Ποιειν Και Πραττειν - create and do

Vision 2020: strategy and need to create value

The vision

"To achieve a sustainable social market economy, a smarter and greener economy, Europe needs to promote key, agreed priorities and to work on delivering them over several years. No single Member State can successfully address these challenges alone. Nor is EU policy simply the addition of 27 national policies. By acting together on a common vision, we can make the whole more than the sum of its parts. This is an agenda for all Member States, large and small, old and new, highly developed and still developing: the enlarged EU consists of different levels of development and therefore different needs. But the EU 2020 vision is relevant to all of them and can be adapted to different starting points and different national specificities so as to promote growth for all."

In short, the realization of the EU 2020 vision demands of all member states to enter an enormous 'cultural adaptation process' in anticipation of future needs and to meet requirements as set forth by EU guidelines expressed in various policy measures.

The strategy for the EU in 2020

Europe 2020 is the EU's growth strategy for the coming decade is based on two major premises:

Source: http://ec.europa.eu/europe2020/index_en.htm

Economic governance

to reinforce

- employment

- productivity

- social cohesion

Smart

through more effective investments in education, research and innovation

Sustainable

thanks to a decisive move towards a low-carbon economy

Inclusive economy

with a strong emphasis on job creation and poverty reduction

 

Sustainable development

 Smart growth

 Sustainable growth

 Inclusive growth

Employment

 

 

 

Innovation

 

 

 

Education

 

 

 

Social inclusion

 

 

 

Climate / energy

 

 

 

 

Given 5 targets for the EU in 2020

  1. Employment
    • 75% of the 20-64 year-olds to be employed
  2. R&D / innovation
    • 3% of the EU's GDP (public and private combined) to be invested in R&D/innovation
  3. Climate change / energy
    • greenhouse gas emissions 20% (or even 30%, if a satisfactory international agreement can be achieved to follow Kyoto) lower than 1990
    • 20% of energy from renewables
    • 20% increase in energy efficiency
  4. Education
    • Reducing school drop-out rates below 10%
    • at least 40% of 30-34–year-olds completing third level education (or equivalent)
  5. Poverty / social exclusion
    • at least 20 million fewer people in or at risk of poverty and social exclusion

 

Economic governance

Each Member State can adopt own national targets in each of these areas while concrete actions at EU and national levels should underpin a common strategy designed to improve 'economic governance'. This has to entail coordination between the various levels.

Sustainable development

The strategy is justified by the claim that everything shall be done to achieve 'sustainable development'.

Source: http://ec.europa.eu/europe2020/index_en.htm (accessed last: 16.11.2012)

 

Working out the strategy in a period of acute crisis

Still BBC's Europe business reporter Nigel Cassidy thinks that delivering economic growth in the face of spending cuts and continued anxiety on the debt and currency markets, is not going to be easy.

 

Statement in COMMISSION WORKING DOCUMENT

CONSULTATION ON THE FUTURE "EU 2020" STRATEGY
(Text with EEA relevance)

COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, 24.11.2009
COM(2009)647 final
COMMISSION WORKING DOCUMENT
CONSULTATION ON THE FUTURE "EU 2020" STRATEGY

"This is a time of deep transformation for Europe. The worst economic and financial crisis in decades has hit Europe hard with a sharp economic contraction. The unemployment rate is set to rise to double digit figures in 2010, a level not seen for a decade. Collective action to save the financial system and to boost demand and confidence through public intervention has helped to prevent an economic meltdown. However, the crisis has weakened our resilience. The EU now needs to make a stronger effort to work together to make a successful exit from the crisis and to shape the next generation of public policies in a very different set of circumstances. The exit from the crisis should be the point of entry into a new sustainable social market economy, a smarter, greener economy, where our prosperity will come from innovation and from using resources better, and where the key input will be knowledge. These new drivers should help us tap into new sources of sustainable growth and create new jobs to offset the higher level of unemployment our societies are likely to face in the coming years. However,
we will only succeed if we design and implement a bold policy response. Otherwise the risk is a period of low growth which can only make it harder for Europe to tackle the major challenges we face today. Delivering this sustainable growth requires agreement to an agenda that puts people and responsibility first. The efforts of a decade which resulted in a reduction of unemployment from 12% to 7% in the EU risk being undone by the crisis. We need new sources of growth to
replace the jobs lost in the crisis. This new approach needs to take advantage of a world of globalisation and interdependence which the crisis has underlined still further. The EU needs to work both at home an in international fora like the G20 to seize the new opportunities essential to reach our 2020 objectives. EU 2020 is being designed as the successor to the current Lisbon Strategy, which has been the EU's reform strategy for the last decade and has helped the EU to weather the storm of the recent crisis. EU 2020 builds on its achievements as a partnership for growth and job creation, and renewing it to meet new challenges. It also draws on the benefits that have flowed from the coordinated response to the crisis in the European Economic Recovery Plan. The Commission considers that EU 2020 should focus on key policy areas where collaboration between EU and Member States can deliver the best results, and on improved delivery through better use of the instruments at hand. The purpose of this consultation paper is to seek the views of the other Institutions and stakeholders on a new approach. The Commission intends to adopt a formal Communication addressed to the Spring European Council early in 2010. The successful delivery of the 2020 vision relies on a partnership for progress, combining Member States' commitment to take
action at national level, and the harnessing of Community instruments to make the most of the potential at EU level. In its Communication, the Commission will therefore set out both the action it considers needs to be taken at national level, and the detailed proposals for action that it will propose at Community level."

Recognising constraints and facing new challenges

"A successful EU 2020 strategy must be built on a good analysis of the constraints facing policy makers in the coming years, and on the correct identification of the challenges to be tackled."

"The financial and economic crisis has taken a heavy toll on public finances, businesses, employment and households. At all levels, public policy makers will have to find ways of triggering economic dynamism with limited budgetary margin for manoeuvre. As public sector deficits are brought back under control, public expenditure needs to be reshaped in ways that enable us to reach the 2020 vision. Cutting spending in forward-looking areas such as education and research would make this more difficult to achieve. In developing a new vision and direction for EU policy, we need to recognise that conserving energy, natural resources and raw materials, using them more efficiently and increasing
productivity will be the key drivers of the future competitiveness of our industry and our economies."

"We also need to recognise the challenge presented by European demography: even prior to the crisis, the change in our demography, with a lower proportion of young people in the overall population, was expected to result in a substantially reduced potential growth by 2020. The crisis has exacerbated the long-term social challenges Europe faces today, such as the integration of an increasing immigrant population, social exclusion and child poverty, and solidarity between generations in the context of an ageing society. In order to meet these challenges, employment rates of both men and women will have to rise rapidly and social
protection systems will have to be modernised so that they provide an affordable response to the future needs of our society."

"This implies that new policies must demonstrably contribute to social cohesion, tackling unemployment and fostering social inclusion while securing well performing labour markets. This requires rethinking education systems and labour markets, enhancing mobility and boosting Europe’s dynamism to unleash our innovative and creative potential. The challenge of becoming a smarter, greener economy will require increased policy coordination to make the economy more competitive. Our social, economic and environmental objectives must go hand in hand if we are to deliver on our thematic priorities for 2020. In this paper, the Commission is seeking views on how the EU can set its priorities in a ten year horizon that will allow the EU and national levels to work together to move
beyond the current crisis and to mobilise new sources of growth, ensuring social and territorial cohesion, in line with the basic principles of the new Lisbon Treaty."

 

The key priorities for EU 2020

"To achieve a sustainable social market economy, a smarter and greener economy, Europe needs to promote key, agreed priorities and to work on delivering them over several years. No single Member State can successfully address these challenges alone. Nor is EU policy simply the addition of 27 national policies. By acting together on a common vision, we can make the
whole more than the sum of its parts. This is an agenda for all Member States, large and small, old and new, highly developed and still developing: the enlarged EU consists of different levels of development and therefore different needs. But the EU 2020 vision is relevant to all of them and can be adapted to different starting points and different national specificities so as to promote growth for all."

Needless to say a social market economy hardly exists, in particular in those countries which have faced since 2009 a crisis and therefore were forced to adopt such austerity measures which are anti social and anti environment. The call for economic growth is made without any critical evaluation as to what contributed to the crisis. It includes an artificial demand for housing which collapsed once the financial system was overburdened by outstanding debts. Still today, Greece is facing a time bomb with regards to what private lenders owe to the banks. There is no concept for coordination in place on how to deal with these outstanding debts. Policy is reduced to a mix of calming the waters and management of expectations, so as to have at least some modest claims of success with regards to these austerity measures. But when considering their impact in terms of people thrown into poverty, a youth deprived of working experiences and a society no longer able to take a critical stance against such economic measures which would but mean environmental destruction, there can hardly be talk of a governance linked to a wise use of common resources.

Most telling is that in Greece, there is on the table a new law for coastal zone development which seeks to repudiate the common law giving to everyone the Right to have access to the sea. If that is replaced by granting building rights to private owners, then this seeming economic success of attracting foreign investments is done at a huge cost not only in terms of environmental criteria, but it destroys a cultural basis for any consensus about future use of common resources.

One reason for this apparent contradiction is that the EU Commission seems unable or unwilling to work out these policy contradictions with here the emphasis on economic growth to get out of the crisis and there the advocacy of such policy measures which go completely against what has been attempted to create over the past twenty or more years, namely an awareness for both cultural and environmental factors. A failure may also be due to the lack of a philosophical answer to the question but what is a viable just society. (1)

Instead the European Commission clings onto the Lisbon goal of establishing a knowledge economy which is highly competitive and able to succeed in a global economy:

"Huge opportunities exist for people and for businesses if they are equipped to take them. The Commission's aim is for Europe to lead, compete and prosper as a knowledge-based, connected, greener and more inclusive economy, growing fast and sustainably, creating high levels of employment and social progress. To achieve this, Europe needs a strengthened and competitive industrial base, a modern service sector and a thriving agriculture, rural economy, and maritime sector. As ‘first mover’ in building this society of the future, Europe can derive
important benefits by developing competitive, innovative products, rolling out the
infrastructures of the future, entering new markets and creating new, high-quality jobs. But the benefits go much wider. A Europe that is open to the world will continue to be a model for others to follow, projecting its values and fostering stronger labour, environmental, and safety standards around the globe. In this way, the EU can show global leadership in demonstrating that – with the right policy framework in place and making full use of the new actors and structures offered by the Lisbon Treaty – it is possible to combine the openness needed to ensure ongoing economic dynamism with respect for the social and environmental
concerns of our citizens."


Hence the Commission considers that the key drivers of EU 2020 should be thematic, focused on the following priorities:

  1. Creating value by basing growth on knowledge. Opportunity and social cohesion will be enhanced in a world where innovation makes the difference in both products and processes, harnessing the potential of education, research and of the digital economy;
  2. Empowering people in inclusive societies. The acquisition of new skills, fostering creativity and innovation, the development of entrepreneurship and a smooth transition between jobs will be crucial in a world which will offer more jobs in exchange for greater adaptability;
  3. Creating a competitive, connected and greener economy. The EU should compete more effectively and increase its productivity by a lower and more efficient consumption of non-renewable energy and resources in a world of high energy and resources prices, and greater competition for energy and resources. This will stimulate growth and help meet our environmental goals. It will benefit all sectors of the economy, from traditional manufacturing to new hi-tech start ups. Upgrading and inter-connecting infrastructure, reducing administrative burden and accelerating the market uptake of innovations will equally contribute to this goal. These priorities will guide EU policy making inside the EU and externally. The promotion of international co-operation and multilateral governance, including efficient, fair and rules based international trade and finance systems, will be an integral part of EU 2020.

The Commission is seeking views on the following priorities which it considers to be the key drivers of EU 2020.

1. Creating value by basing growth on knowledge

 

2. Empowering people in inclusive societies

Economic spinning out of control / kinds of job creations after the crisis:

The European Commission states that "in the post-crisis economy, many of the jobs that have been destroyed will not be replaced", and goes on to repeat the well known formula, namely that "the transformation of the EU into a smarter, greener, more competitive economy will boost new job creation and respond to high levels of unemployment." What is not stated, but implicit in the crisis are not merely wage reductions or keeping wages from keeping up with profit increases - see here the entire impact of the Hartz IV Reform process in Germany - but a way to keep personal costs under control, and this for the sake of inflationary ways of gaining incomes by letting money do the work. The new working atmosphere is much more negative and even deterimental to the workers' health and sanity. This is because new managerial concepts linked to an elitist concept of education overshadows almost every effort to safeguard workers' Rights and to bring democracy into the work place.

Little has been learned out of the failure of reforming the Commission itself with such issues as the Right to take initiatives, whistle blower, proper consultation processes, access to decision making and learning how criteria for evaluation purposes are applied etc. still the same as they were in 2000 when a major attempt at reform was initiated by Mr. Kinnock in the Prodi cabinet.

Awareness for the negative effects does exist. There is drafted an entire list of problems in need to be faced:

 

Safety measures proposed:

 

Re-introduction of the term 'culture'

 

The aim for 2020 is more jobs, higher employment rates of the working age population, better jobs, with higher quality and increased productivity, and fairness, security and opportunities, through a real chance for everyone to enter in the labour market, create new companies, and manage labour market transitions through modern and financially sustainable social and welfare systems.

3. Creating a competitive, connected and greener economy
Europe needs to remain competitive in the future world of relatively high energy prices, carbon constraints and significantly greater resource competition. More efficient use of resources, including energy, and the application of new, greener technologies will stimulate growth, create new jobs and services and help the EU both to maintain a strong manufacturing base and a vibrant services sector and to meet its environmental and climate goals. Securing well functioning product, services and labour markets are a pre-condition for success.
Greening the economy is not only about the creation of new industries. It is just as important to accelerate the modernisation of Europe's existing industrial sectors, many of which will already be restructuring in the wake of the crisis. Achieving these objectives will be essential if the EU is to compete in a world where all countries will be looking for solutions to these challenges.
This means using the material inputs in the economy more efficiently, becoming more productive by reducing pressure on resources. This means shifting our economy, through targeted regulation (e.g. promoting energy-efficient products and systems), through emission trading, tax reform, through grants, subsidies and loans, through public investment and procurement policies, and through targeting our research and innovation budgets to this end.
Upgrading and inter-connecting infrastructures and ensuring effective competition of network industries in the single market is key, to improve competitiveness and at the same time deliver tangible benefits for consumers. It is crucial that Europe invests in sustainable high-speed networks. Europe needs 100% broadband coverage as soon as possible, and needs to achieve the roll-out of high speed internet through a massive programme of investment fibre networks and wireless broadband.
Together with the roll-out of high speed internet, the development of smart, upgraded transport and energy infrastructures contributes to multiple objectives including decarbonisation, transport safety, energy security, and the competitiveness of our network economy.
A rethink of transport policy will be needed in order to achieve such a comprehensive shift. Better integration of transport networks, developing alternatives to road transport, promoting clean technologies, and upgrading infrastructure will be essential elements. Big European projects such as Galileo, GMES, and smart road, rail (ERTMS), and air traffic management (SESAR) will play a key role in the integration of transport networks.
By 2030 the EU will have to replace half of its existing electricity plants. If we take the right strategic investment decisions now, two third of our electricity generation could be both low carbon and more secure by the early 2020s. In this context, the development of a European electricity super-grid will enable a considerable increase in the share of renewable electricity and decentralised generation. Improving energy efficiency will also be vital as it is the cheapest way to reduce emissions and, at the same time, to increase the energy independence
of Europe.
Because of its important contribution to growth and jobs creation, and to the development of innovation, a fresh approach to industrial policy is necessary to support industry by putting the emphasis on sustainability, innovation and the human skills needed to keep the EU industry competitive in world markets. Stable and foreseeable framework conditions should help industry tackle the competitive challenges of the future. In the aftermath of the crisis, firms in several sectors will need to tackle structural excess capacities and the EU will need to facilitate restructuring in a socially acceptable way whilst maintaining a level playing field.
This calls for an integrated industrial policy that promotes competitive market mechanisms and develops new sources of sustainable growth with an emphasis on innovation capacity, eco-innovation, new enabling technologies and skills. This transformation will also provide an opportunity to improve the regulatory environment, increase territorial cohesion and promote better conditions for entrepreneurship, foster the development of SMEs and support their growth potential and internationalisation.
In a period of industrial restructuring, state aid policy will play a key role in supporting the transition to a smarter, greener economy. The state aid rules have been overhauled in recent years. European companies have increased productivity and reaped economies of scale by taking up the opportunities offered by the Single Market – now that adjustment is needed in some sectors the Commission will be attentive to ensuring that the Single Market continues to be the basis of EU growth and to combating the risk of national retrenchment.
The aim for 2020 is to meet our agreed objectives on climate change and energy, strengthen our industrial base, fully unlock the potential of SMEs, and respond to the needs of the future, by raising productivity and reducing pressure on resources.

Making it happen: ways out of the crisis

The first task for the EU is obviously to make a successful exit from the crisis, promoting overall exit strategies designed to secure balanced and sustainable growth and sound fiscal policies. The recession and financial strains have had a bigger impact on those countries which were already suffering from major imbalances or policy weaknesses at the onset of the crisis. This diverse situation calls for a differentiated response, raising co-ordination issues.
The spill-over effects of the different responses across countries and policy areas call for effective coordination in the EU. In particular, a level playing field needs to be preserved in the financial and business sectors, and macroeconomic spill-over effects should be considered in the EU coordinated exit strategy.
Financial resources have come under pressure as a result of the crisis. The remaining problems in the financial system therefore need to be solved swiftly in order to support the recovery. Access to credit and efficient financial market supervision will be crucial for the recovery and the transition to the value economy will depend on the availability of capital to finance innovation. New priorities need to be reflected in budgetary policies.
The key challenge is how to balance the continued need for fiscal support to demand in the short run with the need to restore sustainable public finances and macroeconomic stability.
There is a risk that the recovery will be slow, and will not generate sufficient employment growth to bring down high unemployment levels.

Harnessing existing instruments in a new approach
To make a successful exit from the crisis and deliver our EU 2020 objectives, the
Commission considers that we need a strategy for convergence and integration which recognises more explicitly the advanced interdependence of the EU:

The challenge of becoming a sustainable social market economy, i.e. an inclusive, smarter, greener economy, will require increased policy co-ordination, better synergies through effective subsidiarity, and strengthened partnership between the EU and Member States in the design and delivery of public policies. The integration of different policy instruments is necessary, linking institutional reforms, better regulation, new initiatives and public investment.

 

Hatto Fischer

Athens 2012 (revised May 2014)

Footnote:

1. Jürgen Habermas. (2001) "Die Zukunft der menschlichen Natur. Auf dem Weg zu einer liberalen Eugenik?". Frankfurt a. Main: Suhrkamp.

 

Appendix: Methodology for Monitoring the process

 
CONTRIBUTION TO SPECIALISED SUBJECTS
Technical writing for the preparation of official documents regarding the procedures of the European Commission
Review of Performance Framework and its implementation
Preparation of support by financial instruments
IT expertise on technical implications of e-Government (exchange of information between beneficiaries and authorities responsible for management and control of operational programmes solely carried out by electronic data exchange)
Strategic and progress reports on 2007-2013: synthesis of national reports, evidence gathering
Quality analysis of ex ante evaluations
EVALUATIONS DURING THE PROGRAMMING PERIOD
Assessment of the quality of ongoing evaluations, including an evaluation of evaluation design, reliability of the data obtained, reliability analysis and credibility, clarity and relevance of the results and conclusions
Ad-hoc analyses of any problem in implementing the programmes
EVALUATION OF THE MACROECONOMIC IMPACT OF PRE-ACCESSION AND STRUCTURAL INTERVENTIONS
Modelling work aiming at understanding the economic, social, environmental impact of the funds on major aggregates
Quantitative analyses of trade effects of EU aid
Improvement of use of additionality data in the context of Structural Funds (use of national account data)
Use and application of the latest developments in regional economic analysis, concerning especially the impact channels of regional aid on economic growth and job creation in the region and impact on disparities of regions within a Member State and the European Union
PERIOD 2007-2013: THEMATIC ANALYSIS AND EVALUATIONS OF COMMUNITY POLICIES
MAKING EUROPE AND ITS REGIONS MORE ATTRACTIVE PLACES TO INVEST AND WORK
Expand and improve transport infrastructures
Strengthen the synergies between environmental protection and growth, including climate change
Address Europe's intensive use of traditional energy sources
Mobilise the potential of all urban and rural areas
Housing
IMPROVING KNOWLEDGE AND INNOVATION FOR GROWTH
Increase and improve investment in RTD
Facilitate innovation and direct support to enterprises
Promote the information society for all
MORE AND BETTER JOBS
Attract and retain more people in employment and modernise social-protection systems
Improve adaptability of workers and enterprises and the flexibility of the labour market
Increase investment in human capital through better education and skills
Administrative capacity
Help maintain a healthy labour force
PARTNERSHIP AND OTHER ASPECTS OF THE STRUCTURAL FUNDS' DELIVERY SYSTEMS
TERRITORIAL ISSUES INCLUDING CROSS-BORDER, TRANSNATIONAL AND INTERREGIONAL COOPERATION
PERIOD 2014-2020: ANALYSIS OF THEMATIC OBJECTIVES
Strengthening research, technological development and innovation
Enhancing access to, and use and quality of information and communication technologies
Enhancing the competitiveness of small and medium-sized entrerprises
Supporting the shift towards a low-carbon economy in all sections
Promoting climate change adaptation, risk prevention and management
Protecting the environment and promoting resource efficiency
Promoting sustainable transport and removing bottlenecks and key network infrastructures
Promoting employment and supporting labour mobility
Promoting social inclusion and combating poverty
Investing in education, skills and life-long learning
Enhancing institution capacity and an efficient public administration
ANALYSIS OF EX-ANTE CONDITIONALITIES
Research / Innovation
Digital growth / Next Generation Access Infrastructure
Small Business Act / Think Small First Principle / Combating late payment
Energy efficiency / Renewable Energy
Risk Prevention / Risk Management
Water / Waste sector
Road / Railway
Employment / Labour market
Education / Life-long learning
Active inclusion / Health
Administrative efficiency
ECONOMIC AND SOCIAL ANALYSIS
Statistical and economic analysis of regional economic and social processes
Regional poverty, social exclusion, social mobility, and income distribution issues
Analysis of the structure and functioning of national and sub-national budgets and public expenditure
Development of composite indicators to assess and measure different dimensions of regional development
Relations between levels of governments in the design and implementation of development policies
Territorial Cohesion
Urban and rural development

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