BBC News Online: World: Europe

Europe's jobless millions

And more redundancies are predicted as a result of mega mergers, like the one between the Deutsche and Dresdener banks.

Creating a common "employment strategy" to meet the demands of the new economy is the main aim of the EU Lisbon summit.

At the moment, the 15 countries that make up the European Union are tackling their job problems in rather different ways.

Crucial differences

All European Union governments have now agreed that they should aim for full employment. But they still disagree about how to achieve this.

• France has cut the working week to 35 hours, and introduced early retirement programmes. Germany is considering similar programmes.

• Britain has achieved its relatively low unemployment level of 5.9% by clamping down on welfare and fixing a low minimum wage. It has also urged more deregulation of markets.

• Britain and Italy have called for radical reform of European labour markets. They condemn attempts to cut unemployment by taking people out of the labour market.

  "Reducing the size of the labour force is not the way forward. There is no evidence that it works," said a joint letter by the two prime ministers.

• Britain and Spain have opposed early retirement programmes, calling on the EU to make more use of older employees.

New hope

However, unemployment is in fact gradually falling across Europe, giving many cause for greater optimism.

As new president of the EU, Portugal, has declared that the EU should aim to become the most dynamic economic zone in the world within a decade.
This sentiment is echoed strongly by UK Prime Minister, Tony Blair, who has called for "a dynamic knowledge-based economy".

An important part of the Lisbon summit will be working out a common strategy for building an internet-based economy, aimed at making e-business a source of jobs, growth and social stability.

Europe's ability to generate jobs, innovation and economic growth has been dismal compared to the US, particularly around the internet, where revenues are four times those in the EU.

But the summit hopes that by setting concrete goals for using new technology, the EU will overtake the US within 10 years.