1. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT July 2007 Where is Lisbon? (and how far is it from Ljubljana) Janez Šušteršič

2. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT Outline Conceptual background Performance so far Issues for 2008 assessment –Governance –New priorities? –What can we do better together?

3. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT 1. CONCEPTUAL FRAMEWORK Lisbon 2000: –Aim at best performance in the world –Comprehensive vision of sustainable development –Many targets and instruments –Politicaly left of centre –Timing: mid-term assessment foreseen Lisbon 2005: –Improve performance to face globalisation and ageing challenges –Focus on growth and jobs –Fewer targets, structural reforms as the main instrument –Politicaly right of centre –Timing: three-year cycle(s)

4. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT Goals and priorities (2006) of the renewed Lisbon Strategy Increase investment in human capital through better education and skills Facilitate innovation, the uptake of ICT and the sustainable use of resources Increase and Improve investment in Research and Development Extend and deepen the Internal Market Ensure open and competitive markets inside and outside Contributing to a strong European industrial base Attract more people into employment and modernise social protection systems Improve the adaptability of workers and enterprises and the flexibility of labor markets Expand and improve European infrastructure Improve European and national regulation KNOWLEDGE AND INNOVATION (education, R&D, innovation) COMPETITIVE BUSINESS ENVIRONMENT (25% reduction of administrative burden,…) FLEXIBLE LABOUR MARKET oz. flexibility concept, identified as a good practice in some countries ENERGY AND CLIMATE CHANGE. Commission action plan, ambitious goals

5. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT 2. PERFORMANCE SO FAR The Commission’s Annual Progress Report – 12. December 2006 Main findings for the EU –Strong economic growth in EU … EU average: 2,8% in 2006 (2005: 1.7%). –Employment is up and unemployment down, favourable structural changes, EU average 64.7% in 2006 –Progress over the last year has in general been good towards boosting R&D and innovation, improving regulation and enhancing the business environment, especially for SMEs –Insufficient R&D investment - EU average 1.85 % in 2005 –Weak competition in many markets, especially in network services including energy, continues to hold Europe back.

6. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT

7. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT

8. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT Commission assessment: Slovenia "good progress" Positive –entrepreneurship and better regulation –launched most of the major reforms of employment policies –progress in enhancing the innovation and competition framework –progress towards the full liberalisation of energy markets and the creation of a second player in the market Challenges –improving long term fiscal sustainability –increasing the employment rate of older workers –strengthening the activation and prevention aspects of employment policy Recommendations: take further steps to strengthen the reform of the pension system and promote active ageing, with a view to increasing the employment rate of older workers and improving long-term sustainability enhance employment services in light of the move towards more flexible contractual arrangements and the already increased conditionality of benefits, giving high priority to offering services at an earlier stage of unemployment. Fields to focus on: –setting concrete and realistic targets for investment in R&D – strengthening the role of the new Office for Growth and of the Slovenian Technology Agency –strengthening the enforcement of the legal framework for protecting intellectual property rights –improving competition, notably in regulated trades and professional services, and enhancing the effectiveness of the Competition Protection Office –better promotion of environmental technologies and energy efficiency –shortening start-up times for businesses and reducing related costs –reducing the segmentation and integrating young people in the labour market –strengthening the link between the education system and the labour market

9. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT Ambrosetti assessment

10. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT Ambrosetti assessment – the speed of achieving LS goals

11. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT 3. GOVERNANCE Lisbon 2000 –Open method of coordination –Commision as headmaster –Structural indicators Lisbon 2005 –National ownership, Commision as partner –Integrated guideliness, country specific recommendations –Qualitative assessment, negotiations –More sophisticated methodology pending –National ownership

12. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT Process as good practice Overall Slovenia’s Development Strategy to address challenges of EU membership Framework for Economic and Social Reforms (measures proposed by a task force) Reform Programme for Achieving LS goals Coordination: Ministry for Growth Building support: negotiating on Social Agreement and on agreement with (some) opposition parties

13. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT 4. NEW PRIORITIES ? Environmental sustainability? Social cohesion? Education, culture? External dimenson? Macroeconomic sustainability? Integrating horizontal concepts rather than broadening: –Creativity as basis for innovation and human development –Energy and climate change – innovation for sustainability –Flexicurity as basis of European social model –Quality of public finances Focus on implementation: concrete actions rather than new concepts

14. THE GOVERNMENT OF THE REPUBLIC OF SLOVENIA INSTITUTE OF MACROECONOMIC ANALYSIS AND DEVELOPMENT 5. WHAT CAN WE DO BETER TOGETHER ? Community Lisbon Programme: –Needs to evolve from legal action plan into a genuine economic reform program –Monitoring? Benefits from coordination of structural reforms: –Spillovers –Sinergies EU Budget Necessary to improve the ability to act: federalism as delegation