VZCZCXRO8052
PP RUEHIK
DE RUEHBS #1736 3641338
ZNR UUUUU ZZH
P 301338Z DEC 09
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC PRIORITY
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS BRUSSELS 001736 
 
SENSITIVE, SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN EUN
SUBJECT: EU prepares "EU2020" strategy to guide post-crisis 
development 
 
¶1. (U) The European Union is preparing a new vision for economic 
growth over the coming decade.  Dubbed "EU2020" the new strategy 
will replace the Lisbon Strategy that was launched with fanfare in 
2000 with the aim of making the EU "the most dynamic and competitive 
knowledge-based economy in the world ... by 2010" but fell 
considerably short of expectations.  European Commission President 
Barroso launched the EU2020 process on November 24 with a call for 
public comments on the Commission's vision. 
 
¶2. (U) The European Commission's goal is "greener and socially 
inclusive growth."  EU 2020 will take as its starting point the 
achievements (and lessons learned) of the Lisbon Strategy, as well 
as the coordination efforts behind the response to the recent crisis 
in the European Economic Recovery Plan.  The Commission's strategy 
recognizes that the financial and economic crisis has taken a heavy 
toll on public finances, businesses, employment and households.  New 
policy actions will therefore have to acknowledge limited budgetary 
margin for maneuver.  However, the Commission feels that this also 
constitutes an opportunity, since as public sector deficits are 
brought back under control there is the possibility to reshape 
public expenditure in ways that will achieve the stated EU2020 
goals. 
 
¶3. (U) The Commission's call for stakeholder input (available at 
ec.europa.eu/eu2020) proposes three focus areas for EU2020: 
 
- Creating value by basing growth on knowledge 
EU2020 sees knowledge (education, research, innovation and 
creativity) as the engine for growth.  It therefore aims to 
strengthen education as one of the most effective ways of fighting 
inequality and poverty.  The EU aims to create an efficient, 
effective and well-resourced European Research Area to increase 
research efforts by pooling resources and jointly developing major 
research infrastructures across the EU.  Incentives for the growth 
of knowledge-based firms, such as better access to credit, are 
envisaged to provide more attractive conditions for innovation and 
creativity. 
 
- Empowering people in inclusive societies 
EU2020, with its focus on a smarter, greener and more competitive 
economy, aimsto boost new job creation, responding to the hih 
levels of unemployment in the post-crisis European economy.  But 
while this transition takes place, major efforts will be essential 
to prevent people from being excluded and to ensure social cohesion. 
 Deploying "flexicurity" (a concept attempting to conciliate both 
employers' and workers' needs - flexibility and security - by 
ensuring that workers have safe transitions inside the labor market) 
is considered essential, in conjunction with tackling inefficient 
labor market segmentation and life-long learning programs to manage 
the transitions between jobs and between training and jobs. 
Self-employment will be encouraged, through the removal of 
disincentives, and existing social security systems will need to be 
modernized, taking into account the ageing of the European 
population. 
 
- Creating a competitive, connected and greener economy 
EU 2020 calls for a fresh approach to industrial policy to support 
industry by putting the emphasis on sustainability, innovation and 
the human skills.  Increases in productivity will need to be 
realized that, together with the roll-out of high speed internet and 
the development of smart transport and energy infrastructures, will 
contribute to increase the competitiveness of Europe's economy while 
reducing carbon emissions and increasing transport safety and energy 
security. 
 
¶4. (SBU) The Commission proposes that the European Council (bringing 
together Member State governments) and the European Parliament both 
be more involved in designing and championing EU2020 than they were 
in the previous strategy.  The incoming Spanish Presidency has 
declared economic reform a top priority, and has said it will take a 
leading role in the design and approval of an EU2020 strategy that 
brings Europe "jobs of quality" and coincides with a determination 
that the EU has exited from the financial crisis.  They acknowledge 
that the Lisbon Strategy suffered from unrealistic goals and the 
lack of Member State buy in.  They expect that new European Council 
President Van Rompuy - an economist by training - will be a strong 
partner of both the Spanish and the European Commission in moving 
EU2020 forward; Van Rompuy has already indicated that he plans to 
convoke the EU's national leaders in February for an informal 
European Council session dedicated to the economy. 
 
¶5. (SBU) The Commission hopes to complete a set of "integrated 
guidelines" for the Members States to approve at their Spring 
European Council meeting.  However, Spanish officials, citing 
concerns that the introduction of a new European Commission in early 
2010 may slow Commission work, expect that this process will not be 
complete until the June 2010 European Council. 
 
MURRAY