US embassy cable - 04BRUSSELS4741

UNCLAS SECTION 01 OF 02 BRUSSELS 004741 
 
SIPDIS 
 
DEPT FOR DRL/IL 
DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: PREL, ELAB, ECON, EUN, USEU BRUSSELS 
SUBJECT:  EU SOCIAL SUMMIT RENEWS COMMITMENT TO 
LISBON STRATEGY; LABOR AND EMPLOYERS SPLIT ON 
PRIORITIES 
 
 
1.  SUMMARY.  EU-level organizations of labor and 
employers at a pre-European Council meeting with EU 
leaders on November 4 reaffirmed their commitment to 
the "Lisbon strategy" for turning the EU into the 
most competitive economy by the year 2010.  The 
employers and unions not surprisingly continue to 
have different priorities for reactivating the 
Lisbon agenda.  END SUMMARY. 
 
2.  The European Council meeting was preceded on 
November 4 by a "Tripartite Social Summit," in which 
the EU Troika (Dutch Presidency, Luxembourg, UK and 
European Commission) as well as representative 
organizations of the "social partners" (labor, 
employers, "cadres" and employees) reviewed the 
Lisbon strategy for turning the EU into the most 
competitive economy by the year 2010.  The Social 
Summit heard a presentation by former Dutch PM Wim 
Kok of the report drawn up by his high-level panel 
on the progress of the Lisbon Strategy.  The report 
takes a gloomy view on progress made over the past 
four years.  It explains the EU's disappointing 
delivery by the overloaded agenda, poor coordination 
and conflicting priorities, and blames the lack of 
political will by the Member States.  In order to 
ensure that Member States take up their 
responsibilities, the Kok report calls for a process- 
redesign along three lines: "more coherence and 
consistency between policies and participants, 
improving the process for delivery by involving 
national parliaments and social partners, and 
clearer communication on objectives and 
achievements."  The report rejects proposals for the 
2010 Lisbon target to be lifted.  It also states 
that the EU should not become a "copy-paste" of the 
US. 
 
3.  Speaking at the post-Social Summit press 
conference, Dutch PM/European Council chair 
Balkenende said participants all agreed that "if we 
want a social Europe we need a strong economy in 
Europe."  Commission President Prodi underlined the 
need to actually implement the Lisbon agenda.  With 
a reference to the persisting deadlock on the draft 
legislation concerning the Community patent, Prodi 
stated: "If we continue to decide by unanimity, the 
Lisbon agenda has no chance of being implemented." 
Prodi also called for Member State budgets to 
reflect the commitments taken under the Lisbon 
strategy.  Balkenende and Prodi underlined the role 
of social dialogue as being "at the heart of the 
European Social model." 
 
4.  The President of the European Employers' 
Federation (UNICE), Jurgen Strube, opined that the 
sense of urgency with the Lisbon agenda must be 
translated into implementation but called for the 
focus to be on competitiveness: "All (Lisbon) 
objectives are interrelated but it's important to 
focus on the key drivers: competitiveness and 
economic growth.  ETUC Secretary-General John Monks 
said his organization (the European Trade Union 
Confederation) supported the Kok report as a 
"realistic" and "balanced" document, adding:  "We 
know there are choices to be made, but the route is 
not the same as in the U.S.  What concerns us are 
the "delocalisations" (out-sourcing), working time 
related issues, etc.  There is an agenda there." 
 
5.  A statement released by the Dutch Presidency 
said the parties "reaffirmed their commitment to the 
Lisbon agenda" as "the most effective means by which 
to fulfill" the EU's economic and social objectives 
"and thereby underpin the role of social dialogue in 
European governance," adding: "All parties agreed on 
the need to add a new impetus to the implementation 
of the Lisbon strategy in order to bring about a 
balanced economic, social and environmental renewal 
in the EU."  The contribution of social partners was 
"essential in unleashing the potential for economic 
and employment growth by finding the balance between 
flexibility and security."  Balkenende and Prodi 
were said to have "expressed their readiness to 
continue the debate and stated that they were 
looking forward to a substantial joint contribution 
from the social partners with commitments relating 
to their area of competence in the context of the 
Mid-Term review of the Lisbon strategy next spring." 
 
6.  COMMENT.  Just like the members of the Kok panel 
were said to be divided on the remedies to the 
problems of the EU economy, the employers and unions 
not surprisingly continue to have conflicting 
demands on priorities to be addressed in the context 
of their "social dialogue" at the service of the 
Lisbon strategy:  the employers are calling for 
further liberalization, the removal of obstacles to 
cross-border provision of services, and for research 
policy to be tweaked toward boosting 
competitiveness.  In contrast, the ETUC calls for 
stronger social cohesion "as an essential part of 
Europe's competitive advantage" and insists that the 
Lisbon process should not amount to deregulation, 
weakening worker rights and protection, and cutbacks 
in living and social standards. 
 
SCHNABEL