US embassy cable - 03BRUSSELS5619

UNCLAS SECTION 01 OF 02 BRUSSELS 005619 
 
SIPDIS 
 
DOL FOR BLS AND ILAB 
TREASURY FOR IMI 
STATE FOR DRL/IL 
 
E.O. 12958: N/A 
TAGS: ELAB, EUN, USEU BRUSSELS 
SUBJECT: EU "SOCIAL SUMMIT" STRESSES JOBS AND LABOR 
MARKET FLEXIBILITY 
 
REF: Brussels 5469 (notal) 
 
1.  Summary: The Prime Ministers and Employment and 
Social Affairs Ministers of the EU Troika (Italy, 
Ireland, and the Netherlands) gathered with EU-level 
trade union and employers organization leaders 
December 11 to review the employment situation in 
Europe.  The "Social Summit," co-chaired by European 
Council President Berlusconi and Commission 
President Prodi, heard a presentation by former 
Dutch PM Wim Kok in his capacity as head of the 
Employment Task Force, which recently underlined the 
need to press reforms to boost both employment and 
productivity levels in Europe through increased 
training and flexibility.  Together with the EU 
Action for Growth approved by the December 12 
European Council, the "Kok report", as it is known, 
highlights the gap facing the EU in its efforts to 
meet the employment targets set under its "Lisbon 
strategy" for turning the Union into the most 
competitive economy in the world by 2010 (reftel). 
End Summary 
 
EU SOCIAL PARTNERS' VIEWS 
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2.  Berlusconi told the post-Social Summit press 
conference that the Kok report was received 
"positively by a very large majority of 
participants."  He noted that the report called for 
solutions to the EU jobs crisis at the level of the 
individual Member States.  Commission President 
Prodi said all participants agreed on the "clear 
objectives" of the Kok report, although the 
employers and unions had "differences" on the 
"instruments" proposed, he said without going into 
details.  The President of the Union of Industrial 
and Employers' Confederations of Europe (UNICE), 
Jrgen Strube, expressed hope that the EU Summit 
over the weekend would be the "Summit of the Wise, 
that will give us a Constitution that will above all 
allow business to develop".  The Secretary-General 
of the European Trade Union Confederation (ETUC), 
John Monks, asked for his part for "a strong 
Constitution for a strong Europe, and a strong 
social Europe." 
 
COMMISSION VIEWS 
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3.  In his address to the Social Summit, Prodi said 
the report clearly showed that reforms were "both 
possible and necessary, and that they must be 
introduced urgently to support the economic upturn." 
Areas for action identified by the report were 
"fully consistent with" the European Employment 
Guidelines adopted this year.  Prodi called for 
better dissemination of innovation, more stress on 
R&D, developing strategies for dealing with an aging 
population, stepping up preventive and active labor- 
market policies, more investment in human capital, 
and, lastly, more affordable and accessible 
childcare.  Prodi stressed that "In all these areas, 
the Social Partners have a key role to play," and 
that the ability of governments to build up "reform 
partnerships," as the Report puts it, would be 
"crucial for the success" of such policies. 
 
NEXT STEPS 
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4.  The leaders of the EU-25 in their December 12 
European Council meeting subsequently welcomed the 
Kok report as well as the outcome of the Social 
Summit.  Berlusconi used his December 12 press 
conference to reiterate his views in favor of 
freeing European business, using the image of 
"Gulliver being chained by red tape."  In its 
conclusions, the Summit stressed that, in accordance 
with the view of the Task Force, improving the EU's 
employment performance in the context of the 
Employment Strategy depends on meeting four 
essential requirements: 
 
--   Increasing adaptability of workers and 
     enterprises; 
 
--   Attracting more people to the labor market, 
--   More and more effective investment in human 
     capital; 
 
--   Ensuring effective implementation of reforms 
     through better governance. 
 
5.  The European Council tasked the Commission and 
Council to consider the Kok report in preparing 
their Joint Employment Report to be submitted by the 
to the 2004 Spring European Council.  The Report 
would also be valuable for the Commission when 
preparing its country-specific employment 
recommendations next spring.  As the EU work program 
in the area is directed toward the March European 
Council, no concrete results emerged from the 
Summit.  However, the social partners in a joint 
declaration said they were sharing the sense of 
urgency conveyed by the Kok report to meet the 
Lisbon employment targets. 
 
6.  The holding of this three-way Summit reflects 
concern expressed by some Member States (France, in 
particular) about the current economic and 
employment situation in Europe. The upcoming Irish 
Presidency and the Commission have already started 
to prepare, in consultation with the social 
partners, the EU Summit of March 2004 that will 
focus on sustainable growth, the aging of the 
working population, as well as such concerns raised 
in the Kok report as competitiveness and 
productivity, social protection and mobility. 
 
FOSTER