/ coverage of unemployment benefits/ social assistance, link to activation: FR, HU, IE, HR, LT, LV, RO

Childhood poverty: IE Disabled: EE 4. Extending working lives Duration of working life (years, 2012) and employment rate of older workers (%, 2013) 2015 CSRs target mainly on: 1. Restricting access to early retirement FI, HR, LU 2. Adjust statutory retirement age to life expectancy: AT, BE, LU, MT 3. Actively enhance older workers' employability AT, BG, FI, SI 4. Harmonisation of retirement age men and women:

AT, RO 5. Sustainability/adequacy pension system: AT, PT, SI, LT, FR, HR Source: Eurostat 5. Female labour market participation Gaps between male and female full-time equivalent employment rates in 2014 Need for family support services: AT, CZ, EE, IE, RO, SK, UK Source: Eurostat

6. Healthcare and long-term care 2015 CSRs focus mainly on: Public healthcare expenditure as % of GDP, 2012 1. Healthcare: BG, CZ, ES, FI, HR, IE, LV, RO, SI, SK 2. Long-term care: AT, SI Source: Eurostat, OECD, WHO 7. Tax wedge remains high for low income earners Tax wedge and tax

disincentives for low income earners: AT, BE, (EE), CZ, DE, FR, HU, LT, LV 8. ALMPs and employment services Long-term unemployment (%, left scale, 2012) and activation support (LMP participants per 100 persons wanting to work, right scale, 2011) 2015 CSRs target mainly: 1. Enhance quality, coverage, targeting and effectiveness of ALMP: BE, HU, IT, PT, RO, SK 2. PES performance:

ES, IT, PT, RO Source: Eurostat, LMP database 3. Improve employability: EE, FI, LT, LV, SI 9. Employment protection and labour market segmentation Share of temporary contracts (2013) and transition from temporary to permanent (2012) 30.0 2015 CSRs target mainly: 80

1. Labour market segmentation: DE, FR, IT, PL 70 25.0 % temporary Workers 20.0 50 15.0 40 30

10.0 20 5.0 10 0.0 0 RO EE BG SK

T M DK AT % share temp workers (2012) Source: European Commission IE IT 28 EU FI

SI CY transitions temp to perm job (2012) PT PL % transitions to perm jobs 60 2. Employment protection legislation: FR, IT

10. Wages and competitiveness Unit labour costs in deficit and surplus countries, euro-area groups weighted averages, y-o-y % change *Surplus countries are: BE, DE, LU, NL, AT, FI Source: Eurostat 2015 CSRs target mainly: 1. Wage setting, development, indexation and flexibility: BE, ES, FI, FR, HR, IT, LU, PT

2. Minimum wages, incl. not detrimental to job creation: BG, FR, PT, RO, SI

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