This year's Employment in Europe report, the 22nd in the series, comes at a particularly important time for the European Union. Despite moderate signs of economic recovery, European labour markets are still suffering from the aftermath of the economic crisis and they will continue to need to be supported by appropriate crisis exit strategies. Moreover, we need to reformulate policy priorities for the post-2010 period in line with the framework set by the Europe 2020 Strategy.
European labour markets will emerge from the crisis profoundly changed; workers must be given the incentives and tools to successfully adjust to new realities in order to retain or find quality jobs. Action is needed to enhance skills at all levels and to set the conditions for the creation of new jobs. In this respect, flexicurity is still the right framework to modernise labour markets and help foster job-creating recovery.
The Employment in Europe report is one of the tools to support the design and implementation of Member States' employment policies. This year's report focuses on two major themes that reflect the current priorities of employment policies at EU level.
The first theme is an assessment of the labour market adjustments since the onset of the crisis. This is complemented by an analysis of the policy measures implemented by the Member States to mitigate the employment effects of the crisis and to support recovery. It draws on the close monitoring of labour market developments undertaken by the Commission, as well as on the ongoing analysis of the employment policy responses to the crisis, both at Member State and EU levels. In particular, the report examines the extent to which labour market recovery measures have contributed so far to alleviating the negative spill-over effects of the global downturn on labour markets. Although the situation and the constraints differ significantly across countries, this type of assessment allows Member States to learn from each other as they work towards their common employment objectives.
The second theme reflects an important aspect of the flexicurity approach to labour markets, particularly given the impact of the economic crisis. It is vital to overcome the segmentation of the labour markets, as well as, more specifically, the employment situation of young people in Europe. Young workers with temporary contracts have been particularly hard hit by the recession in a number of Member States. Indeed, many have been disproportionately affected by decreasing employment levels.
In many cases, temporary work, which rose during the years prior to the recession, does not lead to stable and higher paid jobs, but instead "traps" workers in a recurring sequence of temporary jobs with frequent unemployment spells in between. The recent crisis has highlighted the flaws of a policy strategy that fosters employment growth almost exclusively through the development of temporary and other forms of 'atypical' contracts. Such strategies increase employment volatility and the risk of low economic growth due to insufficient investment in human capital. It is therefore important to promote policies creating stable employment. This can be achieved, for example, by introducing fiscal incentives for companies to hire permanent workers and to convert temporary contracts into permanent ones.
The findings of Employment in Europe 2010 are, in my view, highly relevant to the current EU policy debate. I trust that readers, as with previous editions, will find the report thought-provoking and a motivating force for new ideas and solutions to the challenges that face us all.