Division for International Dialogue 10 Theses on European Economic and Social Policy 1. The Lisbon Agenda is the central strategy for growth and employment in Europe focussing on the knowledge society and increasing productivity. So far, it has fallen short of its aims, par­ticularly in respect to significantly increasing productivity. For that prupose, workers’ participation and codetermination, higher in­vestment in training and education and greater capital intensity are of fundamental importance. The corresponding socio­economic environment must promote capital accumulation by striking a balance between increasing demand and optimising supply-side conditions. 2. In the Eurozone in particular, national political leeway is restricted by various framework agreements. The current regula­tions, consisting of the Maastricht Criteria and the ECB’s monetary policy, should be supplemented by a coordination of fiscal and wage policies. Full employment in Europe depends decisively on stronger macroeconomic and wage policy co­ordination, as well as a stabilising monetary policy. 3. Every European economic and social policy is faced by the challenge of taking account of its effects on each of the differ­ent national welfare state models. In particular, it must consider In its recent work, the Friedrich-Ebert-Stiftung’s Division for International Dialogue has focused on the prospects of European Economic and Social Policy, European Foreign and Security Policy, European Neighbourhood Policy and International Security Policy. These theses are a contribution to the political positioning within the above-mentioned fields. They also seek to outline future challenges and topics. the different stages of development of the old and the new member states and respect national growth and employment policies, insofar as they correspond to fair competition in Europe. Economic convergence, full employment and Europe-wide solidarity should be the aims of a socially just Union. A future European Economic and Social Model will preserve particular features of individual welfare states and safeguard them by means of minimum standards. 4. The member states have, as a result of pressure due to Single Market integration, lost more control over national social policy than the EU has accrued. In the EU’s multilevel regime social policy has so far played a subordinate role. The member states’ autonomy concerning social policy should be strengthened, while parts of social policy(such as education policy) should be further integrated. The social governance of Europe should not, however, aim at the standardisation of national social policy institutions. European framework directives should serve to protect national social security achievements, such as pub­lic services of general interest. 5. Current tax competition in Europe requires adjustments to welfare state financing and is leading to a shifting of the tax burden on income and consumption. The financial basis for national social security should be fairly pooled and safeguarded, to which end tax policy should increasingly be harmonised. Har­monisation is not in conflict with a just national tax policy; on the contrary, it is one of its preconditions. In the medium term, AUGUST 2008