Employment policy

Creating more and better jobs is one of the main goals of the Europe 2020 strategy. The European employment strategy (EES), with its employment guidelines and supporting programmes such as the Employment and Social Innovation (EaSI) programme, is designed to contribute to growth and jobs, labour mobility and social progress.

Legal basis

Article 3(3) of the Treaty on European Union (TEU) and Articles 8-10, 145-150, 156-159 and 162-164 of the Treaty on the Functioning of the European Union (TFEU).


Important principles, objectives and activities mentioned in the Treaty include the promotion of a high level of employment by developing a coordinated strategy, particularly with regard to the creation of a skilled, trained and adaptable workforce and labour markets responsive to economic change. According to the horizontal clause in Article 9 TFEU, the objective of a high level of employment must be taken into consideration in the definition and implementation of Union policies and activities.


a.The early stages (1950s to 1990s)

As long ago as the 1950s, workers were benefiting from ‘readaptation aid’ in the European Coal and Steel Community (ECSC). Aid was granted to workers in the coal and steel sectors whose jobs were threatened by industrial restructuring. The European Social Fund (ESF) (5.10.2), created in the early 1960s, was the principal weapon in combating unemployment.

In the 1980s and early 1990s, action programmes on employment focused on specific target groups, and a number of observatory and documentation systems were established.

To encourage free movement and help workers to find a job in another Member State, the former SEDOC system was improved and renamed EURES (European Employment Service) in 1992. EURES is a network for cooperation between the Commission and the public employment services of the EEA Member States (plus Switzerland) and other partner organisations.

b.Towards a more comprehensive employment policy

1.The White Paper on Growth, Competitiveness and Employment (1993)

In a context of high unemployment in most EU countries, the White Paper launched a debate on Europe’s economic and employment strategy by bringing the issue of employment to the top of the European agenda for the first time.

2.The contribution of the Amsterdam Treaty (1997)

The new Employment title in the Amsterdam Treaty, which entered into force in May 1999, provided the basis for setting up the European Employment Strategy and the permanent, Treaty-based Employment Committee with advisory status to promote the coordination of the Member States’ employment and labour market policies. The sole competence for employment policy remains, however, with the Member States. The inclusion of a ‘social protocol’ in the Treaty enhanced the involvement of the social partners.

3.Luxembourg process: European employment strategy 1997-2004

The extraordinary Luxembourg Job Summit in November 1997 launched the European employment strategy (EES) together with the open method of coordination — the so-called Luxembourg process, which is an annual coordinating and monitoring cycle for national employment policies based on the Member States’ commitment to establishing a set of common objectives and targets. The strategy was built around the following components:

  • Employment guidelines, formulated by the Commission and adopted by the Council;
  • National action plans (NAPs);
  • Joint Employment Report, published by the Commission and adopted by the Council;
  • Country-specific recommendations (CSRs), formulated by the Commission and adopted by the Council.

The EES set a high level of employment on the same footing as the macroeconomic objectives of growth and stability.

4.The Lisbon strategy (2000-2010)

In 2000, the Lisbon European Council agreed on the new strategic goal of making the EU ‘the most competitive and dynamic knowledge-based economy in the world’, embracing full employment as an overarching objective of employment and social policy, and on concrete targets to be achieved by 2010.

The EES was reviewed in 2002 and relaunched in 2005, with the focus on growth and jobs and with the aim of simplifying and streamlining the Lisbon strategy. Revisions included the introduction of a multiannual time framework (the first cycle being 2005-2008). Since 2005, the employment guidelines have been integrated into the broad economic policy guidelines (BEPG).

5.The Europe 2020 strategy (2010-2020)

This 10-year strategy for jobs and smart, sustainable and inclusive growth defined for the first time a number of headline targets, including:

  • labour market: increase the labour market participation of people aged 20 to 64 to 75% by 2020;
  • social inclusion and combating poverty: lift at least 20 million people out of the risk of poverty and exclusion;
  • improving the quality and performance of education and training systems: reduce the proportion of early school leavers to 10% (from 15%), and increase the share of 30-34-year-olds having completed tertiary or equivalent education to at least 40% (instead of 31%).

All five headline targets must be translated by Member States into national targets, taking into account their relative starting positions and national circumstances.

The 10 integrated guidelines contain six broad economic policy guidelines (Article 121 TFEU) and four employment guidelines (Article 148 TFEU). The employment guidelines adopted by the Council in October 2010 provided for increasing labour market participation by women and men, reducing structural unemployment and promoting job quality; developing a skilled workforce responding to labour market needs and promoting lifelong learning; improving the quality and performance of education and training systems at all levels and increasing participation in tertiary or equivalent education; and promoting social inclusion and combating poverty.

In October 2015 the Council adopted revised guidelines showing a strong labour market orientation:

  • Boosting demand for labour (job creation; labour taxation; wage setting);
  • Enhancing labour supply, skills and competences (relevant skills and competences; necessary investment; tackling structural weaknesses in education and training systems; reducing barriers to employment, in particular for disadvantaged groups);
  • Enhancing functioning of labour markets (‘flexicurity principles’ to reduce labour market segmentation; involvement of social partners; improved active labour market policies; better public employment services; labour mobility);
  • Ensuring fairness, combating poverty and promoting equal opportunities (modernising social security systems, healthcare and long-term care systems; principles of ‘active inclusion’; targeted social policies to prevent early school leaving and social exclusion).
6.Supporting financing instruments and policy initiatives

The EU programme for employment and social innovation (EaSI) 2014-2020, adopted by Parliament and the Council, brings together three existing programmes:

  • PROGRESS (Programme for Employment and Social Solidarity), which provides for the generation of analytical knowledge and supports information-sharing and mutual learning;
  • EURES (European Employment Services), which is a job mobility network that provides information, guidance and recruitment/placement services EU-wide;
  • Microfinance and Social Entrepreneurship, which includes access to microfinance for individuals and micro-enterprises and capacity-building for micro-credit providers, and fosters social enterprises, i.e. businesses whose main purpose is social.

While the European Social Fund (ESF) can support a broad range of initiatives in the Member States, the European Council agreed in February 2013 to create a Youth Employment Initiative with a budget of up to EUR 6.4 billion (3.2 billion from the ESF and 3.2 billion from a specific budget line) for the period 2014-2020 (5.10.2). It targets young people aged 15-24 who are neither in employment nor in education or training (NEETs) in regions particularly affected by unemployment.

Funding instruments help to support policy initiatives in the field of employment.

In December 2012, the Commission proposed the Youth Employment Package, a series of measures to help Member States specifically tackle youth unemployment and social exclusion in the light of high and persisting youth unemployment:

  • a Council Recommendation on establishing a European Youth Guarantee (April 2013), which aims at ensuring that all young people under the age of 25 receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education;
  • the European Alliance for Apprenticeships (launched in July 2013) and complemented by a European Pact for Youth, launched in 2015 together with leading European businesses to establish apprenticeships;
  • a Council Recommendation on a Quality Framework for Traineeships (March 2014).

In December 2016 the Commission issued a communication on investing in Europe’s youth, bundling previous activities and establishing, inter alia, a new European Solidarity Corps with a focus on help in the event of natural disasters or social issues in communities. Some months later, in May 2017, the Commission proposed a dedicated legal basis and a budget of around EUR 340 million for this initiative.

Further policy initiatives were launched for other groups affected by the crisis. In February 2016, the Council adopted the Commission’s proposal for a Council recommendation on the integration of the long-term unemployed into the labour market. Its focus is on registration with an employment service, an individual in-depth assessment and a job integration agreement. As in the case of the Youth Guarantee, a monitoring system will be set up.

The New Skills Agenda for Europe, issued by the Commission in June 2016, aims to equip citizens with skills relevant for the labour market. Actions under this agenda so far include the Council Recommendation of 19 December 2016 on upskilling pathways for adults, the revision of the European Qualifications Framework (EQF) adopted by the Council in May 2017, and a Commission proposal for a decision by Parliament and the Council on the revision of the Europass Framework (October 2016), as well as an EU skills profile for third-country nationals (June 2017).

Role of the European Parliament

Parliament’s role in this area has developed gradually. Since the Amsterdam Treaty came into force, Parliament must be consulted on the employment guidelines before they are adopted by the Council. In addition, the open method of coordination has enhanced the role of parliaments — not only that of the European Parliament, but also that of the national parliaments, which should be involved in the setting and achievement of national targets.

Resolutions and other contributions reflect the fact that the European Parliament considers employment and social inclusion to be one of the EU’s most important priorities, and believes that the EU and the Member States need to coordinate their efforts.

During the 1996 Intergovernmental Conference, Parliament called for a specific employment chapter in the Amsterdam Treaty.

Parliament has given its strong backing to the Europe 2020 strategy. A number of the initiatives aimed at combating youth unemployment go back to Parliament proposing concrete, practical actions, namely the EU Youth Guarantee and minimum standards on internships. Since 2010 Parliament has strongly supported the establishment of the Youth Guarantee Scheme, and it monitors its implementation. In its resolution of 17 July 2014, it called for a European legal framework introducing minimum standards for the implementation of the youth guarantee, including the quality of apprenticeships and also covering young people aged 25-30. As regards the European Solidarity Corps, in its resolution of 6 April 2017 Parliament called on the Commission to include in its future legislative proposal a clear description of the budgetary arrangements in order to avoid a negative impact on existing EU programmes aimed at young people. Furthermore, Parliament supported the approach taken in the Recommendation on long-term unemployment in its resolution of 29 October 2015. Parliament’s intensive work on skills development had an impact on the New Skills Agenda for Europe issued by the Commission in June 2016. This work includes: Parliament’s resolution of 10 September 2015 on creating a competitive labour market for the 21st century: matching skills and qualifications with demand and job opportunities and its resolution of 19 January 2016 on skills policies fighting youth unemployment.

Susanne Kraatz