The European Commission yesterday praised Ireland's national action plan (NAP) on employment but warned that the country must do more to cut the flow of people into long-term unemployment and to put more resources into childcare.

Reviewing the member states' NAPs, submitted in the wake of the Luxembourg summit's agreement last year on co-ordination of labour market reform. the Commission President, Mr Jacques Santer, spoke of a "quiet revolution" underway. Spain and France were singled out by the Irish Commissioner for Social Affairs, Mr Padraig Flynn, for their willingness in 1998 both to spell out reform and to clearly indicate where the budget resources would come from. Most member states, he said, had also begun to do so in the context of their 1999 budgets.

On the Irish NAP, Mr Flynn, noted the pledge to reduce unemployment to 7 per cent by 2000 and the significant commitment to raise the participation rate of the long-term unemployed in training from 11 to 20 per cent. He was convinced, he said, that the Government was also preparing to put the necessary resources into child care. "I believe there is a willingness to do that," he said.

The report notes that the Irish emphasis is on improving the employability of its workforce. Preventive measures involving the young unemployed in their first six months on the dole and the retraining of the older longer term unemployed "show a new orientation in labour market policy, if not yet a decisive shift to the preventive approach".

It criticises Dublin for not setting targets for the reduction in long-term unemployment. The Commission yesterday also proposed the revision of its employment guidelines, the targets set by last December's summit. Mr Flynn said that in 1999 they wanted to put a new emphasis on reform of the tax and benefits system, the improvement of lifelong learning facilities for older workers, greater access to the labour market for the marginalised, affordable care for children and an expansion of service sector employment.

A separate report looks at the employment rates in each of the member states, arguing that these are the best measures of a country's capacity to find work for its population. Ireland is among those who have seen a significant rise in the share of its 15-to-64s at work, up from 51 per cent in 1985 to 58 per cent last year. That is still below the EU average of 60 per cent and well below the near 75 per cent achieved in both the US and Japan.

The report points out that the real gap in performance between the EU and the US arises in the service sector, hence the priority reflected in the employment guidelines for 1999. The new guidelines will be approved by the Vienna summit in December.