Outline: how EU rural employment as an issue is addressed in EU policies

1. Rural Employment Policy in the European Union Hilkka VihinenRuralJobs Regional SeminarDebrecen,12 September, 2008

2. Outline: how EU rural employment as an issue is addressed in EU policies Employment policy in the EU The rural dimension: CAP and RDP Rural employment challenges in the EU Lessons learnt so far

3. Employment policy in the EU • Free movement of production factors is one of the cornerstones of the EU – labour mobility. • Originally an economic community – social and territorial aspects appeared much later. • EU has evolved from the customs union, the four fundamental freedoms, common rules on competition and economic and monetary co-operation to economic and monetary union and a single currency. As the construction of the 'economic union‘ has been completed, the social dimension of the EU has been strengthened. • Employment policy mainly in the mandate of the MSs, EU has a coordinating role.

4. Amsterdam Treaty (1997) put employment for the first time firmly on the Union’s political agenda. The commitment to coordinate employment policies and to promote the creation of more and better jobs was translated into the European Employment Strategy (EES). • EES objectives: achieving full employment, increasing productivity and quality at work, and promoting cohesion. • Lisbon Strategy (2000, relaunched 2005) integrated the economic and social dimensions of the EU, and aims at making Europe the most competitive and dynamic knowledge economy in the world. • By 2010, the EU is to reach the overall employment rate of 70 %, an employment rate for women of 60 % and an employment rate for older workers of 50 %. Also better jobs. • The EES is the policy instrument to achieve these goals.

5. EES sets out action in four priority areas: employability, entrepreneurship, adaptability of the workforce and business, equality of opportunity between men and women. • The European Social Fund is the main funding instrument of the EES, including different measures and initiatives. • The EES has supported since the beginning the development of a territorial dimension of employment policies, underpinned in recent years by the emergence of regional and local action plans throughout Europe.

6. Local approaches prioritised in EU employment policy, because • national labour markets show substantial geographical variations which require adjusted local policy approaches; • labour markets are largely locally based in contrast to globalising product and capital markets; • local stakeholders have the advantage of being close to problems; • local action can build local social capital which can support the momentum of the decentralisation process; • and most importantly, the multi-dimensional character of employment and development problems requires policy approaches which are able to integrate the plurality of ‘sectoral policies’ into a coherent local development concept.

7. However, • EU employment policy, the EES in particular, addresses the territorial dimension with the local, without distinguishing between rural and urban localities. • Growth centre orientation dominates the regional/spatial development strategy of the EU. • Thus, a genuinely rural employment policy is still lacking to a large extent.

8. The rural dimension • Common agricultural policy has long been the core of the EU, and one of its few common policies. • In the mid 70s, the LFA Directive introduced the first territorial component of the CAP. During the 80s, first attempts were made at integrated approaches with the other Structural Funds, but it was with the 1988 reform of the Structural Funds when the EU presented a policy concept of rural development going beyond the farm sector.

9. The Maastricht Treaty (1993) anchored RDP to the objective of cohesion, which was simultaneously turned into one of the three pillars of the EU (economic and monetary union & the single market as others). Cohesion is thus the legal basis of RDP. • With the Agenda 2000, rural development became the second pillar of the CAP. • The dimension of rural areas has penetrated into the EU policy both from the reframing of the CAP, and from the gradual increase of the political importance of territorial cohesion. Yet, at the moment, the agrarian and land management (environmental) interests dominate the content and the governance of the rural dimension in the EU.

10. Current and future challenges in rural employment • At the turn of the century, appr. 56 % of the ‘new’ EU population of 450 m people lived in rural regions. Most negative rural population trends have been traced in the 12 New Member States – demographic ageing, masculinisation, outmigration. • The primary sector accounts for less than 10 % of total empl. and in one third of rural areas its share is less than 5 %, however, in some rural areas in the East and the South of the EU its share is above 25 %. • Agriculture is a low productivity sector that has increased its productivity by diminishing labour (esp. in NMs). • Deagriculturalisation’; social and economic diversification of rural areas. • Simultaneously, new technologies, increasing use of contractors, and labour mobility (legal/illegal immigration) affect strongly the way how work is done in agriculture.

11. Most new jobs in EU are created in the service sector, both in urban and rural areas. • The number of self-employed increases – entrepreneurship. • On- and off-farm business diversification, portfolio entrepreneurs. • Commuting and distance work. • Lack of (skilled) labour – immigration? • In policy making there will be greater focus on economy-wide measures and regulations applied to the agri-food sector, as well as more attention to targeted policies to achieve multiple objectives.

12. Lessons learnt so far : national level Generate integrative regional development approaches: The strong links of active labour market policies with economic, environmental, cultural and societal factors call for a wide regional development approach. The promotion of local employment development would therefore include measures which develop the human capital basis of the territory, support economic growth, strengthen the cultural identity of the region, and promote integrative policy thinking at local level. This would address a wide circle of local actors and will be the key to involve business partners in local partnerships. Most importantly, this would facilitate the development of coherent and comprehensive local plans.

13. Local level Prepare local development plans: Local development plans can have several beneficial effects. First, they can serve as a focal point for coordinating funding from different sources. Second, they can develop ‘horizontal’ thinking that transcends traditional sectoral policy approaches. Third, they can give an orientation to the public on activities in the economic and social fields, thus contributing to the co-ordination of local stakeholders.

14. Enhance efficiency and accountability of local partnerships: Local partnerships need a clear definition of targets, an adequate selection of partners and territories, an efficient decision-making process, and an agreement on the distribution of expected benefits. They need efficient management structures and appropriate controlling instruments. Otherwise partnerships may cause high costs and perform inefficiently. Exchange of experience among local actors can help develop ideas on how to organise integrated partnerships.

15. Improve the professional capacities for employment policy action: The central point for improving the professional capacities is not only the problem of training and information exchange. The problem is the capability of local authorities to establish organisations or expert groups for local employment development. Local authorities should be supported to create the units within their organisation or to establish external organisations for local employment development.

16. To conclude… Hardly any specifically rural (qualitatively different) mode of employment policies to be found at the EU level: action is based on the understanding of general processes of economic change in which the structure of the national (or international) economy conditions the structure of the rural employment. There is an increased awareness of how engagement and action at the local level can add value to policies that are often, initially at least, conceived and managed at higher levels; and that the local level can contribute to the management and conception, not just to the delivery and implementation.

17. Practitioners: Some key characteristics of economic formations suggest that the most dynamic economic areas seem to be comprised of innovative clusters in which networks, norms, conventions and horizontal relations of reciprocity are to the fore – trust, respect, collaboration, learning. • Researchers: Both endogenous and exogenous development processes matter in successful cases and should be apprehended in analyses.