Stockholm’s success hinges on acting upon Lisbon pledges

Date: 15/03/01

By Simon Coss

One thing next week's special EU summit in Stockholm will not be short of is ideas.

Since EU leaders pledged at last year's 'dotcom' gathering in Lisbon to make the Union the world's most vibrant economy by 2010, barely a day has gone by without some EU institution, lobby group or think tank publishing its latest thoughts on the great competitiveness debate.

Taken together, this mass of reports, recommendations and in-depth studies should give EU leaders in the Swedish capital a huge range of policy possibilities for achieving their Lisbon goals.

But many seasoned Union-watchers warn that Stockholm will only be a success if leaders actually have the courage to pick some of these ideas and run with them.

"EU history is littered with good ideas that have run into concerted opposition from vested interests and then quietly been dropped in favour of some new trend," Alasdair Murray of the London-based Centre for European Reform (CER) said recently.

Former Italian Labour Minister Tiziano Treu adopted this theme when he spoke at a pre-Stockholm conference organised by the Brussels-based European Policy Centre (EPC).

"The problem is now more and more implementation," he said.

Murray points to evidence that zeal for reform expressed at Lisbon is already cooling.

"Privately, both the leading business associations and the Commission are expressing concern that the political impetus behind the Lisbon process may be faltering," he wrote in a recent CER report.

But in public both the Swedish presidency and the European Commission insist that Stockholm will mark a new departure in EU summitry.

"The Lisbon process is very different from anything that has happened before," says Commission spokesman Andrew Fielding. "Now we have very precise nuts-and-bolts targets so there is less room for slippage at individual councils. In a sense, we've deliberately painted ourselves into a corner."

Swedish State Secretary of Industry Anna Ekström agrees with this analysis. Speaking at the EPC conference she explained that following Stockholm, EU leaders would meet for annual talks every spring to assess the progress of the Lisbon goals.

But as far as the business community is concerned, Stockholm will fail if member states pledge to introduce only European-level reforms.

Business leaders argue that the biggest single blocks to economic growth in Europe at the moment are member states' bloated social welfare systems.

Unemployment benefit schemes still do not do enough to encourage people to seek work and without urgent reforms, employer-funded pensions schemes risk collapsing under the weight of an ageing population, they add.

But under Union law, only national governments can reform social security schemes.

According to Gerhard Huimer of the EU small business lobby UEAPME, any European-level measures that are agreed at Stockholm will be worth "peanuts" unless accompanied by these national reforms.

Fielding agrees with this analysis. "We absolutely support moves towards pension reform and more active labour market policies, but we're fighting with one hand tied behind our back as we cannot propose legislation in these areas," he explains.

Regine Mattjijsen of industry think tank the European Round Table of Industrialists says EU leaders also need to address the issue of training to ensure that the new competitive Europe has a permanently high-skilled workforce. In today's evolving labour market the need for lifelong learning is greater than ever and national education systems should be reformed to take this into account, she said.

Senior EPC advisor Hans Martens argues that more should be done to encourage people to set up their own firms. He pointed out recently that the strong economic growth the US enjoyed for much of the past decade was largely due to the small business sector.

Preview of the European Council, Stockholm, 23-24.3.01.