We had intended to make a Powerpoint presentation. I understand committee members have received a copy of the slides which I will go through and outline the main features of the proposed guidelines. Following the presentation, my colleagues and I will be happy to engage in a discussion with members or answer any questions they may have.
This communication has been presented by the European Commission in accordance with a request from the European Council in March this year. It arises from the mid-term review of the Lisbon Agenda at the end of the first five year period. The agenda runs from 2000 to 2010. I will return to its content.
At the March European Council Heads of State and Government agreed that urgent action was required to renew the European economy and strengthen social cohesion. The guidelines document presented by the European Commission provides the basis for the relaunch of the Lisbon Agenda. It is a framework document which reflects a new approach to governance based on a three year cycle commencing this year and to be renewed in 2008. The new integrated guidelines reflect what the Commission describes as new simplified and streamlined arrangements about which we will speak a little more.
In its first five year period the Lisbon Agenda has laid foundations, provided a legislative framework, a number of action programmes and agreed key reforms, for example, liberalisation of energy and telecoms markets. The mid-term review showed that progress was at best mixed. The goal was to make the European Union the most dynamic and competitive knowledge based economy in the world capable of sustaining economic growth with more and better jobs, greater social cohesion and respect for the environment. It is a challenging and comprehensive agenda.
The poor performance is due to a combination of factors, including difficult economic conditions in a number of member states such as Germany, Italy and France; the decline in the dot com sector which coincided with the launch of the Lisbon Agenda; the agenda's over-burdened series of disparate objectives and a lack of political engagement in some instances, although not in Ireland's case. We have been strong and staunch supporters of the agenda.
The outcome has been that Europe's growth rates and productivity levels have lagged seriously behind competitors such as the United States. The Lisbon Agenda targets are not being met. The agreed target for average EU employment of 70% stands at only 62.9%, although happily the Irish employment rate is much higher. As the Chairman stated, Ireland has experienced its highest growth rate in employment in years with the level now standing at 66.8%. The target for female employment was 60%; the rate now stands at approximately 56%. By comparison, the Irish rate is 57.5%. The target for overall investment in research and development is 3% of GDP with two thirds coming from the private sector. The rate stands at only around 2%. There are significant slippages in the targets set.
The challenges faced at the mid-term point are considered extremely urgent in the context of global competition and the aging population, given demographics in Europe. In its new start, agreed in March, the Lisbon Agenda aims to address these challenges through a more focused approach. The relaunch sets the scene. The vital strands are the urgent priorities of growth and jobs. The work programme was agreed during Ireland's Presidency in 2004 and reflects the need to boost our growth rates and create more jobs in Europe if we want to improve the quality of life of our European citizens. The other pillars of the agenda, social cohesion and sustainable development, remain important. Making growth and jobs an immediate target goes hand in hand with promoting the social and environmental objectives.
The European Commission is fully committed to sustainable development and modernising Europe's social models, in respect of which it has published complementary papers. This commitment is reflected by the fact that the European Council will adopt a declaration on sustainable development at its meeting later this week. Work on the social agenda is also progressing. Without more growth and jobs the European Union cannot fulfil its wider social and environmental objectives.
The integrated guidelines document is a framework document which brings together two sets of existing guidelines, one of which can be subdivided into the broad economic policy guidelines and the employment guidelines, both of which are treaty based. In addition, the package will give a new process to micro-economic structural reforms policy. The document provides a framework for action in the coming years.
Within the guidelines, member states will have flexibility to focus on policies and priorities relevant to their own particular needs. This is important because in a Community of 25, member states are at different stages in their development in relation to growth and employment, will have different demographics and administrative systems and will be focusing on different challenges. There are no new country-specific recommendations in the guidelines. The existing recommendations remain valid as a reference point and are due to be reviewed in 2006.
I will now deal with the broad economic policy guidelines. This part focuses on giving guidance on macro-economic policies that will contribute to jobs and growth. There are six guidelines which deal with issues as important as raising employment and growth potential, safeguarding our long-term economic sustainability and generally improving the overall adaptability and capacity of the economy in order that the macro-economic framework for action——
