The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 178 3.1.2 From Essen to Lisbon and beyond: Path-Dependent Formal Emancipation Arriving at the Luxembourg Process, the EES and the Lisbon Strategy 3.1.2.1 From Essen to Amsterdam: The Formal Constitutionalisation of the EES Caused by the developments in the policy field until the mid 1990s, steps towards formal constitutionalisation resulted in the integration of employment policy and the Essen Strategy in a distinct Employment Title of the 1997 Amsterdam Treaty (Title VIII, Art. 125 to 130). This specific title gave a constitutional basis to the promotion of broader co-ordination, co-operation and, in the long-run, also convergence (cf. Jacobsson/Schmid 2003:119f.) of member states’ employment policies to a newly established EU employment policy model (cf. chapter 3.2.2). Within this new supranational model, national employment policy traditions and labour market systems as well as policy-making competences were to be respected, while, at the same time, a wide range of political and societal actors was to be involved in the reform processes throughout the different levels of the EU polity. The integration of the Employment Title into the Amsterdam TEC was perceived to socially counterweight monetary integration by rendering “it more sensitive to the advantages of treating employment and social protection as productive factors in supply-side management, rather than a simple drain on competitiveness” (Jenson/Pochet 2002:2; cf. de la Porte/Pochet 2003:17). It was, hence, viewed to be “a unifying and popular project easy to ‘sell’ to European citizens” (Smismans 2004:2). It provided the fundament for the later EU employment strategy. This particular constitutionalisation step underlined the (reinforced) relevance of employment policy as ‘a matter of common concern’ of the member states and their willingness to co-ordinate their domestic policy activities at EU level, upgrading a high level of employment from a target of the EC to an overall target of the EU (cf. Art. 2 TEU). Given that some EU member states perceived national differences to represent too huge an obstacle for the stronger co-ordination of their respective employment policies, the formal constitutionalisation of the Employment Title was accompanied by a difficult bargaining process during the IGC leading towards the Amsterdam Treaty (cf. Tidow 1998b:27ff.; van Riel/van der Meer 2002). The foot-draggers of bottomup Europeanisation (cf. chapter 2.1.2.2) preferred to remain with the status quo, that is, competition between the systems with competences to combat unemployment and inflation left with the member states, rather than transferring them to the supranational level to lay the ground for a co-ordinated European Employment Strategy (cf. Schmid 2004:11). Even if employment policy was originally not on the agenda of the IGC for the revision of the Maastricht Treaty (cf. Lund 2002:18), the reflection group for the preparation of the IGC–under the influence of the 1995 EU enlargement “bringing in a number of countries with strong traditions of social dialogue and active employment policy” (Foden/Magnusson 2003:6)–put it on the list of negotiation items (cf. Schäfer 2004:9). Most pace-setting delegations (cf. chapter 2.1.2.2) were convinced The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 179 that an integration of a co-ordinated employment policy was necessary to jointly fight unemployment in times of flourishing technological development and demographic changes as well as to psychologically justify and counterbalance EMU and its strict stability policy (cf. Best/Bossaert 2002:1; Borrás/Jacobsson 2004:191; Busby 2005:30; Ekengren/Jacobsson 2000:5; Jenson/Pochet 2002:1; Velluti 2002:2). Additionally, the integration should strengthen the overall public support for European integration, which, at that particular time, was declining because of weak economic performance and a high level of unemployment within the EU (cf. McDonagh 1998:35; Régent 2002:7; Steinle 2001:118). With this focus, pace-setting negotiation delegations responded to the fact that, “although there was no clear evidence of a causal relation between the efforts to meet the convergence criteria for monetary union and rising unemployment, European decision-makers feared that public opinion’s perception of such a relation would delegitimise EMU” (Smismans 2004:2). Given that employment levels and monetary policy–as part of the overall socioeconomic policy mix to achieve a high level of employment–are interrelated and, thus, perceived to be reinforcing or weakening each other, this fear was in not at all exaggerated (cf. chapter 2.2.2.3; graph 5). As “monetary union was greeted with scepticism by those actors traditionally concerned about employment and social policy” (Jenson/Pochet 2002:1), not only government officials and those actors preparing the IGC, but also “a grouping of policy entrepreneurs, experts, politicians, non-governmental organisations .. and unions, all of which sought to ‘correct’ the pro-business bias and neo-liberalism of the EMU project” (ibid.:2) were in favour of the proposed treaty amendment to integrate a social equivalent to the Maastricht convergence criteria (cf. Schmid 2004:11; Régent 2002:7) into the Amsterdam Treaty. Once embedded into European socio-economic policy co-ordination, the EES–as “the most co-ordinated response to the seeming imperatives of monetary union” (Jenson/Pochet 2002:2)–was expected to make social policy more efficient (cf. Goetschy 1999:131) and to establish a balance between EMU and social policy (cf. Régent 2002:7). It was hoped to become powerful enough an instrument to develop the supranational policy area towards “the same general scope as national social law, which has always typically embraced areas such as regional .., structural .., cultural .., education … and health policy” (Velluti 2002:2). On the background of this attempt to socially counterweight EMU, the IGC supported the pace-setting Swedish proposal of September 1995 to extend the social dimension of the EU by integrating a special chapter on employment policy into the treaty framework. This special chapter was envisaged to emphasise an active labour market policy approach to complement EMU. As a consequence, it would, in the end, also emancipate employment policy co-ordination from the area of social policy, in which it was embedded for almost 40 years (Sweden 1995; cf. Larsson 1995; Lund 2002:18; Steinle 2001:138; Tidow 1998b:32). With this proposal, backed and negotiated by Allan Larsson (future Commissioner for Employment and Social Affairs; former Swedish Minister of Economics) and Gunnar Lund (Swedish IGC representative) as two decisive norm entrepreneurs of the idea of supranational employment policy co-ordination (cf. Best/Bossaert 2002:8; de la Porte/Pochet The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 180 2003:18; Jenson/Pochet 2003:6; Tucker 2004:13), Sweden, alongside the other 1995 newcomers Finland and Austria, tried “to protect and maintain .. [its] own social model.. [and to] shape employment policy to reflect Swedish policy priorities, and especially Swedish notions of active labour market policy” (Jenson/Pochet 2002:5f.; cf. Ekengren/Jacobsson 2000:8). Strongly promoting this idea during the IGC, “Larsson’s principal argument was that active labour-market policies should be conceived together with the EU’s project of monetary and economic convergence” (de la Porte/Pochet 2003:18) aiming at the development of a “European Employment Union – to make EMU possible” (Larsson 1995) by exploiting synergies between the areas. Considering the Swedish proposal, a majority of member states (among them Denmark, Belgium and Austria), supported by the Commission and the EP, yet, preferred to go beyond the soft-law approach of the Essen Strategy. The softness of the instrument was perceived to not be far-reaching enough to successfully channel supranational employment policy co-ordination and to establish a tight link between European economic and employment policy co-ordination (cf. Goetschy 2003:75; Steinle 2001:139; Tidow 1998b:30, 47ff.). Instead, some of these member states not only opted for the integration of a special treaty chapter on employment. They, furthermore, asked for the establishment of concrete targets, an autonomous European employment policy co-ordination mechanism as well as for instruments for evaluation and assessment. However, also within this group conflicts arose over the exact shape of the co-ordination process and the integration of supranational financial means to support national activities, an option only supported by Belgium (cf. Tidow 1998b:54). Others, among them Italy and Spain, supported the use of soft coordination that exactly mirrored the Essen Strategy, while some like Austria, proposed an obligatory and legally binding character for the procedure, including quantitative targets as well as the option of sanctions as in the case of the SGP in order to better promote full employment within the EU. Austria, on the background of its strong national corporatist tradition, additionally suggested the formal integration of the EP and social partners into the new employment policy co-ordination mechanism (cf. Steinle 2001:142; Tidow 1998b:36). The latter, in the advent, during and after the IGC, “pushed for employment and growth to be explicit objectives of economic union, for institutions to be created to achieve those goals, and to ensure the role for social partner” (Jenson/Pochet 2002:5) in order to keep the door open for an even stronger definition of employment policy co-ordination in the future. During the IGC, the conservative governments of Germany, France, Spain and the United Kingdom (cf. de la Porte/Pochet 2003:19; Schäfer 2004:9), supported by some sceptical voices within trade unions and employer’s organisations, turned out to be foot-draggers and overall opponents to the integration of an employment chapter, while the Netherlands was ‘just’ sceptical to the idea (cf. Jenson/Pochet 2002:6; Tidow 1998b:42, 52). Especially the British conservative government was strongly opposed. As a solution for the critical employment situation within Europe, British government officials favoured de-regulation measures, the increase of labour market flexibility, employability, activation and the strengthening of the competitiveness of The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 181 the national economies instead of an European approach to co-ordinate national employment policies (United Kingdom 1996; cf. de la Porte/Pochet 2003:24; Steinle 2001:141). This solution was strongly influenced by own national policy traditions and choices (cf. chapter 2.2.2.1) and supported also by the conservative German government that itself did not present own proposals (cf. Steinle 2001:141). Instead, the German Government highlighted doubts about the general need for supranational employment policy co-ordination and the job creation potential of the proposed treaty chapter, pinpointing at potential demands of citizens, arising from such a new employment policy co-ordination instrument, which the EU could not fulfil (cf. de la Porte/Pochet 2003:21; Steinle 2001:142; Tidow 1998b:45). German scepticism was nurtured by concerns about additional costs arising from extensive national action programmes related to employment, endangering the success of both EMU and the SGP. Nevertheless and apart from these general objections, Germany was willing to support the establishment of a special employment and labour market committee (cf. Steinle 2001:142). In contrast to this strict rejection of a further bottom-up Europeanisation of employment policy co-ordination by the UK and partially also by Germany, France was in favour of a further institutionalisation of employment matters, even if the country preferred to achieve this without constitutionalising an employment policy title into the treaties. France, thus, supported proposals related to the stronger co-operation between the ECOFIN and the Employment and Social Affairs Council as well as, more generally, between all actors involved in national employment policy-making (cf. ibid.). Despite these most distant negotiation positions, cross-national consent was established on important framework conditions: (1) employment policy-making should generally remain within the competences of the member states; (2) European activities should be restricted to a policy co-ordination approach; (3) EMU should not be affected by the provisions concerning employment policy; and (4) no new financial instruments or means should be allocated to the EU to support employment policy co-ordination (cf. ibid.:145f.). With a view to the thematic focus of the drafted employment strategy, the Commission opted for a strong emphasis on promoting entrepreneurship, while the member states were predominantly in favour of putting employability, “which was conventional wisdom in many member states prior to the Strategy” (de la Porte/Pochet 2003:21), at the centre of the policy co-ordination process. “It is also worth recalling that the fourth pillar on equality of men and women was included … on the insistence of Commissioner Flynn, who had to prove his commitment to this theme, after having [been] accused by the EP of lack of interest” (ibid.:20). The inclusion of employability, hence, roots in the logic of the intergovernmental negotiation situation during the IGC and of national preferences based on domestic traditions, while The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 182 the inclusion of equal opportunities shows traces of a path-dependent supranational development influenced by inter-institutional constraints. On the basis of these different positions, the reflection group elaborated several proposals for the integration of employment policy into the treaty framework, which were presented to the IGC under Italian presidency. Finally, a single chapter on employment was proposed, providing “the Member States with a common strategy, an agenda for reform including objectives and targets, and a process of continuous learning and improvement” (Lund 2002:18; cf. Steinle 2001:146; van Lancker 2002:24). In order to give overall direction to the process, the 1997 Amsterdam European Council “adopted a separate Resolution on Growth and Employment laying down the firm commitments of the Member States, the Commission and the Council to give a new impulse for keeping employment firmly at the top of the political agenda of the Union [with s]ound macro-economic and budget policies go[ing] hand in hand with strong and sustainable growth in output and employment” (European Council 1997a). Additionally, the summit went some decisive step further and called for a strengthened employment focus of the BEPG, reaffirming “the importance it attaches to promoting employment and reducing the unacceptably high levels of unemployment in Europe, particularly for young people, the long-term unemployed and the low-skilled” (ibid.; cf. Kasten/Soskice 2001:11). The Amsterdam European Council, moreover, summoned an extraordinary European Council meeting on employment and growth under the Luxembourg presidency (cf. de la Porte/Pochet 2003:20) and officially welcomed the IGC agreement on the constitutionalisation of a separate Employment Title (cf. European Council 1997a). As the summit’s proposals were accepted by the majority of member states, Germany, France and the UK gave up their strict dissenting positions, albeit maintaining fundamental doubts and trying to amend the IGC proposals according to their own ideas (Steinle 2001:151ff.). This shift of position was caused by the change of important domestic intervening variables (cf. chapter 2.2.1) that fundamentally altered domestic constellations and policy priorities. So, the change of governments in the UK and in France from conservative to centre-left governments impacted also on national IGC negotiation positions that became supportive to the integration of employment policy co-ordination into the treaties and, thus, changed the overall negotiation situation at European level (cf. Best/Bossaert 2002:1; Goetschy 2003:75; Régent 2002:6; Schäfer 2004:9f.; van Lancker 2002:24). Tony Blair, the new British Prime Minister, while no longer contesting a European strategy for employment, however, re-emphasised the importance of de-regulation, employability and competition for successful employment promotion, given that these elements had proven to be successful at domestic level in the past (cf. Jenson/Pochet 2002:6; Steinle 2001:151). “Lionel Jospin, flexing his electoral muscles, threatened to reject the stability pact unless an Employment Title were added to the Treaty of Amsterdam and a special meeting of the Council called specifically to address employment and job creation” (Jenson/Pochet 2002:6; cf. Régent 2002:6; Steinle 2001:154f.). Given the relevance of the SGP to back EMU and the vehement support for it by several The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 183 member states, among them especially Germany, the French proposal was finally accepted after cumbersome negotiations (cf. de la Porte/Pochet 2003:20). Due to the loss of blocking partners at European level and the approaching general elections, the German conservative government tried to avoid isolation and a rather hopeless single-veto-player-foot-dragging position at supranational level (cf. Goetschy 2003:75; Schäfer 2004:9; Steinle 2001:151). Even if in a rather lastminute-effort, it decided to constructively present its own proposals for the adaptation of the negotiated options in order to up-load German policy approaches and preferences. The German propositions focused on employment policy-making remaining within national competences, on the formal constitutionalisation of social partners’ responsibility for a high level of employment and on employment policies remaining part of the co-ordination under the BEPG. According to the German proposals, labour market policies were, yet, to be co-ordinated under the new employment title (cf. Steinle 2001:152; Tidow 1998b:60f.). Related to the shape of employment policy co-ordination, Germany, as the majority of member states, opted for soft policy co-ordination given that the idea of a supranational employment policy à la Community method was neither prominent nor politically backed (cf. Thiel 2004:145f.). “Guidelines, benchmarks, peer review and recommendations have been seen as more appropriate than legislation for the area of labour-market policy; but there is also little doubt that both the fact that the outcome is ‘soft law’ and the fact that serious attempts have been made to engage the member states in the process have helped to make the EES the acceptable face of European social policy” (Foden/Magnusson 2003:8). In the end, during the 1997 Amsterdam European Council summit, the member states agreed upon upgrading a high level of employment to an overall aim of the EU. Furthermore, they decided to strongly emphasise national sovereignty in the field of employment policy-making, to secure the consistence of the EES with the BEPG and to structure supranational employment co-ordination mechanism according to the Essen Strategy, “mimicking” (de la Porte/Pochet 2003:15) the existing macro-economic policy co-ordination cycle (cf. Jenson/Pochet 2002:6; McDonagh 1998:8; Régent 2002:7; Tidow 1998b:58). With these treaty amendments, “the focus switched from a normative approach centered on legislative harmonization and binding measures, to social consensus” (Régent 2002:7). As foreshadowed by the negotiations during the IGC. The European Social Fund (ESF) remained the only financial instrument for EU initiatives and activities in the field. With these decisions, the Employment Title was finally integrated into the Treaty of Amsterdam after two long years of challenging negotiations. With this decisive constitutionalisation step, even though legally non-binding in terms of sanctions, “the EES became, as of its integration into the Amsterdam Treaty …, part of the processes in which the member states were obliged to participate” (de la Porte/Pochet 2003:19). The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 184 3.1.2.2 From Amsterdam to Luxembourg: The Pre-Ratification Kick-Off of the Luxembourg Process The special European Council on employment and growth, called for by France during the Amsterdam IGC (cf. ibid.:20; Jenson/Pochet 2002:6; Lund 2002:18f.; Steinle 2001:155), took place in Luxembourg in November 1997. It was hold in order to put into operation the new employment policy co-ordination mechanism even before the formal ratification and entering into force of the Amsterdam Treaty (cf. European Council 1997b; Steinle 2001:161ff.). The so-called ‘Luxembourg Jobs Summit’ witnessed “the emergence of a new architecture as well as novel forms of governance, that is policy co-ordination and benchmarking” (Jenson/Pochet 2002:7). At the summit, the Essen Strategy was officially introduced into the European socioeconomic policy armoury. Re-labelled as ‘European Employment Strategy’ and the so-called ‘Luxembourg process’, it became “the first of those city-named strategies” (Best/Bossaert 2002:1) of supranational socio-economic policy co-ordination. Already before the Luxembourg summit, an advocacy coalition (cf. Jenson/Pochet 2002:10), composed of the Luxembourg presidency of the EU and the European Commission72, strongly promoted the Commission’s proposal for narrow employment guidelines, their concentration on the Essen target areas and the introduction of quantitative aims to increase political pressure on member states (cf. Jenson/Pochet 2002:7; Schäfer 2004:10; Steinle 2001:161). The Luxembourg negotiations were rather difficult and agreement could hardly found in the first place. There “were 29 different opinions among the 14 finance ministers and 14 ministers of employment and social affairs, and … [Jean-Claude Juncker], in the EcoFin and Social Affairs and Employment Councils, was the sole actor supporting the single joint discourse of the need for development of an interlinked economic and employment policy” (de la Porte/Pochet 2003:20). Just as during the Amsterdam IGC, the success of negotiations, thus, heavily depended on the advocacy coalition of strongly committed norm entrepreneurs pushing forward the idea of European employment policy co-ordination as “the ‘orchestrator[s]’ of the Luxembourg Jobs Summit” (ibid.:21). At the end of the Luxembourg summit, the member states, “[i]nspired by the convergence process in the economic field, … further strengthened [the employment policy co-ordination process] into a ‘guidelines procedure’” (Smismans 2004:2; cf. Kasten/Soskice 2001:27f.; Steinle 2001:161) and agreed upon setting up first Employment Guidelines (EGs) focusing on employability for 1998 (European Council 1997b:I.3; cf. Jenson/Pochet 2002:7; Steinle 2001:162). This decision to adopt EGs can be regarded as “a compromise between … the idea that European intervention based on the Community method and a real common European employment policy 72 This advocacy coalition was led by Jean-Claude Juncker (Luxembourg’s Prime Minister and Finance/Labour Minister), who “had a transversal view of the political constellation at the time” (de la Porte/Pochet 2003:20; Schäfer 2004:10), Jacques Santer (Commission President) and Padraig Flynn (Commissioner for Employment and Social Affairs). The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 185 would be too intrusive into the member states’ competencies, and … the awareness that high and rising unemployment represented a major social and economic challenge for Europe” (Smismans 2004:2). However, “no consensus could be reached on defining a target for unemployment as a counterpart to those concerning public deficits, inflation, and debts” (Schäfer 2004:10). After its formal inception in 1997, the EES enriched the so-called “second policy mix” (Goetschy 2003:79) to complement the “first policy mix” (ibid.:82) of monetary and budgetary policy co-ordination. Under the ‘European Employment Pact’, this ‘second policy mix’ combined employment policy co-ordination efforts with other supranational economic policy co-ordination processes (cf. 2.1.1.3.1). Within the pact, the EES complemented the “benchmarking process on policy reform regarding capital, product and labour markets” (Smismans 2004:3) of the so-called ‘Cardiff process’ (European Council 1998:point 11) and the macro-economic policy perspective, known as the macro-economic dialogue of the ‘Cologne process’ (European Council 1999:point 8), “consisting of biannual discussions of the policymix at EU level between the social partners, the European Central Bank, the Commission and the Council” (Smismans 2004:3; cf. Best/Bossaert 2002:2; Ekengren/Jacobsson 2000:6; Régent 2002:14; graph 6). Graph 6: The Three Pillars of European Employment Pact Source: Adapted and amended version of DGB einblick 2002; www.dgb.de. European Employment Pact Co-ordination of employment policy and labour market aims and measures by European Employment Guidelines and National Action Plans (Luxembourg process) Elimination of structural market inefficiencies through economic reforms– more competition with the internal market (Cardiff process) Macro-economic policy-mix co-ordination of monetary, finance and income policy aiming at growth and employment accompanied by price stability (Cologne process) The ‘Three-Pillar-Model’ The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 186 Concerning further institutionalisation in the field, the Council, path-dependently continuing institution-building of the 1960s, established the Employment and Labour Market Committee (ELMC, the later EMCO; cf. Council of the EU 1997a; Eironline 1997; European Commission 2006b) in 1996/7. This new committee was based on the structures of the 1963/68 expert committees on employment (cf. chapter 3.1.2.1). It was foreseen to immediately support the work of the Employment and Social Affairs Council with a view to employment policies and the Essen Strategy (cf. Régent 2002:10) and, thus, to principally fulfil all EES-related co-ordination tasks, “i.e.: • collective examination of the national employment reports; • preparation of the joint employment report by the Commission and the Council; • drafting of an opinion on the employment guidelines” (European Commission 2006d). 3.1.2.3 From the Luxembourg Process to Lisbon and Beyond: The Lisbon Strategy Putting the EES into the Sustainability Context Continuing path-dependent institutionalisation, the SCE as well as the ELMC were again reformed in 1999 and 2000 respectively. The 1999 reform of the tripartite SCE, instigated by the Amsterdam Treaty’s Employment Title and foreseen to be reexamined in 2002, especially focused on tightening the contacts with the ELMC in order to more strongly integrate social partners into the supranational employment co-ordination process (cf. Council of the EU 1999a). The overall structure of the SCE, however, remained that of the 1970 tripartite SCE except for the reduction of the number of social partners from 18 to 10 of each camp of the industry (cf. ibid.:Art.2.3). The social partners represent the economy as a whole, covering the whole range of economic activities. Given this range of branches, “general crossindustry organisations; cross-industry organisations representing certain categories of workers or undertakings, and sectoral organisations representing agriculture and trade” (ibid.:art.3) are allowed to attend meetings. Their representation is coordinated by ETUC and UNICE. The reform, moreover, brought about greater flexibility in the set up of delegations, which can now be composed according to the issue discussed. The reformed tasks of the SCE are to “ensure … that there is continuous dialogue, concertation and consultation between the Council, the Commission and the social partners in order to enable the social partners to contribute to the coordinated employment strategy and to facilitate coordination by the Member States of their policies in this field, taking into account the economic and social objectives of the Community as reflected in both the Employment Guidelines and the Broad Economic Policy Guidelines” (ibid.:art.2.1). Since 2000, the work of the SCE was supplemented by informal tripartite meetings, which became further institutionalised in 2003 with the establishment of the Tripartite Social Summit (cf. chapter 4.1.1.4). The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 187 With the entering into force of the Amsterdam Treaty, the ELMC was formally replaced by the EMCO. The Council decision on the official replacement of the ELMC followed in 2000. It continued the path established with the creation of the ELMC in 1997 and transformed the committee into the present EMCO. The main tasks of the EMCO are to prepare the work of the EPSCO Council, to promote employment mainstreaming of EU policies, to contribute to the establishment of the BEPG in order to ensure coherence with the EGs as well as to offer a supranational arena for exchange of information and peer review (cf. European Commission 2006d). The EMCO is composed of two officials of each member state and the European Commission, including two alternates (cf. Council of the EU 2000c:art.2.1; on the EMCO cf. chapter 4.1.1.2). After these institutionalisation steps of the post-Amsterdam phase, the EES became even more concretised in 2000 by the formal decision of the Lisbon European Council on employment. The summit decided to integrate ambitious targets for employment into the strategy (European Council 2000a) and to combine the strategy with “other social questions designed to cover not only employment policies, but also the fight against poverty, the reform of social protection systems (pensions, health), and education and training matters” (Goetschy 2003:74; cf. Ekengren/Jacobsson 2000:6; Régent 2002:15). With this integrated sustainability approach, “the Lisbon reform programme has sought to marry economic dynamism to create higher growth and employment rates with longstanding European concerns to advance social cohesion, fairness and environmental protection” (High Level Group 2004:8). On the basis of the evaluation of the Cardiff, the Cologne and the Luxembourg process, the Lisbon Council “put the icing on the cake by completing Delors’ 1993 plan” (van Lancker 2002:25) by adopting a concrete quantitative target of 70 pp for the overall employment rate of EU member states until 2010, a target of 60 pp female employment and an envisaged 3 pp annual economic growth rate to be achieved by the implementation of the strategy’s measures (European Council 2000a:point 30 and 6; cf. Jenson/Pochet 2002:7f.). Moreover, the Lisbon European Council “defined the OMC explicitly as a new policy instrument, and .. embed[ded] the employment OMC in a broader coordination of different policy fields” (Smismans 2004:3; cf. European Council 2000a:point 37). With the 2000 Lisbon amendments, the so-called ‘Lisbon Strategy’ was baptised. With its particular programmatic focus, it was designed to satisfy “both the liberals with its economic reforms and the socialists with the safeguarding of the EU social model” (Smismans 2004:17). It reflects “both the need to speed up liberalisation reforms in several sectors … in order to complete the internal market, and also the wish for more macroeconomic coordination within the EU at its late-spring European councils” (Goetschy 2003:73). Yet, the Lisbon European Council did not opt for a new co-ordination process to make the EU “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion” (European Council 2000a:point 5). It rather introduced a simplification and better co-ordination of exist- The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 188 ing policy co-ordination cycles (European Council 2000a:point 35), establishing an “interlinkage between different policies, notably growth, employment creation and social cohesion” (de la Porte/Pochet 2003:56; cf. Tucker 2004:10; van Lancker 2002:25) in order to enhance structural reforms. Following this combined perspective, the Lisbon summit institutionalised a new European Council especially dedicated to socio-economic issues each spring (European Council 2000a:point 36; cf. Jenson/Pochet 2002:7). This “Spring Summit aims at combining the European Broad Economic Policy Guidelines with the Employment Guidelines, the Lifelong learning policy, the social protection reforms and the economic structural reforms” (Smismans 2004:3). By this mix, it tries to balance economic and social interests within the EU. With the decision to establish the Lisbon Strategy, “Europe has built a distinctive economic and social model that has combined productivity, social cohesion and a growing commitment to environmental sustainability” (High Level Group 2004:7). However, the practical “operation of the Lisbon strategy has shown a real risk of a hierarchical relationship between policy fields rather than a genuine coordination (economic considerations being hierarchically superior to employment and social issues; and of structural reforms and the stability pact having precedence over macroeconomic governance)” (Goetschy 2003:81f.). In the period to follow the 2000 Lisbon European Council summit, “[o]ther European Councils added items to the policy agenda. The quality of employment was a priority of the Belgian presidency and has fed into the Luxembourg process .. [, while] sustainability (in both an environmental and a social sense) was the key message of the Gothenburg Summit” (Foden/Magnusson 2003:9). In 2001, the Stockholm European Council further specified the quantitative Lisbon targets by amending a rate of 50 pp employment for older people (55-64 years) to be reached by 2010 (European Council 2001a:III.9). It, moreover, amended intermediate targets for the overall employment rate and for female employment to be achieved in 2005, the former laying at 67 pp, the latter at 57 pp (ibid.). These Lisbon and Stockholm quantitative targets “reflect th[e] active policy paradigm, linked politically to overall macroeconomic growth and competitiveness objectives” (de la Porte/Pochet 2003:24; cf. chapter 3.2.2). Additionally, the 2002 Barcelona Council decided to improve social partners’ and civil societies’ as well as territorial entities’ involvement in the Luxembourg process (European Council 2002:points 29 and 30; European Commission 2003a:17) in order to further strengthen the multilevel approach of the strategy. “Social dialogue should, consequently, be at the heart of the process” (Begg 2004:4). Finally, at the end of the path-dependent bottom-up Europeanisation process leading towards the inception of the EES, which in the literature has been characterised as a ‘passive revolution of molecular changes’ (Tidow 1998b:7, 22ff.), “working with the EES has become a policy process in its own right with broad social implications … [and] horizontal policy treatment” (Jenson/Pochet 2002:8). The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 189 3.2 How and What?: Structural-Procedural Aspects and Policy Paradigm of European Employment Policy Co-ordination – The ‘Letters’ and the ‘Practice’ 3.2.1 The ‘Legal Constitution’ of the Luxembourg Process: Structural-Procedural Aspects of the Written Proto-Type OMC The EES is operated by the specific characteristics of the OMC (cf. chapter 2.1.1.3), creating a “fully decentralised approach [, actively involving] … the Union, the Member States, the regional and local levels, as well as the social partners and civil society” (European Council 2000a:point 38). This decentralised approach is caused by the fact that the aims of the EES, especially those related to lifelong learning, can only be achieved through the integration and “mobilization of social partners and subnational authorities, and more generally the mobilization of knowledge and resources, which .. may not be best achieved by legal instruments” (Borrás/Jacobsson 2004:192; cf. Jacobsson/Schmid 2003:114). By this broadening of the scope of actors involved, the EES impacts on the structural and procedural preconditions of EMLG and of policy co-ordination within the EES-PCN (cf. Pochet 2002:38; cf. chapter 4.1.2). Within this new EES-PCN, the EU level formulates broad employment policies targets, while member states’ governments hold the competence to choose the instruments to implement these common policy aims (cf. Begg 2004:1) within this process of “governance by objectives” (Ekengren/Jacobsson 2000:2). By this ‘third way’-combination of supranational and intergovernmental elements (cf. Jacobsson/Schmid 2003:113), “the EU seeks to foster the discovery of effective ways to combat unemployment while still respecting the autonomy of Member States in this sensitive policy area” (Eberlein/Kerwer 2004:125). With this focus, the EES also allows for “a diversity of approaches and called for the involvement of all relevant actors, in accordance with the wide diversity in national institutional set-up and social dialogue practices” (European Commission 2002d:6). Art. 125-130 TEC represent the formal treaty basis, hence, the “legal constitution” (Olsen 2000:7; cf. March/Olsen, 2004:8), of the EES. At the heart of the EES stands the open co-ordination cycle known as the ‘Luxembourg process’ (European Council 1997b). This cycle became enshrined in Art. 128 of the Amsterdam Treaty’s Employment Title and is characterised by a permanent monitoring process within a perpetual ((multi-)annual) cycle of reporting and peer review, issuing EGs and recommendations, setting up the Joint Employment Report (JER), and evaluating the overall employment situation in Europe. The main features of the (multi-)annual Luxembourg process are inter- and transgovernmental commitments to common objectives and the establishment of indicators to measure and evaluate employment performance. It involves EU member states (including subnational and regional entities), the Council and EMCO, the European Commission and–as enshrined in Art. 126(2) and 130 TEC–also social partners of business and labour as core actors of the EES-PCN (cf. chapter 4.1.2).