Select Committee on European Union Thirteenth Report


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.

COUNCIL OUTCOMES

  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 thinking—away 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 market (2001);

    —  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, postal services;

    —  reduce State Aids;

    —  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 several measures:

    —  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.

QUESTIONS RAISED IN REPORT

  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 markets.

  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 policy.

  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.


 
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