The EES is designed as the main tool to give direction to and ensure co-ordination of the employment policy priorities to which Member States should subscribe at EU level. On the basis of the new provisions of the Amsterdam Treaty, the Luxembourg European Council of November 1997 initiated the European Employment Strategy (EES), also known as 'the Luxembourg process'.
In the 1990s, political consensus developed around the structural nature of Europe 's employment problem and on the need to increase the employment intensity of growth. Both the monetary stabilisation policy, followed to prepare for Economic and Monetary Union, and the common nature of the employment and unemployment challenge, provided the impetus for a more co-ordinated employment oriented policy response at European level.
The debate, begun during the negotiation of the Maastricht Treaty (1992), which strengthened the social dimension of the European model through a social protocol, led to the agreement at the Amsterdam European Council (June 1997) on new employment provisions for the Treaty. While confirming national competence for employment policy, employment was declared in article 126 a matter of common concern and Member States were called upon to develop a co-ordinated employment strategy at EU level. Largely inspired by the Treaty provision on economic policy co-ordination, and by the co-ordination of employment policies launched at the Essen Council of 1994, the new article 128 instituted a framework for developing national employment policies on the basis of shared European priorities and interests. Under this new framework, policy co-ordination could be fostered by a "management by objectives" approach.
The Lisbon European Council (March 2000), while continuing to call for greater efforts to reduce the still high numbers of unemployed people, set full employment as an overarching long term goal for the new European economy in the form of ambitious targets for employment rates for 2010 (70% overall and 60% for women). The Summit also recommended new or strengthened priorities (for example skills and mobility, lifelong learning), which were reflected in the Employment Guidelines for 2001 through new horizontal objectives. Subsequent adaptations to the Employment Guidelines were mainly triggered by the Stockholm Summit conclusions.
The Nice European Council of December 2000 introduced the issue of quality as the guiding thread of the Social Policy Agenda, and in particular quality in work as an important objective of the EES. It stressed the multi-dimensional character of the quality issue, concerning both job characteristics and the wider labour market context, and stated that it should be promoted through actions across the pillars.
The Barcelona European Council in March 2002 identified "Active policies towards full employment: more and better jobs" amongst the three areas requiring specific impetus. It underlined that full employment in the EU is at the core of the Lisbon strategy and constitutes the essential goal of economic and social policies. In light of the above, the European Council called for a reinforced Employment Strategy and provided directions for the future of the EES.
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