| dc.description.abstract | In 2010, the European Council agreed on a comprehensive response to the challenges that Europe is currently facing: the Europe 2020 strategy. In the current climate, this strategy has become more relevant than ever. GDP in the EU grew in the first quarter of 2011, but has slowed down substantially since then. Economic growth is now expected to come to a virtual standstill towards the end of the year.1 In the euro area, this is exacerbated by the continuing sovereign debt crisis and remaining fragilities in the banking sector. In this situation, households and businesses lack confidence and therefore hold back on consumption and investments. In addition, with strained public finances, there is very limited room for further expansionary fiscal policy to boost growth. This situation weighs heavily on future growth prospects, having wide-spread negative effects on business operations, on the labour market – with the young and low-skilled being particularly hit, and on government finances - both on the revenue and expenditure side. At the same time, the global environment is becoming ever more competitive, with emerging economies climbing up the technology ladder. In the face of its deepest economic crisis since its inception, the EU must redouble its efforts to accelerate growth, productivity and job creation. There is no longer a distinction to be made between the short and the long-term as longer-term economic prospects have an immediate short-term impact on countries' borrowing costs. Longer-term reforms have to be pursued in parallel to shorter-term measures. The Europe 2020 strategy rightly puts an emphasis on the need for a new growth path that can lead to a smart, sustainable and inclusive economy, a path that can overcome the structural weaknesses in Europe's economy, improve its competitiveness and productivity and underpin a sustainable social market economy. The strategy defines where the EU wants to be by 2020 through five headline targets: 75% of the EU population aged 20-64 should be employed; 3% of the EU's GDP should be invested in R&D; the "20/20/20" climate/energy targets should be met. The share of early school leavers should be under 10% and at least 40% of the younger generation should have a tertiary l education attainment or equivalent. At least 20 million people should be lifted out of poverty and social exclusion. These targets are interrelated and critical to our overall success and require concerted efforts across Member States, supported by EU-level actions. |
