ECONOMY

Implementing the right reforms will help boost employment, prosperity

Last November, a special Employment Task Force set up by the European Union and presided over by former Dutch Prime Minister Wim Kok – also a former trade union leader – produced a special report titled «Jobs, jobs, jobs.» The report was in keeping with the so-called Lisbon Agenda, formulated by the EU’s current 15 members in March 2000. According to this set of targets, the EU members must give absolute priority to pushing for the structural changes necessary to catch up with the United States and face up to the ever-increasing global competition which, among other things, leads to shifts in capital capacity and jobs. Two years ago, at the Barcelona spring summit, the EU added a new criterion for assessing a member country’s achievement of the Lisbon goals. According to this criterion, by 2010 33 percent of children up to the age of 3 and 90 percent of children aged between 3 and the age of entry into primary schools must have access to child care services. It is easy to see the economic logic behind this requirement. Achieving this target would allow more women to join the labor force. It will also help both parents achieve a more optimal combination of family and professional life. The same council set another measurable goal, this one more controversial. It said that by 2010, the average age at which EU employees retire must rise by five years. A year before that (in 2001), at the Stockholm spring summit, EU heads of state added a number of goals. By 2005, the summit conclusions said, the overall employment rate ought to increase to 67 percent of the population between the ages of 15 and 64. Women’s employment rate, in particular, ought to rise to 57 percent. By 2010, the overall employment figure should rise to 70 percent, including 60 percent for women. It was also agreed that the employment rate among people aged 55-64 ought to rise to 50 percent. These targets indicate which structural reforms must take priority among EU member states. The setting up of day schools, that keep pupils occupied through the afternoon, is one such reform, proposed long ago, and in which Greece is lagging behind. We also lag behind in eliminating obstacles that prevent the spread of part-time employment. Greece has by far the lowest percentage of part-time employees, just 3.5 percent of the work force, while the EU averages 18 percent. There are also deficiencies in employee training, both for the original entry into the jobs market and in lifetime training. Thus, Greece faces the problems of old manufacturing powers with decaying industries. Older people losing their jobs cannot find work elsewhere and there is too much unskilled labor. Part of the problem is that spending on education – which must be separated from spending on training, which is overseen by the Labor Ministry – is still at very low levels, at 3.5 percent of the country’s gross domestic product (GDP). Now, the two major parties fighting the March 7 election agree that this should rise to 5 percent of GDP. However, this would bring Greece barely to the average level of EU spending and is clearly inadequate. Families are forced to spend on cramming schools to compensate for the inadequacies of the education system, and are thus prevented from spending the money elsewhere. This increases social disparities and creates dissatisfaction and uncertainty among citizens. The European Union wants to favor the forces of change. Besides some measurable goals, however, it does not specify the extent and the kinds of change. It also fails to provide additional funds, although, to be fair, Greece is the recipient of enormous amounts designed to modernize infrastructure, boost entrepreneurship and improve the welfare state. It is only through structural changes that we will increase our productivity, modernize the labor market and, ultimately, help the economy grow faster. It is this change that will bring new investments. We should encourage and facilitate change. Stagnation in economic development, which is barely hidden behind the triumphalism over our high GDP growth, is already making the standard of living shrink. The new government must make certain commitments and keep to them. Change must be the result of dialogue and a common sense of the challenges that lie ahead. This was not done in the past four years, at least. It is time for change now.