*Updated June 2010* European Council adopts ’2020 strategy’ EU 2020 Strategy launched

*Updated June 2010* On 17 June, the European Council adopted the "Europe 2020" strategy

In its conclusions, the European Council confirms the five EU headline targets which will serve as goals to guide the action of Member States and the Union as regards promoting employment; improving the conditions for innovation, research and development; meeting our climate change and energy objectives; improving education levels and promoting social inclusion in particular through the reduction of poverty.

Heads of States also gave their political endorsement to the Integrated Guidelines for economic and employment policies, which will be formally adopted following the European Parliament’s opinion.

The European Council endorses the establishment of an ambitious digital agenda based on concrete proposals. The Council Conclusions call on EU institutions to engage in its full implementation, including the creation of a digital single market by 2015.

The European Council looks forward to the presentation of the other flagship initiatives before the end of the year.

EU headline targets
 raising to 75% the employment rate for women and men aged 20-64, including through the greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants;
 improving the conditions for research and development, in particular with the aim of raising combined public and private investment levels in this sector to 3% of GDP;
 reducing greenhouse gas emissions by 20% compared to 1990 levels; increasing the share of renewables in final energy consumption to 20%; and moving towards a 20% increase in energy efficiency;
 improving education levels, in particular by aiming to reduce school drop-out rates to less than 10% and by increasing the share of 30-34 years old having completed tertiary or equivalent education to at least 40%;
 promoting social inclusion, in particular through the reduction of poverty, by aiming to lift at least 20 million people out of the risk of poverty and exclusion.

European Council Conclusions of 17 June 2010 is available here.

Background

On 3 March 2010, José Manuel Barroso, President of the European Commission, released the long-awaited “EU 2020 Strategy,” which will replace the Lisbon Strategy and become the roadmap for the next ten years for greener growth and jobs in Europe.

The strategy contains proposals on reducing poverty, promoting research, and increasing employment within the EU. According to President Barroso, the strategy should bring at least 2% growth. The Financial Crisis has caused skeptical EU countries to stop opposing greater European economic integration. “Now things have changed," Mr. Barroso stated, "we are more interdependent than ever. We need economic coordination now more than ever, divergences between Member States have a direct impact on everyone else". The programme was discussed by EU leaders at a summit on March 25-26 before its planned approval in June.

Five headline targets

The strategy identifies five headline targets at the EU level, Member States will be asked to translate these targets into national goals:

 Raising the employment rate of the population aged 20-64 from the current 69% to 75%.
 Raising the investment in Research and Development (R&D) to 3% of the EU’s GDP.
 Meeting the EU’s ’20/20/20’ objectives on greenhouse gas emission reduction and renewable energies.
 Reducing the share of early school leavers from the current 15% to under 10% and making sure that at least 40% of youngsters have a degree or diploma.
 Reducing the number of Europeans living below the poverty line by 25%, lifting 20 million out of poverty from the current 80 million.

A few of these targets, like the 3% R&D target, were included in the Lisbon Agenda. Others like the 20% greenhouse gas emission reduction target and renewable energy objectives have already been agreed and put down into hard legislation.

A series of seven flagship initiatives were identified where joint action can be taken: innovation, youth, the digital agenda, resource efficiency, industrial policy, skills and jobs and the fight against poverty.

One of the main criticisms of the Lisbon Agenda was the lack of means to monitor success, therefore the Commission proposed evaluating national policy programmes alongside fiscal stabilisation plans adopted under the Stability and Growth Pact. To assess progress in achieving the agreed national targets, the Commission will submit an annual report to EU leaders for discussion at their spring annual summit.

In the opinion of the Commission, the European Council should direct the strategy, as it is the most suitable institution to manage interdependence between member states and the EU.

Policy recommendations already exist under the Stability and Growth Pact and carry legal weight. "Policy warnings," on the other hand, are a new instrument provided by the Lisbon Treaty (Article 121.4 of the revised EU treaties).

EU Spring Summit 2010

During the EU Spring Summit on 25 and 26 March 2010 in Brussels, EU leaders agreed to strengthen economic policy coordination by defining future common guidelines and issuing early warnings against failing member states, as is already the case for fiscal policy.

"We commit to promoting strong coordination of economic policies in Europe. We consider that the European Council must improve the economic governance of the European Union," reads a compromise text adopted by EU heads of state and government on Friday, 26 March.

The wording of the text was quite controversial, for example explicit reference to European economic governance was the subject of long negotiations. Many Member States supported using the term “economic government” which indicates the intention to move towards a common European economic policy.

The milder concept of "economic governance," was the term included in in the compromise text adopted to outline an aid plan for Greece. However, "governance" only appears in the English version, with the French version of the statement using the term “gouvernement économique”.

In addition to retaining what was originally included in the draft common conclusions leaders added a clear reference to the "better use" of instruments provided by Article 121 of the Lisbon Treaty.

Article 121 gives the Council the authority to "formulate a draft for the broad guidelines of the economic policies of the member states and of the Union". After involving the other European institutions, "the Council shall adopt a recommendation setting out these broad guidelines."

The Conclusions from the Summit will allow EU leaders to define and monitor economic policies, rather than fiscal policies alone. This is one of the long-term objectives set by the permanent President of the European Council, Herman Van Rompuy.

For More Infromation

 Europe 2020

 Commission Communication Europe 2020 A strategy for smart, sustainable and inclusive growth

 Statement by the Heads of State and Government of the Euro Area

 Conclusions of the European Council 25-26 March 2010

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