Attila Ágh and András Vértes (eds)

From the Lisbon Strategy to the Europe 2020 Strategy:

Think European

for the Global Action

Together for Europe
 Series

Kossuth Publishing Co.

The ‘Together for Europe’ Research Centre

wishes to express its gratitude

for the financial support of its

research programmes:

‘Competitiveness of the Hungarian Regions

in the European Union’ project of the Hungarian National Research Foundation

(OTKA ID: 77659)

and

‘Strategic research for the preparation

of the Hungarian EU presidency

in 2010-2011’ for the Prime Minister’s Office – Hungarian Academy of Sciences

Table of Contents

Preface By András Vértes

Europe needs an effective long term political and economic strategy

Introduction

On the Europe 2020 from Lisbon Maria João Rodrigues

Introduction

1  Our development model is unsustainable

2 A new concept of prosperity

3 A strategy of innovation for sustainable development

A. To make a shift to low carbon activities

B. To make knowledge and creativity the main resource of people, companies and regions

C. To make the welfare system to support change and reduce social inequality

D. To make the financial system serve the real economy

4 A new approach for policy making in the global era

5 Multilevel actions with a stronger European dimension

A. To promote new patterns of consumption and production for a low-carbon economy

B. To actively support innovation, investment and jobs creation in new areas

C. To strengthen the European research potential

D. Competence-building for all

E. Supporting professional transitions and reducing social in-equalities

F. Making public services a major innovator for sustainable development

G. Reform the financial system and corporate governance for sustainable development

H. Public finances to support sustainable development

6 To improve governance: participation, coordination and accountability

7. To strengthen the interface with the EU external action

8 The implications of the Lisbon Treaty

General references

Institutions

The instruments

Relevant changes in specific policies

Annex

Taking stock of the Lisbon strategy

Recent Bibliography

Chapters

Europe 2020, Social Europe and Industrial

Democracy Janine Goetschy

Introduction

1 The impact of the Lisbon Strategy (2000-2010) for Social Europe

1.1 The EU social policy agenda

1.2 The OMC potential and pitfalls

1.3 What kind of policy coordination?

1.4 The European Council and OMCs as mentors for social progress?

1.5 The centrality of New Public Management Tools

1.6 Toward more ”politized” versus “depolitized” EU employment and social policies

2 The Lisbon Strategy, OMCs and democratic issues

2.1 The “democratic legitimacy” of the OMCs ten years after?

2.2 Evolving Social Europe agendas: seeds for a capability approach?

3. The external EU social dimension and the European Social Model in the world

3.1 The EU external social dimension: a variety of devices

3.2 Perspectives for corporate governance and EU industrial democracy

Conclusions

References:

Policy coordination, competitiveness and cohesion in the Europe 2020 strategy

1. Competitiveness versus economic catching-up

1.1 The sources of economic growth

1.2 The sources of competitiveness

2. Policy coordination

2.1 The major tools of policy coordination

2.2  Deficiencies in the Stability and Growth Pact

2.3  Some weaknesses of the common monetary policy

2.4 Member states policies aiming at increasing competitiveness

2.5 Other deficiencies in the macro- and microeconomic environment

2.6  Sequencing

3. The requirements for resource allocation in the Europe 2020 strategy

4 Implications for the EU budget

5  Summary and conclusions

References

The Lisbon and Europe 2020 Strategies of the EU: The Birth Pangs of the European Governance

Introduction: Overcoming the governance deficit in the EU

I. The evaluation of the LS: achievements and failures in the first decade

1. Lisbon euphoria: the challenge of European Governance in the early 2000s

2. Lisbon Fatigue: the “neoliberal turn” in 2005

3. Lisbon Sobriety - the Lisbon external action

II. The Europe 2020 Strategy: Constructing the EU for the next decade

1. The emergence of the Europe 2020 Strategy in 2009-2010

Conclusion: Future-oriented definition of the EU

Introduction: Overcoming the governance deficit in the EU

The LS as a governance mega-project

The history of the EU as progress in European Governance

9. The evaluation of the LS: achievements and failures in the first decade

1 Lisbon euphoria: the challenge of European Gover-nance in the early 2000s

1.1 The Lisbon Jungle of theories and approaches

1.2 The brave vision combined with policy-planning

1.3 The Lisbon euphoria turning sour in 2004

2 Lisbon Fatigue: the “neoliberal turn” in 2005

2.1 Relaunching LS as LS-II: The “Growth and Jobs” Challenge

2.2  Reinventing cohesion policy as an instrument of the LS

2.3 The pre-Lisbon stage in the new member states

3 Lisbon Sobriety - the Lisbon external action

3.1 The global extension of policies and governance methods

3.2 The Global Challenge in the late 2000s

3.3 The evaluation of the LS: the bitter success of the first decade

3.5 The Europe 2020 Strategy: Constructing the EU for the next decade

1 The emergence of the Europe 2020 Strategy in 2009-2010

1.1 The crisis of crisis management in spring 2010

1.2 The May Drama: the need for “integrative balancing”

1.3 The June Solution: institutionalizing the crisis management

2 The role of political leadership in reforming the European Governance

2.1 The strategic-political leadership of the European Council

2.2 The rotating and team presidencies in managing the Europe 2020 Strategy

2.3 The defeated winner: the European Parliament marginalized

3 The super-planning: Europe 2020 with the new policies in the central stage

3.1 The old policy rivals: competitiveness and cohesion

3.2 The widening EU policy universe as integrative balancing

3.3 Institutional and policy proposals for the Europe 2020

Conclusion:

The Long Road to the new Europe 2020 Strategy

References:

EU documents – Lisbon Strategy

EU documents – cohesion policy

Cohesion Reports

Progress Reports

Conclusion

Social Europe and the Europe 2020

4. Conclusion

1 New skills for new jobs

1.1 Actions for a skilful labour force

1.2 Using the European funds

1.3 Improving labour market information

1.4 Up-to-date policy analysis

1.5 A unifying framework: Europe 2020 and the Agenda for New Skills and Jobs

1.6  Cooperation for a global response to a global challenge

2 Acting against social exclusion

2.1 Why we need to act

2.2 What to do

2.3 Enhanced policy coordination

2.4 Policy integration for a decisive impact

2.5 Improved use of European Funds

2.6 Raising awareness

3 Green jobs – more and socially fair jobs

3.1 Green jobs everywhere

3.2 Housing: Reducing fuel poverty and creating green jobs in parallel

3.3 New jobs in mobility

3.4 New jobs in disaster management and in public works

3.5 The preparations: Skill building, social dialogue and some options for funding

3.6 A sweeping social transformation

4  Conclusion

Imprint

Preface
By András Vértes

Europe needs an effective long term political and economic strategy

The Hungarian Prime Minister’s Office in cooperation with the Hungarian Academy of Sciences has initiated a research project to elaborate the strategic vision for the Spanish-Belgian-Hungarian team presidency. The strategic working group of Spanish, Belgian and Hungarian experts had their first meeting on 7-9 September 2007 in Hungary, at the nice resort place, Lillafüred. This process of the intensive SBH cooperation was followed by the second meeting in Brussels on 17-18 April 2008 and in Madrid on 12-13 March 2009. The experts of the SBH team presidency met again in Hungary, on 11-12 2009 in Gödöllő, near Budapest in the former Royal Palace in order to discuss the perspectives of the Spanish presidency as the first rotating presidency in the SBH team presidency. It was followed by a conference in Brussels on 27-28 April 2010 on the incoming Belgian presidency.

The first volume on presidencies by our expert group – The prospect of the EU team presidencies: Integrative balancing in the new member states – has focused on the general description of the team presidencies as a new institution in the EU and on the first team presidency (Germany, Portugal and Slovenia, GPS) but it has also dealt with the two former rotating presidencies earlier (Austria and Finland). The second volume – New perspectives for the EU team presidencies: New members, new candidates and new neighbours – has taken into account that the EU faces new challenges that are high on the agenda of the second team presidency of France, Czech Republic and Sweden (FCS). The new perspectives have also been analyzed in the second volume, since the EU27 has to complete its deepening by the Lisbon Treaty and at the same time to continue its widening by facilitating the West Balkan integration and by reforming the European Neighbourhood Policy in the team presidency of Spain, Belgium and Hungary.

The third volume - The global crisis and the EU responses: The perspectives of the SBH team presidency - has taken the experiences of the FCS team presidency into account but it has turned more to the tasks of the SBH team presidency. No surprise that for the SBH team presidency the main issue is the global crisis management and the unfolding financial, economic and “ideological” crisis. The integrative balancing is still a vital issue for the conceptual framework of team presidencies because – as it has also been emphasized in the former two volumes – the intensive cooperation in the team presidencies between the old and new member has produced a new quality of the EU cooperation. The third volume with a clear objective of preparing the third team presidency of Spain, Belgium and Hungary in 2010-2011 has dealt first of all with the evaluation of the global crisis management in the successive team presidencies, followed by the analysis of the most important policy fields. Finally, since the main event of the first half of 2009 was the EP election in June 2009, the third part of the book has addressed the relationships between the European Parliament and the East-Central European national parliaments.

Finally, this fourth volume on presidencies - Think European for the Global Action: From the Lisbon Strategy to the Europe 2020 Strategy - deals with the priority of priorities, i.e. with the Lisbon Strategy and with the following Europe 2020 Strategy. The incoming Europe 2020 Strategy is a common concern for the SBH team presidency, since it has been launched by the Spanish presidency, the national contributions have been summarized in the Belgian presidency and its detailed Action Programme will be finalized by the Hungarian presidency. The editors are grateful for the participation of the internationally known experts, Maria Rodrigues and Janine Goetschy. Our team has been represented by Miklós Losoncz and Attila Ágh who have dealt with the economic and the governance dimensions of this Strategy. Obviously, the rotating presidencies in the framework of the common team presidency have also elaborated their own national priorities, thus for the preparation of the Hungarian EU presidency our team has also published a volume on the European Danube Strategy.

Europe as a whole and the European Union as the leading integration in the world has been recently facing basic long term economic challenges: (1) how to improve international competitiveness and to speed up economic growth, (2) how to maintain sustainability of public and private finances, (3) how to restructure economy and our entire life in accordance with the climate changes and (4) finally how to preserve at the same time the values of Social Europe. In the light of the global economic and financial crisis these challenges evidently cannot be solved in national framework. The bad news is that it cannot be solved in the recent model of European Integration either.

European Union needs new approaches and new ideas, or modified structures and rules as basically new tools for a real political and economic union. There are two main possibilities, either in the next decade EU will deepen the integration effectively or the EU will remain a “light” integration of country-groups which are developing at different speed and to various directions. To realize the first option is very difficult, since it needs committed political leadership at the EU and compromise-driven leaderships at the national levels. One of the basic tasks is to renew macroeconomic policy and policy coordination in the EU. It includes modernization of the Stability and Growth Pact and the European Monetary Policy, i.e. all structural policies as the whole conceptual basis of economic cooperation. In order to strengthen the single market the EU should not play only the role of a coordinator of national policies but also that of an economic policy actor on its own right. In order to perform this role the EU needs a more flexible budget with EU tax revenue.

In accordance with “shared responsibility” concept, the Member States must concentrate on long term financial stability. The EU should support both economic growth and structural reforms. Emergence and successes of new economic competitors (BRICs) make clear the need for much more effective structural policies. It is about Europe 2020, the new post-Lisbon Strategy. This book is devoted to that topic in a very interesting time. The main goals and basic outlines of the Europe 2020 Strategy have been adopted by the Council, but the details are still to be elaborated. This book demonstrates the usual situation when experts suggest various tools and measures for the design and implementation of the EU Strategies.and GKI Economic Research Co.

Introduction

On the Europe 2020 from Lisbon Maria João Rodrigues

1. Our development model is unsustainable

2. A new concept of prosperity

3. A strategy of innovation for sustainable development

4. A new approach for policy making in the global era

5. Multilevel actions with a stronger European dimension

6. To improve governance: participation, coordination and accountability

7. To strengthen the interface with the EU external action

8. The implications of the Lisbon Treaty

Annex: Tacking stock of the Lisbon strategy

Introduction

In the beginning of a new decade, the European Union, while implementing its new institutional setting defined by the Lisbon Treaty, is dealing with two major challenges: redefining its role in the new emerging international order and renewing its development model. This renewal should be guided by a Europe 2020 succeeding to ten years of a unique experience of transnational coordination of economic and social policies framed by the Lisbon strategy adopted in 2000. This is the moment for a thorough critical assessment of this experience and of the situation we are now after of an also unique financial and economic crisis. This should also be the moment for setting a new ambition with very precise requirements, regarding a central purpose, the strategic priorities, the key-actions and the governance method for the years to come.

1  Our development model is unsustainable

The point of departure should be to recognize that, even if Europe presents the best international example of quality of life and of a development model combining is economic,

social and international dimensions, this model is just not sustainable and is driving us to an unacceptable situation.

First, our development model is unsustainable because our patterns of consumption and production are undermining the climate and the ecological balance of the planet. The way our houses manage energy, the way our transports are organised and the way our factories work are translated into carbon emissions which will lead to a major disturbance of this balance, if they are not reversed until 2020. This reversal of the trend we are in will require to increase energy efficiency and to spread renewable energies in all sectors, in order to decouple growth from carbon emissions. Nevertheless, it is not enough to reduce the ratio of carbon emissions in the GDP, in the sense of a relative decoupling. We need to have an absolute decoupling, meaning a reduction of the total amount of carbon emissions. This is only possible with a radical shift of economic activities to low-carbon activities. In the high polluter sectors, such as transports, this will depend on major technological and social innovations. Finally, this will also require a major change in our consumption habits regarding mobility, habitat, domestic equipment and energy and our way of life in general. Ultimately, the central question to underpin this major transformation is: how should we define what is a good way of life and what is prosperity.

Second, our development model is unsustainable because our ageing trends are undermining the financial basis of our social protection systems. Even if the employment rate in-creases substantially, the European labour force will decrease and the dependency ratio will increase, which might strengthen the financial burden over the next generations or reduce their level of social protection, or most likely, both. This will be unavoidable unless, other factors are brought to this picture such an increase in birth rate, in working life length or in immigration flows, generalised equal opportunities, new priorities in the redistribution of income or an unattended leap in labour productivity, based on new sources of growth. In fact, the relevant discussion for the future is about the right mix of all these factors, if we want to avoid a downgrade of the European welfare systems.

Third, our development model is unsustainable because our financial system is undermining the conditions for the long term investment which is necessary to ensure sustainable growth and jobs in the transition to a low-carbon and knowledge intensive economy. Over the last two decades a major transformation took place in several varieties of capitalism, starting in the Anglo-Saxon one but spreading to others, including the European continental one. By increasing their role in funding companies, the financial markets have taken the driving seat of the economic system submitting it to chronic instability and to a new rule of profitability: not the long term profitability of productive investment which is necessary to sustain growth and jobs creation, but the short-term and short-sighted profitability which is requested by most of the shareholders. Furthermore, this kind of profitability has been developed by new financial instruments which aim at extra profits by gambling with extra-risks (such as short-selling and derivatives).

The banking system was also contaminated by the logic, which was also encouraged by insufficient regulation on capital reserves. Finally, many companies were also influenced by the same kind of logic, when their corporate governance has started to respond the share-holders expectations, rather to all stakeholders’ ones, and when their top management was refocused in favour of financial management. Hence, the recent financial and economic crisis is the direct consequence of this major metamorphosis of capitalism. Even if it was possible to control this crisis by an unprecedented public intervention, it will be necessary a major reform of the financial system and of the corporate governance to overcome it and to prevent it again in the future. We should then ask what kind of new economic paradigm should we aim at moving to.

These are fundamental questions Europe can no longer postpone, even more in a decisive moment when a long-term development strategy is to be designed and adopted by the European institutions involving all the relevant stakeholders.