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Growth and jobs

Growth and jobs

Outline of the Community (European Union) legislation about Growth and jobs

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > European Strategy for Growth > Growth and jobs

Growth and jobs

“Employment and social policy” >

The aim of the Lisbon Strategy, launched in 2000, was to make Europe “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion”. According to the mid-term review of the Lisbon Strategy, the results are, at best, mixed. The gap in terms of productivity and growth between Europe and its economic partners has continued to widen, and the ageing population represents a further challenge.

The European Council has therefore decided to relaunch the Lisbon Strategy through a partnership for growth and jobs. The objective of this partnership will remain firmly anchored in sustainable development. However, in order to achieve it, Europe needs to focus on a more restricted number of priorities. Indeed, the achievement of stronger, lasting growth and the creation of more and better jobs would unblock the resources needed to realise our more general economic, social and environmental ambitions.

  • A new start for the Lisbon Strategy (2005)
  • The Community Lisbon Programme
  • The Community Lisbon Programme: proposal for 2008–2010
  • Strategic report on the renewed Lisbon strategy for growth and jobs: new cycle 2008-2010
  • Participation of young people with fewer opportunities

MAKING EUROPE A MORE ATTRACTIVE PLACE IN WHICH TO INVEST
In order to boost growth and employment, Europe needs to become more attractive as a place in which to invest. Given the significant contribution made by small and medium-sized enterprises (SMEs) to creating jobs and growth, Europe must first combat the obstacles to the creation of SMEs and stimulate entrepreneurship. Furthermore, in spite of the progress achieved since the launch of the Lisbon Strategy, there is still not enough available risk capital to launch young businesses, and the current tax provisions discourage the retention of profits to build up equity.

  • Financing SME Growth
  • The contribution of taxation and customs policies to the Lisbon Strategy

Ensuring open and competitive markets inside and outside Europe
Competition on the internal market stimulates productivity and innovation. European competition policy plays a key role in shaping competitive markets. It must be continued within an enlarged Europe and in certain markets which have not revealed all their potential. This involves the elimination of barriers to competition and the rechannelling of State aid into innovation, research and development, and risk capital. Outside the EU, commercial policy must ensure that European businesses have access to the markets of third countries and comply with the rules guaranteeing fair competition.

  • A proactive competition policy for a competitive Europe
  • State Aid Action Plan
  • A stronger partnership to deliver market access

Improving European and national legislation
Simplifying legislation helps business and in particular small and medium-sized enterprises (SMEs) by eliminating unnecessary administrative formalities. The European Commission and the Member States have already launched initiatives to reduce administrative costs. This would benefit European businesses in terms of the productivity and competitiveness, and increase their ability to adapt, innovate and create jobs. It would also make it easier to set up new businesses.

  • Fewer administrative formalities for more growth
  • Simplifying the regulatory environment

Expanding and improving European infrastructure
Investment in transport must respond to the economic, social and environmental needs of society. A modern infrastructure is an important factor in competitiveness when it comes to attracting businesses in that it facilitates exchanges and mobility. In addition, climate change highlights the need for more sustainable mobility. The aim of intermodality is to channel traffic into more environmentally-friendly means of transport which are safer and more energy-efficient. Alongside this, new technologies make for a more efficient transport system.

  • Keep Europe moving – Sustainable mobility for our continent. Mid-term review of the 2001 White Paper

KNOWLEDGE AND INNOVATION FOR GROWTH
Knowledge and innovation are essential for the growth of productivity. Productivity growth is a critical factor for Europe, because in the context of global competition it must contend with competitors benefiting from cheap labour and natural resources.
Increasing and improving investment in research and development

  • The European Research Area (ERA): new perspectives
  • An innovation-friendly, modern Europe
  • A broad-based innovation strategy for the EU
  • Placing taxation at the service of research and development

Facilitating innovation and the adoption of information and communication technologies (ICT)
In order for research to lead to growth, research results must be used for the purpose of innovation. More cooperation between universities and businesses makes for a better transfer of ideas in return for increased participation on the part of businesses in the financing of universities. The result is higher quality, more profitable research. The Competitiveness and Innovation Framework Programme supports actions which promote the use of information technologies, environmental technologies and renewable energy sources.

  • Challenges for the European Information Society beyond 2005

Innovation serving sustainable development
Innovation and technological development are key factors for environmentally friendly economic growth and for ensuring the sustainability of resources (particularly energy resources). The development of environmental technologies can also open up new markets, which will boost the competitiveness of businesses and create jobs.

  • Strategy for sustainable development
  • Action plan in favour of environmental technologies
  • Life sciences and biotechnology
  • Green Paper: A European strategy for sustainable, competitive and secure energy

Contributing to the creation of a strong European industrial base
The technological potential of European industry is still not being fully exploited. A common European approach to challenges in the field of research, regulation and financing can create synergies which make it possible to achieve large-scale progress and provide a more appropriate response to the needs of society. Furthermore, a financial contribution from the public sector can foster the sustainable development of specific products and services while improving European competitiveness on an international level. The Galileo project and mobile telephony are good examples of partnerships.

  • European industrial policy

CREATING MORE AND BETTER JOBS
Europe needs more and better jobs. Demographic change, which is exerting increased pressure in terms of employment needs, makes this an absolute necessity from an economic and social viewpoint.

  • Promoting solidarity between the generations
  • The demographic future of Europe – from challenge to opportunity
  • Green Paper “Confronting demographic change: a new solidarity between the generations”
  • Promoting young people’s full participation in education, employment and society

Attracting more people to the labour market and modernising social protection systems
The Member States are being called upon to set employment rates for 2008 and 2010 and adopt the measures to be implemented in their national reform programmes. The integrated guidelines for employment help them to select the most effective instruments. The challenge lies in attracting more people to the labour market and in keeping them there: particular attention is focused on the unemployed, young people and older workers. In this context, there is also a need to reform the pension and healthcare systems in order to ensure their viability and provide reliable social protection.

  • European values in a globalised world

Increasing the adaptability of workers and businesses and the flexibility of the labour markets
Rapidly changing economies need highly adaptable workers who must be capable of developing their skills to meet the needs of high-growth sectors. However, such flexibility must be accompanied by social security provision which also covers periods of change. Social security systems must be modernised in order to cope with these new challenges. In order to meet market needs more effectively, it is essential that obstacles to labour mobility be removed.

  • Green Paper on Modernising Labour Law
  • Workers’ mobility: facilitating the acquisition and preservation of supplementary pension rights

Investing more in human capital through better education and skills
Education and training play an essential role in a knowledge-based economy in that they support growth and employment by providing highly qualified and adaptable labour. They also strengthen social cohesion and active citizenship. Access for everyone to education and training should be ensured through the European area of lifelong learning, which should become a world reference by 2010.

  • European Job Mobility Action Plan (2007-2010)

The EU Cohesion policy for 2007-2013 and the role of the Structural Funds and the Cohesion Fund
The Community strategic guidelines lay down priorities for cohesion policy. These guidelines identify the fields in which cohesion policy can help to achieve the objectives of the Lisbon Strategy and of the integrated guidelines for growth and jobs. The programmes and national projects under the Structural Funds and the Cohesion Fund therefore target growth, employment, innovation and the knowledge-based economy, as well as the creation of physical infrastructure.

  • Research and innovation in support of the competitiveness of the European regions

Investment research and financial analysts

Investment research and financial analysts

Outline of the Community (European Union) legislation about Investment research and financial analysts

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: transactions in securities

Investment research and financial analysts

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 12 December 2006 entitled “Investment research and financial analysts” [COM(2006) 789 final – not published in the Official Journal].

Summary

Investment research provides financial information to ensure appropriate pricing, help issuers to raise capital and ensure deep and liquid secondary markets for financial instruments.

Financial analysts carry out this type of research by synthesising raw information to make it accessible. This work helps investors make decisions and facilitates research, investment advice and marketing communication by intermediaries.

Analysts are of great assistance for the financial markets. They do, however, face a variety of conflicts of interest. The interests of a firm or of clients may, for example, conflict with the interests of those to whom the research is directed. The Commission is therefore considering measures to improve the value and integrity of investment research.

This communication echoes the work done by the Forum Group on Financial Analysts and the International Organisation of Securities’ Commissioners Technical Committee (OICV-IOSCO). Work of the Forum Group and the OICV-IOSCO

The focus of the Forum Group’s report is the prevention, management, monitoring and disclosure of conflicts of interest relating to investment research. It gives recommendations to analysts involved in securities offerings or other finance work. It also advises companies on best practice, dissemination of investment research to the retail market, remuneration of analysts and securities dealing by analysts.

The OICV-IOSCO is focused on analysts working in integrated investment banks or broker-dealers, although the effects of conflicts of interest also affect other individuals. The report seeks to implement consistent rules relating to:

  • identification, avoidance, management, disclosure and elimination of conflicts of interest;
  • the integrity of analysts and their research;
  • education of investors concerning the conflicts of interest faced by analysts.

Market Abuse Directive and Markets in Financial Instruments Directive (MiFID)

Successive Directives on market abuses require information which advises an investment strategy to be fair and disclose the existence of conflicts of interest. The Commission has set up a disclosure regime for conflicts of interest that could influence investment data.

As soon as a firm provides investment services, it must be authorised by the MiFID and comply with its requirements. The MiFID requires firms to:

  • take steps to identify conflicts of interest;
  • disclose their conflicts of interest policy;
  • define and implement measures designed to serve their clients’ interests;
  • indicate where the steps taken are not sufficient to ensure the client’s interests;
  • inform their clients of the nature and origin of conflicts of interest.

Conflicts of interest – investment research

A recommendation described as “investment research” or something similar, or presented as objective and independent, is deemed to qualify as investment research. Generally directed at the client, such a recommendation may not constitute advice, as it must correspond to the needs of a specific client or be based on the specific situation of the client. Investment firms must effectively separate activities that serve clients and those that serve business interests. Thus, a firm that gives recommendations not constituting research must indicate that these are not given in accordance with standards designed to promote objectivity.

To guarantee their objectivity, investment firms must prevent persons involved from having certain dealings, particularly if they have knowledge of the timing or content of research before the public.

Firms disseminating information produced by third parties are not bound by these measures, provided that they have not altered this information and that they have verified the application of MiFID requirements.

Four outstanding issues

Work done by the Forum Group and the OICV-IOSCO has left four issues outstanding. The first relates to the possibility of mandatory registration by analysts of their qualifications. However, problems of analyst subjectivity do not derive from their lack of competence, but rather from the failure of firms to manage conflicts of interest affecting their research.

The second issue relates to the research services of independent firms and investment banks. Although the former are financed by their clients and the latter more indirectly, there are not necessarily quality differences between the two. For the research they carry out to be treated fairly, the MiFID permits investment firms to accept inducements, as long as these improve the quality of services and are disclosed to the client. This authorisation is valid for ‘bundled’ or ‘softed’ services provided by brokerage houses to portfolio managers.

The third issue relates to implementation of a best practice code to cover issuer relations with analysts. The rules set out by the Market Abuse Directive and the MiFID prohibit issuers from having undue editorial influence over research. They also prohibit them from disclosing price-sensitive information to analysts ahead of its release to the rest of the marketplace. For the Commission, the development of a best practice code will make relations between issuers and analysts more professional.

The final point relates to investor education. The Commission considers that it is the Member States, trade associations and investment firms that must take action in this area. The Commission itself undertakes to inform and educate consumers, notably through a conference that aims to bring together best practice in consumer education and to find out how to improve their financial literacy.

International investments: towards a comprehensive European policy

International investments: towards a comprehensive European policy

Outline of the Community (European Union) legislation about International investments: towards a comprehensive European policy

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External trade

International investments: towards a comprehensive European policy

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Towards a comprehensive European international investment policy [COM(2010) 343 final – Not published in the Official Journal].

Summary

The Commission presents a strategy to prepare a new European policy for international investment.

Since the adoption of the Lisbon Treaty, the European Union (EU) has exclusive competence to introduce the progressive liberalisation of Foreign Direct Investment (FDI) transactions *. A new European policy should thus enable the treatment of foreign investors in the EU to be improved, and access for European investors to third-country markets to be facilitated.

The foundations of a common policy

European investors in third countries should be able to benefit from a favourable and stable environment, particularly in countries where the legal, political or economic conditions are insufficient to guarantee the certainty of investments. Thus, at the present time, EU countries conclude Bilateral Investment Treaties (BITs) with third countries, in order to obtain guarantees on the treatment of their investors. However, this situation creates unequal conditions of competition between European investors.

In the future, the EU should obtain guarantees through trade negotiations. Its trade partners should commit to protecting and facilitating the flow of all forms of European investment. The EU may also conclude stand-alone investment agreements with certain countries (in particular with China or Russia), in order to increase the degree of cooperation in one specific trade sector or for all types of investments.

Foreign investors in the EU should in turn benefit from a level playing field and uniform and optimum conditions.

Finally, a common policy should enable investors’ needs to be better addressed at every stage (planning, admission to a country, etc.). EU countries should also be able to adopt measures to promote investment, at national, regional and local levels, in particular through tax incentives or technical assistance.

A common negotiation agenda

Each trade partnership is unique, according to existing relations between partner States. Nevertheless, the Commission identifies a number of principles which should frame its future negotiations as regards international investments. These are:

  • selection criteria for partner countries, which take into account the guarantees offered to European investors (fair and predictable treatment, political and institutional stability, economic potential, etc) and the degree of trade cooperation;
  • the treatment of investment-related fields, in order to cover all transactions concerning the acquisition or establishment of enterprises (costs of fund transfers, payments, intellectual property rights, etc);
  • investment protection standards, specifically concerning the fair treatment of investors, legal certainty, the principle of proportionality of public action and also expropriation rights and the freedom to transfer funds;
  • the implementation of commitments concerning FDI, for example to guarantee transparency or the proper regulation of litigation;
  • States’ international responsibility, in particular concerning the payment of financial compensation.

These principles are to be formalised by a Commission Recommendation.

Key terms
  • Foreign Direct Investment: any foreign investment which serves to establish lasting and direct links with an undertaking whose capital is employed to carry out an economic activity. Such investments may enable shareholders to participate in the management or control of a company.

Related Acts

Proposal for a Regulation of the European Parliament and of the Council establishing transitional arrangements for bilateral investment agreements between Member States and third countries [COM(2010) 344 final – Not published in the Official Journal].
The Commission proposes a transitional framework for implementing international investment agreements. This framework should allow existing agreements to be maintained and conditions to be laid down for future agreements.
Codecision procedure: (COD/2010/197)

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

A new start for the Lisbon Strategy

A new start for the Lisbon Strategy

Outline of the Community (European Union) legislation about A new start for the Lisbon Strategy

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

A new start for the Lisbon Strategy (2005)

A mid-term look at the Lisbon strategy shows the outcomes to be somewhat disappointing, particularly with regard to employment. In order to give the strategy some fresh momentum the Commission proposes a simplified coordination procedure and a focus on the national action plans (NAP). The emphasis is no longer on targets, of which the only one to be retained is the figure of 3% of GDP to be devoted to research and development by 2010. There is a switch of emphasis in the Communication away from the medium and long term in favour of the urgent action needed in the Member States.

Document or Iniciative

Communication to the spring European Council of 2 February 2005 entitled “Working together for growth and jobs. A new start for the Lisbon strategy”. Communication from President Barroso in agreement with Vice-President Verheugen. [COM(2005) 24 final – Not published in the Official Journal].

Summary

Taking stock five years after the launch of the Lisbon strategy, the Commission finds the results to date somewhat disappointing, and the European economy has failed to deliver the expected performance in terms of growth, productivity and employment. Job creation has slowed and there is still insufficient investment in research and development.

The Commission based its findings on the November 2004 report by the high-level group entitled “Rising to the challenge: the Lisbon strategy for growth and employment”. Requested by the March 2004 European Council, this evaluation of progress achieved with the Lisbon strategy is extremely critical: lack of political resolve and inability to complete the internal market in goods and establish the one for services. The report is also critical of a top-heavy agenda, poor coordination and irreconcilable priorities.

The Commission has therefore decided to focus attention on the action to be taken rather than targets to be attained. The date of 2010 and the objectives concerning the various rates of employment are thus no longer put forward as priorities. This Communication fits into this context as a signal for relaunching policy priorities, particularly with regard to growth and employment.

More growth

The Member States, in order to achieve this progress, must focus their efforts on the reforms agreed as part of the strategy and pursue stability-orientated macroeconomic policies and sound budgetary policies. A new partnership for growth and employment is essential in order to give a fresh start to the Lisbon strategy. Accordingly, in order to stimulate growth, the Commission intends to:

  • make the European Union (EU) more attractive to investors and workers by building up the internal market, improving European and national regulations, ensuring open and competitive markets within and outside Europe, and lastly by extending and improving European infrastructures;
  • encourage knowledge and innovation by promoting more investment in research and development, by facilitating innovation, the take-up of information and communication technologies (ICT) and the sustainable use of resources, and by helping to create a strong European industrial base.

More and better quality jobs

The Commission intends to review the European employment strategy in 2005. The Commission’s new proposal concerning the financial framework for the period 2007-2013 moreover reflects a switch of emphasis in favour of growth and employment. To create more and better jobs, the Commission intends to:

  • attract more people to the employment market and modernise social protection systems. The Member States and the social partners must implement policies to encourage workers to remain active and dissuade them from leaving the world of work prematurely. They must also reform the social protection system in order to achieve a better balance between security and flexibility;
  • improve the adaptability of the workforce and business sector, and increase the flexibility of the labour markets in order to help Europe adjust to restructuring and market changes. Simplifying the mutual recognition of qualifications will make labour mobility easier throughout Europe. The Member States should remove all restrictions in this area as quickly as possible;
  • invest more in human capital by improving education and skills. The Commission intends to adopt a Community lifelong learning programme. The Member States will also submit national strategies in this area in 2006.

Better governance

The Commission also stresses the need for responsibilities to be shared more clearly and more effectively. Overlapping, an excess of red tape and not enough political ownership are holding up progress. It will put forward a Lisbon action programme in order to clarify what needs to be done.

The Commission will propose simplified coordination with fewer and less complex reports. It is also proposed that the national programmes concerning the Lisbon strategy be presented in a format bringing together three coordination processes:

  • labour market policies (the Luxembourg process);
  • microeconomic and structural reforms (the Cardiff process);
  • macroeconomic and budgetary measures (the Cologne process).

This will enable the European Council to put forward practical guidelines every spring and make it easier for the Commission to monitor progress.

It is also planning to put forward integrated guidelines for both employment and the broad economic policy guidelines in a single document. These guidelines will thus simultaneously cover macroeconomic policies, employment and structural reforms.

The Commission is also proposing that Member States should appoint a “Mr” or “Ms Lisbon” at government level to oversee the implementation of the reforms agreed under the Lisbon strategy.

This new reporting process will provide a mechanism through which the European Council and the European Parliament can focus on key policy issues. There will henceforth be a single Lisbon report at EU and at national level on the progress made.

Related Acts

Presidency Conclusions (FR) (pdf ) of the Spring European Council in Brussels on 13/14 March 2008 [Not published in the Official Journal].

On the basis of Commission documents and in the light of the work carried out by the Council, the European Council launched the second cycle of the renewed Lisbon strategy for growth and jobs for the period 2008-2010, i.e. the Lisbon Community Programme (LCP). The European Council confirmed the integrated guidelines and the recommendations for each country. It also reaffirmed the four priority areas of the renewed Lisbon Strategy: investing in knowledge and innovation; unlocking business potential, especially of small and medium-sized enterprises (SMEs), and modernising labour markets; and developing an energy-efficient low-carbon economy. On the basis of the measures proposed by the Commission in its Communication of 11 December 2007 entitled “The renewed Lisbon strategy for growth and jobs: launching the new cycle (2008 -2010)” and the work of the European Parliament and the Council, the European Council also approved a number of specific measures to be implemented.

Presidency Conclusions of the Spring European Council in Brussels on 8/9 March 2007 [Not published in the Official Journal].

Presidency Conclusions of the Spring European Council in Brussels on 23/24 March 2006 [Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament of 20 July 2005: Common actions for growth and employment: The Community Lisbon Programme [COM(2000) 330 final – Not published in the Official Journal].


Presidency Conclusions
(pdf ) of the Spring European Council in Brussels on 22/23 March 2005 concerning the mid-term review of the Lisbon strategy [Not published in the Official Journal].
The spring 2005 summit of Heads of State or Government saw the adoption of the simplified Lisbon objectives proposed on the occasion of the mid-term review. Yet the Presidency conclusions refer to nearly 100 different objectives. These objectives stress the implementation of the reforms needed for growth and employment.

Commission Communication of 20 April 2005 entitled “Mobilising the brainpower of Europe: enabling universities to make their full contribution to the Lisbon Strategy” [COM(2005) 152 final – Not published in the Official Journal].