The European Union has agreed on an employment rate target for women and men of 75% for the 20-64 years age group by 2020: an ambitious commitment to the sustainability of Europe’s social model, welfare systems, economic growth and public finances. Bridging the gap to the target will be no easy task. The crisis has brought the employment rate down to 69%, and the unemployment rate up to 10%; assuming the labour market stabilises in 2010-2011, achieving an employment rate of 75% by 2020 will require an average employment growth slightly above 1% per annum. With declining fertility rates, the EU working age population (15-64) will start shrinking as early as 2012; even with continuing immigrant flows. A skilled workforce is an essential asset to develop a competitive, sustainable and innovative economy in line with Europe 2020 goals. In times of budgetary constraints and unprecedented global competitive pressures, EU employment and skills policies that help shape the transition to a green, smart and innovative economy must be a matter of priority.