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Where Now for European Social Democracy? - Policy Network

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64WHERE NOW FOR EUROPEAN SOCIAL DEMOCRACY?some way away.Even in countries with recent strong employment per<strong>for</strong>mance likethe UK, there is no room <strong>for</strong> complacency. The New Deal has been abrilliant success in tackling long-term unemployment among youngpeople and relatively so amongst lone parents. However, theGovernment’s Strategic Audit 9 laid bare uncom<strong>for</strong>table facts about theextent of inactivity in the UK labour <strong>for</strong>ce, especially among the over55s. The outlook <strong>for</strong> the unskilled, particularly in the less buoyantregions, is bleak; and far too many people in the work<strong>for</strong>ce lack themost basic of skills. High levels of inactivity combined with a deficit ofskills is a huge part of the progressive deficit in the UK that Labour hasstill to address.Why the <strong>European</strong> dimension of economic re<strong>for</strong>m ‘adds value’However, this particular UK illustration exposes a presentationalproblem <strong>for</strong> Lisbon. The themes that this paper has highlighted wouldcome across to many Labour MPs as essentially national challenges inwhich the role of the <strong>European</strong> Union is, at best, peripheral. I fear thatto their German counterparts, the EU might come across not just asperipheral, but as part of a more general problem of unwanted topdown interference. If much of the Lisbon agenda is about nationalpolicy implementation, why not leave member states to get on withmanaging the political challenges of domestic re<strong>for</strong>m, without any fussfrom Brussels? Why bring Europe into the equation at all?The best reason is that the <strong>European</strong> dimension adds unique value– both in economics and politics. Market-opening measures, thatdeepen economic integration within the Single Market, improve growthpotential all round. This market-opening thrust is only one dimensionof the Lisbon package, but it is a crucial dimension, and one that canonly be delivered at <strong>European</strong> level. A vigorous combination of newdirectives to free up markets, better en<strong>for</strong>cement, a strongercompetition policy to promote new entry, co-ordinated regulation ofnetwork industries and more open trade would be a potent mix toenhance long term growth potential.Simply because this agenda is sold as ‘good <strong>for</strong> business’,

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