Transcript Education

THE EU LISBON STRATEGY FOR
GROWTH AND JOBS
• Special European Council held in Lisbon,
23-24th March 2000
• Very good macroeconomic conditions:
wage moderation, low inflation and low
interest rates
• On the other hand, low economic growth
during the 1990s: GDP and employment
growth in the EU was much lower than in
the US
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GDP, employment and productivity:
percentage change on previous year
1996
1997
1998
1999
2000
Average
GDP
1.7
2.7
2.9
3.0
3.8
2.8
Employment
0.6
1.1
1.8
1.9
2.2
1.5
Labour productivity
1.1
1.6
1.1
1.1
1.6
1.3
GDP
3.7
4.5
4.4
4.8
4.1
4.3
Employment
1.3
2.2
1.4
1.5
2.5
1.8
Labour productivity
2.4
2.3
3.0
3.3
1.6
2.5
EU (15 countries)
United States
2
• How to improve the EU growth performance?
• Emphasis on knowledge, innovation and
education (make the EU “the most dynamic and
competitive knowledge economy of the world by
2010”)
Some of the (many) goals to be achieved in 2010
• A 3% share of R&D expenditures on GDP (2/3
of them financed by the business sector)
• A Community patent
• An employment rate from 61% to 70% (for
women: from 51% to 60%)
3
The Lisbon targets were not achieved
(and this is not because
of the 2008 crisis)
• The EU employment rate reached 66% in
2008 (from 62% in 2000)
• Total R&D expenditures on GDP moved
from 1.8% in 2000 to 1.9% in 2008
• A community patent will be introduced
probably in 2016
4
Explaining the disappointing performance
• The Lisbon strategy contained too many goals
• It was not strongly linked with other EU policies
• No authority effectively controlled the
implementation of the Member States
• Most importantly: limited resources were
devoted to growth policies
• The Obama Administration spent $787 billion
(about €565 billion; 5% of US GDP) for
stimulating the economy after the 2008 crisis
• The total budget of the EU is € 960 billion in
seven years (2014-2020: 1% of annual GDP)
5
Europe 2020: a strategy for smart, sustainable
and inclusive growth.
Launched in 2010: five main targets
1. Employment: 75% of the 20-64 year-olds to be employed
(68.3% in 2013): this means about 20.6 million new jobs in
seven years, a bit more than the population of Romania, the
7th more populated country of EU28
2. R&D/innovation: 3% of the EU GDP (public and private
combined) to be invested in R&D/innovation
3. Climate change/energy: greenhouse gas emissions 20% (or
even 30%) lower than 1990; 20% of energy from renewable
sources; 20% increase in energy efficiency
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4. Education: Reducing school drop-out rates
below 10%; at least 40% of 30-34–year-olds
completing third level education
Too many young people leave education/training
without qualifications and jobs (NEET: Not (engaged)
in Education, Employment or Training)
Only under a third of Europeans aged 25-34 have a
university degree (40% in the US, over 50% in Japan)
5. Poverty/social exclusion: at least 20 million
fewer people in or at risk of poverty and social
exclusion
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Risk of replicating the failure of Lisbon strategy
• Lack of financial resources (see slide n. 7)
• Too much emphasis on reducing public debt and
deficit. How governments under high fiscal
consolidation pressure (i.e. compelled to
implement austerity policies) can find the
resources for investing in Europe 2020 goals?
• Emphasis of the need of increasing the weight of
manufacturing on GDP (from 16% to 20%), but
little attention on how such a goal should be
achieved
• Competitiveness based on cost reductions?
8
K. Aiginger, Industrial policy for a sustainable growth path,
2014, wwwforeurope policy paper n. 13
• In principle, countries have two ways to increase dynamics of
the economy or to reduce unemployment. One is to lower
costs (wages, taxes, energy prices); the other is to raise
productivity, by boosting capabilities (education, innovation),
and by becoming a leader in energy efficiency and renewable
energy
• We label the first path to regain competitiveness a “low-road
strategy” and the second a “high-road strategy”
• It is difficult for countries with high wages to increase percapita GDP by reducing wages, because low-income countries
have greater competitive advantages in this aspect
• Industrialised countries can more successfully compete on
quality, innovation and new services
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Taking stock of the Europe 2020 strategy
• In March 2014, the Commission published a
Communication taking stock of the Europe 2020
strategy, including an overview of progress on the
2020 targets
• The EU is on course to meet or to come close to
its education, climate and energy targets
• We are not on track to meet our employment,
research and development or poverty reduction
goals
• In any case, results and forecasts vary widely
across Member States
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The 2008 economic crisis
• In 2009, the European economy suffered an unprecedented
blow: a contraction of 4.5% in GDP
• A temporary respite in economic decline in 2010 proved
short lived and the negative trend continued in 2011-2012
• A gradual recovery has set in since 2013 and is expected to
continue, with real GDP projected to grow again by 1.5%
in 2014 and 2.0% in 2015
• According to the latest forecasts, the EU annual GDP
growth could be in the order of 1.6% throughout the period
2014-2020, compared to 2.3% over 2001-2007
• Expressed in GDP per capita, average annual growth in the
EU would thus be in the order of 0.9% over 2014-2020,
compared to 1.8% over 2001-2007
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Europe 2020 targets are monitored by Eurostat
This table focuses on those of major interest for our course
Headline indicator
Employment
R&D
Education
Past
situation
2008
Current situation
2012
2013
2014
2020
Target
Employment rate, total
(% of the population aged 20-64)
Gross domestic expenditure on
R&D
70.3
68.4
68.4
69.2
75
(% of GDP)
Early leavers from education &
training
1.85
2.01
2.02
:
3
(% of population aged 18-24)
14.6
12.6
11.9
11.1
<10.0
31.2
36
37.1
37.9
≥40.0
Tertiary educational attainment
(% of population aged 30-34)
12
Others Europe 2020 targets
Climate change &
energy
Poverty or social
exclusion
Headline indicator
Greenhouse gas emissions
(index 1990=100)
Share of renewable energy in gross final
energy consumption (%)
Primary energy consumption
(Million tonnes of oil equivalent)
Final energy consumption
(Million tonnes of oil equivalent)
People at risk of poverty or social
exclusion
(million)
Past
situation
2008
Current situation
2012 2013 2014
2020
Target
90.4
82.1
:
:
80
10.5
14.1
15
:
20
1,686.6 1,583.9 1,566.5
:
1,483
1,173.3 1,102.4 1,104.6
:
1,086
:
96.6
116.6
122.7
121.6
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European Union 28 countries
Official name
Belgium
Bulgaria
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Latvia
Abbreviation
BE
BG
CZ
DK
DE
EE
IE
EL
ES
FR
HR
IT
CY
LV
Official name
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United Kingdom
Abbreviation
LT
LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
FI
SE
UK
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Employment rates in EU Member States
(share of people employed, 20-64 age group)
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R&D investment in EU Member States as a % of GDP
16
Tertiary attainment rate in EU Member States
(population aged 30-34 with completed tertiary education – ISCED levels 5 + 6)
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ISCED - International Standard
Classification of Education
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ISCED LEVEL 2 - LOWER SECONDARY EDUCATION
3 - UPPER SECONDARY EDUCATION
4 - POST-SECONDARY NON-TERTIARY EDUCATION
5 - SHORT-CYCLE TERTIARY EDUCATION
6 - BACHELOR’S OR EQUIVALENT LEVEL
7 - MASTER’S OR EQUIVALENT LEVEL
8 - DOCTORAL OR EQUIVALENT LEVE
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