Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-03-14-Speech-3-054"
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Madam President, ladies and gentlemen, I would like to start by congratulating the presidency on the excellent work it has done in preparing for next week's summit in Stockholm. As has been announced, the presidency has even organised a meeting between European Union leaders and President Putin, on similar lines to the meeting planned with President Bush at Gothenburg in June. This will be an excellent opportunity to review the main aspects of our partnership with Russia and our partnership with the United States as well. In particular, I hope we will be able to take stock of the progress of Russia's economic reform programme and improvements in the investment climate that are vital for the success of our energy dialogue and our dialogue on all issues, including matters of citizens' rights, extremely serious issues that we are to discuss.
Ladies and gentlemen, I would now like to expand on one of the ten priority areas we identified. I will not go into the whole caboodle, to coin a phrase, just the last point: ‘Effective social protection for an ageing population’. I have picked this topic because it is particularly close to my heart and because it has huge scope; because it has far-reaching implications for all our policies and because it will take us from Stockholm to Gothenburg, which means sustainable development; and because it is an issue that will stay with us for many years to come. The Lisbon agenda is set against the background of a major challenge: our ageing population. I am happy to say that Europeans are living longer, but they are also having fewer children and working less. In the European Union, at present, for every person of 65 or over there are four people of working age. In 20 years' time, there will be only three and in 40 years' time only two potential workers to every pensioner. These are the actual data, given that those who have not been born cannot be born in the future: these are the current demographic statistics.
This also applies to almost all the candidate countries as well as the Member States. In other words, a shrinking workforce will have to support a rapidly growing number of non-working people even in the enlarged European Union. These are stark, statistical facts that we have to take into consideration. Do we want Europe to remain a fair, caring society, which is our goal? Do we want our children and grandchildren to enjoy the kind of social security we have come to expect? Then we must modernise our welfare and pension systems, making them sustainable in the long term. We need a strategy for consolidating Europe's long-term competitiveness without giving up the social inclusion that characterises our societies. I want Europe to be not only the most competitive region in the world, but also the region with the highest level of social inclusion.
The post-war era has brought unprecedented prosperity to all the States of European society. Today, our societies are – on average – the wealthiest in history. At the same time, well-developed welfare and pension systems have distributed our wealth so as to ensure a minimum of social justice: not the level we had hoped for but still a minimum level of social justice.
However, these systems were built on the criteria of expanding or at least stable populations. Now that our working population is shrinking, we are facing a potential structural crisis in the distribution of wealth, a crisis that could, in the space of a few decades, severely undermine the European Union's competitiveness, Economic and Monetary Union and our social model, given that our objective is to preserve a sound social protection model. We must therefore take action now. We need to develop a long-term policy mix and start to think very hard about what sort of social justice and intergenerational equity we want, and what our political criteria for achieving it should be.
Social protection systems are, of course, a national responsibility, and, I would stress, it is primarily up to the Member States – not the European Union institutions – to bring about the necessary reforms. There are, however, four key areas where we have to develop appropriate strategies. They are intergenerational equity, distribution of work, social and family policy and immigration. Although the national governments are free to act autonomously in these matters, we must give thought to their development here.
Firstly: intergenerational equity. The ageing of our societies is placing a substantial extra financial burden on certain generations. If no adjustments are made, today's younger generation will have to pay not only for their parents' and grandparents' retirement pensions but also for their own, because by the time they retire the pension system will have become unworkable. If adjustments are not made to take full account of the demographic factor, parts of today's adult generation could fall into poverty.
Secondly: the distribution of work. Not everyone of working age actually works. Quite apart from the difficulties preventing young people from entering the labour market early enough, there is a trend towards early retirement that shortens people's working lives by 10 years or more. This aggravates the long-term strain on the pension systems. Moreover, as of about 2007, our workforce could be too small to meet our economic needs. We shall be facing a labour shortage in the Union.
In future, therefore, all generations will have to work longer. We need to keep older people active in the economy, at least part time. We must ensure they have the skills needed for types of work that may be new to them. Therefore – and this is our duty – we shall urge the Member States to invest much more in education and training for young and old alike. Lifelong learning is essential in order to update people's skills constantly and enable them to adapt to change. This policy should help ease labour shortages, improve intergenerational equity and give the citizens a more satisfying old age.
Thirdly: social and family policy: There are far too few women in work. The employment rate for women is only just over 70% of the employment rate for men. In its report for Stockholm, the Commission urges the Member States to make it easier for women to enter or re-enter the labour market. Women must, of course, be given the same job opportunities, working conditions and pension schemes as men, and we must make it easier for both sexes to reconcile work and family life, especially if we want to encourage people to have children. In short, we need to take ever better care of our increasingly depleted human resources.
Fourthly and lastly: immigration. Bringing young people with the right skills into the European Union is another way to increase the size of our workforce. We have a frontier-free, Europe-wide labour market: we urgently need a Europe-wide immigration policy to match. The basis for this policy should be the ‘shared assessment of the economic and demographic developments within the Union’ which the Tampere European Council called for. Last November, the Commission issued a communication on this subject, and I hope that this House and the Council will examine it as soon as possible.
The second topic I want to focus briefly on today is the Commission's ‘Spring Report’. When I stood before this House just a year ago, it was to present to you the Commission's contribution to the Lisbon Summit. What the Commission proposed at Lisbon was a detailed strategy for making Europe dynamic and competitive, while, at the same time, promoting social inclusion and solidarity: a strategy for ensuring that economic progress and social progress in Europe go hand in hand. The outcome of that summit was very positive: the Member States unanimously adopted almost all the Commission's proposals.
Madam President, Minister, ladies and gentlemen, I said just now that pensions and social protection systems are essentially national responsibilities and that it is for the Member States to bring about the necessary reforms. Nevertheless, the European Union, and the Commission in particular, does have a responsibility in this field. To conclude my speech, let me therefore outline what the Commission is doing to provide adequate responses to the problems linked to the ageing population.
One of the great successes of Lisbon was that the Member States agreed, for the first time, to coordinate their action on welfare reform, exchanging experiences and best practices. This process must be enhanced. They also mandated the High Level Working Party on Social Protection to study the sustainability of social protection and, in particular, of pension systems, on the basis of a Commission communication. Thus, welfare reform is part of the Lisbon agenda and the Commission is playing its part. It will make clear the true scale of the demographic problem so that the European public can understand it.
In the first place, our public finance accounting systems do not give a true picture at present. We need to develop indicators that show the long-term implications of our social spending and tax decisions, in particular with regard to pensions.
Secondly, we need to bring the single market fully into play with regard to pensions. At present, unlike insurance, pension funds are not covered by a European Union legal framework. However, the Commission is fully committed to bringing the single market into full play here. We have already tabled a proposal for a directive and I hope the Council will act swiftly on it. This directive forms part of our Financial Services Action Plan that the European Council agreed should be implemented within five years. I urge this House and the Council to speed up their work on this plan.
A properly regulated, pan-European pension fund market will increase the mobility of workers and pensioners and give them better value for money. At present, pension provision is unnecessarily expensive, and this is a waste we can no longer afford. Pension schemes must therefore be made fully portable within the European Union. At Stockholm, Member States will have to sweep away the tax barriers that obstruct the cross-border payment of pension contributions and the cross-border management of pension funds. We are not talking about a tax revolution here: this is a matter of an extremely sensible adjustment, to which the citizens have every right. Coordination of national tax systems is essential here, and the Commission will be tabling its proposals.
Thirdly, it is vital that we address the effects of ageing on public finances. The effects of ageing on our social systems must reinforce our commitment to reducing public debt. The interest saved must be used to support pensions and healthcare. This is a matter of social justice, and the Commission's Synthesis Report will urge the Member States to continue the reforms already under way along these lines. The citizens need time to make provision for their old age. Action is required now to prevent social systems from losing public credibility.
Fourthly and lastly, we need to incorporate the long-term sustainability aspect of public finances into Economic and Monetary Union. The current 'close to balance' rule in the EMU Stability and Growth Pact has done a great service to the cause of safe pensions. We must acknowledge this fact and be proud of it, but the long-term sustainability of public finances is not included in the requirements of the Stability and Growth Pact. Imagine, for example, that a particular Member State is currently running balanced budgets but that its spending programmes will mean increasing deficits and debt within the next ten years. In a situation of this kind, the European Union can do nothing to induce that country to change course because the European Union does not possess the necessary instruments, nor does it possess the instruments to influence the quality of the adjustments undertaken, yet that country's chances of long-term success basically depend on their getting the adjustments right today. This was less important in the run-up to EMU, where action had to be taken in the short to medium term, but the ageing of our population makes long-term action on public finances essential.
What we need, therefore, is a renewed commitment to maintaining stable public finances that can sustain social protection in the longer term. Indeed, sound public finances must be an integral part of the strategy for sustainable development in Europe. The Commission will be proposing just such a strategy, and it will be the main subject of the Gothenburg Summit in June.
Madam President, ladies and gentlemen, the subject I have chosen to raise in this House today is a difficult and technical one, but it is crucial for the prosperity of future generations in Europe. There is not, and there never will be, one single model of social inclusion in Europe. Each Member State will make its own choice, reflecting its own traditions, culture and the will of its people. Nevertheless, we have to establish an overall framework, and this can only be done at European Union level. This House is, of course, the European institution where the democratic debates on the fundamental aspects of our fellow citizens' future have to take place. Therefore, ladies and gentlemen, my Commission is ready to fully play its part together with you.
The strategy adopted at Lisbon is important in two ways. Firstly, it is an integrated strategy; far from there being tension between the social and economic agendas, they actually support each other. Secondly, it sets specific tasks for the different players to carry out within specific time frames.
Responsibilities and targets are therefore clear and we will be able to measure our progress clearly.
The Lisbon strategy is designed for a ten year period, and progress is to be assessed annually at the Spring European Council. As a basis for this assessment, the Commission will produce an annual progress report (known as the ‘Synthesis Report’), which I shall present to this House every year at about this time. It will become the Commission's key instrument for coordinating social and economic policy. If the Gothenburg European Council agrees, we shall add an environmental dimension, giving Europe an overall strategy for sustainable development.
The synthesis report will outline our successes since Lisbon, but also identify areas where swifter and more determined action is needed over the next twelve months. Among the initial successes I am particularly pleased with this year are the adoption of the Social Agenda at Nice, the endorsement of a strategy on social exclusion, and our progress in combating discrimination and ensuring equal opportunities. These successes should give us great satisfaction and this year's report records them, although it touches only lightly on these particular issues, for we must concentrate on the areas where progress is not satisfactory.
Our report this year highlights ten areas where progress has been unsatisfactory and fresh or greater impetus needs to be given. Sometimes this is because Member States have been dragging their feet – it has to be said – lacking a sense of urgency or political will, or both. Sometimes it is because circumstances have changed and a new scenario confronts us. Our report therefore makes very specific recommendations, and at Stockholm I shall make every endeavour to urge the Member States to follow them. Moreover, these are commitments that these States have made and therefore European leaders need to deliver on them. Two examples are the Community patent and the GALILEO programme.
Let me say just a little more about these two issues, which I consider to be particularly important. Firstly: the Community patent. There is an urgent need for a single patent that is legally valid throughout the EU, and there should be a single jurisdiction. This would cut business costs, encourage innovation and provide a clear legal framework for settling disputes. Industry and science are clamouring for it, as it will boost competitiveness and employment – especially in the new sectors we need most. The Lisbon and Feira European Councils recommended that the Community Patent should be available by the end of 2001. I repeat: the Lisbon and Feira Councils called for this. The Commission tabled its proposal last autumn, but the Council has been unable to reach agreement on it as we saw again just this week at the Internal Market Council and this can only be alarming. Above all, we cannot continue to hold Councils where, even in cases in which a majority vote is acceptable, unanimity is strived for and the adoption of proposals deferred. The Member States must act consistently and show a greater sense of responsibility if this project is to succeed.
Secondly: the GALILEO programme. The Kosovo war showed only too clearly Europe's total dependence on the American GPS satellite navigation system. If this is switched off for military reasons, European businesses are forced to suspend many of their operations and there are a number of other examples. Now then, the GALILEO project offers an alternative that would make Europe self-sufficient in satellite navigation signals for all civilian, military and scientific purposes. It is an opportunity we simply cannot afford to miss. It would take only a modest injection of public funds to trigger massive private investment, although I recognise that this private sector participation has yet to be explored in depth, as some governments have been requesting and as, moreover, we undertook to do. This project, which I see many countries almost do not want to be involved with, could generate more than 100 000 high-level scientific jobs. I therefore urge this House and the Council to come to an agreement very soon on the next stage of development of this important project. The Commission, for its part, will display the necessary flexibility as regards the participation of private capital."@en1
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