Facing the Challenge: The Lisbon strategy for growth and employment

European Commission, The High Level Group


In March 2000, European leaders committed the EU to become by 2010 ‘the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment’. The Lisbon strategy, as it has come to be known, was a comprehensive but interdependent series of reforms. Actions by any one Member State, ran the argument, would be all the more effective if other Member States acted in concert.

External events since 2000 have not helped achieving the objectives but the European Union and its Members States have clearly themselves contributed to slow progress by failing to act on much of the Lisbon strategy with sufficient urgency. This disappointing delivery is due to an overloaded agenda, poor coordination and conflicting priorities. Still, a key issue has been the lack of determined political action.

The Lisbon strategy is even more urgent today as the growth gap with North America and Asia has widened, while Europe must meet the combined challenges of low population growth and ageing. Time is running out and there can be no room for complacency. Better implementation is needed now to make up for lost time.

In this context, if we are to deliver the Lisbon goals of growth and employment then we must all take action. To achieve them will require everyone to engage. This means more delivery from the European institutions and Member States through greater political commitment, broader and deeper engagement of Europe’s citizens, and a recognition that by working together Europe’s nations benefit all their citizens.

Each element of the Lisbon strategy is still needed for the success of the whole. Improved economic growth and increased employment provide the means to sustain social cohesion and environmental sustainability. In their turn, social cohesion and environmental sustainability can contribute to a higher growth and employment.

For Europe to increase its living standards, it needs to accelerate employment and productivity growth via a wide range of reform policies as well as a wider macroeconomic framework as supportive as possible of growth, demand and employment. No single action will deliver higher growth and jobs. Rather, there are a series of interconnected initiatives and structural changes that through concurrent action in the European Union will release its undoubted potential. This requires urgent action across five areas of policy:

  • the knowledge society: increasing Europe’s attractiveness for researchers and scientists, making R & D a top priority and promoting the use of information and communication technologies (ICTs);
  • the internal market: completion of the internal market for the free movement of goods and capital, and urgent action to create a single market for services;
  • the business climate: reducing the total administrative burden; improving the quality of legislation; facilitating the rapid start-up of new enterprises; and creating an environment more supportive to businesses;
  • the labour market: rapid delivery on the recommendations of the European Employment Taskforce; developing strategies for lifelong leaning and active ageing; and underpinning partnerships for growth and employment;
  • environmental sustainability: spreading eco-innovations and building leadership in eco-industry; pursuing policies which lead to long-term and sustained improvements in productivity through eco-efficiency.

Individual Member States have made progress in one or more of these policy priority areas but none has succeeded consistently across a broad front. If Europe is to achieve its targets, it needs to step up its efforts considerably.

The task is to develop national policies in each Member State, supported by an appropriate European-wide framework, that address a particular Member State’s concerns and then to act in a more concerted and determined way. The European Commission must be prepared to report clearly and precisely on success and failure in each Member State. National and European Union policies, including their budgets, must better reflect the Lisbon priorities.

In order to ensure that Member States take up their responsibilities, a new focus is required along three lines: more coherence and consistency between policies and participants, improving the process for delivery by involving national parliaments and social partners, and clearer communication on objectives and achievements.

In addition, the High Level Group proposes that:

  • the European Council takes the lead in progressing the Lisbon strategy;
  • the Member States prepare national programmes to commit themselves to delivery and engage citizens and stakeholders in the process;
  • the European Commission reviews, reports and facilitates the progress and supports it by its policies and actions;
  • the European Parliament plays a proactive role in monitoring performance;
  • the European social partners must take up their responsibility and actively participate in the implementation of the Lisbon strategy.

To achieve the goals of higher growth and increased employment in order to sustain Europe’s social model will require powerful, committed and convincing political leadership. Member States and the European Commission must re-double their efforts to make change happen. Far more emphasis must be placed on involving European social partners and engaging Europe’s citizens with the case for change. Greater focus is required to build understanding of why Lisbon is relevant to every person in every household in Europe.

Europe has built a distinctive economic and social model that has combined productivity, social cohesion and a growing commitment to environmental sustainability. The Lisbon strategy, refocused on growth and employment in the way this report suggests, offers Europe a new frontier for that economic and social model.

(Executive Summary)