Law 21/1991, by which the Spanish ESC was set up, specifies as one of the Council?s functions the drawing up of this annual report to be submitted to the government in the first five months of the year. As in previous years, the Report covers the three main as-pects of the socio-economic situation (a survey of the economy, employment and labour relations, and quality of life and social protection), and it is the product of a consensus among the organizations represented on the Council. The following are some of its most notable points:· In 2003 the Spanish economy grew above the European Union average, thanks largely to consumption and investment in construction. But the negative contribution of foreign trade to the economy as a whole was greater than in 2002.· Employment grew in relation to 2002, with greater growth in indefinite con-tracts, although the temporary employment rate fell by just four tenths of a point, to 30.6%.· The year was marked by the recovery of the climate of confidence in dia-logue between management and industry, especially as regards the preven-tion of occupational hazards, and most notably in the signing of the ANC 2003 collective bargaining agreement. A new framework was also developed for continuing training.· Spending on R&D and innovation grew over the year, as did employment in the sector, but results in scientific production, innovation and exports of high-tech products were still unsatisfactory.· The renewal of the Pacto de Toledo agreement confirmed it as the frame-work of basic consensus for a broad outline of reform in the pensions sys-tem.In 2003 the world economy and world trade grew more than forecast, thanks to strong growth in the emerging economies of Asia and, to a lesser extent, the United States, based on markedly expansive monetary and fiscal policies.In the European Union, in the context of the weakness of its main economies, the Sta-bility and Growth Pact was widely criticised in 2003 following the default by Germany and France on the limit set for public deficits. A more flexible application of the terms of the Pact was demanded from several quarters, taking into account, among other fac-tors, the stage of the economic cycle in each country, the medium-term sustainability of its public finances and its level of public debt.The Spanish economy performed more dynamically than that of the European Union. The acceleration of activity was chiefly accounted for by consumption and investment in construction, whereas the negative contribution of foreign trade to the economy as a whole was greater than in 2002. All the sectors of the economy showed improved growth rates, and company earnings recovered considerably.Despite this greater dynamism, inflation grew at a slower rate than the previous year, largely thanks to the rising euro/dollar exchange rate, and the price gap in relation to the rest of Europe slightly decreased. The Social Security surplus once again offset the central and regional government defi-cits, and enabled the public accounts to be closed with a slight surplus.2. Labour market, employment policy and industrial relationsThe situation in employment in 2003 was better than in 2002, without matching the good results of the period 1997-2001. This recovery was uneven in the various sectors of activity: the employment growth rate in services picked up, and in construction the previous year?s rate was maintained, but in industry there was another sharp decline in the working population.This recovery led to a notable rise in indefinite employment. Even so, the temporary employment rate was still above 30 per cent, due both to the large volume of temporary employment accumulated in the private sector since the early nineties and to the behav-iour of the public sector, in which the proportion of temporary employment has in-creased over this period, from just over 16 per cent in 1997 to almost 23 per cent in 2003.In the field of employment policy, the Action Plan for Employment in the Kingdom of Spain (2003) reflected EU employment policy and the guidelines set for Spain by the European Council for the period 2003-2005. The social partners welcome the existence of an instrument for coordinating employment strategy but have appealed for a stable and periodic institutional methodology in Spain to allow the social partners to take part in the preparation, implementation and assessment of employment plans.In a section devoted to the development of dialogue between management and la-bour, the report highlights the efforts that have been made in the framework of the Joint Labour Programme agreed upon for the period 2003-2005.The trends in collective bargaining showed constant growth in the number of collective agreements and of companies and workers concerned: in 2003, over 5,500 agreements were counted, covering more than 1.3 million companies and more than 9.7 million workers.The average wage increase agreed upon in 2003, including wage adjustment clauses applied at 31 March 2004, was 3.67 per cent, slightly below that of the year before, with 70 per cent of agreements index-linking wage rises to the government?s inflation fore-casts. A progressive attempt to rationalize the various items of remuneration was also noted.Despite the still worrying data on the accident rate, the trend in accidents at work in 2003 showed a continuation of the improvement in this indicator that began in 2001. 3. Quality of life and social protection In 2003 the Education Council set five European benchmark objectives to be achieved by 2010. The report shows that in Spain there have been important steps forward to-wards these objectives, but that the historical imbalances in the educational pyramid, along with the quality problems in the education system itself, mean that some of the objectives are hard to achieve. Particular concerns are the low school-leaving age, the performance of Spanish pupils in the key skills and the lack of syllabuses including two foreign languages.In comparative terms, the Spanish health service has an intermediate level of human and material resources and receives a share of public spending somewhat below the EU average. Spain?s comparative situation is better in some indicators concerning the gen-eral state of health of the population, such as life expectancy or incidence of cancer, and somewhat worse in the prevalence of certain preventable infectious diseases and the number of accidents.The were abundant regulatory and institutional initiatives in 2003 with major repercus-sions in the sphere of health, such as the passing of Law 16/2003 of 28 May on Cohe-sion and Quality in the National Health System, which is a reference point in the current situation and was discussed in the Council?s Opinion 10/2003. In it the Council ex-pressed its concern about certain undesired effects of the new law.The trend of sharp increases in housing prices over the last five years continued in 2003. This trend meant that, despite the full implementation in the year of the actions corresponding to the 2003 programme of the Housing Plan 2002-2005, the indicators of access to home ownership continued to worsen.In the environment, Spain?s comparative situation in the international context showed various shortcomings, especially as regards the level and efficiency of raw material and energy consumption, waste generation and gas emissions, and the portion of the budget allocated to environmental protection. In other fields, such as the production of renew-able energy, municipal waste management, the population with access to wastewater treatment or expenditure on environmental protection, positive trends were observed.As to the development of the information society, Spain?s comparative position in in-ternational terms revealed a mixed picture. Spain is well placed as regards the penetra-tion of mobile telephony and the availability of online government services, but is well behind in the proportion of households with personal computers and in Internet use, which, with the resultant low use of email, is especially significant in the business sec-tor.With regard to R&D and innovation, although some indicators developed positively (as in the slight increase in private spending in relation to public spending, the rise in em-ployment in the sector, or the larger presence of women among research staff in Spain than in the rest of Europe), the overall results were not auspicious, as shown by the data evaluating scientific output, innovation capacity and exports of high-tech products.The adoption of the National R&D and Innovation Plan for 2004-2007 was discussed in the Council?s Opinion 10/2003. Although it made a positive assessment of the Plan?s main aims, the Council reiterated its view that the funding of science and technology remains insufficient, which may well impair the sector?s capacity to meet the objectives. In addition to these problems is the fact that the Plan?s structure of grants is not suffi-ciently geared to the funding of private-sector R&D.In the field of social protection, the most notable event of the year was the renewal of the Pacto de Toledo pensions agreement, which made it possible to assess the degree to which the recommendations formulated in 1995 had been fulfilled, and to determine how well adapted those proposals were to the objectives and guidelines established in Europe.Together with the renewal of the Pacto de Toledo agreement, a wide range of initiatives were adopted over the year, notably including the National Social Integration Plan 2003-2005, which was covered by the Council?s Report 1/2003, and various regulations affecting the integration of the disabled. Parallel to this, the 2nd Action Plan for Dis-abled People 2003-2007 and the National Accessibility Plan 2004-2012 were adopted, in respect of which the Council highlighted the need for the greatest possible social de-bate and consensus on the issue, with the involvement of the social partners, and to speed up the Plan?s implementation by means of shortening the periods set for the pur-pose and specifying the measures for developing each initiative.
