GROWTH AND JOBS: NEXT STEPS

Presentation of J.M. Barroso,

President of the European Commission, to the informal European Council of 30 January 2012

Tackling the vicious circles affecting Europe

Europe 2020 Europe 2020 Macro-imbalances procedure Macro-imbalances procedure Euro Plus Pact Euro Plus Pact

Low competitiveness Low productivity Higher taxes Low tax revenue Low growth Low demand Limited access to finance

Government debts Bank guarantees and recapitalisation International agreement International agreement Stability and Growth Pact Stability and Growth Pact Financial stability funds Financial stability funds Euro Plus Pact Euro Plus Pact

Private and financial sector indebtedness

Lower values of bonds

EU supervisory framework EU supervisory framework Macro-imbalances procedure Macro-imbalances procedure Euro Plus Pact Euro Plus Pact

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

Restoring growth: a pressing priority

EU GDP level in recent years (first quarter 2005 = 100)

110 109 108 107 106 105 104 103 102 101 100

GDP level

?
2006 2007 2008 2009 2010 2011 2012 2013

2005

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

Discipline and growth must be combined

Government balance in % of GDP
6 4 2 0

2007

2011

2013*

EA SE EE DE BG MT* AT RO LV HU* LT PT SK FR ES SI CZ LU

EU

-2 -4

FI

IT
-6

DK PL* CY*

BE* NL

-8 -10 -12
* This forecast is based on an Autumn 2011 scenario of no policy change and does not reflect announcements made since then, except for BE, CY, HU, MT and PL, where information for 2013 dates from January 2012.

EL UK IE

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

Europe 2020: the EUs growth strategy

Strengthened EU economic governance
Macro-economic & fiscal surveillance Regulation of financial services Targets and guidance for structural reforms

Flagships for smart, sustainable and inclusive growth

Digital Agenda New Industrial Policy New Skills and new Jobs Youth on the Move Platform against Poverty Innovation Union Resource Efficiency

Modernised EU levers for growth and jobs

Single Market Act Trade and external policies Structural Funds and future EU budget
4

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

EU recommendations for action at national level

Public finances Labour market
Active Labour Market Policy

Structural policies
Business environment and SMEs Public services and cohesion policy

Financial stability

Fiscal consolidation

Long-term Fiscal Sustainability framew ork

Taxation

Wage Setting

Labour Market participation

Education

Netw ork industries

Energy efficiency

Service sector

R&D and innovation

Banking

Housing market

AT BE BG CY CZ DE DK EE ES FI FR HU IT LT LU MT NL PL SE SI SK UK

Note: Recommendations adopted by the EU in July 2011 for 2011-2012. For IE, LV, EL, PT and RO, the only recommendation is to implement existing commitments under EU/IMF financial assistance programmes.

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

Commitments made under the Euro Plus Pact

Foster competitiveness Foster employment Sustainability of public finances
Low er labour taxes ParticiAlign pation of pensions to 2nd earners demography Incentives f or older w orkers

Reinforce financial stability

National legislation f or banking resolution and other f inancial stabilisation measures

Wage Public sector setting w age mechanisms developments

Competition in services

Education, R&D, innovation

Business environment

Labour Labour Undeclared market participation w ork f lexicurity

Lif e-long learning

National fiscal rule

AT BE BG CY DE DK EE EL ES FI FR IE IT LT LU LV MT NL PL PT RO SI SK

Note: this table summarises commitments taken by Member States participating in the Euro Plus Pact since Spring 2011.

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

Annual Growth Survey: five priorities for 2012

Pursuing growth-friendly fiscal consolidation Restoring normal lending to the economy Promoting growth and competitiveness Tackling unemployment and the social consequences of the crisis Modernising public administration

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

FOCUS 1: Tackling youth unemployment

Youth unemployment rates (November 2011)

% of labour force (EU average = 22%)

< 10 10 - 20 20 - 30 30 - 40 > 40

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

Unemployment levels vary greatly

Unemployment rates and numbers of unemployed (November 2011)
Unemployment rates in % (total population) Number of persons unemployed (rounded) Youth unemployment rates in % Number of young unemployed (rounded) Unemployment rates in % (total population) Number of persons unemployed (rounded) Youth unemployment rates in % Number of young unemployed (rounded)

EU BE BG CZ DK DE EE IE EL ES FR IT CY LV

9.8 7.2 10.9 6.7 7.8 5.5 11.3 14.6 18.8 22.9 9.8 8.6 9.1 14.8

23 674 000 351 000 361 000 351 000 229 000 2 339 000 79 000 303 000 934 000 5 333 000 2 850 000 2 142 000 37 000 169 000

22.3 21.1 25.6 19.0 14.9 8.1 21.8 29.3 46.6 49.6 23.8 30.1 23.1 29.9

5 579 000 84 000 61 000 72 000 70 000 393 000 17 000 58 000 145 000 990 000 722 000 459 000 8 000 34 000

LT LU HU MT NL AT PL PT RO SI SK FI SE UK

15.3 4.9 10.7 6.4 4.9 4.0 10.0 13.2 7.3 8.2 13.5 7.4 7.4 8.3

247 000 12 000 457 000 12 000 437 000 174 000 1 776 000 720 000 727 000 83 000 367 000 201 000 374 000 2 665 000

31.1 14.7 25.9 14.3 8.6 8.3 27.8 30.7 23.4 15.2 35.1 19.6 23.2 22.0

43 000 2 000 78 000 4 000 121 000 49 000 456 000 143 000 204 000 13 000 78 000 63 000 148 000 1 023 000

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

The EU opens up opportunities for young people STUDY: ERASMUS

3 million students so far > 200 000 a year > 90% satisfaction

TRAIN: LEONARDO
710 000 people so far > 80 000 placements a year 86% find it beneficial

WORK: EURES
1.3 million vacancies 25 700 employers registered 100 000 jobs/offers a year
Presentation of J.M. Barroso to the informal European Council, 30 January 2012

10

A Youth on the move Pact (1) EACH MEMBER STATE TO:

Develop youth jobs plans by mid-April as part of National Reform Programmes Agree with social partners to increase number of apprenticeships and traineeships Guarantee job, education or training for each young person within 4 months of leaving school Re-direct EU Structural Funds to give priority to youth unemployment

Use existing EU support schemes to facilitate youth mobility (with EU and/or top-up national funding)
Presentation of J.M. Barroso to the informal European Council, 30 January 2012

11

A Youth on the move Pact (2) WHERE YOUTH UNEMPLOYMENT IS SIGNIFICANTLY ABOVE EU AVERAGE:
Action teams with Commission, Member States & social partners to develop youth jobs plans Use of unallocated EU Structural Funds to fund training and work experience
Presentation of J.M. Barroso to the informal European Council, 30 January 2012

12

FOCUS 2: Helping our entrepreneurs

What is the most pressing problem your firm is facing? (all SMEs in the EU, %, survey from December 2011)
2009 2011

Finding customers Access to finance Competition Availability of skilled staff or experienced managers Costs of production or labour Regulation

10

15

20

25

30

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

13

 and boosting the competitiveness of our SMEs Access to finance

EU schemes for SMEs: Direct funding and loans Guarantees Working capital EIB EU market for venture capital Innovative financing instruments (project bonds)

Access to markets
At home: Enforce Single Market legislation Fast-track Single Market Act Use of public procurement Abroad: Support for internationalisation New trade agreements

Cutting red-tape

E-government and e-commerce 3 days to start a business Reduction of late payments Exemptions for micro-firms
Presentation of J.M. Barroso to the informal European Council, 30 January 2012

14

Tapping the potential of EU Funds

EU Structural Funds still to be allocated for the period 2007-2013 (estimate end 2011)
ESF* unallocated ( m) ERDF* unallocated ( m) Total unallocated ( m) Unallocated funds as % of total EU funds ESF* unallocated ( m) ERDF* unallocated ( m) Total unallocated ( m) Unallocated funds as % of total EU funds

EU BE BG CZ DK DE EE IE EL ES FR IT CY LV

22 271 45 422 1 370 91 2 112 33 2 1 495 2 712 747 3 674 0 0

60 043 85 1 578 5 630 14 3 688 340 0 2 805 8 000 3 500 4 326 0 450

82 314 130 2 000 7 000 105 5 800 374 2 4 300 10 712 4 247 8 000 0 450

24% 6% 30% 26% 21% 23% 11% 0% 21% 31% 32% 29% 0% 10%

LT LU HU MT NL AT PL PT RO SI SK FI SE UK

289 0 2 190 20 0 78 3 775 1 760 698 204 39 89 195 230

761 5 4 010 55 240 322 13 725 1 240 5 102 371 2261 261 105 1 170

1 050 5 6 200 75 240 400 17 500 3 000 5 800 575 2 300 350 300 1 400

15% 10% 25% 9% 14% 33% 26% 14% 30% 14% 20% 22% 18% 14%

Note: Commission estimate of EU funding in programmes still to be allocated to specific operations on the ground. * ESF = European Social Fund. ERDF = European Regional Development Fund.

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

15

European Semester: working together on next steps

Now: Prepare youth jobs plan in each National Reform Programme Commission / Member State action on youth unemployment in worst affected Member States (accelerating / redirecting structural funds for youth and SME support) March: EU-level guidance from Spring summit (based on Annual Growth Survey) April: May: June: Member State commitments in National Reform Programmes Commission country-specific recommendations European Council decisions on country-specific recommendations
16

Presentation of J.M. Barroso to the informal European Council, 30 January 2012

EUROPE 2020
Presentation of J.M. Barroso to the informal European Council, 30 January 2012

17