I. Internal Policies

The successful passage to EMU and the full exploitation of the potential of the single market will enhance Europe as an economic entity, contributing to sustainable growth. Its competitiveness depends on dynamic enterprises and the skills and knowledge of its people. In order to turn growth into jobs, employment systems should be modernised. Beyond these economic goals, Europeans also want a cohesive and inclusive society based on solidarity, as well as a high quality of life, sound environment, freedom, security and justice. The internal policies of the Union should be more resolutely oriented towards meeting these objectives.

1. Setting the conditions for sustainable growth and employment

The process leading towards Economic and Monetary Union continues to be a major driving force for the Union. All the technical preparations are now in place to ensure that the euro will see the light of day on 1 January 1999. As a result of the enormous convergence efforts of the Member States, there is a good prospect that a large number of them will be ready for participation from the start. The move towards the euro will not only provide an anchor of stability, improve market efficiency and encourage investment. It will also open new possibilities for more effective macroeconomic management in Europe. The Amsterdam Resolution on Growth and Employment and the Stability and Growth Pact provide a favourable framework for economic growth and new job opportunities.

The Single Market can play a central role in furthering growth and employment, provided its potential is fully exploited. To this end, the Action Plan endorsed by the European Council of Amsterdam must be implemented in all its components. Making the rules more effective and removing all market distortions and sectoral obstacles will turn Europe into a dynamic and attractive market place. Moreover the Single Market must be there for the benefit of all citizens. The assets of the Single Market must be used to promote the Union’s interests and presence internationally.

With further integration, the strict application by the Commission of competition rules, including close surveillance of state aids, becomes ever more important for the market operators and will enhance the overall economic performance of the Union. Rules will be made simpler and surveillance and enforcement structures will be modernised in partnership with Member States, with a view to decentralisation where possible. The Union should also press for more international cooperation in competition policy.

Given their proven potential for job creation, improving the operating conditions for small and medium-sized enterprises in the Single Market remains a high priority. This must be done by reducing administrative and regulatory red tape, stimulating new forms of cooperation between small and large companies and improving SME access to finance and capital. The projected new EIB lending facility will be of particular importance. Moreover, the Union should continue to fund actions aimed at improving the operating conditions of SMEs.

Following the inclusion of sustainable development as one of the Union’s objectives into the Amsterdam treaty, progress must be made towards environmentally sustainable production and consumption patterns. The incorporation of the latest technological evolutions into environmental policy and the use of new instruments like market based incentives can actually enhance the competitiveness of European industry and services.

The continued development of the Transeuropean networks (TENs) will serve to enhance both sustainable development and the internal cohesion of the Union by tying regions closer together. This will need to be accompanied by a move towards sounder transport systems, drawing fully on new technology, to address the problems of congestion, pollution and climate change. TENs also have a particularly important role to play in creating new links with the Central and Eastern European candidate countries. It is precisely the trans-European nature of the benefits from these projects which justifies continued substantial contributions at the Union level towards their realisation.

Community funds can play a crucial role in getting TEN projects in transport, energy and telecommunications off the ground. The next financial period will see the main construction phase on many of the priority projects, involving higher overall spending than in the period 1994-99 during which the Community essentially financed preparatory works. Enlargement will extend the geographical coverage of the TENs, and consequently the financing needs. There is a range of sources of finance for TENs, including the Cohesion Fund, the European Regional Development Fund (ERDF) and the European Investment Bank/European Investment Fund (EIB/EIF). Effective coordination of these instruments, including development of public/private financing, is essential, but will not be sufficient to cover the identified needs in this sector. Additional funding must therefore be identified beyond present appropriations.

2. Putting knowledge at the forefront

The key feature of today’s world economy is a rapid shift towards globalisation and information and communication technologies. These technologies determine the global competitiveness of all economic sectors and foster the emergence of new immaterial goods.

In order to derive the maximum benefit from this process in terms of growth, competitiveness  and employment, special attention must be paid to the development, dissemination and use of these immaterial goods. Knowledge policies - research, innovation, education and training - are therefore of decisive importance for the future of the Union.

In response to the challenges of technological development and innovation coming at a time when Europe’s competitors are stepping up their efforts significantly, it is vital that the Community research and technological development effort be given new impetus. Community RTD must provide real added value in relation to national programmes. This is the main objective of the 5th framework programme, which will need to see its financial allocation increased above the level of the present programme. The Union must focus research activities on improving the competitiveness of the European economy, thereby promoting the creation of new jobs. It is particularly important that Europe should be able to transform scientific and technological breakthroughs into industrial and commercial successes. In this connection, innovation by small and medium-sized enterprises is a particularly important factor on which to build. The creation of innovative high-tech companies in Europe must be encouraged. The Union also has to improve on the dissemination of technology and the system of intellectual property rights for its discoveries.

Like research, education and training represent essential immaterial investments. The Union will go on giving priority to concrete initiatives to promote exchanges of young people, scientists and teachers along the lines of the Socrates, Leonardo da Vinci and Youth for Europe programmes. The success of schemes like the Erasmus programme should lead to new initiatives to promote transnational mobility for European citizens. An exchange programme for young apprentices should be developed rapidly. At the same time the European youth volunteer programme should be developed. The new generation of programmes would seek to encourage life-long training through innovative transnational projects and the exchange of good practice.

The information society holds major opportunities for Europe’s competitiveness and its development must be promoted in areas such as electronic commerce and the audiovisual sector. But it has also become a formidable medium for education, training and culture. Familiarity with these new technologies must therefore be improved, in particular in schools.

3. Modernising employment systems

In order to draw the maximum benefit from growth and competitiveness for employment, labour market and employment policies must be modernised. Whereas the responsibility for these policies is largely national, the Union has provided a reference framework building on the process started in Essen and amplified in Amsterdam. It should fully exploit all the possibilities offered by the new employment title of the treaty such as pilot projects, exchange of best practices, benchmarking exercises and specific recommendations to Member States. In this way, a true coordination of national employment policies will take place involving all relevant actors and stimulating social dialogue. The aim must be maximum flexibility for the enterprises and maximum security for the individuals.

The Community and its Member States will have to rethink a number of policies in order to achieve these aims: how to invest permanently in the skills of the existing work force; how to increase the participation rate by providing new forms of work organisation; how to encourage mobility; and how to anticipate and respond to restructuring by appropriately informing and consulting workers, improving their reintegration and stimulating entrepreneurship. The present social protection systems should be made more employment-friendly, unemployment schemes should be geared towards greater employability in the context of a move towards life-long learning. Furthermore, tax regimes should also provide the appropriate incentives towards job creation.

The reform of pensions and health care systems against the background of an ageing population presents the Member States and the Union with a particular challenge. It must be reconciled with the need for budgetary rectitude. Modernisation of protection systems must build on common analysis, coordination of policies and joint dialogue with the social partners. The Union will continue to serve as a forum for promoting better mutual understanding of long-term perspectives and for identifying common challenges. Where necessary, regulatory initiatives can provide a new common framework, in particular for pension funds in the euro financial area.

4. Improving living conditions

The overall growth and employment prospects in the coming decade are encouraging. At the same time, there could still be very different patterns of employment and social development within the Union, or within individual Member States. Special efforts will be required to ensure that the benefits of growth can be used to promote a more cohesive and inclusive society. Beyond the targeted use of structural funds and other Community instruments, the Union can play a supporting role by encouraging best practices and facilitating cooperation in the fight against social exclusion and all forms of discrimination.

Recent events have increased the sensitivity of Europeans as regard public health. There is an urgent need to draw the lessons from this situation, notably for improving food safety. As a matter of priority, a reflection is needed on the system of authorisations for the production and distribution of products with an impact on public health. In this context, Article 129 as complemented by the Amsterdam Treaty should be fully exploited. The Union should also defend its approach and high standards in this field at the international level in accordance with multilateral rules.

In order to be able to respond to the environmental challenges in an enlarged Union, a better implementation and enforcement of the environmental acquis must be ensured. Further efforts will have to be made towards integrating environmental considerations into the design and implementation of all relevant Community policies, thus responding to public demand for creating higher "quality of life".

Globalization and increased economic integration imply that cost-effectiveness becomes a crucial determinant of sound environmental policy and so does an extended cooperation with the stake-holders, as successfully practised in the Auto/Oil Programme. This not only preserves and improves the situation within the Union, but also presents a way to achieve the objectives the Union is committed to in the follow-up of the Special Session of the United Nations General Assembly on the environment and sustainable development.

The right to move and settle freely is fundamental to the European citizen. The free movement of persons must however be accompanied by an adequate level of security and justice if it is to be seen as a genuine advantage by all. In Amsterdam, this twin requirement was written into the Treaty in the form of a progressive establishment of an area of freedom, security and justice. The integration of the Schengen cooperation into the Treaty amplifies the acquis in this area.

Migratory pressures on Europe will remain strong in the coming years and will, as in the past, have a strong impact on economic and social development. Europe will continue to attract people in need of international protection.

Crime, fraud, corruption, trafficking in human beings or smuggling of drugs and other illicit goods all call for clear common responses. With the new Treaty there is now scope for developing a comprehensive Union policy covering border control, immigration, asylum, the fight against crime in all its forms as well as judicial cooperation in civil and criminal matters. The Action Plan against Organised Crime agreed in Amsterdam bears witness as to the political determination to move forward immediately in this area of great interest to the European Citizen.