JOINT COMMITTEE ON EUROPEAN AFFAIRS debate -
Wednesday, 25 Feb 2004

Lisbon Agenda - Module 2: Employment.

Chairman

This is the second in the series of meetings planned on the Lisbon strategy. Today's meeting will focus on delivering more and better employment. The remaining two modules, which we will consider in the coming weeks, will be to promote growth-oriented economic policies and to ensure sustainable growth. We are grateful to the participants who have agreed to come to discuss these issues and for the briefing material they have kindly made available.

I welcome our guests: Mr. Antonis Kastrissianakis of the European Commission, Director for Employment and ESF Policy Co-ordination, Directorate General Employment and Social Affairs; Mr. Seán Gorman, assistant secretary at the labour force development unit of the Department of Enterprise, Trade and Employment; Mr. Padraig Cullinane, principal officer at the Department of Enterprise, Trade and Employment with responsibility for labour market policy; Ms Pauline Gildea, principal officer at the Department of Education and Science with responsibility for further education; and Mr. Kevin McCarthy, principal officer at the Department of Education and Science. Perhaps Mr. Kastrissianakis will make some opening comments, after which we will open up the discussion to those who wish to ask questions.

Mr. Antonis Kastrissianakis

Since the European Employment Strategy was launched in 1997, the European Union has gained valuable experience in assessing and comparing employment statistics throughout the Union. It is important for us to share this experience with national audiences.

In my presentation today, I would like to focus on three points: what has been achieved so far, our ambitions for the future, and the significance of the report of the employment task force chaired by Wim Kok in this respect.

On what we have we achieved, since the 1997 Amsterdam treaty, employment is a core objective of the Union. The Luxembourg Job Summit 1997 strengthened the political focus on employment and, most importantly, established mechanisms for co-operation and support at EU level, the open method of co-ordination. In 2000, the Lisbon Summit gave us not only a commitment to more and better jobs, highly significant in itself, but also a commitment to quantitative targets for employment to achieve by the end of this decade.

An extensive evaluation of the first five years of the European employment strategy was carried out in 2002. It highlighted that progress had indeed been made in terms of policy co-ordination at EU level, convergence of national policies and of performances.

Let me begin with the institutional consequences of the EES since, in themselves, these have been a major breakthrough at EU level. In a nutshell, the employment strategy is made up of four elements: setting employment policy guidelines for the Union and member states with quantified targets where appropriate; translating these European guidelines into annual national action plans, with specific targets and measures, taking into account national and regional differences; an annual monitoring, evaluation and peer review at European level, naming and shaming member states in a joint Commission and Council employment report which is then tabled to the European Council; and there are specific recommendations on employment policy.

What the EES has brought in practice is a new way of working together on employment issues at EU level, keeping the momentum for reforms and supporting exchange of experiences. Its methodology has inspired a number of other processes developed at EU level within the framework of the Lisbon strategy and the EES is often referred to as a best practice when it comes to describing successful open methods of co-ordination.

The evaluation conducted in 2002 showed how the employment strategy helped reshape and refocus employment policies in many member states. It has triggered an overall policy shift away from simply trying to tackle unemployment towards the objective of increasing employment. This is not just semantics. The best cure for unemployment is an increase in employment. Employment policies in Europe have become more far-reaching, including a widening range of actors, with more emphasis on active and preventative policies, a greater endeavour to improve adaptability of labour markets and work organisation through flexible working arrangements, and to develop new securities for workers through lifelong learning and social partnerships. The EES has also steered a new monitoring and benchmarking culture by putting the emphasis on effective delivery of reforms and on improved governance.

Although the situation across member states varies greatly, overall performances have improved over the years. Unemployment and long-term unemployment were significantly reduced by 30% over the first five years of the employment strategy. Unemployment in the European Union dropped by 30% and long-term unemployment dropped by 40%. Employment increased by more than 11 million leading to a sharp rise in employment rates, from 60.5% in 1997 to 64% in 2002. Since 2001, European labour markets have shown remarkable resilience in the face of the economic slowdown in sharp contrast with the poor performance of the early 1990s.

The employment growth of the late 1990s and the resilience of employment in the recent period provide strong evidence that labour markets and employment policies have become more effective. This shows that labour market reforms are possible and that they have already made an important contribution to increasing employment and reducing unemployment in the EU. It demonstrates that we also succeed in the future.

To make further progress, it is important to look at the broad picture and reflect on the main economic and social challenges with which the EU is confronted. Looking beyond the current climate of economic uncertainty, I would like to stress the two main structural challenges facing Europe. The first relates to the accelerated pace of economic restructuring in the context of increased economic integration within the enlarged Union and worldwide. The economic transformation brought about by globalisation is changing the employment profile of the EU, the skills requirements of enterprises and traditional thinking about how, when and even where people should work. Economic change is affecting everybody but mostly those individuals, member states and regions who are the least equipped, be it in terms of knowledge or infrastructures, with a risk of widening social and geographical gaps.

The second main challenge relates to the ageing of Europe's population. While facing increased economic restructuring, Europe will have to cope with a shrinking workforce in just four or five years. This means that even if the EU meets its target of having an employment rate of 70% by 2010, the fall in the working age population during the subsequent 20 years will result in a sharp decline in employment. Unless that decline is compensated by higher productivity gains and/or immigration flows, the average growth of GDP per capita will slow down significantly between 2010 and 2030. To face up to these challenges, it is vital for Europe to accelerate both employment and productivity growth. Employment and productivity growth are the drivers of economic growth in the long term. While some progress has been achieved as regards employment, productivity growth in Europe remains particularly disappointing over the medium run. This certainly requires action on the labour market and at the workplace, but it also requires actions that go beyond the labour market such as reforms in products, services and financial markets.

These challenges have been fully integrated in the revision of European employment strategy carried out in 2003. The strategy was radically reviewed with a triple aim: to increase its effectiveness; to align it more closely to the broader Lisbon objectives and targets; and to prepare for enlargement. The renewed strategy is based on three over-arching objectives; full employment by 2010 - this means achieving an overall EU employment rate above 70% for the population of working age by 2010 as well as an employment rate of 60% for women and of 50% for older workers; and to improve quality and productivity at work. More jobs is not enough, we need better and more productive jobs. There are too many working poor in some member states and we need to reverse the decline in productivity growth; to strengthen cohesion and promote inclusive labour markets. In this regard, there are two aspects, social inequalities and regional disparities.

At the same time, the content, format and time-horizon of the guidelines have been revised. We have a stronger link with economic policy co-ordination; fewer and more focused guidelines; a medium-term perspective allowing for an increased emphasis on results and outcome; and greater focus on governance and implementation with a strengthened involvement of social partners, local authorities and other stakeholders.

The analysis of the 2003 national action plans shows that much work remains to be done to fulfil the employment objectives and targets set at Lisbon. To achieve the 70% employment rate target by 2010, the existing Union must create 15 million jobs. This would imply the creation of 22 million jobs by the enlarged Union. This, of course, requires higher employment rates for women and older workers. The employment rate of women has improved and remains on track for the employment target of 57% set for 2005, but gender gaps in a number of countries remain very significant.

As regards older workers, however, the EU still falls short of the target, both in terms of the employment rate and the average exit age, introduced in Barcelona to raise the exit age by five years. At the moment the average exit age from the labour market in Europe is 60 years. Despite improvements, stronger efforts are needed to make the necessary progress towards both targets, in particular the employment rate of women and of older workers.

Circumstances have not been very favourable over the past number of years for carrying out the necessary reforms. Economic growth has been sluggish in the EU where GDP growth reached an annual average of 1.25% in the past three years, less than half the rate we had some years ago.

With regard to the strengthening of conditions for higher levels of sustainable economic growth and employment, the report of the employment task force chaired by Wim Kok is a timely contribution to boost the momentum of reforms carried out within the European employment strategy. It clearly underlines that there is no quick fix or easy solutions and calls for a balanced but resolute set of actions on a number of fronts.

Mr. Kok will have the opportunity to present his report in greater detail tomorrow in a national forum with the social partners, which is organised by the Irish Presidency. I will restrict myself to recalling the main messages of the report.

The report of the task force confirms the validity of the European employment strategy and its assessments and policy messages are fully shared by the European Commission and Council. This is why this year's joint employment report integrates the messages of the task force report. The analysis of the 2003 national action plans and the report from the task force show that success in implementing the strategy will depend on progress in four key areas.

The first key requirement is to increase the adaptability of workers and enterprises. This requires promoting flexibility combined with security in the labour market by focusing on work organisation and the attractiveness for employees and employers of labour contracts with different arrangements.

In this respect, it is essential to avoid the emergence of two-tier labour markets. The concept of job security should be modernised and broadened with a view not only to covering employment protection but also to building on people's ability to remain and progress in work. It is also important to maximise job creation and boost productivity by reducing obstacles to setting up new business, spreading innovation and research and by promoting better anticipation and management of restructuring.

The second key requirement is to attract more people to enter and remain in the labour market and to make work a real option for all. The task force report highlights five lines of action in this respect. More should be done to make work pay, that is, to review the combination of financial and non-financial incentives to work. This should go hand in hand with a second line of action to strengthen active labour market policies. These policies are crucial to tap the potential of the labour force, all the more so in periods of downturn.

Europe must also remove the many obstacles that still hinder the participation of women, including inadequate provision of child care, inappropriate family based taxation and persistent gender pay gaps. All member states should implement comprehensive active ageing strategies. Such strategies should set appropriate legal and financial incentives for workers to remain in work and for employers to hire and keep older workers. Participation in training for all ages should be increased, especially for the low skilled and older workers. Working conditions and quality in work should also be improved. In order to increase labour supply member states should also strengthen their capacity to integrate migrants and prepare themselves to reap the full benefits from new immigration.

The third key requirement for Europe is to invest more effectively in human capital and lifelong learning. Member states have long paid lip service to these concepts but progress is too slow. A well educated, skilled and adaptable workforce able to embrace change is essential to accelerate both employment and productivity growth and Ireland provides a good demonstration of that. It is a key condition for achieving greater adaptability of workers and enterprises and for attracting more people into jobs.

Member states need to set ambitious policies for raising our levels of human capital. To achieve this, the costs and responsibilities must be made more transparent and incentives for investing in human resources in enterprises must be reviewed. The European level can be of help, through the European social fund in particular. It will be important to tap the potential for human resources investment in the next programming period of the EU budget and structural funds.

The fourth key requirement is the need to ensure effective implementation of reforms through better governance at national and EU level. To progress on reforms, we need to build up reform partnerships that mobilise the support and participation of the various stakeholders. These should be backed by clear national objectives and targets reflecting those set at EU level, as well as by efficient use of public funds.

The national action plans for employment are an obvious tool to bring together these different elements in the programming of reform, but their potential is not fully recognised by the member states. To have an impact, the national action plans, NAPs, need to have political legitimacy and the approach of several member states of involving their national parliaments in the preparation of their NAPs, and consulting the social partners and civil society should become the norm.

Europe can also help by strengthening the role of country specific recommendations, strengthening the link between the implementation of the employment guidelines and recommendations and EU funding, especially from the structural and social funds, and also by encouraging a strong commitment from the European social partners and developing a more effective system of mutual learning through exchange of experiences. We intend to launch a new and more ambitious programme for peer reviews of experiences and good practice as of this year.

Full employment, better jobs and greater social cohesion are central objectives of our strategy and the Union is firmly committed to providing continuing support to member states at national, regional and local levels. As I have highlighted, the strategy's direction is to define a more effective framework for action, which naturally calls for an increased emphasis on the use of targets measuring progress in delivering these results. It also calls for more forceful recommendations addressed to the member states. The next set of recommendations will be presented by the Commission this April. To succeed, we must by all means improve the delivery and effectiveness of reforms. The success of the Irish social partnership has inspired many member states and we should build on this experience to make progress Europe-wide.

I thank the committee for its attention.

Chairman

Thank you for that interesting presentation. For the information of the committee, at the meeting of COSAC - the committees of European Affairs of all the national parliaments - chairmen last week, together with the European Parliament, it was agreed that we would put the Lisbon process on the agenda for the plenary COSAC meeting when all 25 parliaments and the European Parliament meet here in May. This was agreed at the request of the chairpersons who sat this week. We hope to conclude these examinations and prepare a report which would form the basis of a discussion document to kick off the discussions in May. When this arose at the forum last week and it was decided to put the matter on the agenda, it was suggested that national parliaments and the European Parliament should collectively interest themselves in the issue. We are not looking at it simply from the point of view of Ireland but on a Europe-wide basis.

I invite Mr. Gorman to make the presentation on behalf of the Department of Enterprise, Trade and Employment.

Mr. Seán Gorman

I will endeavour to highlight for the committee the role of the Department of Enterprise, Trade and Employment in the development and implementation of the European employment strategy at a national level, particularly in the context of the Irish Presidency of the European Union, a Presidency in which employment has been identified as one of the key themes in the six months of the Presidency.

As my colleague from the European Commission stated, the aim of the Lisbon Agenda is for Europe to become the world's most competitive and knowledge-based economy, with more and better jobs and greater social cohesion by 2010. It is not just an employment initiative, it is an integrated approach across a whole series of policy areas, economic, social and environmental. In order to succeed, all these strands have to be moved forward and implemented successfully.

The European employment strategy is the leading instrument in the implementation of the employment objectives of the Lisbon Agenda and the revised employment strategy for the period 2003 to 2005 was agreed in June 2003. At various fora such as councils and summits, Ministers have been taking stock in recent times of the progress being made towards the achievement of the Lisbon employment targets. Concern has been expressed that these are at serious risk of not being achieved.

The consequence of that concern was that at the spring 2003 European Council, that meeting approved the establishment of the European employment task force, which is referred to as the Kok report now that it has been published. It was charged with undertaking an independent examination of employment policy at a European level and of trying to devise practical reform measures which would have an immediate impact on the ability of member states to implement the European employment strategy. That report was published in November 2003. The issues raised in that report by the chairman, Mr. Kok, and his committee complement and reinforce the messages that have already been coming from the European employment strategy.

In the intervening period there have been deliberations at Community level and the recommendations of the report have been integrated into the current draft of the joint employment report which will be going forward for consideration by Ministers for Labour and Social Affairs and later in the month at the spring European Council. That is a document known as the joint employment report. It will take stock of the progress made in implementing the employment strategy and will focus on and highlight areas for action which hopefully will help Europe move forward towards the achievement of the Lisbon objectives.

The Department of Enterprise, Trade and Employment represents Ireland in these discussions, as does the Minister at the Council. The Department is involved both in the preparation of the European employment strategy and in the implementation at a national level of a series of actions which are agreed nationally and with the Commission, and also with the social partners, which are appropriate for the achievements of the various targets identified. Success on the Lisbon Agenda has to spread across a number of areas and our plan is prepared at national level with other Government Departments, principally the Department of Social and Family Affairs, Education and Science, Justice, Equality and Law Reform and the social partners. The plan would also take account of our own national development plan, the Sustaining Progress national agreement and our national plan for social inclusion.

At a European level, both in the context of our normal participation in debate and dialogue at European level and particularly in the context of our Presidency, we have been working through the employment committee, which is a committee of experts in Europe which advises the Council on labour market matters. We have been involved in the preparation of views and opinions for the consideration of Ministers, taking account of the Kok report in the context of the joint employment report which will be going forward. That committee recognises that priority attention must be given to a number of areas, such as adaptability of workers to enterprises, attracting more people to enter and remain in the labour market, and the general question of investment in human resources.

At the Irish level in labour market terms, despite some slowdown in the rate of economic growth, we have been enjoying some significant achievements and the labour market has been holding up reasonably well. At the third quarter of 2003 there were 1.8 million people in employment. While job losses were experienced in some sectors, they were offset by employment opportunities elsewhere. The forecast for employment growth is estimated at 1% for this year. Our average unemployment rate in 2003 was 4.7% which is well below the EU average of 8%.

In the Department I have responsibility for the labour market brief but it is a cross-cutting approach across key areas of the Department which involves the attraction of further foreign direct investment and increased commitment to investing in research and innovation. In my area it involves an increased commitment to invest in training and upskilling to improve the quality of the workforce.

The IDA continues its efforts to attract and win significant share of inward investment. It is continuing to have successes in that area. In 2003, the IDA signed up 64 projects, including new greenfield projects and expansions. Inward investment into Ireland still represents 9% of the total into Europe.

ln the area of research and development, there has been a significant increase in the allocation of funds to that area, the allocation currently being €2.5 billion. It will be spent across a range of Departments in the context of objectives set in the national development plan. Some of the key investments in the research and development area focus on the research capability of Ireland and these are being delivered through the new body, Science Foundation Ireland, which is working with third level institutions on research programmes and is operating towards improving Ireland's capacity and attractiveness as a location for research and development projects. There will be an increase in our expenditure in 2004 for research and development by over 36% on the 2003 levels. We have increased the budget for Science Foundation Ireland from €53 million to €201 million.

In parallel with the efforts of the IDA, significant increases in money are being made available through Enterprise Ireland for supporting research and development investment in indigenous companies. For its part, FÁS will continue to provide a wide range of both advisory and human resource development services to industries and companies. It will work closely with companies to identify their training needs.

During 2003, we began in conjunction with FÁS to put a new emphasis on training for lower-skilled workers. FÁS introduced and implemented a number of pilot programmes. It is continuing to co-operate with the other development agencies and local organisations working with people who have unfortunately been made redundant, with the purpose of trying to ameliorate the effects of lay-offs on communities and individuals and helping individuals access new employment opportunities or retraining through training and counselling.

The principal instrument for Ireland implementing the overall guidelines which emanate from the consideration of employment strategy at a European level is the national employment action plan. That plan is pursuing three over-arching objectives: full employment, quality and productivity at work, and social inclusion. The plan has been prepared across ten specific guidelines which I will list. These are: prevention and activation; job creation and entrepreneurship; adaptability and change; investment in human capital and lifelong learning; increasing labour supply and active ageing; issues around gender equality; promoting integration and combating discrimination; tackling disadvantage; making work pay; issues around undeclared work; issues of regional disparities and instruments aimed at same. It is a cross-cutting approach which involves quite a number of Departments and strategies across the machinery of Government. This is our Department's contribution to the European employment strategy which is given practical effect in the national employment action plan.

Chairman

Thank you, Mr. Gorman. I take it Mr. Cullinane does not want to add anything to that. I call Ms Gildea of the Department of Education and Science.

Ms Pauline Gildea

The role of the Department of Education and Science in this is in investment in human capital and also support for the concept of lifelong learning. We have worked closely with the Department of Enterprise, Trade and Employment to develop a cohesive policy on lifelong learning. My area of responsibility is adult and further education but of course the concept of lifelong learning, as it has evolved, is the cradle to grave philosophy, so all the activity of the Department of Education and Science and the funding provisions are in fact in support of the totality of lifelong learning.

In the context of investment in human capital for the purposes of supporting the employment strategy, I will focus on mainly the adult, further and higher education area. The policies in that area have been very much informed by EU strategies and policies and, in particular, by the EU initiatives in the area of supporting lifelong learning and the memorandum and consultation process on lifelong learning. We in Ireland have had a consultation process which resulted in the White Paper on Adult Education. Two documents, that White Paper and the report of the task force on lifelong learning, essentially form the basis on which policies are being developed and are emerging in this area.

The remit of the Department of Education and Science is really in the area of provision of academic and vocational training, and is primarily initial training but also continuing training in schools and colleges and further education centres. Supports are now being provided in a wide range of adult and community education centres in addition to the traditional universities and colleges.

In the area of workplace learning, the Department of Enterprise, Trade and Employment would have primary responsibility. In that field we are co-operating on a strategy to develop work based learning in support of employment related areas. Other Departments also obviously have responsibilities in terms of sectoral development which would include agriculture, fisheries, tourism, etc. These Departments have contributed to the development of the report of the task force.

The task now is essentially to move that forward and implement the key recommendations. The strategy framework for lifelong learning, as outlined in the report of the task force, included the national framework of qualifications, ensuring basic skills for all, the provision of information and guidance, flexible provision and funding, financial and fiscal supports, and better opportunities for work based learning.

The National Qualifications Authority has been established since the publication of the report of the task force, as have the two awards councils - the Further Education and Training Awards Council and the Higher Education and Training Awards Council. These bodies are contributing to the development and certification and accreditation of the totality of learning which will support the enhancement of the skills of the workforce and of those who are unemployment and enable the skills to be upgraded.

Another area where the qualifications authority is investing is in looking at issues relating to transfer and progression and the accreditation of higher learning. These areas are also tremendously important in the development of skills within the workforce. Some key issues in supporting lifelong learning are in the area of the availability of flexible opportunities to engage in learning, both on a part-time basis and through distance learning. Obviously there is quite a deal of work to be done in that area to develop a totally open and flexible engagement in lifelong learning opportunities.

I would like to ask my colleague, Mr. Kevin McCarthy, to speak about key areas of higher education which are contributing to the lifelong learning agenda.

Mr. Kevin McCarthy

I want to supplement what Ms Gildea has covered by focusing on key aspects of the role of higher education in supporting sustainable growth and quality employment. Those key areas in higher education are skills provision, research and development - on which Mr. Seán Gorman has touched in terms of the role of the Department of Enterprise, Trade and Employment - and access to and participation in higher education.

To look at skills provision in the first instance, obviously a key role for the higher education sector is in developing the human capital required for our productivity and employment growth in the context of moves to, and the development of, the knowledge economy, and in particular through responding to current and future labour market requirements for skilled graduates. The Kok report emphasised the importance of the ability of member states to anticipate their future skills needs and in Ireland we have had a successful mechanism for this for a number of years through the Expert Group on Future Skills Needs which has its secretariat in Forfás.

The expert group was established by the Government in 1997 to develop national strategies on tackling the issue of skills needs and manpower planning and training for business and education in Ireland. It is composed of a range of public and private sector enterprise and interests as well as development agency and educational representatives. That serves as a highly important mechanism for the Irish higher education sector in terms of setting the agenda of graduate skills requirements for the wider economy into the future.

The group's objectives are set out in the text that has been circulated but it has produced four main reports to date as well as a series of sectoral reports which have resulted in a number of skills initiatives in the higher education sector aimed at responding to the wider developing needs of the economy. One of the more recent initiatives on foot of the third report of the expert skills group was the establishment of an information technology investment fund which was aimed at developing ICT education and training on a number of fronts. That is resulting in an ongoing investment in ICT skills through the provision of new courses with a particular emphasis on part-time flexible provision targeting disadvantaged and under represented groups in ICT education, together with postgraduate conversion courses and measures aimed at improving completion rates on ICT courses. This initiative builds on a number of earlier skills initiatives on foot of earlier work of the expert group.

Through its more recent work the expert group has been placing an increasing emphasis on the skills and competencies being acquired through education programmes, and that was a strong focus of the fourth report published in October and will continue to be a focus of the future work. That fourth report also placed strong emphasis on science and technology skills requirements for the economy, particularly in the context of the needs of the bio-technology sector, for instance, which has been identified as a major growth area for the future, and for engineering skills.

The committee will be aware that in the knowledge era the availability of an adequate supply of graduate skills in the science fields, particularly physical sciences, mathematics, technology and engineering, will be a critical factor of the economy's future competitiveness. Strengthening the quality of our science teaching and learning at first and second levels is important in that context and therefore encouraging students to take the science subjects at senior cycle and to progress to third level options in this area is a critical element of our national strategy to support competitiveness and employment into the future.

We produce a relatively high proportion of graduates in these areas by reference to OECD comparisons, but obviously there is a need to address concerns that students are turning away from these areas and that this could jeopardise our future competitiveness. In that context a number of activities are under way on foot of the report of the task force on physical sciences which was adopted in principle by the Government in November 2002. It had been established to address concerns around a decline in the take-up of the physical science subjects at senior cycle in second level and at third level.

Progress has been made on a number of fronts, particularly in regard to curricular reforms at leaving certificate, junior certificate and primary level. Resources have been provided to support the introduction of new curricula and syllabi at primary and post-primary levels, in terms of ICT integration projects, awareness programmes and the provision of materials and publications to schools to promote the attractiveness of science options. Further curricula reform has taken place in the mathematics area in terms of overall grading of the leaving certificate and at third level, in terms of foundation, bridging and progression measures, some of which have been touched on by Ms Gildea in the context of the development of a national framework of qualifications by the National Qualifications Authority. They are important developments in the context of the role of education and higher education in contributing to employment growth and productivity growth in future.

The second area is research and development. Mr. Gorman has already covered this in terms of the role of SFI and the growth in the budget of Enterprise Ireland. Our future competitiveness in the knowledge age is heavily dependent on our ability to produce knowledge, on our investment in research and development and in the development of our research and development infrastructure and capacity.

In terms of the education sector contribution to that, since 1998 we have seen the commencement of the programme for research in third level institutions and the establishment of the two research councils; the Irish Research Council for Science, Engineering and Technology and the Irish Research Council for the Humanities and Social Sciences. Together with the establishment of Science Foundation Ireland, these have been milestones in developing a national research infrastructure that relies very much on the higher education sector at its epicentre in terms of delivering on research activity.

The Barcelona target of 3% of GDP spend on research and development, which was one of the key elements of the Lisbon strategy, places the higher education sector firmly at the forefront of our overall economic development strategy for the coming years. In that context our higher education institutions and the researchers therein must be seen as a key national resource in meeting the Lisbon aims.

The Barcelona target has major implications for numbers of researchers here. Recent initiatives aimed at supporting international researcher mobility into Ireland are important in that context. The universities are looking at career structures for researchers aimed at improving the attractiveness of research careers in Ireland and have concluded agreements with Government on facilitating work permits for researchers coming here, which is extremely important. The SFI and PRTLI investments have attracted significant numbers of overseas researchers into universities to date and we hope to see that continue. It must accelerate and continue if we are to have any chance of meeting the Barcelona target both here and in Europe.

The third area which relates to higher education is the question of access and participation. The human capital on which our research effort depends relies very much on the ability of our higher education system to produce skilled graduates in the first instance, in terms of our wider ability to produce the people that are going to serve as a magnet for inward investment in the knowledge economy. It is extremely important that our higher education system continues to grow and produce skilled graduates in the numbers required.

The expansion of higher education in the past two decades is recognised as an important factor in our economic development to date. It is worth reminding ourselves that in the early 1980s enrolments were just 40,000, while enrolments now stand at over 130,000 in the higher education system. The growth in the past two decades is reflected in the strong performance by Ireland among OECD countries in terms of higher education participation rates among the school leaver age cohort.

It remains the case that there are significant disparities in terms of access to higher education on the basis of socio-economic background. Apart from the social equity considerations associated with that, from a human capital point of view it represents a sub-optimal position for Ireland and there are grounds for improvement.

As members are aware, the national development plan provided third level access funds totalling €121 million over the period 2000-06 which aimed at tackling under-representation among three target groups; students from disadvantaged backgrounds, mature students and students with disabilities.

In the second half of last year, a national office for equity of access to higher education was established within the Higher Education Authority. This was a key recommendation of the action group on access to third level education, the McNamara report. It aims to facilitate the increase in higher education participation among the three target groups.

Within the past year the Minister announced a package of measures costing €42 million aimed at addressing problems facing particularly students from lower socio-economic groups in accessing third level education. This involved substantial improvements in the level and coverage of the maintenance grants and increases in the top-up grant for the most disadvantaged.

Those are the three key areas in terms of higher education's role; access and participation, research and development and skills provision. The OECD review of higher education is also important. All the issues associated with the contribution of higher education to sustainable growth and increased quality employment are relevant to that review, which is being conducted at present by the OECD at the request of the Minister for Education and Science. It is a comprehensive review with wide-ranging terms of reference. One of its key stated aims is to ensure that our higher education system is appropriately positioned in terms of governance, structure, policies etc. in order to be able to respond to all of the strategic challenges associated with its role in Ireland's future economic development in the knowledge age.

Chairman

I am anxious to keep the focus on European issues as much as possible. Clearly we began with Europe and there were some Irish issues as well. Four members are offering, but I want to ask some questions myself.

I concur with Mr. Kastrissianakis that this issue is the most complex and diffuse policy undertaken by the European Union. Will he expand on efforts being made to involve civil society rather than elites in the Union in dealing with this issue?

Initiatives clearly need to be taken to implement this policy at every level - European, national, regional, public and private. The European Council can give impetus, but how is it intended to pursue a structured follow-through? In his contribution he referred to GDP per capita. He said this would significantly reduce between 2010 and 2030 if the population declines. This is clearly an issue because we have an ageing population. Given the controversy in recent days on access by citizens of accession states to employment and welfare in the 15 member states, perhaps it is time we had a wider debate on this issue. Has the Commission done any forecasts on the need for immigration from outside the Union and if so, what numbers and when? Is it forecast that the rate of replacement of population in the Union will increase? What are the issues surrounding that? Clearly there are implications between 2010 and 2030, which is not that far off.

I wish to ask Mr. Gorman about the recent Commission report on gender mainstreaming which demonstrates the inability of the system to retain women. Enrolment in third level education here shows equal participation of women and men, although that is not the case in mathematics, informatics, engineering, building and construction. The number of women who get to the top in the labour market is fewer than is the case for men. Surely this is an unacceptable loss to the labour market. What has been done to address this?

The references to access and participation at third level are all about facilitating or advising. Will Ms Gildea or Mr. McCarthy state who has direct responsibility for delivering on the numbers getting second-chance education?

Deputy Mulcahy

I join the Chairm an in welcoming all the delegates, particularly Mr. Kastrissianakis because he obviously travelled a bit further than the others. It is clear from the papers we received today that EU growth is lagging behind growth in the United States. I am not sure if any of the papers answer why this is the case. We should really ask ourselves in a very direct way why we are lagging behind and why the European economy is so sluggish. I posit two reasons for this, the first of which concerns our own venerable institution, the EU itself.

The European Union is making regulations for everything. Some members of this committee are also members of the Sub-Committee on European Scrutiny. Once every two weeks we sit down with a mountain of documents and look at all the new regulations Europe is dreaming up to help us with our lives. Is it not about time that we compared these regulations with those of the United States and asked if we are over-regulating ourselves to death? It is very well to give women and men maternity rights and paternity rights, respectively, and to establish a minimum period of leave, but there is a cost. Is this cost affecting our competitiveness? If so, to what extent?

The second reason for our economic sluggishness is EU interference in the marketplace. Is it interfering too much? The European Union seems to be happy to let Air France and KLM merge but it was also very happy to clobber the most successful airline in Europe, Ryanair, when it did a commercial transaction with a regional airport in Europe. Is it not time that the Union took its hands off private business and told the bureaucrats to leave business to the business people, as is the case to a greater extent in the United States? I am sorry if I have been a little direct.

On the overall progress made since 2002, the briefing document - I believe it is from the European Commission - states that several key markets have been completely or partially opened up to competition, namely the telecommunications, rail freight, postal services, electricity and gas markets. This is certainly not the case in Ireland. Only one operator is allowed put a cable in my house. There is a monopoly in rail freight and postal services. The electricity market has only been partially opened up and, as far as I know, there is still a monopoly in our gas market. The State broadcaster, the State lottery and the State airports comprise other examples.

There is also a great monopoly in the field of education. If one opens a private college the fees of the students are not paid for by the Department of Education and Science, even if that private college is providing an equally good education. Somebody in the Department of Education and Science has decided that private colleges do not give as good an education as the big colleges, and therefore there is no support for them.

Could we talk practically and have real deregulation in our society? There are too many regulations. Let business people get on with business. If we take this task seriously, we might match the growth rate of the United States.

Chairman

My view is that the monopoly of Government might be the place to start.

Deputy J. O’Keeffe

I will focus on three areas, the first of which is the issue of attracting more people to enter and remain in the labour market and increasing the participation of women in the labour market. Is there a target at European level? What is the Irish position on this target? Are we near the ceiling? Have we anything to learn from other member states in terms of other incentives or the provision of facilities that would enable us reach the target?

The second issue on which I want to touch is the third level sector, which has been the subject of considerable debate in Ireland recently in light of the OECD review. Where do we stand on this? I know an enormous increase has been evident over 25 years. Where do we stand on investment at third level compared with other member states? Are we slipping backwards? I am not asking the delegates to outline from where funding might come - that is a rather hot political potato which I am sure will be the subject of considerable debate in the years ahead. Is there a need for greater investment in general in the third level sector if we are to attain the kind of target in question?

The third point concerns the reference to better governance. I am not asking the delegates to agree that one of the best ways of achieving this might be to get rid of the present Government; we will leave this aside. I am interested in the more efficient use of public funds. What can we learn from other member states on this? I have been in politics for a while and get the impression that in any major capital projects, such as the building of roads, bridges or tunnels, the cost on the Exchequer or, perhaps, the European Union, is usually double the initial quote. Can we learn from our colleagues in the European Union how to make more efficient use of public funds, especially in the completion of major capital projects?

Senator Ormonde

I, too, thank all the speakers. I am suffering from overload because so much material was furnished to me today from all angles on the strategy on the Lisbon Agenda. Mr. Kastrissianakis stated that since the European employment strategy was launched in 1997, the European Union has gained valuable experience in assessing and comparing employment statistics. I do not feel there is much comparison taking place. I know the aim is to have adaptability - this was a point made strongly throughout the debate. Flexibility and life-long learning go together and we have to have the necessary structures in place in this regard.

I know the education field best and I believe Deputy Mulcahy has touched upon it. Given that I deal with second and third level institutions, I realise how difficult it is to gain access to third level education. What comparisons have been made in terms of validating courses to assist one in sending a student abroad to study in another member state? How can one be sure that the degree or postgraduate degree in question will stand up? How can one be sure that the degree or postgraduate degree in question will stand up if we say that much experience has accrued relating to our qualifications and the validation of courses? This is an important issue in terms of the mobility of people and their access to and participation in the workforce, access to third level education and life-long learning.

What could I say to an audience this evening about what progress has been made in reaching our target by 2010? Could I say "Yes, you can do a third level course in such and such a place and it will be validated"? Deputy Mulcahy touched on the issue of private institutions. If one undertakes a primary degree in one of the private institutions, it will not be validated here. Students have to do another examination.

Last night, I listened to an audience talking about teachers who qualify in Northern Ireland and cannot teach in a permanent position in the Republic unless they do a course in Irish which one would almost require a degree to pass. We have not made progress in these areas. I hate to be the Devil's advocate but the progress to date has not been as it should be if we are to be on target.

Senator Bradford

Mr. Kastrissianakis referred to Europe's ageing population as our second main challenge. In the ongoing development of the EU, the question of Europe becoming old is an issue to which we are not giving sufficient attention. Some of us got excited during the east-west tiff, when US phraseology differentiated between "new Europe" and "old Europe". However, when one looks a bit deeper, one can speak with validity about "old Europe" because the population of Europe is becoming the old man or old woman of the world when compared with the US or Africa. On a trip to Africa some months ago, I was amazed at the number of business people and people in commerce we met who referred to Africa being young and Europe being old. The Far East is young, as is China, therefore the issue of Europe becoming old is one which needs urgent and separate attention.

Mr. Kastrissianakis made the point that, in response to the immediate problem of the ageing of the European population, we will have to try to deal with increasing productivity and introducing millions of migrant workers into Europe. With his social affairs hat on, can Mr. Kastrissianakis state if we are looking at the Europe getting old problem as a specific project? There is a sociological side to it. There was a time when the US got old and one when the population of the Far East got old. However, they appeared to redress it. Apart from looking at expected further productivity from the workers of Europe and the migration solutions, could we do some in-depth sociological investigation into why Europe is getting old and why our population is falling? Can we give the problem the attention it deserves?

Looking at the solution from the point of view of productivity and migration is only half a solution - it just about stems the tide. If the population trends in Europe continue, in 25, 30 or 35 years' time we might be solving the work side of the equation through immigrant workers and ongoing productivity, but the face of the Continent will have changed beyond anything we can imagine. Are we looking at that issue separately?

Deputy Morgan

I welcome the presentations, for which I thank the guests. There is a commitment to life-long learning and there is a strategy to deliver it. The other positive development is the commitment in regard to crèche facilities. I hope they are delivered upon because they are a key element in delivering employment opportunity for a whole swathe of people. I agree with Deputy O'Keeffe's point in regard to the improved numbers of women in the workforce. My understanding is that rate has improved only marginally. I would like to know the figures in that respect today if they are available.

The Department of Education and Science has agreed to make work permits available for researchers, which I welcome. However, I wonder if their partners will be permitted to come and if they will be able to get work permits. That has been a big issue with a considerable number of people to date. Partners have not been able to get work permits, therefore because of the cost of living here they cannot bring them along.

Does Mr. Kastrissianakis agree that there is a growing concern among the poorer countries in Europe that competitiveness or the economic pillar is overriding all other considerations, including the social pillar? Does he think people are right to be concerned that the current approach is determined by funding being made available for social protection rather than social inclusion objectives?

Does Mr. Kastrissianakis have a view on the issue of access to social welfare benefits for citizens of accession countries, which is causing a stir in Britain and Ireland? When workers from those countries come to Ireland or Britain, they will not be able to access social welfare rights and entitlements. Is Mr. Kastrissianakis aware of the regulation at EU level in that respect?

Does he agree that EU employment policy must address the needs of the working poor to make sure better paid jobs are available to provide a living wage?

Senator Quinn

Two men were looking at a mechanical digger and one said to the other, "If we had not used that machine, we could have created jobs for ten men with spades." The second man said, "That is true, but if we gave them spoons, we could create 100 jobs." It is not a funny story, but there is depth in it. If the aim is to create good jobs and, with the Lisbon strategy, we aim to be the most competitive and dynamic knowledge-based economy in the world, sometimes the wrong way to go about creating jobs is to "make" jobs. Sometimes, by far the best way to create jobs is to create the environment with less regulation and a much greater move towards the intended subsidiarity concept.

I fear that many of well-worded intentions in the document, instead of creating jobs, will actually hinder job creation. We see other economies with less regulation and more freedom booming and moving ahead much faster than us. To what extent is it a matter of juggling, of keeping all the balls in the air at once? How do we manage to create more jobs and do so through less regulation rather than more regulation? The intention is clearly the same on both sides: to create a vibrant, knowledge-based economy. Let us make sure that in trying to do so we do not stifle things by creating more regulation.

Deputy Kirk

Many of the points to which the panel will want to respond have already been mentioned. On 1 May ten applicant states with large populations will enter the EU. This will have profound implications for the rate of economic growth within the Community, within the area of the ten new member states and within the existing member states. In the matter of the cohesion of the two economies within the Community, has there been any quantification of the impact of the accession of the new member states, whether in the accession states or the existing member states, including Ireland and the UK?

Labour is available in accession states at a lower level of pay than exists here for comparable jobs. This creates an economic pull to the accession area which must have profound implications for labour-intensive industries in Ireland, France or the UK. Perhaps it is anticipated that there will be a movement of labour in the opposite direction - that people will come to where the level of pay is higher. The investment decisions taken by those who control the decision making in the various industries - especially the more labour-intensive industries - are important. What about the quantification of the overall impact within the broadened community? Has any attempt been made to do this? Are the visitors prepared to forewarn the economic decision-makers in Ireland, the UK or France about the implications?

Let us take the example of the industry with which I am most familiar, the agricultural industry. Nobody could have predicted when we joined the EEC in the early 1970s the changes that have taken place over that short period. We are now in a position in which individual farmers are paid a single payment just to bolster the incomes of their farms. At the same time, in many of the enterprises, considering the market prices for produce at this time, they are producing below cost. Do the visitors think an arrangement such as this is viable or sustainable in the long term?

Under the original aspirations of the EEC in the 1950s, a prime political and economic objective was to ensure we had security of food supply within the community. Is there any danger that security of food supply may become an issue in a relatively short time? Under the single farm payment arrangement, people decide to decline and diminish production on individual farms, which in turn has implications for the processing, wholesale and retail sector.

Mr. Kastrissianakis

I hope members will excuse me if I cannot pronounce any of their names. Perhaps I could organise my reply into three main points. The first is the question of the relationship between competitiveness, employment and social protection.

One of the challenges I mentioned in my statement was that of an accelerating economic restructuring which is due to the opening up of the economies of Europe and the world as well as the integration of European markets. This is a fact of life. It is important to accept that we live in a world economy. The European economy will flourish only if it can compete in the world economy. Within Europe it is essential that we also have the best allocation of resources and that we achieve, in the context of enlargement, the best possible use of factors of production. There is a question of ensuring we adapt to this challenge, which is worldwide. We can adapt by ensuring that enterprises and workers have this capacity. This is one of the items which is underlined in the Kok report.

However, it is not just a question of competitiveness. The main indicator of competitiveness is the evolution of productivity growth in the medium term. If we want to have a high standard of living, this depends on the number of people in employment. We need to accelerate productivity growth, therefore achieving better competitiveness, while achieving higher levels of employment. There is no contradiction, a priori, between these two aims. We can achieve both. This is exactly the challenge that Europe is facing at this stage. Whereas we have been successful in creating jobs, we have been less successful in terms of productivity growth. However, there is no trade-off involved in achieving both aims.

This brings me to the question of regulation. If Europe has contributed anything, one of its major contributions has been the single market. This has meant bringing together the separate and regulated markets of the member states. The contribution of Europe has been in the direction of deregulation rather than regulation in terms of integrating markets which were previously regulated separately. Of course there are questions about regulation. There are different traditions within the member states. Many of the regulations are also national regulations. The Commission has been making proposals about how to achieve better regulation in Europe. This is one of the items that are being dealt with.

My second point is about the ageing population. From 2010 we are facing a fall in the working-age population. Ageing will accelerate in the coming years and the age structure will become less favourable. We must, therefore, improve productivity and raise employment rates, without which it will be impossible to achieve higher rates of growth and we will be unable to pay for social welfare.

A higher immigration level is not the solution but it will make a contribution. Immigration is already increasing - figures for the European Union have reached 1 million per year, as high as the United States. Increased immigration is a fact and we must deal with it by improving our capacity to integrate immigrants and ensure that future immigration will be more in tune with the needs of the European labour market.

Studies show that internal migration after enlargement will not be excessive - we have calculated in the order of 350,000 migrants a year. There will not be a flood of eastern European migrants into western Europe. The eastern European countries are faced with an ageing structure that is even less favourable than in western Europe. I am not, however, suggesting that immigration will be the solution to the problem of employment. It can only make a contribution to improving the problems of labour supply in the future. The main contribution will have to come by efforts to increase our employment rates and growth in productivity.

The Chairman asked about the follow up. In our view, as is stated in the report by Wim Kok, the overall framework for the employment strategy is in place but we must ensure more effective implementation. The task force report and the draft joint employment report of the Commission and the Council have identified issues that must be examined. I mentioned the possibility of member states organising reform partnerships that will bring together the different stakeholders and achieve public conviction on the need for reform. This is an element underlined in the Kok report because the reforms are in different areas - economic, social and employment - and reform partnerships could be a way of responding to this.

There is also a need to make national action plans more proactive when bringing together the various elements of programming reforms. There is a role for the social partners and national parliaments in the formulation of the national action plan. At European level we must strengthen the recommendations to member states so they can be more forceful and more can be expected from them. One way to do that is to link EU financing with the implementation of the guidelines and recommendations.

I may not have addressed the many points raised by the committee but I hope my answers have been sufficient.

Mr. Gorman

The Chairman raised the issue of gender mainstreaming and attracting women to the workforce and retaining them in it. Lisbon sets a European female employment target of 60% by 2010. Ireland's rate is currently 55.4%, which compares to an average for the current EU member states of 55.6%. We are beginning to move reasonably close to the European average.

Gender mainstreaming and labour supply and activation and retention of women in the workforce feature strongly in the European employment strategy and specifically in our own national employment action plan, which has been prepared as the Irish contribution to the European employment strategy. In guideline number 5, which addresses the issue of labour supply generally, there is a particular focus on female participation. In guideline number 6, under the gender equality heading, there is a specific outline of the actions and objectives for Ireland in this area.

The Department of Justice, Equality and Law Reform has established a dedicated gender equality unit which is looking at these issues across a range of headings. It provides training and advice on gender mainstreaming as an obligation imposed under the national development plan and is carrying out significant research and providing training to improve the participation and retention of women in the workforce. As part of a specific commitment in Sustaining Progress, that Department is working on a five year national women's strategy which will address these issues.

Some of the significant issues regarding women and the workforce arise around family friendly work practices and the extent to which we make it either easy or difficult for women to participate. Child care and, in other European member states where the demographic profile is ten to 15 years older than ours, elder care are major issues for women in the workforce. We are addressing these issues with the help and support of the equality unit in the Department of Justice, Equality and Law Reform and we have a range of regulations which the Equality Authority is enforcing to ensure the law is implemented and that women have equal opportunities in the labour market.

The female participation rate in Ireland rose by a third in the course of the 1990s. Many factors contributed to that. There were cultural changes and the labour market improved which provided an opportunity, or maybe many opportunities, that might not otherwise have existed. Rising educational attainment among women was a very important contributory factor.

In conjunction with the Department of Justice, Equality and Law Reform which is leading this, we have begun to put in place significant measures to address issues of child care and providing support and help for women in this area. That will continue to be a very important part of our labour market policy as we advance the activation agenda.

The issue of governance features very strongly at European and local levels. It operates in two ways, peer reviews between member states, facilitated by the Commission, where we review one another's action plans and progress or lack of it, in terms of implementation and effect. In that context the Commission pushes member states, including Ireland, very hard to set more performance indicators, and quantify more the impact or failure of programmes to achieve specific objectives. We also share experiences and try to learn from our successes and mistakes across member states. We have an agreement with FÁS to review its schemes on a programme basis in terms of helping people to upskill or progress from situations of labour market disadvantage into mainstream employment. Value for money is the common denominator which underpins that exercise but in that context it can be measured in many ways. There are relevant social inclusion and upskilling indicators and ultimately the attainment of a job.

In the past week or so the Tánaiste introduced a new policy whereby the spouses of researchers will be given an automatic right to work. The precise details are being finalised now in consultation with the Department of Justice, Equality and Law Reform. This applies also to the spouses of nurses.

I will refrain from responding to Deputy O'Keeffe's comments on capital investment projects. My area is investment in human resources and human capital. Maybe others on another day can address that topic.

Ms Gildea

Since publication of the White Paper and the increased investment in further and adult education, the VECs, funded by the Department of Education and Science, have a particular responsibility to deliver second chance education. If we include education and training, FÁS is the other partner. There is a wide variety of further and adult education programmes available through the VECs and FÁS and some other agencies, such as Fáilte Ireland etc. The needs at this level range from basic literacy to acquiring a particular qualification to access third level education and beyond. That and the policy are being jointly developed by the Departments of Education and Science, and of Enterprise, Trade and Employment, in association with the agencies. These groups also seek to develop a policy, with the Irish Vocational Educational Association, the representative body for cohesive VEC structure, for the total development of an area that is disparate and has varying needs.

Mr. McCarthy

The Bologna process, which operates at European level with 40 signatories, aims to create a common European area of higher education by 2010 and in terms of its objectives runs parallel to the Lisbon strategy. It focuses on developing common awarding structures across European countries based on those already in place in the UK and Ireland such as diploma, degree and master's degree. There will be greater student mobility with that convergence of awarding structures across the Bologna signatories.

Milestones on the road to 2010 have been established and targets have been set for 2005 towards which all member states are working. This encompasses the particular structure, quality assurance mechanisms and the introduction of a diploma supplement which will increase the transparency of awards made across European higher education systems for employers and other institutions, for progression and transfer purposes. There is considerable activity to ensure that students and graduates will soon enjoy mobility of their awards across borders within Europe.

It will always be open to the private sector to develop programmes to provide higher education. It would be difficult for the Exchequer to commit to free fees in respect of all of those and I doubt that our Minister is well disposed to extending the free fees scheme. Our principal concern is to ensure that provision in the private sector falls within a quality assurance framework for award, a context in which FETAC and the National Qualifications Authority play a particularly important role. Tax relief is available on fees paid for private sector programmes so there are supports for students. A wider resourcing issue has been raised in terms of the potential to expand that. There are some examples of free private sector courses but they are the exception.

The best information on our investment in higher education and our comparative international standing is available in a recent OECD publication, Education at a Glance. We were placed eighth among the 29 OECD countries considered in that report in terms of our expenditure on higher education as a percentage of GDP in 2000. The gap between our GDP and GNP is disproportionately high, for all the reasons with which we are familiar, so our performance in that context may be somewhat understated. If GNP were the comparator the ranking would be somewhat higher. That report also found that the level of public expenditure on higher education here is among the highest in the OECD and substantially above the OECD average, which raises the issue of the proportion of public funding as a percentage of overall income in the higher education sector. In the Irish context, there is a heavy reliance on public and Exchequer sources for funding. I expect the OECD teams currently reviewing higher education to look at this area as part of their terms of reference.

Is there a need for greater investment in higher education? Yes, in the context of our ambition for higher education and for an economy to move up the value chain in pursuit of the Lisbon goals.

Chairman

I am interested in the area of immigration and the EU. I have no difficulties with either immigration or emigration as people should be relatively free to move. Mr. Kastrissianakis said it would make a contribution but would not solve our employment and growth problems. Has there been any study of immigration trends from outside the enlarged Union over the next 20 years? Have there any studies on our needs, likely moves of population and dates for such demographic changes?

Mr. Kastrissianakis

Before responding to your question, it is expected that from 2010 to 2030 there will be a 1 million decrease in European workers, totalling 20 million due to demographic ageing of the population. These figures take into account current levels of immigration. There will be no increase in immigration compared to the recent past.

There is no study about what future levels of immigration would be necessary for the European economy to grow in certain areas. However, this figure is an indication of the shortfall in employment compared to the present situation if we lose 1 million workers from 2010 to 2030. Various studies have been made on the needs of the European economy, not just in the knowledge field but developments in skills, including low skills. There already has been the experience of shortages in various sectors. It is expected that as the years go by, these shortages will become more widespread throughout Europe. There are no studies that I can refer to with regard to the needs of the European economy.

Chairman

Would it help in the medium to long term if the EU was to have a green card type system for immigration to identify its needs and to encourage immigrants to match economic needs?

Mr. Kastrissianakis

The Commission adopted a communication on immigration, integration and employment last year, presenting the challenges. The communication indicated that better management of immigration flows would be necessary to ensure, on the one hand, that illegal immigration is minimised and, on the other, to ensure that future flows are more attuned to the requirements of the labour market. Various systems could be designed and devised to achieve this. It is also important that we learn from the systems other countries are applying. At same time, it is important that immigration becomes more acceptable. We will not be able to reap the benefits of immigration unless immigrants integrate more effectively with our societies. The emphasis must be on integration into society and policies to that effect.

Chairman

Is this a strand of the Lisbon process and, if not, should it be?

Mr. Kastrissianakis

In the guidelines to the European employment strategy, there are references to immigration which were introduced only last year. Labour supply and the integration of immigrants are both issues covered by these existing guidelines for member states.

Chairman

Is the report available on the Commission website?

Mr Kastrissianakis

Yes.

Chairman

I wish to thank Mr Kastrissianakis. The committee has done violence to his name. We have a long way to go in the area of integration ourselves. However, at least we did not trouble him by conducting the proceedings as Gaeilge. I also wish to thank Messrs. Gorman, Culinane, McCarthy and Ms Gildea.

The joint committee adjourned at 4.55 p.m. until 2 p.m. on Wednesday, 10 March 2004.