Will the EU achieve the job targets set by the Lisbon Treaty?

Civitas, 13 March 2009

The Annual European Growth and Jobs Monitor says that the economic downturn has compromised the economic growth and employment goals envisaged in the EU’s Lisbon Treaty, writes Kyial Arabaeva. The report says that “Declines in growth rate and labour productivity will be followed by deteriorations in employment and public finances”.

Business Europe has recently predicted that the Eurozone economy is likely to contract by 2.1% in 2009, compared to 0.8% growth in 2008. The EU area is expected to see a negative growth of 2.2%. According to the Business Europe survey, the EU’s unemployment rate has increased from 7% in 2009 to 9% in 2009. The UK and Spain will see 2 million job losses in 2009. Soaring unemployment is hugely affecting Europeans, although EC President Barroso claims that there are necessary ‘safety-nets’ to protect EU citizens. The Secretary General of the European Trade Union Confederation John Monks predicts that unemployment will get even worse.

EU executive and social partners will hold an unemployment summit on the 7th of May to come up with ‘recession-proof employment policies’ to ease the adverse effects of the economic downturn on EU citizens. The intention is for the summit to look forward to make coordinated efforts to find new ways to tackle unemployment.

But how effective and ‘recession-proof’ are the EU’s employment policies in the face of the current deepening recession, financial sector losses and corporate bankruptcies? Many argue that the EU is not doing enough. President of the Party of European Socialists, Poul Nyrup Rasmussen, blamed the EU Commission President Jose Manuel Barroso saying that people expected more from the EU. He urged the Commission President to adopt a comprehensive recovery package.  MEPs also called on the Commission to provide wider access for workers to the European Globalisation Fund and to open a temporary European Social Fund. Meanwhile, Business Europe has criticized the EU for “failing to ensure that member states make progress on meeting the Lisbon ‘Growth and Jobs’ targets, while restructuring their economies and labour markets”.

The Socialist Group called for investments in unemployment recovery initiatives to increase GDP by 1% in 2009 and 1.5% in 2010 because without this intervention unemployment in the EU might soar up to 25 million people by the end of the year. Eurostat figures in January showed 7.6% (18.4 million people) unemployment in the EU27 from 2.8% in the Netherlands to 14.8% in Spain.  According to the official data, unemployment in the UK at the end of January 2009 was 2.1 million. Moreover, the unemployment pace is growing with 100,000 a month. What will be the fate of another 600,000 UK graduates who are likely to enter the labour market in July this year? Youth unemployment remains a major problem in most EU member states and it has been largely increasing since 2004.

In an upbeat report on the EU bloc’s labour market at the end of February this year, the EU promised to create 5 million new jobs by 2009, thus cutting unemployment rate by 7%. With the current 66% employment rate, to reach its target of 70% by 2010, the EU must create 20 million jobs in the next three years. However, the EU’s efforts currently lag far behind people’s expectations, which could compromise its raison d’être of providing “peace and prosperity” if the unprecedented economic problems also provoke civil unrest.