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Europaudvalget 2005-06
Det Europæiske Råd 23-24/3-06 Bilag 3
Offentligt

COUNCIL OF

THE EUROPEAN UNION

Brussels, 3 March 2006

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LIMITE

POLGEN 26

NOTE

from :

to :

Subject :

Presidency

Coreper

European Council (23 and 24 March 2006)

– Draft conclusions

The Presidency submits herewith to Coreper a preliminary set of draft conclusions to be adopted by

the European Council at its meeting on 23 and 24 March 2006. It will be progressively developed

and updated in the light of the outcome of the forthcoming meetings of the ECOFIN, EPSCO,

Competitiveness, Environment and Energy Councils.

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The meeting was preceded by a presentation given by Mr Josep Borrell, President of the

European Parliament, followed by an exchange of views.

THE RENEWED PARTNERSHIP FOR JOBS AND GROWTH

CONTEXT

Drawing on lessons learnt from five years of implementing the Lisbon Strategy, the European

Council in March 2005 decided on a fundamental re-launch. It agreed to refocus priorities on

jobs and growth coherent with the Sustainable Development Strategy, by mobilising to a

greater degree all appropriate national and Community resources. It also agreed on a new

governance cycle based on partnership and ownership.

At Hampton Court, the Heads of State or Government provided further political impetus to

the renewed Lisbon Strategy, in particular by emphasising the way in which European values

can underpin modernisation in our economies and societies in a globalised world.

Finally, the agreement reached at the December 2005 European Council on the Financial

Perspectives 2007-2013 represented an important step forward in providing the Union with

the means to carry through its policies, including those contributing to an effective

implementation of the renewed Lisbon Strategy. In this context, the European Council

stresses the importance of concluding as soon as possible the new Inter Institutional

Agreement and of rapidly adopting the necessary legal instruments, so as to allow investment

in jobs and growth as from 1 January 2007.

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The background in Europe is characterised by intensified competition from abroad, an ageing

population, higher oil prices and the need to safeguard energy security. Since the end of 2005,

a gradual economic recovery is under way, with growth expected to return towards potential

in 2006 and to accelerate further in 2007. The EU is expected to create six million new jobs

during the three-year period 2005-2007, helping to reduce unemployment from a peak of

9.0% at the end of 2004 to 8.1% in 2007. However, the further reduction of unemployment

and the increase of potential growth remain the key challenges for the Union.

Preparing for ageing populations and the ambition to reap the full benefits of globalisation

will be the two main drivers for structural reforms. Further structural reforms are required to

increase the competitiveness of Europe and to sustain growth, thereby contributing to an

increase in living standards and the creation of new jobs. Improving business and consumer

confidence will contribute to durably bring growth up to its potential level. More determined

fiscal consolidation will further strengthen the conditions for more jobs and growth.

The economic recovery provides a strong opportunity for pursuing vigorously structural

reforms in line with the National Reform Programmes, as well as for enhanced fiscal

consolidation in line with the renewed Stability and Growth Pact. In this context, concrete

targets and timetables are a useful tool for speeding up the implementation of the envisaged

reforms and for delivering better results in terms of growth and employment.

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II.

IMPLEMENTING THE RELAUNCHED LISBON STRATEGY FOR JOBS AND

GROWTH

The European Council notes that the governance of the renewed Lisbon Strategy for jobs and

growth is functioning properly. It welcomes the Commission Annual Progress Report and the

fact that all Member States have rapidly drawn up their National Reform Programmes. These

Programmes, geared to Member States' own needs and specific situations, constitute the main

tools to implement the re-launched Lisbon Strategy, translating the integrated guidelines

adopted by the Council into reforms which Member States are responsible for delivering. The

National Reform Programmes represented a vital first step in moving forward with increased

ownership and awareness of reform priorities. The European Council also welcomes progress

made concerning the Community Lisbon Programme covering action to be taken at

Community level.

Assessment has shown that the National Reforms Programmes provide a good basis for

driving the reform agenda forward. The European Council notes in particular the large

convergence of views on the key challenges, such as sustainability of public finances, labour

supply, RDT, innovation, business environment and environmental sustainability. It also notes

that the Programmes contain a wealth of promising policies to be shared and learnt from.

However, the European Council at the same time notes the Commission's view that some

Programmes could include more specific targets and timetables and further details on the

budgetary aspects of envisaged reforms and that they could also be more detailed as concerns

competition and removing obstacles to market access. The top priority for Member States in

2006 will be the timely and comprehensive implementation, and if necessary, strengthening of

the measures agreed in the National Reform Programmes. This should be complemented by a

clear communication on the benefits of reform.

10.

The European Council confirms that the Integrated Guidelines 2005-2008 for jobs and growth

remain valid.

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11.

In line with the Strategy's new governance, Member States have made real efforts to involve

national parliaments and representatives from regional and local authorities as well as social

partners and other stakeholders of the civil society in the formulation of their national

programmes. However, it is necessary to involve European citizens more actively in the

process in order to convince them that timely and properly implemented reforms will

contribute to greater and better shared prosperity.

12.

In this context, the European Council welcomes the initiatives taken up by European

institutions to increase the ownership on Community level and takes note of their valuable

contributions: the European Parliament's second inter-parliamentary meeting with the national

parliaments, the Territorial Dialogue of the Committee of the Regions, and the European

Economic and Social Committee's joint report. It encourages the European Economic and

Social Committee to continue its work and asks that it submit a summary report on the

contribution made by organised civil society to the implementation of the Lisbon Strategy in

early 2008. It welcomes the initiatives of the Committee of the Regions supporting the Lisbon

Strategy and asks for a summary report on its referring contributions in early 2008. The

European Council reiterates the importance of ensuring that the regional and local authorities

– in compliance with the constitutional framework of the respective Member States – as well

as civil society are involved in the preparation and implementation of the National Reform

Programmes.

13.

The European Council welcomes the important contribution made by the social partners

within the framework of the Tripartite Social Summit. Social partners were already closely

and constructively involved in establishing the National Reform Programmes. Consequently,

a proper implementation of the renewed partnership for jobs and growth will require an active

contribution of all stakeholders involved, in particular the social partners. To this end, their

recently agreed joint multi-annual work programme will be a valuable instrument. In this

context; the European Council welcomes the intention of the Finnish Presidency to hold a

Tripartite Social Summit.

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14.

Now that the National Reform Programmes are in place, it is essential to maintain momentum

by ensuring their effective implementation. Accordingly, the European Council calls on the

Member States to:



report in Autumn 2006 on the measures taken to implement their National Reform

Programmes, particularly in the light of the evaluation by the Commission and by the

Council in the context of multilateral surveillance and the agreed priority actions

mentioned below;



work with the Commission, when drawing up proposals for their National Strategic

Reference Frameworks for Cohesion to ensure structural funds are used as far as

possible in support of Lisbon National Reform Programmes.

Furthermore, the European Council invites the Commission to:



identify specific policy areas of interest for mutual learning benefit and organise the

exchange of experiences in a practical way;



and to pay particular attention, in its report in view of the 2007 Spring European

Council, on progress towards implementing the National Reform Programmes, to the

priority actions and to propose any additional measures that might be required.

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III. MAINTAINING MOMENTUM ACROSS THE BOARD

Ensuring sound and sustainable public finances

15.

At present, 12 EU Member States are in excessive deficit and the debt levels are above 60%

of GDP in several Member States. Against this background, the European Council calls upon

Member States to use the opportunity of the evolving economic recovery to pursue fiscal

consolidation, in line with the Stability and Growth Pact. Member States should make faster

progress towards their medium term objective and those Member States in excessive deficit

should pursue more ambitious fiscal consolidation so as to put an end to their excessive deficit

as soon as possible.

16.

Further comprehensive reforms are needed in many Member States to improve the

sustainability of their welfare systems, and meet the economic and budgetary consequences of

ageing. In this context, the European Council takes note of the report on the impact of ageing

populations on public spending, and reaffirms the three-pronged strategy, aiming at reducing

public debt, increasing employment rates and productivity, and reforming pension and health

care systems. Measures which discourage early withdrawal from the labour force, or reduce

pension costs should be promoted. Further the European Council invites the Commission to

undertake a comprehensive assessment of the sustainability of Member States' public finances

by autumn 2006.

17.

The European Council underlines the need to further improve the efficiency and effectiveness

of public spending and revenues in order to enhance the quality of public finances and

re-direct them towards growth and employment enhancing activities, in line with the Lisbon

priorities.

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Completing the internal market and promoting investment

18.

In order to encourage investment and provide an attractive setting for business and work, the

European Union must complete its internal market by achieving significant progress on the

following key files:



[PM Services Directive]

achieving final agreement on the REACH package before the end of 2006, as well as on

the closely-related Regulation concerning classification and labelling of hazardous

substances and mixtures;

making progress towards an effective, modern and affordable European intellectual

property rights regime, in particular through the creation of a Community patent system,

to increase the competitiveness of the European economy;

making further progress on simplification and modernisation of the VAT and customs

system, in particular on the location of supply of services and on the simplification of

the obligations of taxable persons (one stop-shop);

promoting a fully integrated and well functioning financial market and better access to

finance, particularly through the implementation of the FSAP-measures and the

Commission's working programme outlined in the White Paper on Financial Services

Policy (2005-2010), the simplification and harmonisation of cross-border fund

distribution and the creation of a Single European Payment Area based on the

provisions of the New Legal Framework for Payments, as well as enhancing the

framework for cross–border financial sectors supervision and crisis management.



19.

The European Council notes the Commission communication on the "Functioning of the

Transitional Arrangement set out in the 2003 Accession Treaty" in accordance with paragraph

3 of the transitional arrangements on freedom of movement for persons annexed to the Treaty

of Accession and the respective review discussions in the Council. In the light of the review

and according to the relevant provisions of the Accession Treaty the Member States

concerned will notify the Commission whether they will continue applying national measures

or measures resulting from bilateral agreements, or whether they will apply Articles 1 to 6 of

Regulation (EEC) No 1612/68 henceforth.

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20.

The European Council recalls the Hague Programme of November 2004 whereby legal

migration will play an important role in enhancing the knowledge-based economy in Europe,

in advancing economic development, and thus contributing to the implementation of the

Lisbon strategy. It takes note of the Commission's Policy Plan on Legal Migration presented

in December 2005 and invites the Commission to discuss with and consult relevant experts,

especially from Member States, the other EU institutions and international organisations,

social partners and civil society in preparation of the possible legislative instruments.

21.

The European Council underlines the importance it attaches to Better Regulation at national

and European level as a means to achieving the Lisbon goals and urges all institutions and the

Member States to implement their commitments, including using robust impact assessment

with measurement of administrative costs, delivering the rolling programme of simplification

for the priority sectors of waste, construction and the automotive industries. Unnecessary

bureaucratic burdens hinder entrepreneurial dynamism and pose a significant barrier to a more

innovative and knowledge-intensive economy. Such burdens particularly harm small and

medium-sized enterprises, which account for two thirds of jobs in Europe.

22.

The European Council recognises the crucial importance to the Lisbon Strategy of more

productive use of information and communication technologies in business and administrative

organisations throughout the European Union. Focused, effective and integrated ICT policies

at both at European and national level are essential to achieving the Lisbon goals of economic

growth and productivity. As such, the European Council calls on the Commission and the

Member States to implement the new i2010 Strategy vigorously.

23.

In support to the completion and deepening of the internal market, further efforts are required

with a view to making progress on the expansion, improvement and interconnection of

European infrastructure, and in particular carrying out the TEN projects in the fields of

transport and energy.

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24.

Against this background, the European Council endorses the EIB's Group contribution to

promoting growth and employment, which, building on the European Action for Growth will

shift the quality of the Bank's operations towards higher value added and risk, thereby

leveraging private capital to increase substantially financing available for growth-enhancing

investments in R&D, SMEs, infrastructure and energy security in Europe.

25.

The European Council invites the relevant actors to take the necessary follow-up steps

without delay, taking into account the final agreement on the Financial Perspectives, and

respecting the agreed framework for the EIB's capital (i.e. no capital increase before 2010 and

self financing via reserves). It also underlines the need of close co-operation between the EIB

and the Commission as well as between the EIB and the EBRD in order to fully exploit their

catalyst function with regard to economic growth and employment.

26.

The European Council further underlines the importance of ensuring open and competitive

markets inside and outside Europe. An ambitious and balanced outcome of the WTO DDA

negotiation can make a significant contribution to European growth.

Enhancing social cohesion

27.

The new strategy for jobs and growth provides a framework where economic, employment

and social policy mutually reinforce each other, ensuring that parallel progress is made on

employment creation, competitiveness, and social cohesion in compliance with European

values. For the European social model to be sustainable, Europe needs to step up its efforts to

create more economic growth, a higher level of employment and productivity while

strengthening social inclusion and social protection, in line with the objectives provided for in

the Social Agenda.

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28.

The Spring European Council in March 2005 stated on the occasion of the mid-term review of

the Lisbon Strategy that growth and employment are at the service of social cohesion. In this

context, the European Council welcomes the Joint Report for Social Protection and Social

Inclusion and the new objectives and working methods in this area and asks the Member

States to submit National Strategies for Social Protection and Social Inclusion for 2006-2008

by September 2006. The Commission and the Council will report on the progress in the area

of social protection and social inclusion to the Spring European Council each year.

29.

The European Council stresses that the policies for social protection and social inclusion have

to be closely coordinated with the partnership for jobs and growth, both at national and

European level in order to ensure that economic, employment and social policies interact in a

positive way and that social protection is regarded as a productive factor.

30.

The European Council reaffirms the Lisbon objective that steps have to be taken to make a

decisive impact on the eradication of poverty. Social inclusion policies should be pursued by

the Union and the Member States, with its multifaceted approach, focusing on target groups

such as children in poverty. The European Council asks the Member States to significantly

reduce child poverty by 2010 and to set ambitious national targets.

31.

The European Council stresses that in view of the demographic change in the European Union

employment rates have to be increased and the reconciliation of work and family life has to be

promoted. To tackle these demographic challenges, it will be necessary to support

family-friendly policies with a focus on the importance of children and families, equal

opportunities, to enhance the solidarity between the generations, improve affordable care for

children and other people in need of care, life-long learning and an increased activity rate of

young people, older workers and disadvantaged groups.

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32.

Further progress is also needed as concerns measures for young people, including the

implementation of the European Pact for Youth. In this regard the European Council invites

the Member States and the Commission to report more systematically and more visibly on the

Pact within the strategy for jobs and growth in order to facilitate monitoring of the progress

made. It encourages the Member States to reinforce links between policies on education,

training, employment, social inclusion and mobility, so as to develop more effective

cross-sectoral strategies. The Commission and the Member States are requested to involve

young people and youth organisations in the implementation of the European Pact for Youth.

Environmentally sustainable growth

33.

Over and above its importance in its own right, an ambitious environmental policy can make

an important contribution to jobs and growth and can impact positively on important sectors

such as public health and health-care costs, and social inclusion and cohesion. It also

constitutes a crucial component of Europe's new energy policy, particularly as concerns the

promotion of energy security and energy efficiency (see below).

34.

The European Council endorses the following lines for action:



strong promotion and diffusion of eco-innovations and environmental technologies,

inter alia

through the Environmental Technology Action Plan;

as a result of the Montreal Climate Action Plan, constructive engagement in a broad

dialogue on long-term cooperative action under the UN Framework Convention on

Climate Change and in a process under the Kyoto Protocol to prepare options for a post-

2012 arrangement without delay;

review of the environmental structural indicators in order to cover the environmental

dimension of the Lisbon Strategy more comprehensively;

urgent implementation of the EU objective of halting the loss of biodiversity by 2010,

notably by integrating its requirements into all relevant Lisbon agenda policies and by

swift presentation and discussion of the Commission communication on biodiversity;

exploration of specific actions to bring about more sustainable consumption and

production patterns at EU and global level and fostering green public procurement, inter

alia by examining the proposal for a Directive on the promotion of clean road transport

vehicles as soon as possible;



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

further exploration of appropriate incentives and disincentives, and a reform of

environmentally harmful subsidies.

IV. PRIORITY ACTIONS

35.

Against the background described above, the European Council agrees on the following

priority actions to be implemented by the end of 2007, thus providing a firm foundation for

launching the second cycle of the jobs and growth strategy in Spring 2008.

Investing more in knowledge and innovation

36.

In view of the importance of R&D for future growth and in providing solutions for many of

the problems confronting our society today, the European Council reiterates the commitment

entered into at Barcelona, welcomes the progress made concerning setting specific national

targets and calls upon all Member States to promote policies and actions aiming at the

established overall 3% objective by 2010, taking into account the different starting points of

Member States (see Annex X).

37.

To provide more and better resources for research and innovation, Member States should

refocus their public expenditure on research and innovation as well as promote private sector

R&D, in particular by improving their mix of support instruments.

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38.

The European Council calls for the speedy adoption of the 7

Framework Programme for

Research and Development and the new Competitiveness and Innovation Programme, with

particular emphasis on a strong promotion and more rapid diffusion of eco-innovations and

environmental technologies. It calls for the quick establishment of the European Research

Council with the objective of raising yet further the excellence of Europe's best research

teams. Action undertaken under the Research Framework Programme should be better

coordinated with other European and national actions to promote public-private partnerships,

including intergovernmental initiatives such as Eureka. The cooperation and technology

transfer between public research and industry should be enhanced, both within and across

national borders. A dynamic environment should be fostered by the creation of attractive

clusters. Member States are invited to create a single, open and competitive European labour

market for researchers, notably by overcoming remaining obstacles to geographical and

intersectoral mobility.

39.

Furthermore the European Council recognises the role that ICT policies need to play in

boosting innovation and knowledge. It calls for more innovative and forward looking policies

in a fast changing information society, notes the significance of the Aho report and requests

the Commission to look into ways of implementing its recommendations by supporting

markets for innovative goods and services and excellence in research in new technologies to

boost knowledge and innovation. Links should be stengthened between R&D, innovation

systems and business environment in order to improve the effectiveness of the innovation

process and shorten the time needed for innovations to mature and to be translated into

commercial products and services.

40.

Education and training are critical factors to develop the EU's long-term potential for

competitiveness as well as for social cohesion. The search for excellence and innovation, in

particular through better links between higher education, research and enterprises is crucial.

Reforms must also be stepped up to ensure high quality education systems which are both

efficient and equitable. National lifelong learning strategies should provide all citizens with

the competences and qualifications they need. To support greater mobility and an efficient

labour market, progress on a European Qualifications Framework (EQF) should also be

achieved.

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41.

Investments in education and training produce high returns which substantially outweigh the

costs and reach far beyond 2010. They should be targeted on areas where economic returns

and social outcomes are high. Education and Training must occupy a central position in the

Lisbon reform agenda, in particular through the Education & Training 2010 work programme.

In this context, the new Lifelong Learning Programme 2007-2013 will be essential.

42.

Against this background, the European Union needs to step up its investment in higher

education. To that end, the European Council calls on the Member States to facilitate by the

end of 2007 universities' access to complementary private sources of funding and to remove

barriers to public-private partnerships with businesses. Furthermore, it underlines the crucial

role of universities and their research staff in the dissemination and transfer of research results

to the business community and hence the need of developing managerial skills and

competencies for the people involved. The European Council looks forward to the report of

the Commission on higher education which will address in particular the triangle education-

research-innovation as well as the links between universities and the business community.

43.

[PM EIT]

Unlocking business potential, especially of SMEs

44.

There is consensus on the overall importance of a strong and competitive industrial base in

Europe and therefore on the need for a modern and coherent concept for EU manufacturing.

The European Council stresses the importance of achieving the right balance between

horizontal and sectoral approaches and refers to the necessity of improving the consistency of

policies in order to be able to benefit on a larger scale from potential synergies. The European

Council calls on Member States to proactively develop national strategies and implement

measures to foster competitiveness and productivity through policies that address the social

dimension and the needs of individuals in the process of internationalisation and structural

change.

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45.

The European Council acknowledges the crucial role of small and medium-sized enterprises

to achieve more growth and better jobs in Europe. There is a need to develop comprehensive

supportive policies for SMEs of all types. The European Council expects the Commission to

further assist Member States in adapting their policies for SMEs and to further promote the

dialogue with all stakeholders.

46.

Considering that SMEs are the backbone of Europe's economy and that they need a regulatory

environment that is simple, transparent and easy to apply, the principle of "think small first"

must be consequently applied. This approach should become the guiding principle for all

legislation at Community as well as at national level.

47.

It is of the utmost importance to create a more favourable business environment, especially

for SMEs. At Community level, significant progress has been achieved, notably through the

Commission's thorough and balanced impact assessments of new proposals. On the national

level, many Member States have to put into practice the commitment they entered into in their

National Reform Programmes, to making impact assessments on legislative initiatives and to

measuring administrative costs.

48.

The Commission is invited to launch an exercise to measure the administrative costs

associated with EU rules in specific areas, including the need to give particular attention to

SMEs and to identify which costs flow directly from EU legislation and which costs vary as a

function of the manner in which Member States transpose EU rules. On this basis, the

Commission is invited to come forward with proposals for setting quantitative targets to

reduce these administrative costs at Community level.

49.

The Member States should establish, by 2007, a one-stop-shop for setting up a company in a

quick and simple way. The average time taken to set up a business should be reduced by half

by 2007, with the ultimate objective of being able to do this within one week anywhere in the

EU by 2010. Start-up fees should be as low as possible and the recruitment of a first employee

should not involve more than one public administration point.

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50.

Europe needs more entrepreneurs equipped with the appropriate skills to successfully sustain

and compete in the markets. The European Council therefore underlines the need of creating

an overall positive entrepreneurial climate and of appropriate framework conditions that

facilitate and encourage entrepreneurship and therefore invites the Member States to

strengthen respective measures, including through entrepreneurship education and training at

the appropriate level of education. Communication and media can also play an important role

in promoting entrepreneurship and in encouraging people to decide for an entrepreneurial

career. Furthermore, measures to improve the business environment for SMEs and to

encourage more people, in particular women and young people, to become entrepreneurs

should also be explicitly mentioned in the National Reform Programmes as well as in the

reporting.

51.

Sufficient access to finance is crucial for the growth of small and medium sized enterprises. If

not properly addressed, the lack of finances will continue hindering innovation in SMEs. At

community level, sufficient funding sources shall be made available through the financial

instruments under the forthcoming Community programmes, in particular the 7th Research

Framework Programme and the Competitiveness and Innovation Programme (CIP). In

addition, the Council calls on Member States to fully utilise the potential of structural funds,

notably the future funding scheme for joint European resources for micro- to medium

enterprises (JEREMIE). Moreover, the intellectual property rights' (IPR) potential of SMEs

deserves more attention. Furthermore, SMEs' access to markets will be improved by

facilitating their access to public procurement markets and standardisation as well as by

supporting their internationalisation.

52.

The European Council welcomes the Commission's intention to take fully into account the

need for consideration to amend existing state aid rules reflecting market failures relevant to

SMEs and at simplifying administrative procedures,

inter alia

the so called "de-minimis"

exemptions.

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Increasing employment opportunities for priority categories

53.

Increasing employment in Europe remains one of the top priorities for reform. Labour market

reforms that have been undertaken in recent years are beginning to bear fruit. A key objective

is to increase labour market participation, especially of the young, of women, of the elderly

and of ethnic minorities. To achieve these objectives, work will be conducted in close

cooperation with social partners.

54.

Taking advantage of Europe's improved economic prospects to create more and better jobs,

more effort must now be put into implementing the European Employment Strategy and the

three priorities for action: attract and retain more people in employment, increase labour

supply and modernise social protection systems, improve adaptability of workers and

enterprises, and increase investment in human capital through better education and skills.

Better organisation of work, quality of working life and continuous updating of workers'

qualifications are factors which should be analysed in view of boosting labour productivity.

55.

Within these priorities, and given the recent improvement of economic conditions, further

efforts are necessary to increase European employment by at least 2 million jobs yearly until

2010 as a further step to reaching the Lisbon employment targets.

56.

The European Council calls on the Member States to:



develop a life-cycle approach to work, facilitating swift employment transitions

throughout working life and leading to an increase in the total number of hours worked

in the economy, and to improving the efficiency of investment in human capital;

pursue the shift towards active and preventative policies, encouraging and helping

people to find paid employment;

better focus measures for those with low skills and low pay, in particular those on the

margins of the labour market.



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57.

It is urgent to improve the situation of young people in the labour market and to reduce

significantly youth unemployment. To that end, the European Council stresses that

in line with the agreed target for 2010, efforts should be intensified to reduce early school

leaving to 10% and to ensure that at least 85% of 22 year olds should have completed upper

secondary education.

58.

With a view to making it more attractive for older workers to stay employed for longer, the

European Council underlines that active ageing strategies should be implemented. In this

context, financial incentives for prolonging working lives, gradual retirement, part-time work,

improving quality at work and targeted incentives to ensure that the number of workers over

the age of 45 participating in training rises much faster than that for the overall workforce

should be considered.

59.

Acknowledging that gender equality policies are vital to economic growth, prosperity and

competitiveness, the European Council stresses that it is time to make a firm commitment at

European level to implement policies to promote women's employment and to ensure a better

work-life balance. To this end, the European Council approves the European Pact for Gender

Equality (see Annex Y) and agrees that the availability of quality childcare should be

increased in line with Member States' own national targets.

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60.

The European Council stresses the need to develop more systematically in the National

Reform Programmes comprehensive policy strategies to improve the adaptability of workers

and enterprises. In this context, the European Council asks Member States to direct, special

attention to the key challenge of "flexicurity - flexibility through security": Europe has to

exploit the positive interdependencies between competitiveness, employment and social

security. Therefore Member States are invited to pursue reforms in labour market and social

policies under an integrated flexicurity-approach, adequately adapted to specific institutional

environments. The European Council welcomes the Commission's proposal to explore the

development of a set of common principles on flexicurity and invites Member States and

social partners to actively participate in this process. In this context, it also welcomes the

proposal by the Commission to establish a European Globalisation Adjustment Fund to help

workers to cope with rapid change and transitions to new jobs and invites the Council, the

European Parliament and the Commission to take the appropriate measures in order for the

Fund to be operational as soon as possible and preferably on 1 January 2007.

[PM ENERGY]

________________________

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ANNEX X

R&D expenditure (2004) as % of GDP and targets set by Member States in

National Reform Programmes

Member State

Belgium

Czech Republic

Denmark

Germany

Estonia

Greece

Spain

Ireland

France

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Slovenia

Slovakia

Finland

Sweden

2004

1,93

1,28

2,61

2,49

0,91

0,58

1,07

1,20

2,16

1,14

0,37

0,42

0,76

1,78

0,89

0,016

1,77

2,26

0,58

0,78

1,61

0,53

3,51

3,74

1,79

2010

3,00

1,65

3,00

1,90

1,50

2,00

2,50

3,00

N/A

0,86

1,50

2,00

3,00

1,8

0,20

3,00

1,65

1,80

3,00

1,80

4,00

2,50

Remarks

Target of 1%public RTD and unchanged private R&D

Target of 2.5% of GNP in 2013.

Target of 0.65% in 2008.

Target for 2007

Target of 1,65% of GDP in 2008.

Target of 1% public R&D and tripling of private R&D.

Target of 1% public R&D and unchanged private R&D.

Target of 2.5% for 2014.

N/A = not available

________________________

Source: Eurostat. Most values are provisional. The values for IT, LU and PT refer to 2003.

Source: National Reform Programmes, with European Commission estimates based on the

targets provided by CZ, CY, IE, PT, SE and UK.

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ANNEX Y

EUROPEAN PACT FOR GENDER EQUALITY

Considering the need to:



contribute to fulfilling EU ambitions on gender equality as mentioned in the Treaty,

close the gender gaps in employment and social protection, thus contributing to make full use

of the productive potential of the European labour force,

contribute to meeting the demographic challenges by promoting better work-life balance for

women and men,

the European Council has adopted a European Pact for encouraging action on Member State and

Union level in the following fields:

Measures to close gender gaps and combat gender stereotypes in the labour market



promote women's employment in all age brackets and reduce gender gaps in

employment, including by combating all forms of discrimination;

equal pay for equal work;

combat gender stereotypes, in particular those related to the sex-segregated labour

market and in education;

consider how to make welfare systems more women's employment friendly;

promote women's empowerment in political and economic life and women's

entrepreneurship;

encourage social partners and enterprises to develop initiatives in favour of gender

equality and promote gender equality plans at the workplace;

mainstreaming the gender perspective into all public activities.

Measures to promote a better work-life balance for all



achieve the objectives set at the European Council in Barcelona in March 2002 on the

provision of childcare facilities;

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

improve the provision of care facilities for other dependents;

promote parental leave for both women and men.

Measures to reinforce governance through gender mainstreaming and better monitoring



ensure that gender equality effects are taken into account in impact assessments of new

EU policies;

further develop statistics and indicators disaggregated by sex;

fully utilise opportunities presented by the establishment of the European Institute for

Gender Equality.

The European Pact for Gender Equality, as well as the Annual Report on Equality between Women

and Men, should be linked to the established follow-up mechanisms of the Lisbon Strategy, taking

into account the European Youth Pact, and aim to promote the implementation of gender

mainstreaming in actions taken within the strategy. When reporting on the implementation of their

National Reform Programmes for jobs and growth, Member States are encouraged to include a

perspective of gender equality, especially concerning Guideline 18. The Commission and the

Council are invited to do likewise in the Annual Progress Report on the Lisbon Strategy.

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