6th REPORT, SESSION 1999-2000: PROSPECTS
FOR THE LISBON SPECIAL EUROPEAN COUNCIL
Memorandum from the Foreign and Commonwealth
Office to the Select Committee on the European Union
1. The Government notes the conclusions
and the questions raised in the Select Committee on the European
Union's Report Prospects for the Lisbon Special European Council.
The Government's summary of the Council's outcomes and the responses
to the Committee's question follow below.
2. The Government regards the Lisbon Special
Council as a significant event on the European Union agenda. The
results were highly satisfactory, demonstrating that the European
Union is a very different place from even a few years ago. The
success of the Council also showed the value in the Government's
positive approach to Europe and to working with our European partners
in putting economic reform at the forefront of the EU's work.
The Council itself arose from a UK-Spain bilateral initiative
in 1999, and the UK agreed a further eight bilateral initiatives
in the run-up to the Council, including with France, Belgium and
the Netherlands, to promote our joint views for Lisbon.
3. The Prime Minister stated in the House
of Commons that the "Council marks a sea change in European
economic thinkingaway from heavy-handed intervention and
regulation, towards a new approach based on enterprise, innovation
and competition". That is now the agenda the Commission,
the Council and Member States will pursue to achieve the goals
and tight deadlines set out at Lisbon.
4. The Council was a success on many fronts.
In general, as the Prime Minister noted, it signals a reorientation
of how Europe approaches economic issues. The Council agreed a
new strategic goal for the next ten years "to become the
most competitive and dynamic knowledge-based economy in the world
capable of sustainable economic growth with more and better jobs
and greater social cohesion". The strategy for achieving
this is designed to enable the Union to regain the conditions
for full employment. The Council also agreed a new open method
of co-ordination, involving benchmarking Europe's performance
and progress against the best in the world and exchanging best
practice and experience among Member States. An annual meeting
of the European Council in the Spring will monitor follow-up.
5. More specifically, the Council agreed
a set of proposals with clear deadlines for completion.
In the areas of innovation and economic reform,
the Council agreed to:
implement an effective legal framework
for e-commerce (2000);
fully liberalise the telecommunications
ensure access to the Internet for
all schools (2001);
ensure electronic access to the main
basic public services (2003);
introduce a European diploma for
basic IT skills to improve labour mobility;
establish a Community-wide patent
(2001), making patent protection as simple, inexpensive and comprehensive
as anywhere in the world;
complete a Small Firms Charter (2000)
to promote better access to capital and training;
EIB to make another billion euro
available for venture capital for SMEs (2000-02);
produce a strategy for removal of
barriers to services (2000);
liberalise more quickly gas, electricity,
implement the Financial Services
Action Plan (2005).
6. In the area of the European social model,
the Council agreed that the model needs to be modernised by investing
in people and building an active welfare state. The Council proposed
a range of actions to combat social
exclusion including national action plans, work on indicators
and targets, and exchange of information and good practice;
an increase in per capita investment
in human resources;
schools and training centres, linked
to internet, developed into multi-purpose local learning centres;
furthering all aspects of equal opportunities;
a study on the future of social protection,
in particular the sustainability of pensions systems in the EU;
Europe-wide data base on jobs, training
and learning opportunities;
increase the overall employment rate
in EU from 61 per cent to 70 per cent and the female employment
rate from 51 per cent to over 60 per cent.
7. It is a priority of the Government, as
well as the Commission and other Members of the European Council,
to see that these decisions are implemented. Various specialist
Councils will be taking forward work, and the Commission will
be producing proposals for the Council to consider. An annual
Spring European Council will allow Heads of State and Government
to monitor progress towards achieving the Council's goals. We
are committed to a multi-year effort to make the EU the best place
in the world to do business, to work and to live.
8. Regarding the concerns raised in the
Committee's Report, the Government believes that most will have
been satisfactorily resolved by the Council conclusions. These
differ from the original Presidency paper which the Committee
evaluated for its Report.
9. The Report raises a concern about a "new
extension of EU activities in employment policy" in addition
to the existing EU processes. Lisbon agreed not to begin any new
processes. The Council did, however, agree to co-ordinate more
closely the EU's employment and economic policy framework, agreed
to give the Luxembourg process a renewed impetus through a mid-term
review of the employment Guidelines focusing on employability
and skills, lifelong learning, the service sector and equal opportunities;
and set aspirational targets for learning, the service sector
and equal opportunities; and set aspirational targets for increasing
the employment rate, for which Member States will set their own
goals. The emphasis at the Council was on increasing employment
opportunity for all.
10. Second, the Report notes that there
was no mention of the liberalisation of energy markets or of the
reduction of state aids to industry in the Presidency document.
The Lisbon Council conclusions do in fact explicitly mention the
need to reduce state aids and liberalise the electricity and gas
11. Third, the Report notes a concern with
how "renewing the European social model" would actually
be developed. The Council made it clear that for Europe to succeed
in the new economy, the EU needs to reorient its social model
to improve employability, create opportunity for all, adapt learning
and training systems to employment requirements, modernise social
protection, and promote social inclusion. It was not the intention
of the Council, or of the Government, to dispense with the social
system that has been built up in Europe but to reform and improve
it. The Council recognised the need for Europe to move away from
central regulation towards more delegated approaches to social
12. Fourth, the Report raises a broad concern
about subsidiarity. This is a concern that the Government has
always shared, and Government was careful to ensure that the Councils
strictly adhered to the principle of subsidiarity throughout the
conclusions. Many of the Council's action points can be dealt
with effectively only on a European level, eg, single market issues.
But the implementation of other goals is left for Member States,
eg, targets for employment rates, priorities for combating social
exclusion. The Council gave a clear steer to the Commission and
Council that the EU needs to do more benchmarking and peer review
and less regulation in areas best left to Member States.
13. Finally, the Report stated that the
Committee was "uncertain about the underlying rationale"
of the Council. The Government believes that the Council did achieve
its aims of highlighting the need for European economic and social
reform, while laying out clear objectives and deadlines for Europe's
future economic development.