EUROPEAN PAPERS ON THE NEW WELFARE

Active Ageing: the EU Policy Response to the Challenge of Population Ageing

4. Stockholm and Barcelona targets

The following section will analyze the Stockholm and Barcelona targets which constitute the core of the active ageing policies at EU level.

4.1 Stockholm Target: Increasing the Employment Rate of the Older Workers

At the Lisbon European Council (March 2000) the European Union set for itself a new strategic goal for the next decade to become “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”. The Council considered that the overall aim of these measures should be to raise the overall EU employment rate to 70% and to increase the number of women in employment to more than 60% by 2010.
The Lisbon strategy was strengthened at the Stockholm European Council (2001) which added one additional target: the employment rate of the older workers (55-64) will be 50% by 2010, known as Stockholm target. The Stockholm target has been included in the European Employment Guidelines of the year 2001, 2003 as well as in the new set of 2005 Guidelines (Guideline No. 17) which are valid for the period 2005-2008.

4.2 Barcelona Target: Delaying the Exit from the Labour Market

Following the Lisbon European Council which stressed the need to study the evolution of social protection, giving particular attention to the sustainability of pension system, broad principles were approved in 2001 by the Goteborg Council (2001) with a view to modernizing pension systems and to maintain their financial sustainability.
The Laeken European Council of 2001, besides recommending that the open method of coordination should be used in pensions, adopted 11 common objectives for a European Strategy for adequate, sustainable and adaptable pensions. Higher employment rates for older workers were highlighted as an important element in making pension systems durable. It was seen as essential that the long standing practice of off-loading employment problems on to the pension system through the early retirement patterns had to cease (Nielsen, 2005).
In February 2002 the Joint Report “Increasing Labour Force Participation and Promoting Active Ageing” adopted a life cycle approach to promote active ageing and discourage early retirements. The Report focus on two general policies: first, to ensure that the present and future working generations will remain active as they grow older and secondly, on the ways “to prolong the participation of today’s older workers, in particular those over 50 being at risk of early retirement”.
All these initiatives culminated with the Barcelona target. In March 2002, Barcelona European Council concluded that “a progressive increase of about five years in the effective average age at which people stop working in the European Union should be sought by 2010”. The age was estimated at 59.9 in 2001. The Barcelona target have been included in the new set of European Guidelines for the employment polices of 2003, the 5th guideline “Increase the Labour Supply and Promote Active Ageing” as well as in the new set of European Guidelines valid for the period 2005-2008.
To sum up, the Stockholm and Barcelona targets constitute the core of the active ageing policies and are ambitious targets. Therefore meeting these targets in the remaining 3 years before 2010 will constitute one of the greatest challenges for the EU member states.

5. Progress towards the Stockholm and Barcelona targets

In the following section the paper will asses progress against the Stockholm and Barcelona targets. First the indicators of assessment will be analysed and then the progress achieved from 2001 to 2006 towards meeting the objectives will be scrutinised.

5.1 Indicators of assessment

The EU in the Framework of the Stockholm and Barcelona targets has identified a set of indicators which allow for progress to be monitored and assessed. The indicators to measure progress (see Table 1) are the average exit age (Barcelona target), the employment rate of 55-64 years-old (Stockholm target) as well as activity rate and employment rate. The average exit age stood at 59.9 years in 2001. Thus, the Barcelona target commits the Union increase by five years more than the average exit age, i.e. to about 65 years by 2010 (see table 2). The employment rate of 55-64 age-group stood at 38.8% in 2001 (EU-15) and the Stockholm target commits the Union to increase the employment rate of older workers of 50% by 2010. Whereas the two other indicators — activity rate and unemployment rate — stood at 41% and 6.8% respectively in 2001, the picture is more complex here since low unemployment rates may result from low activity and low exit age and not necessarily from high employment rates.
Some important differences between the Barcelona and Stockholm measurements that need to be highlighted are the following:
• The Stockholm target is about increasing the employment of those aged 55-64. This requires the reduction in unemployment and inactivity and the progress is monitored through the employment rate. The Barcelona target is about delaying the age at which individuals withdraw from the labour force into inactivity and monitored by changes in the activity rate. It also takes the unemployment into account.
• The Stockholm target refers to those aged 55-64, whereas the Barcelona target does not set any specific age threshold. Therefore, when monitoring the average age of withdrawal from the labour market, the age-span is broader, and it has been defined as 50 to 70+ years, that is, including the age-class 50-55 as well as the over-65s.
In absolute terms, reaching the 50% employment rate target for older workers will imply an increase in employment for this group by 7.4 million between 2002 and 2010 (Joint Employment Report, 2002). As for the Barcelona target, two thirds of the workers the are currently 46-55 years old would have to remain in the labour force by 2010, an equivalent increase of 7-9 million, (Nielsen, 2005).

Table 1: Indicators for Stockholm and Barcelona targets
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Source: DG EMPL and Eurostat (2006).

5.2 Progress Against the Stockholm and Barcelona Targets

The analysis of the progress against Barcelona and Stockholm is based on the EU active ageing policy-related documents (Yearly Joint Employment Reports and Eurostat).
While some progress has been made towards reaching the Stockholm and Barcelona targets, the overall picture is mixed. On the one hand, the reforms carried out under the Stockholm and Barcelona targets in many member states have proved their worth in improving older people employment and the reform of the pension systems. Therefore, there have been significant changes in national employment policies, with a clear convergence towards the common EU objectives set out at the Barcelona and Stockholm Summits (COM, 2002). As table 2 shows, in this direction goes the positive result of a group of eight countries which in 2005 achieved Stockholm target (DK, EE, IR, CY, PT, FI, SE and UK). Moreover, these countries are also the top-performers even for the Barcelona target, with exit ages over 62 years. On the other hand, EU progress as a whole towards both the Stockholm and Barcelona targets — based on the present facts — is not very encouraging or even worrisome.
As regards the Stockholm target, the employment rate of older workers in 2005 stood at only 42.5% for the EU-25, that is, 7.5 percentage points below the 2010 Stockholm target. What is more, there is a second group of countries (BE, IT, LU, MT, AT, PL, SL and SK) where the situation is really worrisome since the employment rate of older workers ranges from 27.2% (Poland) to 31% (other countries) (see table 2 below). In relation to the Barcelona target, the situation for the exit age from the labour market, is much less optimistic. This is so because, first, no member state has reached the Barcelona target until 2004 and the figures vary substantially between them, ranging from 57.7 years (Poland, Malta and Luxembourg) to 62.8 years (Sweden). The member states lagging behind are the same as those with lower employment rates. Second, the EU average exit age stood in 2004 at only 60.7 years, from the initial situation (2001) of 59.9 years, therefore the implementation deficit is about 4.3 years below the 2010 target. It follows that standing at the current situation the Barcelona target will be missed.
In 2004 the European Commission was very critical about the progress and stated that: “(…) the EU still falls short of both the Stockholm and the Barcelona targets and the long-term trend in the employment rate of workers aged between 55-64 is indeed worrying” (COM, 2004).
But the slow progress towards meeting the targets is likely to continue even for the remaining three years before the 2010 target, since many member states give little attention to address the targets and, what is more, their national targets are not consistent with the outcome expected at EU level, the EU, following the recommendations of the European Employment Task Force (2003), asked in the 2005 Employment Guidelines (2005/600EC) that “member States should consider setting national employment rate targets”. First, many countries, even though lagging behind, did not respond to this EU requirement (AT, FR, DE and LU). Second, from those countries that set out national targets to meet the Stockholm (11 countries) and Barcelona (only eight member states) targets, there are some of them that have set national targets which are below the targets set at EU level for 2010. For the Stockholm target these countries are CZ (47.5%), HY (37%), MT (35%) and SI (35%). As for the Barcelona targets seven out of eight countries (BE, CY, DK, FI, IT, LT, SK) have set out national targets that are far below the Barcelona target. Given this prospect the EU in its 2005/2006 Joint Employment Report laconically states that: “(…) there is reason for concern that the gap between ambition and realization cannot be bridged by the action announced”.
What is really worrisome, concerning the future of the active ageing policy is that some big and influential states such as France and Germany either have no active ageing policies or have fragmented policies (Piekkola, 2004). Two other EU big states (i.e. Italy and UK) follow suit. While in the UK there are not programmes targeting the older workers, in Italy the greatest barrier to an active ageing policy is the regionalisation (Piekkola, 2004).
To sum up, without urgent and drastic measures to reverse the current trends, there is no chance of getting nearer, let alone reaching the European targets for increasing the employment rate of older workers and raising average exit ages from the labour market.

Table 2: Stockholm and Barcelona targets: situation in 2001, current situation and targets set for 2010

kasneci-tab2.gif
Source: DG GII, Joint Employment Reports: 2004/2005; 2005/2006 and Eurostat.
(:) not available;
(b) break in series;
(i) see explanatory Y text;
(p) provisional.
Note: Subsequently revised upwards to 60.5 years.


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