The Union Members had some many problems to solve when drafting the Treaty of Rome (1958) that very little attention was paid to social policies provisions on the rights of workers, even less space was devoted to the migration of labour in the common market and the idea of full employment was considered a chimera. Simply, unemployment, as such, was not a Community concern at the time; although, by 1990 unemployment became the EU´s most intractable economic problem .Employment policies, ¨Employment, Social Affairs and Equal Opportunities,Luxembourg Jobs Summit, European Employment Strategy (EES)

Lorca-Susino, Maria

English

Research Papers in Economics

 
  
 
 
Robert Schuman   
                                       
Miami-Florida European Union Center of Excellence 
EUMA 
                   EU Unemployment Strategy: In One Ear, Out the Other 
-Maria Lorca
 
 
 
  EUMA
Vol. 2 No. 8 
April 2006
  
 
 
 
 
 
This publication is sponsored by the EU Commission.EUMA 
 
 
 
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¾  Turkey: prospects of membership 
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¾  The EU and Latin America 
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¾  The euro and the dollar 
¾  EU responses to Katrina 
¾  EU image in the United States 
 
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EU Unemployment Strategy: In One Ear, Out the Other 
 
 
 
 
 
 
 Maria Lorca
 ∗
 
 
 
Miami-Florida European Union Center of Excellence 
University of Miami 
Miami, Florida 
April 2006
                                                           
∗ Maria Lorca is a Ph.D. student in International Relations at the University of Miami. She has her Bachelors of 
Science and Masters of Science in Economics, also from the University of Miami.
 
 
 
 
 
 EU Unemployment Strategy: In One Ear, Out the Other 
 
 
Introduction 
 
 
The Union Members had so many problems to solve when drafting the Treaty of Rome (1958) 
that very little attention was paid to social policies and provisions for the rights of workers. Even 
less space was devoted to the migration of labor in the common market and the idea of full 
employment was considered a chimera. Simply, unemployment, as such, was not a Community 
concern at the time; although, by 1990 unemployment became the EU’s most intractable 
economic problem.
1
 
  Employment policies in the European Union are drafted by the “Employment, Social 
Affairs and Equal Opportunities” Commission whose Commissioner and Directorate-General 
until 2009 are Vladimir Spidla and Odile Quintin. The European Commission for Employment 
and Social Affairs explains that “(t)he objectives of full employment, quality of work and 
productivity and employment and cohesion are at the centre of EU policy.”
2  Also, by 1970, a 
Standing Committee in Employment of so-called “Social Partners” composed of trade union and 
employer representatives was created by the Council of Ministers to advise the Council and the 
Commission on employment policy.
3  Nevertheless, the main goals of  the Employment, Social 
Affairs and Equal Opportunity Commission are summarized by these four main points:
4
•  To create more and better jobs 
•  To reap the benefits of its enlargement and to coordinate national 
employment, inclusion and social protection policies and financial support 
provided by the European Social Fund (63 billion euro over 2000-2006) 
•  To address the impact of demographic aging on its social protection systems -
pensions, health care, long-term care- and on employment policies 
•  To promote an inclusive society and continue to roll back all forms of 
discrimination, based on race or ethnicity, disability, age, sexual preference 
  It is true that at the beginning of the EU, employment policies were not a priority to the 
EU government but the unemployment situation in its members’ states was so desperate that in 
the Luxembourg Summit (1997) the Luxembourg Jobs Summit was organized and the European 
Employment Strategy (EES) was presented as the key element in the EU for employment policy. 
The EES was geared to obtaining notable employment improvements in only five years while 
                                                           
 
1Van Oudenaren, John. Uniting Europe: European Integration and the Post-Cold War World. Lanham abd 
Oxford: Rowman & Littlefield Publ., Inc., 1999. 190  
McCormick, John. The Eurooean Union Politics and Policies. Boulder: Westview Press, 1999. 160 
 
2.Employment and Social Affairs. Employment Analysis.  
http://europa.eu.int/comm/employment_social/employment_analysis/index_en.htm
 
3 Rosemberg, Jerry M. The New Europe. An A to Z Compendium on the European Community. BNA 
Books, The Bureau of National Affairs, Inc., Washington, D.C. 1991. 52. 
   Iming, D. and Sidney Tarrow. Contenious Europeans: Protest and Politics in an Emerging Polity. Rowman and 
Littlefield, 2001. 55. 
 
4Spidla, Vladimir. Key Policies. 
http://europa.eu.int/comm/commission_barroso/spidla/policies/policies_en.htm 
 establishing policies to implement and improve employment.  Basically, the EES is designated as 
the main tool to give direction to and ensure coordination of the employment policy priorities 
that Members States should subscribe at the EU level. The latest EES agreed in spring 2005 by 
all Heads of State and Government covers a three year period, from 2005 to 2008, and has been 
revised to improve coordination between Member States and the European institutions of the EU.  
 
  Later summit councils such as Cardiff (June 1998) and Cologne (March 1999) shaped the 
form and structure of such necessary instruments. During these summits, the Heads of State and 
Government of the Member States stressed their commitment to combat unemployment and 
implement the policies necessary to obtain such a goal. The urge to solve the employment 
situation was such that a new employment title was introduced by the Amsterdam Treaty 
(articles 125 – 130) where the promotion of employment was considered a “matter of common 
concern” of the member states and one of the Community’s main goals. 
  
  “Member States and the Community shall, according to this Title, work towards 
developing a coordinated strategy for employment and particularly for promoting a skilled, 
trained and adaptable workforce and labor markets responsive to economic change…”
5
 
  The most important of all the efforts to solve the employment situation in EU was 
performed at the Lisbon European Council in March 2000 where the EU set the goal of “to 
become the most competitive and dynamic knowledge based economy in the world, capable of 
sustainable economic growth with more and better jobs and greater social cohesion.”
6  During 
the Barcelona Council in March 2002 it was confirmed that full employment was the main goal 
of the EU.
7  The main objectives behind this reasoning were to design a strategy with 
employment policies that would enable the EU to achieve full employment by 2010, along with 
certain short term employment objectives. Unfortunately, the European Commission in its draft 
entitled Joint Employment Report (JER) for 2004-5 shows that the overall employment rate has 
stagnated at 63 per cent, despite continuing increases for women and recently also for older 
workers. Hence, the Commission has concluded that the Lisbon target of achieving a 70 per cent 
employment rate by 2010 looks “increasingly challenging.”
8  Five years after the launch of the 
Lisbon strategy, the Commission recognizes that the results are somewhat disappointing and that 
the European economy has failed to deliver the expected performance in terms of growth, 
productivity and employment. Therefore, the EU decided to focus attention on the action to be 
taken rather than targets to be attained.
9 This situation prompted heads of states or government 
during the spring 2005 summit to revise the Lisbon objectives and stress the importance of 
implementing the reforms needed for growth and employment in order to relaunch the strategy 
                                                           
 
5 Amsterdam Treaty, The Employment Title - article 125. http://www.ebuindigo.org/gat4-en.htm#D 
 
6The Lisbon Council. Misión.  Http://www.lisboncouncil.net/Mission.asp 
 
7El Mundo. Aznar considera 'irreversible' el proceso de reformas económicas y sociales en la Unión 
Europea  http://www.elmundo.es/elmundo/2002/03/16/enespecial/1016288161.html 
 
8Infobase Europe. Joint Employment Report Suggests Lisbon Targets Are "Increasingly Challenging". 
http://www.ibeurope.com/Records/8100/8146.htm 
 
9Community Employment Policies. A new start for the Lisbon Strategy (2005). 
http://europa.eu.int/scadplus/leg/en/cha/c11325.htm 
 without delay.
10 As McCormick states in his book The European Union, Politics and Policies, 
the urge and necessity of creating jobs is mainly due to the necessity and convenience to help 
maintain Europe’s competitiveness in the global market (298). It is also necessary to mention 
that the so-called European social partners of the Standing Committee in Employment shared the 
EU view on the employment situation. They declared their support for the review of the Lisbon 
strategy at the Tripartite Social Summit in Brussels that was held together with representatives of 
the EU
11.  
  Nowadays, if we look at the unemployment statistic for EU 15 and EU 25 from 1990 to 
2004 provided by the OECD in its annual “OECD Employment Outlook 2005” and we compare 
those percentages to the unemployment figures of US or Japan, it is clear that a lot has to be done 
(see graph number 1). For instance, the US is reducing its unemployment rate. In fact, according 
to the latest data released on Friday June 2nd by the Bureau of Labor Statistics, “both the number 
of unemployed persons (7.0 million) and the unemployment rate (4.6 per cent) were essentially 
unchanged in May.  A year earlier, the unemployment rate was 5.1 percent. Total employment 
(144.0 million) continued to trend up in May; over the year it has increased by 2.4 million. Both 
the employment-population ratio (63.0 per cent) and labor force participation rate (66.1 per cent) 
held steady over the month.”
12  In Japan, in April 2006 unemployment stayed at a seven-year 
low, and the jobless rate was unchanged at 4.1 percent for a third month; furthermore, 
“companies are facing labor shortages, according to the Bank of Japan's March Tankan survey. 
An index of labor demand among large manufacturers fell to minus 1 in March from 2 in 
December 2005, the lowest since 1992. A negative number means more companies are short of 
manpower.”
13 These figures are indicating that the labor market in Japan will stimulate more 
labor contracts and a further reduction of the Japanese unemployment rate. 
  
                                                           
 
10 Presidency conclusions of the Spring European Council in Brussels (22-23 March 2005) [ PDF ] 
concerning the mid-term review of the Lisbon strategy. 
http://ue.eu.int/ueDocs/cms_Data/docs/pressdata/en/ec/84335.pdf 
 
11 Social partners strongly support the Commission's Lisbon Strategy. 
http.//europa.eu.int/comm/employment_social/social_dialogue/news_en.htm
  Eironline. New rules adopted for tripartite social dialogue. 
http://www.eiro.eurofound.eu.int/2005/03/feature/sk0503101f.html
 
12 United States Department of Labor. Boreau of Labor Statistics. 
http://www.bls.gov/news.release/pdf/empsit.pdf 
 
13 Bloomberg. ¨Japan´s Production rises; unemployment at 7-year low.¨ 
http://www.bloomberg.com/apps/news?pid=10000080&sid=aMbGMLKN9_q0&refer=asia 
 UNEMPLOYMENT RATE
0
2
4
6
8
10
12
1990
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
p
e
r
c
e
n
t
a
g
e
Japan US EU-15
 
Source: OECD Statistical Annex. OECD Employment Outlook 2005. 
  
  In EU-15, the unemployment rate varies across countries as shown in the next chart.  
Since 1990 Spain has had the highest unemployment rate despite the fact that it has strongly 
worked towards reducing its high figure; for instance, in 1994 the unemployment rate in Spain 
hit an all time high of 20 per cent unemployment rate, while in 2004 it was below 10 per cent. 
However, Demark and UK are the two countries with the lowest unemployment rates since 1990. 
As of May 2006, still Denmark with a 4.8 per cent and Britain with a 5.2 per cent keep the 
lowest rates while France with 9.3 per cent, Germany with 11 per cent, and Belgium with 12.1 
per cent are championing this non-prestigious league. Finally, Spain is maintaining a high but 
maintained 8.7 per cent unemployment rate. 
 
  
Unemployment Rate 
0
5
10
15
20
25
1990
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
P
e
r
c
e
n
t
a
g
e
Belgium Denmark France Germany Greece
Italy Portugal Spain Sweden UK
 
Source: OECD Statistical Annex. OECD Employment Outlook 2005. 
 
  Nevertheless, in my opinion, the EU has only limited responsibilities for such high 
figures since the EU sets the policies to implement but it is the responsibility of each member 
state to provide the national political means to meet the requirements to lower unemployment. 
This is the case of a possible comparative study between the evolution of unemployment rates in 
Ireland and Spain. Both countries started off in 1990 with about the same unemployment rate. 
But in 2004 the Spanish unemployment is more that 6 per cent points higher that the Ireland 
unemployment rate, although both had to implement and follow almost the same EU 
employment policies (see graph number 2).  
 
 Unemployment rates in Spain & Ireland
0
5
10
15
20
25
1
9
9
0
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
P
e
r
c
e
n
t
a
g
e
Ireland Spain
 
Source: OECD Statistical Annex. OECD Employment Outlook 2005. 
 
However, Spain is still implementing new measures to reduce this high unemployment rate; if 
during the Spanish economic take off the unemployment rate remained high around 10 per cent, 
it will be troublesome if the Spanish economy eventually slows down since it will negatively 
affect the labor market and unemployment would suffer an undesirable rise. It is important to 
mention that according to the latest economic figures,
14 in April 2006 Spain had 2,004,528 
unemployed, of which 61 per cent (1,241,530) were women.  Furthermore, it is important to 
mention that unemployment among young people, that is men and women under 25 years of age, 
represents 87 per cent of the 2 million unemployed, which is still a very negative data since it 
proves that young people do not access the labor market. In order to reduce this youth 
unemployment that is vital to the economy, the government has announced measures to boost the 
labor market.
15  Furthermore, it is important to mention that in Spain’s largest community, 
Andalusia, has been leading the unemployment reduction in the year 2006. But my biggest 
concern is that Andalusia—located in Target Group I as its income is lower than 75 per cent of 
the average— due mainly to the EU enlargement, has lost 34 per cent of the EU regional funds 
investments as Spain is going to loose 29.5 per cent of its economic assignment. The 15,448 
million euros received between the years 2000-2006 will be reduced to 10,181 in the 2007-2014 
Financing Prospect.
16 I strongly believe that the drop of these funds in Spain, and especially in 
Andalusia, will have a dramatic social effect on Spanish unemployment rate. The effect will have 
to be closely supervised as Spain as a whole depends on these funds, as infrastructures, the road 
system, together with the environmental project, among others, are elements that need major 
investments, which increase labor demand that eventually reduces unemployment. 
                                                           
 
14 Misnisterio de Trabajo y Asuntos Sociales. http://www.realinstitutoelcano.org/documentos/204.asp  
 
15 Ministerio de Trabajo y Asuntos Sociales. ¨Acuerdo para la mejora del crecimiento y del empleo.¨ 
http://www.mtas.es/destacados/reforma.pdf 
 
16 Torreblanca, Jose. “¿Adiós A Los Fondos? Claves Para Entender La Posición De España A La Hora De 
Negociar El Presupuesto De La Ue Para 2007-2013” DT Nº 21/2005 (Traducción del inglés). 
http://www.realinstitutoelcano.org/documentos/204.asp 
 
  
  With the EU enlargement, the unemployment rate has increased (see graph below) and 
policies should be implemented at the European Union level to control the unemployment rate of 
the newcomers. Although, in my opinion, the core of the problem does not lay in the EU and its 
policies but in the member states that are the ones that should put in place and implement 
policies and requirements. The figures represented in the graph below, show how the 
unemployment rate is lower for the EU-15 that for the EU-25 since the new ten members have 
higher unemployment rates. 
 
Unemployment Rate
0
2
4
6
8
10
1998 1999 2000 2001 2002 2003 2004 2005
P
e
r
c
e
n
t
a
g
e
EU-15 EU-25
 
Source:Eurostat.http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=po
rtal&_schema=PORTAL&screen=detailref&language=en&product=STRIND_EMPLOI&ro
ot=STRIND_EMPLOI/emploi/em071
  Finally, if the members states, whether for political or economical reasons, do not 
implement and enforce sound employment policies and measures to boost the labor market, 
the European Commission for Employment, Social Affairs and Equal Opportunities will just 
be a bureaucratic leviathan with background noise of member states singing along “in one 
ear, out the other” while the EU economy is challenged by an aging population that is 
causing a decline of the workforce, and by a labor market characterized by high levels of 
unemployment.  
  
 
 
 

In One Ear, Out The Other

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