Valentina FikardouGiorgos Constantinou

Europe 2020 is the EU's growth strategy for the coming decade.

To make EU a smart, sustainable and inclusive economy.

To help the EU and the Member States deliver high levels of employment, productivity and social cohesion.

The Union has set five ambitious objectives to be reached by 2020 :

Employment Innovation Education Social inclusion Climate/energy

Smart growth means improving the EU's performance in:

education (encouraging people to learn, study and update their skills)

research/innovation (creating new products/services that generate growth and jobs and help address social challenges)

digital society (using information and communication technologies)

Sustainable growth – (for a resource efficient, greener and more competitive economy)

building a more competitive low-carbon economy that makes efficient, sustainable use of resources

protecting the environment, reducing emissions and developing new green technologies and production methods

introducing efficient smart electricity grids harnessing EU-scale networks to give our

businesses an additional competitive advantage improving the business environment, in

particular for SMEs Helping consumers make well-informed choices.

Inclusive growth – (a high-employment economy delivering economic, social and territorial cohesion)

raising Europe’s employment rate – more and better jobs, especially for women, young people and older workers

helping people of all ages anticipate and manage change through investment in skills & training

modernizing labour markets and welfare systems ensuring the benefits of growth reach all parts of

the EU

The crisis exposed fundamental problems and unsustainable trends in many European countries. The new EU economic governance is based on three main blocks:

A reinforced economic agenda with closer EU surveillance.

Action to safeguard the stability of the euro area.

Action to repair the financial sector

Austerity is defined as a state of reduced spending and increased frugality in the financial sector. It refers to the measures taken by governments to reduce expenditures in an attempt to shrink their growing budget deficits.

Austerity comes in many forms: higher taxes fewer state benefits more job cuts working longer until retirement.

Greece one of three Euro zone nations to need an international bailout.

Has cut spending on: Public sector salaries Pensions Education Health care and defence. As a result, unemployment has soared to over

21%, fuelling social unrest that has sometimes turned deadly.

Portugal is paying its bills only because of an international rescue loan. But the effect of lower government spending is:

The economy is expected to contract 3.4% this year after a double-dip recession last year.

Unemployment has climbed to a record 15%. New labour laws have made it easier for

employers to hire and fire workers and change their working hours.

Rent controls have been scrapped and state energy companies have been sold off.

Ireland, the third European nation on rescue loans. It has been forced to raise taxes and slash

spending for years and that won't stop until at least 2015.

The sales tax is now up to a whopping 23% middle-class wages have been cut around 15%. Residents face higher taxes on incomes, cars,

homes and fuel. Nearly 15% are unemployed and seen lower

welfare and other benefit payments. Ireland has also cut the number of civil servants.

Spain The government has raised income and

property taxes cut spending on healthcare and education made it easier for companies to fire workers on the heels of a real estate market implosion Unemployment is around 25%, a record in the

17-nation euro zone Half of its young people have no jobs. The country's sales tax has been increased to

18%.

France The government has increased the

retirement age from 60 to 62 Raised the sales tax from 5.5 to 7% on

non-essential products Cut tax breaks to the wealthy and

corporations Reduced regional and local government

budgets For the next two years, two state workers

have to retire before one is replaced.

Italy Austerity measures have sent Italian

unemployment up to 9.8% Put the country in a recession that is expected

to shrink its economy 1.2% this year. The prime minister, Mario Monti, is trying to

change laws to make it easier to fire workers. Rome dropped its bid for the 2020 Olympics

after the government said it could not back the estimated €9.58bn cost,

An art museum near Naples burned paintings to protest against the lack of culture funding.

Britain Britain's coalition government is making

spending cuts of £103bn through 2017 University tuition costs have soared,

provoking violent protests. Harsh spending cuts have slashed

government jobs by the thousands and cut funding to police.

Unions have threatened to strike and disrupt the London Olympics to oppose the cuts.

Europe 2020 is not up to the challenge. The Commission needs to rethink its

economic development role start to build a political consensus around

what is important, realistic and practicable. The EU increasingly takes second place to

national interests for many Member States. Germany has shown itself reluctant to bail

out weaker economies.

The subsequent cuts in public budgets made by governments have led to an increase in social exclusion and the risk of poverty.

Growing joblessness, especially among the young.

Growing number of people receiving social benefits

reductions in wages as well as increasing unemployment are squeezing household income.

Serious concerns have been raised about funding for the Europe 2020 Strategy.

Ambitious targets will require significant investments.

There are no new funding instruments leaving the EU budget as the sole source of funding.

At the same time, across the European Union, Member States are tightening their budgets and cutting spending in order to fight the crisis.

If the austerity measures put pressure on the European budget, the combination of the lack of new funding instruments and smaller bud gets could jeopardise implementation of the Strategy.