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Mr. László Andor

EU Commissioner for Employment, Social Affairs and Inclusion

Statement of Mr. László Andor on the Annual Growth Survey

Joint press conference with President José Manuel Durão Barroso and Commissioner Olli Rehn.

Brussels, 12 January 2011

Good afternoon Ladies and Gentlemen,

Let me first of all stress the points made by the President and my Colleague Commissioner Rehn on the importance of employment. This has rightly been made a priority of the Europe 2020 strategy. Achieving the targets and stepping up reform measures will not be an easy task, especially at a time of ambitious deficit reductions in public budgets. Tough choices are necessary to be made within the fiscal consolidation programmes.

But by all means we have to avoid jobless growth! On the contrary: we have to ensure growth that creates jobs, to get people back to work, and to attain the headline target of 75% employment rate.

Tackling unemployment and preventing long-term exclusion from the labour market is urgent given the relatively low utilisation of the labour force and the particularly sharp ageing of European population. Failure would mean lower competitiveness and more inequalities in the European society.

Meanwhile, it is important to emphasize that welfare systems have played an acknowledged role in stabilising the economy and cushioning the social impact of the crisis. Reforms are needed to ensure that they continue providing adequate protection, play their role in preserving and improving skills and employability and creating incentives to work in order to preserve human capital and take full advantage of recovery.

The Annual Growth Survey identifies the key measures, those most urgent, to be taken on the basis of the analytical work contained in the draft Joint Employment Report:

Introducing employment-friendly taxation systems, namely by shifting taxes away from labour;

Reducing labour market segmentation by re-balancing employment protection legislation between workers with permanent and those with time-limited and precarious contracts.

Removing barriers to balancing private and professional life and other disincentives for the participation of second earners in the work force;

Making sure high quality training and job search support is provided to the unemployed while ensuring sufficient incentives to reward return to work or to go into self-employment;

Increasing the participation of older workers in labour markets by eliminating early retirement schemes while increasing the retirement age by the Member States, if they have not already done so and consider linking it with life expectancy.

Member States will have to prioritise reforms according to their fiscal room for manoeuvring and the state of their economy. Fiscal consolidation also requires better targeting of existing social expenditures.

Based on today's input, the Spring European Council will give guidance on Europe's main challenges ahead and Member States will then set out their own National Reform Programmes needed to reach their national targets.

Such reforms can sometimes be painful, but I am convinced that they are crucial. It is essential that we take swift action to reform our labour markets to raise employment, people's skills, create job opportunities and enhance social inclusion.

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