Barroso sets out ambitious 10-year plan

EUROPEAN COMMISSION chief José Manuel Barroso has unveiled an ambitious 10-year economic programme for the EU, urging “political will” from government leaders to avoid repeating the failures of the previous plan.

Although the jobs and growth project is the centrepiece of Mr Barroso’s second term at the helm at the EU executive, it has already run into trouble with German chancellor Angela Merkel.

An EU diplomat said Dr Merkel expressed serious reservation in a letter to Mr Barroso about the commission’s attempts to link economic targets with financial oversight. Such a move could undermine the euro’s stability, Dr Merkel argued.

Mr Barroso believes the plan has potential to foster annual growth of “2 per cent or more” in the EU at large but said it would be unwise to fix a specific target.

Amid anxiety about the poor state of the public finances in Greece and several other members of the single currency, the commission calls in the plan for the development of “a framework for addressing imminent threats for the stability of the euro area as a whole”.

Mr Barroso declined to say whether the EU was working on a solidarity fund for distressed euro members and offered no further detail, saying he did not want to fuel speculation about Greece.

“We have to have solidarity in the European Union. The concrete instruments, we will present them in due time,” he told reporters in Brussels.

EU leaders have pledged special aid for Greece “if needed”; the Lisbon Treaty empowers the union to grant “financial assistance” to a member state seriously threatened with severe difficulties caused by exceptional occurrences beyond its control.

However, the commission and other EU authorities are keen to avoid such an intervention. At the same time, the commission wants EU governments to strengthen the co-ordination and surveillance of their budgetary discipline and set out economic policy guidelines for them.

The 2020 plan succeeds the Lisbon Strategy, a 10-year initiative noted for missed targets which fell far short of its objective of making the European economy the most competitive and dynamic in the world by this year.

Mr Barroso said the new plan had better prospects because it contained far fewer targets but said “nothing is going to happen” if government leaders did not take ownership of the initiative.

The plan embraces efforts to boost employment as well as expenditure on research and development, an area overseen by Ireland’s new EU commissioner Máire Geoghegan-Quinn. “Now it is my duty to ensure that we turn innovation into jobs and that we transfer research into retail products,” Ms Geoghegan-Quinn said.

The plan also aims to cut greenhouse gas emissions and bring millions of people out of poverty.

Main points

• Raise employment rate to 75 per cent of population aged 20-64 from 69 per cent;
• Increase investment in research and development to 3 per cent of GDP from less than 2 per cent by boosting private sector research;
• Cut harmful emissions by at least 20 per cent of 1990 levels, increase renewable energy use by 20 per cent and achieve a 20 per cent rise in energy efficiency;
• Cut share of early school leavers to 10 per cent from 15 per cent; raise to 40 per cent the number of people in their early 30s with third-level education;
• Cut the number living below the poverty line by 25 per cent, lifting 20 million people out of poverty.