HC Deb 08 September 2004 vol 424 cc1292-3W
Keith Vaz

To ask the Chancellor of the Exchequer what action has been set by the EU as highest priority for new member states in generating rapid economic reform. [186788]

Ruth Kelly

The new member states have been integrated into the Broad Guidelines of the Economic Policies of the member states and the Community, for the period 2003–05 (BEPGs).

The 2004 BEPG update highlighted country specific economic measures and priorities that each member state should undertake. Under "economic reforms to raise Europe's growth" potential, the Commission also suggested that the existing guidelines aiming at 'more and better jobs' and at 'increasing productivity and business dynamism' be implemented in a comprehensive and co-ordinated way by the new member states. Given the labour market situation is considerably worse in the new member states, the BEPGs recommend that policy efforts concentrate on a small number of priority areas that are likely to have the largest impact on labour market performances: ensuring that real wage developments reflect productivity growth; improving the financial incentives to work by reforming tax/benefit systems; improving skills and training, through the provisions of lifelong learning facilities; and undertaking appropriate reforms of labour market regulations.

The BEPGs also indicate that R and D diffusion and technology transfers will be as important as R and D investment in accelerating the transition towards higher value-added activities. Sustaining a high level of foreign direct investment is essential, as is an increased responsiveness of the education and training systems to the changing needs of the labour market.

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