Plan aims to make EU economy the world's most competitive

Leaving aside for the moment our continuing national debate on the Nice Treaty and the still-uncertain long-term consequences…

Leaving aside for the moment our continuing national debate on the Nice Treaty and the still-uncertain long-term consequences of Ireland's referendum vote, most press coverage of EU matters here, as elsewhere, tends to focus on two types of event.

First, there are the competing grand visions of prominent figures in the European debate - Prodi, Fischer, Schroder, Chirac; second, there are the great gatherings, the summits when the state holding the six-month presidency plays host over a weekend to the other 14 national delegations and a large army of Eurocrats, observers and media crews.

It is a favourite journalistic trope to say that such summits are sometimes "overshadowed" by other events - the British foot-and-mouth crisis, for example, or a vigorous bout of "anti-capitalist" mayhem on the streets, but the reality is that the work of the Union quietly continues and even progresses in the background, both at the summits and in the constant work that goes between them under the aegis of the presidency.

The Swedish presidency, which is now drawing to its conclusion after a total of 72 intra-EU meetings, identified three areas of particular concern on which it wished to focus during its term of guardianship of the advance of Union policies. In shorthand, they were identified as the three Es: enlargement, employment and environment. It is on the second of these, employment and related social issues, that I wish to briefly focus.

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The current (March 2001) average EU unemployment rate is 7.8 per cent, the lowest rates being in Luxembourg (2.3 per cent), the Netherlands (2.5 per cent), Austria (3.7 per cent) and Ireland (3.8 per cent); the highest (13.5 per cent) in Spain. To say that unemployment is a social evil is perhaps to state the obvious. However, firm consensus on the analysis that work, rather than welfare, constitutes the surest route out of social exclusion is a relatively recent development.

Increasing the general level of employment throughout the Union, principally through investment in appropriate training in new technology, is also an imperative for another reason. Birth rates throughout the EU are continuing to fall. At the same time people are living longer. The inescapable effect of these two factors operating together is that our pension systems are heading for crisis, with an increasingly serious imbalance between contributors and beneficiaries.

Accordingly, the Swedish presidency has set a new target for employment across the Union, the aim being that at least 50 per cent of people over the age of 55 will be employed by 2010. The current figure is 38 per cent. It is also hoped to increase significantly the participation of women in the labour force, principally through increased provision of child care.

Other restraints on participation, such as gender inequality, low quality of work, and the absence of opportunities for lifelong learning are also to be tackled. Legislation in this area, it should be said, is a matter not for the EU but for national governments: the objectives have been agreed.

There is a particular appropriateness in such a social agenda being an important centrepiece of a Swedish presidency, as indeed there also is in the prominence accorded to environmental issues. The so-called "Swedish model", which emerged out of the country's long experience of social democratic government, has been long admired, though it has also more recently been questioned by neo-liberal thinkers.

The economy and society Sweden has built over many decades is one characterised by high levels of social provision, paid for by high taxation. It is a model which is based on a bargain between the state, labour unions and employers: Sweden's first "national agreements" date from the 1930s.

It is also a model which has repeatedly been endorsed by the electorate, which is in the habit of turning down the offer of tax cuts, knowing that such cuts must be paid for with cuts in much-cherished services in education, health, childcare and public transport (74 per cent of children aged one to six benefit from municipal day-care).

Support for the system comes not just from voters for the dominant Social Democratic Party; there is a broad consensus across virtually all parties that the essentials of the national social model must be preserved. Where we in Ireland have been encouraged to regard taxation as a form of theft, the Swedes regard it as the price of admission to a civilised and efficient society.

Flexibility and innovation are also part of the bargain and a key to its continued success. A Swedish trade union leader, when asked if he was not afraid of new technology, replied : "No, I am afraid of old technology."

Promoting the idea of the EU as an association of "active welfare states", the Swedish Prime Minister, Mr Goran Persson, has stated as his aim that the Union should become by 2010 the most competitive economy in the world. With many endorsing low tax, low wages and low regulation as the only route to success, it is reassuring that another voice is still being heard.