Barroso Push on Europe2020 Agenda

The European Commission President José Manuel Barroso was in London yesterday to meet with British Prime Minister David Cameron in a bid to shore up support for his flagship Europe 2020 strategy.

Mr Barroso is personally spearheading the drive to ensure Member States implement the numerous recommendations laid out in the strategy. Europe 2020 is a successor to the Lisbon Strategy on jobs and growth and is designed to ensure that Europe can compete with emerging economies such as China, India, Brazil and Russia. Inevitably, the strategy is laden with targets for improving productivity, competitiveness, education and skills, both at an EU level and at national level.

This is starting to ruffle feathers in London where Ministers are starting to realize just how intrusive the targets can be. At a Council meeting on Finance Ministers in Brussels on Tuesday, UK Chancellor, George Osborne signalled that the European Union had no place in setting targets for reducing early drop out rates in British schools. Europe 2020 sets a European-wide target of reducing early-school leaving at 10% or less and will publish an action plan next week. The new UK Government is averse to target-setting at the best of times but to have them imposed from Brussels must be especially galling.

However, the UK along with the 26 other Member States, have signed up to the Europe 2020 strategy and can’t cherry-pick the targets they would find easy to meet, as much as they would like to. The EU has no competence in national schools policy and even though a single market is beginning to develop in European universities, the EU has a limited role in higher education too. Nevertheless, Europe2020 is unapologetically focused on education and skills. The competitiveness challenge will only get worse if standards in skills and education are not raised.

The scale of the challenge is considerable. Europe suffers from a massive skills shortage which stems from under-performing schools. In 2009 more than six million young people, 14.4% of all 18 to 24 year olds, left education and training with only secondary school qualifications or even no qualifications at all.

The European Commission wants to have by 2020 at least 90% of young Europeans completing upper secondary school. Europe2020 even has targets for toddlers. Europe’s education ministers have agreed to target that 95% of four year-olds should have access to pre-school education.

Europe is also poor at importing skills. Almost 70 million migrants (about 43% of the world’s total) come to Europe but highly skilled foreign workers account for only 1.7% of all workers in the EU, compared to 9.9% in Australia, 7.3% in Canada and 3.5% in the United States.

Europe2020 sets targets for increases in employment levels also. Employment rates in the working age population should increase from 69% to at least 75%. Of course, this would require growth in the economy – and here too the Europe2020 strategy sets out some priorities for measures that support growth in sectors such as digital communications and renewable energy. In turn, investment in research and development of new technologies is required to reach at least 3% of GDP.

Signing up to these general policy aspirations was easy – who doesn’t want to see employment levels increase or educational standards rise? However, things are starting to get tricky now that national reform programmes, based on the 2020 guidelines, have to be drawn up and “political warnings” issued if progress in structural reforms too slow.

Any Europe-wide strategy for competitiveness and growth will only work if there is continuous political will and on-going peer-pressure. Some of the targets – such as reducing the number of people living below the national poverty lines by 25% and lifting 20million people out of poverty, are very ambitious and may be quietly dropped. However, the Commission will still need to focus on the targets that can be achieved if it improves competitiveness prosperity in the EU.

Political will is difficult to maintain. Already some member states are diverting funds away from R&D as massive budget cuts force governments to make some painful decisions. Commission President Barroso will have to keep up the pressure on national leaders like David Cameron, to stop the Europe2020 project from de-railing and going the same way as its doomed predecessor, the Lisbon strategy.