Brussels, 25 Feb 2003

According to the Seville European Council Conclusions the General Affairs and External Relations Council, acting on a presidency proposal, shall draw up an annotated draft agenda at least four weeks before the meeting of the European Council.

The Presidency accordingly submits the following annotated draft agenda, which sets out the main items it expects the European Council to address in connection with the Lisbon Strategy. It draws on the Commission's Spring Report, which has reviewed progress made towards the Lisbon goals and suggested policy orientations. Work on many of those questions has already been or will shortly be carried out in the various Council configurations concerned and the Presidency will, as appropriate, draw on the outcome of that work when fleshing out these elements into a set of conclusions for the European Council.

A revised annotated draft agenda will be submitted to the meeting of the GAERC immediately preceding the European Council.

I. The Lisbon Strategy of economic, social and environmental renewal in Europe
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The European Council will also hear a progress report on work in the European Convention from its President, Mr. Val¨¦ry Giscard d'Estaing.

The meeting will be preceded by an expos¨¦ by the President of the European Parliament, Mr. Pat Cox, followed by an exchange of views.

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I. Economic, Social and Environmental Renewal in Europe

1. The European Council assumes, at its Spring meetings, the central role in setting the direction for the Union's economic, social and environmental action in order to meet the objectives of the Lisbon strategy. Sustainable development requires that economic, social and environmental considerations receive equal attention in policy-making and implementation.

The European Council will review progress achieved, discuss key issues, set priorities and give guidance for future work. 2003 sees the Lisbon Strategy entering its fourth year. This next European Council, building on the successes achieved in many areas but aware also of slow progress in others, must demonstrate ahead of enlargement that it is capable of maintaining and accelerating the pace of reform and keeping the Union on track in a balanced way across Lisbon's three main pillars ? economic, social, and environmental.

Economic context and policies

2. The economic slowdown has lasted longer than anticipated and the outlook is clouded by economic uncertainties and global political risks. Sustainable growth cannot be taken for granted; it is conditional on international developments but also, and even more importantly, on a forceful implementation by Member States of the Lisbon reforms combined with appropriate economic policies geared to maintaining macroeconomic stability.

¡¤ orientations for establishing the next broad economic policy guidelines in the light of the key issues paper submitted by the ECOFIN Council;

¡¤ strengthening economic policy coordination in the light of the Commission's Communication and the conclusions by the ECOFIN Council;

¡¤ improving statistical and analytical tools for policy-making.

3 . Economic reforms to raise Europe's growth potential

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Fostering entrepreneurship

3. Growth, jobs and prosperity in an enlarged European Union depend on fostering entrepreneurship and improving the overall business environment for European industry and for small firms. The European Council, in the light of the Green Paper on Entrepreneurship and the communication on industrial policy in an enlarged Union, is expected to call for further action in the following areas:

¡¤ facilitating market entry and exit mechanisms, so as to generate the right framework and cultural conditions for entrepreneurship and for small and medium sized firms to start-up and grow; in this context, speeding up the implementation of the European Charter of Small Enterprises and lending it greater focus;

¡¤ improving regulation and reducing administrative burdens at the Community and national levels, based on an active contribution from all institutions to simplify, clarify and update the body of Community and national law;

¡¤ comprehensive impact assessment of proposed legislation and policy initiatives which affect industrial and business competitiveness, including broad consultation of interested parties and taking into account the three pillars of the Lisbon Strategy; in this context, ensuring that each Commission proposal includes an analysis of its potential impact on industrial competitiveness;

improved flow and use of venture capital, including removing obstacles to investment by institutional investors, including pension funds;

¡¤ elaboration of an action plan on better company law and corporate governance drawing on High Level group report (Winter group).

Connecting Europe ? completing and extending the internal market

4. A well-functioning internal market, ensuring the free circulation of goods and persons and capable of bringing tangible benefits to Europe's citizens and enterprises, remains a key element of the growth strategy. Work is already well underway and good progress has been made since the last Spring European Council. The European Council is expected to give new impetus to the completion and extension of an internal market for the new enlarged Europe by focussing on the following issues:

¡¤ improving the speedy implementation and effective application by Member States of legislation already agreed at the EU level in accordance with commitments undertaken;

¡¤ giving guidance to ensure early final agreement at the EU level on pending internal market legislation within the Lisbon strategy in relation to the energy and transport sectors;

¡¤ accelerating work to create integrated financial services and procurement markets, pushing forward the internal market for services and efforts to tackle unfair tax competition;

¡¤ services of general interest, in the light of the Commission's Green Paper on consolidating the framework for their operation;

¡¤ the conditions needed in terms of "connectivity" (e.g. cross-border connections, TENs, ...) in energy, transport and telecommunications infrastructure in order to complete and extend the internal market, especially in view of enlargement.

5. Increasing investment in research, innovation, education and skills, is key to creating a knowledge-based economy and opening up opportunities for sustained growth, enterprise and new jobs. Equally important is enhancing the economic and social returns on research and development by strengthening the links between knowledge and the marketplace, and ensuring conditions are in place for the roll out of the broadband networks and services which support a truly knowledge-based economy.

The European Council is expected to give impetus and guidance on the following issues:

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¡¤ the implementation and deepening of the European Research Area, with emphasis on developing frontier and leading-edge technologies, establishing clearer links between research and business, and encouraging mobility of researchers. Use should be made, where appropriate, of the open method of coordination;

¡¤ achieving, on the basis of the Commission's forthcoming Action Plan, the objective for investing in R&D by stimulating both public and private investment, while creating improved conditions for innovation through inter alia agreeing on a transparent, non- costly and non-discriminatory Community patent;

¡¤ the development of the information society, drawing on the eEurope 2005 Action Plan considered by the European Council in Seville, and the current situation in the telecommunications sector on the basis of the Commission's recent Communication;

¡¤ implementation of the Action Plan on biotechnology, in particular the need to put current measures in place at a national level in time and to rapidly finalise the pending legislative framework;

¡¤ implementation of the 10-year programme on the objectives for education systems, inter alia by using benchmarks to identify best practice and to ensure efficient and effective investment in human resources.

Reforms for more and better jobs

6. Attaining the ambitious employment targets of the Lisbon agenda requires improved policy instruments as well as more efforts at national level. The review of the European Employment Strategy, and better synchronisation of economic and employment policies, should both work in the direction of tackling Europe's employment deficit.

In this respect, the European Council is expected to:

¡¤ consider the employment situation in the Community on the basis of the Joint Employment Report;

¡¤ in the light of the Commission's communication and work in the Council, give guidance to ensure that the revised Employment Strategy, as translated into new guidelines, becomes an effective and focussed instrument for bringing about a high level of employment;

¡¤ in this context, examine how to maintain the momentum of reform of national labour markets; this examination could be linked to the work of a high level Task Force, leading to practical proposals for action;

¡¤ review ongoing efforts to improve the quality of work by inter alia maintaining effective health and safety regulations and promoting life-long learning.

Solidarity and social cohesion

7. Progress towards the Lisbon goals can only be achieved by moving ahead at the same time in the social field. The orientations and measures proposed in the European Social Agenda remain valid. Particular attention should be given to promoting social inclusion and to modernising social protection systems to meet the challenge of an ageing population. This should include consideration of how existing work might be streamlined over time.

priority the following issues:

¡¤ the reforms necessary to secure sustainable and adequate systems for pensions, health care and long term care for the elderly on the basis of the analysis and guidance given by the Employment, Social Policy, Health and Consumer Affairs Council and the ECOFIN Council;

¡¤ the improvement of the overall framework for social protection policies and of the national action plans on social inclusion through a greater emphasis on the effectiveness of benefit systems and the identification of best practice.

In relation to employment and social protection issues, the European Council will take due account of the results of the tripartite Social Summit, which will be linked from now on with the Spring European Council thus underscoring the importance of the dialogue between social partners in achieving the goals of the Lisbon Strategy.

D. Sustainable development for future prosperity: the environmental dimension

8. The task of the 2003 Spring European Council will be to give fresh impetus to the implementation of the comprehensive sustainable development strategy launched by the G?teborg European Council, including the environmental dimension that it added to the Lisbon Strategy, by identifying key priorities for immediate action in certain sectors and by reinforcing the instruments available to the Union to pursue its overall objective.

Bearing in mind the need for overall coherence between internal and external policies and commitments, the European Council is expected to:

?? on the internal level:

¡¤ highlight the measures to be taken in order to accelerate efforts to address unsustainable trends in sectors such as energy, climate change, natural resources and transport; as regards the latter, move in the direction of ensuring that the price of using different modes of transport better reflects costs to society;

growth, jobs and a better environment, in particular, by ensuring the right incentives for such technologies are in place, as well as how to improve and extend the use of economic instruments to attain environmental objectives;

¡¤ consider the ways and means of making sure that sustainability is properly addressed in policy formulation and implementation, including through impact assessment, by further improving structural indicators and monitoring of progress in each sector.

?? on the external level:

¡¤ examine how the Union can keep its leading role in promoting sustainable development on a global scale, by making globalisation work for sustainable development (Doha), ensuring that the commitments on financing for development are respected (Monterrey), and contributing to translate into concrete actions the political ambitions of WSSD (Johannesburg).

9. Regarding maritime safety, and following recent events and in the light of the Commission's report, the European Council is expected to:

¡¤ call on the Institutions and the Member States to take all necessary steps to ensure that the measures on maritime safety announced at the Council December 2002 are speedily and effectively implemented in all their aspects.

P.M. Message for enlargement countries

10. The future Member States have been covered for the first time in the Commission's Spring Report. They are adopting Lisbon measures, participating in many Lisbon programmes and are starting to take part in the open method of coordination. The Lisbon Strategy is therefore as relevant for those countries as it is for the current Member States. It offers common solutions to common problems. While recognising the ambitious nature of the Strategy for an enlarged Union, the European Council will consider how the strategy can best be used to support the process of enlargement and share best practice and experience across the Union.

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P.M. ? International Situation

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