I thank the committee for the invitation to meet with it today to discuss a topic central to European Union activity right now and indeed to the debate taking place in Ireland. That debate concerns what the EU is about, the society of the EU and the kind of society we want ten, 20 or 50 years from now if we consider our children and grandchildren. The moment for decisions on issues that need to be adjusted or supported is now. The timing is relevant from the perspective of the EU because it is our proposal that, in the middle of next year, we will bring forward a renewed social agenda — the framework used for activities in the social area. It will span five years and set in train support for development that will bring us to the objectives we wish to achieve over the next ten to 15 years.
We in Brussels live in an ivory tower and cannot claim to know what is best for Europe. We modestly acknowledge that. However, we have taken the opportunity to visit the member states of the EU and to ask them what they think of Europe, what Europe should be like 30 years from now and the issues they would like to see addressed. Many of these issues will be addressed by the member states, primarily, but the EU can also take action to support the action of the member states. That is why we have opened the social reality stocktaking and vision exercise. It began with a stocktaking paper. I will summarise some of the points to see if they ring bells with committee members. Notwithstanding the fact that we live in an ivory tower, we can read statistics and understand trends in member states.
The EU is the largest single geographic block that formed in a peaceable fashion since the world started. We are in an experimental environment and many would say it is remarkably successful so far. There are flaws and difficulties but we are 500 million people living in peace and harmony. That we are only fighting with words is not a bad achievement in modern times.
With 500 million people, a number of challenges confront us. The population will not remain at 500 million because we do not have babies in Europe anymore. They have gone out of fashion and the fertility rate has dropped below replacement level. Even in Ireland, with the second highest fertility rate in Europe, the replacement rate has slipped. We will not have 500 million in Europe for much longer. This deficit is primarily noticeable in the labour market. The decline in babies was acutely noticeable in the German labour market five years ago and immigration is compensating to some extent for this decline. There is an average of 2 million immigrants, those travelling to the EU from outside, per year. I do not refer to migration, another characteristic that I will discuss.
The society is changing and has become more secular. This is a visible phenomenon in Ireland in recent years. There is a disengagement from community activities, most visibly in politics. Turnout for political elections tends to be low, not just in Ireland but in the UK and other member states. With the exception of Belgium, where one is legally obliged to vote, attendance rates for local, regional and national elections have declined. There is a growth of materialism, by design or necessity, leading to an increase in dual earner families. This has been visible in Irish society in recent years.
We also have a society that is more and more diverse. Following the most recent enlargement this year when Bulgaria and Romania joined, we have a diversity of income of the order of one to 28. Colleagues living in these new member states have an average income of €100 per month. This also applies to some countries from the enlargement in 2004, where average income is between €500 and €600 per month. Therefore, we have large income diversities across the EU.
There are now 23 languages in the EU and it is a constant struggle to remind my colleagues in the Commission that Irish is a language and that we must produce our publications in Irish. They would often ask me why are we not all speaking Irish today, but we make the point very forcefully. We also have a huge diversity of customs across the EU. There is a rich tapestry of ethnic origins, practices and cultures. This can bring benefits to the European Union but must be managed in a way that allows everybody to feel part of the community and not be excluded.
I have come to the home of economic growth today. If we achieve a GDP growth of 2% in the EU, champagne bottles are opened. When it drops to 4% in Ireland, everybody gets very upset: we are in a very polarised position here vis-à-vis the rest of Europe. It has been a very fortuitous growth period for Ireland, but the rest of Europe is beginning to catch up and move positively. In the last year, 3 million jobs were created across Europe. This was a very good result, having spent almost ten years in the EU with jobless growth. Gross domestic product was growing but we were not able to get jobs out of it.
Members are probably familiar with the Lisbon targets of 70%, 60% and 50%. Ireland is almost there at 68%, with 77% employment for men and 59% for women. The target for women's emloyment is 60% and it is likely that in another year Ireland will make the Lisbon targets. Ireland already exceeds the target for older workers at 53%. It is not the case for other countries such as Italy, where fewer than 40% of women are working. In Belgium, two out of every three men over the age of 52 are no longer working. We have very different employment situations across the member states
Having said all that, European citizens are happy, according to the Eurobarometers we have done. If that is what it was all about, we could just stop there. People are happy themselves because they are living in a free society. They feel the possibility to be empowered themselves. They are living in peace and they are materially quite well off. There is a real concern expressed in the surveys, however, that people do not believe that life will be as good for their children as it is for them. They feel that their children will be confronted with much greater difficulties and much fewer opportunities than they had owing to a number of circumstances and the threats that exist. These include globalisation, delocalisation of jobs, the change from an industrial society to an information society and a disconnection with the community.
There are also concerns that not all the opportunities available today are being maximised. There is a difficulty with early school leavers in Europe. One in six people across the EU leaves school without achieving second level education. That figure is lower in Ireland at one in eight. Of those who leave school without secondary education, the unemployment prospect is very real. It rises to as high as 40% in some countries, whereas in Ireland it is 19%. Ireland is in a better position than elsewhere, but it is still a serious difficulty. At the end of the day, people are the resource for the European Union and it is a tragic waste that not everybody gets the opportunity to contribute to the maximum.
We also have a growing problem with regard to poverty. When the figures came out, people in Ireland were very shocked to find we had one of the highest levels of poverty in the European Union, at 20%. This is primarily due to the impact of transfers in other countries, where social welfare and pensions tend to be much higher, thereby reducing the poverty level, whereas they do not have the same impact in Ireland. Will the divergence in incomes between those in new member states and those in old member states remain? Will it become worse or better? How can we improve the situation? These are a number of the issues that still remain and we have not quite managed to achieve utopia.
There are a number of issues in which the citizens of Europe have identified points of concern and where they would like to see action taken. That is the question on the agenda today. One of the papers we have produced is entitled The Social Reality, and is effectively a stocktake. It gives the figures and asks the committee if it agrees with how we interpret the statistics. The second and more recent is entitled The Vision, because it is important to move forward from an analysis of the cold, hard facts and figures to ask what we can do about them. We ask what needs to be done and who can do it.
The European Union can offer five possibilities. Society responds best to governance at its most proximate level, so member states will tackle the issues themselves. However, there are areas in which the European Union can offer support and we want to hear the committee's thoughts on that as part of the consultation. How can we ensure everybody in Europe is offered an equal opportunity? We cannot predict the outcome because individuals are different and, as a consequence, their outcomes will be different. However, we should be able to offer equal opportunities to everybody across the European Union and ensure everybody has access to services. We should guarantee solidarity, which is one of the fundamental principles on which the European Union is built and which will allow us to take forward our work.
What can we do? The first thing we can do is work with member states in establishing policy frameworks for action in areas which directly affect the citizen. I will give one example which is topical at present, flexisecurity. How do we take on board the challenges in the labour market to provide solidarity and security for workers while producing sufficient adaptability and flexibility to respond to the very real challenges we face? One option is a policy framework with agreed objectives and targets and a review of how we make progress in that area. The Lisbon strategy is a very good illustration of a policy framework.
We also have the opportunity to support a level playing field. I do not have to mention some of the recent debates that have taken place in Brussels, on the working time directive and the agency working directive. Part of our role is to ensure that it is possible to enjoy the four freedoms, including movement of product, people, services and finance across the European Union. Some of the measures we take must be legislative to ensure that is possible and that, at the very least, minimum standards apply, particularly in the area of health and safety. That is the second area in which we can offer support to the actions member states choose to take.
A third area relates to sharing experiences and good practices. We do not live in an ivory tower — we see what is going on. We are fortunate in having the opportunity to see what is happening across 27 member states. One of the challenges we in Brussels must meet is to keep our eyes and ears open to see and hear what is going on. When something is innovative and works we should say it is a good idea and resolve to make it visible so that others can share in it and benefit from it. The platform of exchange of experiences, especially good experiences, is a very important instrument which we can support.
Specific issues arise in respect of local, regional and national social and employment activities, primarily through the financial instruments. The cohesion policy is funded through the structural fund, which brought major benefits to Ireland in the past. At one stage, transfers to Ireland through the structural fund were of the order of 2% of GDP. These transfers were put to good use, as is evidenced by the results that have been achieved. Visible returns were made from the investment in education, which has allowed people to develop Ireland to its current position. We are continuing to work on this area in other member states, particularly new accession countries. Of course, Ireland is not receiving as much money as it used to and will be a net contributor to the next round.
The structural fund is the basis of the solidarity I mentioned earlier and, even when the sums of money are not huge, it stimulates three responses. First, its seven year financial framework stimulates a medium term planning process and commits money to it because the co-financing comes from national budgets. Second, it makes people sit around the table to find a joint solution to the problems they confront. Third, it delivers visible results which can be supported through the financial instruments. This is another area which we can support in terms of building the European Union we want.
Challenges arise for the EU, and for me personally, in terms of raising awareness among EU citizens of what is happening, what is good and what could be improved. Drawing attention to aspects of our policy, such as through this year's European year of equal opportunities, allows us to highlight and make legitimate, for example, acceptance of diversity. Such acceptance is made fashionable because it is the right thing to do and we must approach the issue in a way that relates to people and allows them to buy into the concept.
These are five areas of action through which we can offer support for the general progression of European society. The intention of this consultation is to learn from members what they want. They will do what is right for their constituencies but I ask what do they want us to do to support their efforts over the next ten or 20 years so that we can all move in the same direction. That is what the social reality paper and the social vision is about. The consultation process is open until the middle of February and, on the basis of what we hear from politicians and other interested parties, we will come forward with the renewed social agenda in the middle of next year. Adoption of the agenda is planned for June and the French Presidency intends to make its content visible.
It is essential that two other related issues are borne in mind when the future of the European Union is being considered. A major exercise is currently ongoing in regard to the budget review. For those who are familiar with the negotiations on the EU budget two years ago, one of the elements of the deal was that the entire structure of the budget would be revisited and re-proposed as necessary. That review is now open for consultation. It is important for a number of reasons. Ireland is moving from being a net recipient to becoming a net contributor, so it has experience of what it is like as a recipient country to receive support and of using the money to obtain the maximum benefit. Now that Ireland will be paying the bill, what are the expectations for the money and what should others produce in terms of their actions as recipients? The projects supported by EU funding are arguably the most visible expression, to the ordinary citizen, of solidarity, be it in rural parts of Poland, in the mountains in northern Italy or in Andalucía in Spain.
What kind of budget do we want and on what should we spend it? To answer this, we must determine the share of the budget that should be accorded to social issues. Infrastructure and very large projects will receive their fair share. Intrinsic to budgeting is the question of how funds are to be generated. Should we continue to work by using the current opaque gross national income percentages and own-resource calculations, with the complications of rebates, or should we change these mechanisms? Should we move to some sort of tax-based system and, if so, what kind? There are many questions on the budget and the reason they are so important to the social agenda is because it is important that the social policies be supported financially as we proceed with the budget debate.
The cohesion policy debate must also be borne in mind. In respect of the cohesion policy, 38% of the budget is spent through the Regional Development Fund, the European Social Fund and the Cohesion Fund. Social activity represents 10% of the Community budget and thus the European Social Fund is 10% of the Community budget. This is the primary financial support for social activities within the European Union. We must ask whether this is too little or too much, or whether it should be spent as it is now or in a different way. We must also ask what we can do to maximise the return for expenditure on social activity and ascertain the areas on which the fund should be spent.
These questions are very much related to the more general discussion on the social reality of Europe and the question of how we want to proceed in this regard in the coming years. We must determine the tools and techniques we can use. Let us not forget that money is a very important element and that it is part of the ongoing debate. I hope I have not spoken for too long.
