I attended the Special European Council on Employment in Lisbon on 23 and 24 March. The Minister for Foreign Affairs, Deputy Cowen, and the Minister for Finance, Deputy McCreevy, also attended. I take this opportunity to commend Prime Minister Guterres and the Portuguese Presidency for calling the summit and for the enormous efforts made to ensure a successful outcome.
I was pleased to have the opportunity which the summit afforded to outline to our European partners the success of the Irish experience over the last number of years. Our experience demonstrates that it is possible to underpin social progress through economic and employment development and to combine prudent fiscal policies with increased social spending. It does not mean abandoning social goals or the crucial balance between economic development and social equity which characterises the European model.
I have mentioned the enormous efforts of the Presidency through bilateral contacts with partners, the Commission and the Council secretariat and a variety of special preparatory meetings, but I should also mention the exceptional level of interest taken by individual member states who produced individual and joint responses to the Presidency's paper. In Ireland's case we did both, reflecting our deep interest in the summit.
On 6 March I submitted to Prime Minister Guterres Ireland's national response to the Presidency paper on the content of the European Council. The paper focused on our priorities for the summit, particularly in the areas of life long learning, the economic and social environment, IT access and e-commerce, research and development and the role of benchmarking. I also submitted with Prime Minister Blair a joint paper highlighting areas of common concern for our two countries on which we wished to see progress during the summit. That paper focused on education and life long learning, innovation and enterprise and measures to combat social exclusion.
The summit has set the Union a new strategic goal for the next decade as follows: to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion. Achieving this goal requires an overall strategy aimed at preparing the transition to a knowledge-based economy and society by better policies for the information society and research and development, as well as by stepping up the process of structural reform for competitiveness and innovation and by completing the internal market; modernising the European social model, investing in people and combating social exclusion; and sustaining the healthy economic outlook and favourable growth prospects by applying an appropriate macro-economic policy mix. I was happy to give my full support to the above strategy and will now outline some of the major outcomes from the summit from Ireland's perspective.
For a number of years we have given an increased emphasis to the potential contribution which the information society, if properly harnessed, can make to the lives of everybody in society. The conclusions of the Lisbon Summit demonstrate Union level recognition of this contribution. In terms of the development of e-commerce, Europe clearly is currently a long way behind the US. Before we can begin to close this gap it is vital that Europe adopts a harmonised regulatory framework for e-commerce as early as possible. For this reason I gave my full support to the objective of all e-commerce related directives currently under discussion being adopted by the end of 2000. For our part, Ireland will use every effort to meet this objective.
The lnternet is at the heart of the information society revolution and Europe needs to embrace it fully if it is to achieve the benefits of growth, employment and inclusion that the information society offers. I therefore welcome the high priority that the Commission and the European Council are giving to rapid expansion of low cost, high speed lnternet access. The availability of broad band and other advanced communications infrastructure and services at low costs is one of the prerequisites of an economy based on innovation and knowledge.
The shift to a digital, knowledge-based economy, prompted by new goods and services, will be a powerful engine for growth, competitiveness and jobs. In addition, it will be capable of improving citizens' quality of life and the environment. To make the most of this opportunity, the European Council requested a comprehensive e-Europe action plan to be presented to the European Council in June, using an open method of co-ordination based on the benchmarking of national initiatives and drawing on the Commission's recent e-Europe initiative as well as its communication, "Strategies for jobs in the Information Society".
For the Union to close the gap between itself and the US in the e-commerce area, EU leaders stressed the need for competitive services. Accordingly, it was decided that a fully integrated and liberalised telecommunications market should be completed by the end of 2001. In particular, it is intended that this will involve greater competition in local access networks before the end of 2000 and unbundling the local loop in order to help bring about a substantial reduction in the costs of using the lnternet.
It is clear that Europe's education and training systems need to adapt both to the demands of the knowledge society and to the need for an improved level and quality of employment. They will have to offer learning and training opportunities tailored to target groups at different stages of their lives. This new approach should have three main components: the development of local learning centres, the promotion of new basic skills, in particular in the information technologies, and increased transparency of qualifications. In order to achieve these aims, the summit set a number of targets which I am pleased to say we in Ireland have already reached or are due to meet within the timescale outlined. I also fully supported the commitment to a substantial increase in per capita investment in human resources.
In Ireland, we have accepted that the wider use of information and communication technology – ICTs – will facilitate a higher quality of learning and teaching. Our schools IT 2000 programme is already ahead of target with every school now having an lnternet connection. In addition, a new £81 million programme for technology use in schools has recently been announced which sets new ambitious targets in the education area.
The special role of the Education Council in this area was recognised by the summit. As a result, it will undertake a general reflection on the concrete future objectives of education systems, focusing on common concerns and priorities while respecting national diversity, with a view to presenting a broader report to the European Council in Spring 2001.
The Government has recognised the central role of research, technology and innovation in a knowledge-based economy with an unprecedented level of funding committed in the national development plan. At Lisbon it was agreed that research activities at national and Union level must be better integrated and co-ordinated to make them as efficient and innovative as possible and to ensure that Europe offers attractive prospects to its best brains. A number of steps were agreed towards the establishment of a European research area, including the development of appropriate mechanisms for networking national and joint research programmes; improvements in the environment for private research investment, research and development partnerships and high technology start-ups by using tax policies, venture capital and EIB support; the creation by the end of 2001 of a very high-speed trans-European network for electronic scientific communications; and that a Community patent is available by the end of 2001.
I am pleased to be able to point to the Government's recent announcement of the £560 million technology foresight fund which will provide the necessary impetus in research and development in the ICT and biotechnology areas.
In advance of the summit I had sought, as a concrete outcome, the creation of a charter for small firms to set out clearly how we can help this key sector to develop through better and more sensitive regulation, easier access to venture capital and technology and the creation of a wider culture of enterprise. Accordingly, I welcome the commitment given to the establishment of a European charter for small business to be endorsed in June, which will commit member states to focus on small companies as the main engines for job creation in Europe and to respond specifically to their needs.
One of the Union's greatest successes is the Single Market in goods and services. However, in keeping with its focus on competitiveness, the Lisbon summit recognised that in order to ensure the interests of business and consumers, rapid work is still required in certain sectors to complete the internal market and to improve under performance in others. We agreed, in order to meet this aim, to set out by the end of 2000 a strategy for the removal of barriers to services; to speed up liberalisation in areas such as gas, electricity, postal services and transport; to conclude work in good time on the forthcoming proposals to update public procurement rules; to take the necessary steps to ensure that it is possible by the end of 2003 for Union and government procurement to take place on line; and to set out by 2001 a strategy for further co-ordinated action to simplify the regulatory environment, including the performance of public administration at both national and Union level.
Efficient and transparent financial markets foster growth and employment by better allocation of capital and reducing its cost. Since the introduction of the euro, good progress has been made on the rapid integration of money markets and payments systems. However, we must accept that a great deal of work still needs to be done. The European Council recognised that the Union's financial markets remain segmented and business and consumers have not yet fully benefited from direct access to cross-Border financial institutions. Again, the Union is currently behind the US. It was agreed that the financial services action plan should be implemented by 2005 in an attempt to close this gap. In addition, full implementation of the risk capital action plan by 2003 will be ensured. I fully support the need for priority action to achieve a fully integrated financial services market.
It is clear that the Union, through the existing broad economy policy guidelines and the Luxembourg, Cardiff and Cologne processes, has the necessary instruments to carry forward the outcomes from the summit. However, it was agreed that the guidelines should focus increasingly on the medium-term and long-term implications of structural policies and on reforms aimed at promoting economic growth potential, employment and social cohesion, as well as on the transition towards a knowledge-based economy.
Implementation of this strategy will be achieved by improving the existing processes; introducing a new open method of co-ordination at all levels; and by a stronger guiding and co-ordinating role for the European Council to ensure more coherent strategic direction and effective monitoring of progress. The first meeting of the Council each year in spring will determine the relevant high level mandates and ensure that they are followed up. I welcome this development as it will allow the necessary political emphasis to be placed on these crucial issues.
Ireland has long recognised that the mainstreaming of social inclusion in general Government policy is a vital factor in tackling social inclusion. Undoubtedly, the new knowledge-based society offers tremendous potential for reducing social exclusion, both by creating the economic conditions for greater prosperity through higher levels of growth and employment and opening up new ways of participating in society. It is also important, at the same time, to recognise the risk of an ever-widening gap between those who have access to the new knowledge and those who are excluded. In order to promote social inclusion, the European Council is seeking to promote a better understanding of social exclusion through continued dialogue and exchanges of information and best practice; to mainstream the promotion of inclusion in member states' employment, education and training, health and housing policies; and to develop priority actions addressed to specific target groups.
I argued in Lisbon that the turnaround in Ireland's economic and social fortunes is in no small part attributable to our system of social partnership. This has allowed us to develop a shared understanding with the social partners of the challenges to be faced and the strategies to be adopted to tackle them. I gave strong support in this respect to the European Commission in seeking to encourage the social partners to begin discussions this year on all aspects of the knowledge-based economy and society. The social partners need to be more closely involved in drawing up, implementing and following employment guidelines at Union level. In Ireland, this already happens.
I was pleased that the European Council acknowledged that the European social model, with its developed systems of social protection, must underpin the transformation to the knowledge economy. However, there is a shared understanding that the model needs to be adapted to ensure its long-term sustainability in the face of the Union's ageing population, to promote social inclusion and gender equality and to provide quality health services.
It is essential that member states co-operate together in co-ordinating policy development in this field to meet the major challenges they face in regard to ageing, changing employment patterns and family structures and social exclusion. Given the variety of the systems of social protection among the 15 member states, there is a wealth of experience on social protection policy and its implementation in the EU. The high level working party on social protection will prepare a study on the future evolution of social protection from a long-term perspective, giving particular attention to the sustainability of pensions systems.
Ireland's demographic profile and the current strength of our economy gives us an opportunity to prepare for the costs which inevitably arise as the population grows older. The problems facing some of our European neighbours demonstrate why we should act now while we have the time and resources. We have established a fund to partially offset the future cost of both social welfare and public service pensions. The Government has decided that 1% of GNP will be set aside every year for this purpose. The majority of the receipts from the privatisation of Eircom have also been ring-fenced for this purpose. This will be viewed as a wise and prudent measure in years to come.
The European Council recognised that, as well as preserving macro-economic stability and stimulating growth and employment, macro-economic policies should foster the transition towards a knowledge-based economy, which implies an enhanced role for structural policies. As regards the sustainability of public finances a report will be presented by spring 2001 assessing the contribution of public finances to growth and employment. The mandate given for the review of the quality and long-term sustainability of public finances is timely and of crucial importance. The issues posed are critical to the future prosperity and inclusiveness of our societies. A long-term perspective is needed to ensure that budgetary policies are framed for sustainability within budgetary balances which support confidence and growth.
Implementation of the Union's ten year strategic goal will be facilitated by applying a new open method of co-ordination as the means of spreading best practice and achieving greater convergence towards the main EU goals. This method, which is designed to help member states to progressively develop their own policies, involves establishing, where appropriate, quantitative and qualitative indicators and benchmarks against the best in the world and tailored to the needs of different member states and sectors as a means of comparing best practice and periodic monitoring, evaluation and peer review organised as mutual learning processes.
Benchmarking our position and progress in the knowledge-based economy and taking whatever corrective action is highlighted is a necessary underpinning to the new strategy and we should make comparisons with the most advanced economies in the US and elsewhere. We already have the base of raw data and research results in many cases. A structure which will allow this base to be used quickly and productively is needed. The model of voluntary co-operation among member states, with central co-ordination by the Commission, seems to be a good one to follow. This has the potential to allow the process to proceed as fast and efficiently as possible. We cannot mistake analysis for action.
With regard to the core theme of the summit, anyone examining the conclusions can only be impressed by the very specific goals and deadlines set down in every area which was considered. Equally, one cannot fail to note that, in addition to content, EU leaders acted to ensure that the processes by which the Union's goals are to be attained are streamlined and better synchronised. While no substantial discussion took place on the intergovernmental conference, Ireland together with its partners expressed satisfaction with the progress made to date and I look forward to the Presidency's report at Feira in June.
My colleague, the Minister for Foreign Affairs, will outline in detail in his contribution developments in regard to Common European Security and Defence Policy; the Western Balkans; Russia; and the EU-Mexico Agreement. Accordingly, I do not propose to replicate his statement. However, with regard to security and defence, I am happy to report that the European Council welcomed the establishment of the interim bodies foreseen at Helsinki and also the achievements in the non-military crisis management track.