EU must create 16 million jobs by 2020 – Van Rompuy

The European Union must create 16 million jobs to reach the targets set in the Europe 2020 strategy, Council President Herman Van Rompuy stressed.

Addressing a press conference after the tripartite social summit – a discussion with social partners – Van Rompuy said the biggest challenge for the EU remained the creation of sustainable jobs and strengthen potential economic growth.

“We cannot allow our citizens to fall in the poverty trap and we cannot remain in a situation were job recovery is poor. The targets set in the EU 2020 strategy are ambitious and we are half way through achieving these objectives,” he said, conceding that there existed room for cautious optimism.

The EU 2020 strategy, launched in 2010, is the EU’s growth strategy for the coming decade.

The President of the Council said the financial crisis had taken a heavy toll and the EU was lagging behind. “The divergences between member states have increased… for example the level of employment have stagnated,” he said.

Van Rompuy insisted that employment targets could only be reached if some 16 million men and women join the workforce. He warned that the European Council will call on and ensure that the member states adhere to and reach the objectives set by the 2020 strategy.

He was very critical of the EU’s progress on reducing the number of people at risk of poverty and social exclusion: “These objectives are out of reach,” he said.

Europe this morning reached a deal on the last piece of the banking union, making sure taxpayers will never again foot the bill for defunct banks.

The Single Resolution Mechanism will see the European Central Bank (ECB) directly supervise banks in the euro area and in other Member Stateswhich decide to join the Banking Union. The SRM would ensure that – not withstanding stronger supervision - if a bank subject to the SSM faced serious difficulties, its resolution could be managed efficiently with minimal costs to taxpayers and the real economy.

Van Rompuy said the agreement reached this morning was “good news”.

He was now also expecting good news on a fair and effective tax systems, indispensable elements of well-functioning social market economies and social justice.

For the first time, the EU is now giving a push to European industrial competitiveness where Europe has been described “as walking” while the rest of the world was “running”.

“Now that the fire-fighting is behind us, we need to focus on nurturing our still fragile recovery,” he said.

Europe’s industrial base generates 80% of its exports and private spending on research and development and careates a quarter of private jobs.

Van Rompuy insisted that industrial competitiveness should be a key driver for growth and jobs in Europe: the overall policy framework at European and national levels must be made more conducive to investment, innovation and the re-shoring of manufacuturing jobs.

Van Rompuy also said that security of energy supply was an important element to be discussed in the summit, especially for those countries who are dependent on gas imports.

“We need to ensure affordable energy prices and we need to ensure security of energy supply in particular for the countries most dependent on imports, especially imports of gas.”

On his part, Commission president Jose Manuel Barroso said that although financial recovery was gaining ground across Europe, youth unemployment remained a cause for concern.

“We cannot safely say we are out of the crisis and the Commission is actively supporting member states in fighting unemployment,” he said.

Greek prime minister Antonis Samaras, whose presidency of the EU terminates in June, said access to liquidity for small and medium enterprises was crucial: “SMEs are the building blocks that provide solution to employment and growth. But this cannot be achieved without SMEs having easier access to bank credit.

“We must show that Europe works towards both long-term and immediate needs of the European citizens. We have to convince citizens that Europe works and cares.”