EU 2013 Policy Priorities Employment and Social Affairs
This report outlines the main policy proposals the EU institutions will be putting forward in the field of employment and social policy throughout 2013. The report offers an overview of the stand points of the European Greens on these specific policies, and points to the national contexts where these policies are likely to stir most discussions. This report is researched and drafted by Jonas Hirschnitz.
Overview Relevant Commissioners: László Andor (Employment, Social Affairs and Inclusion, Hungary, EPP) Relevant Committees: Employment and Social Affairs (EMPL) Main Green actors in the European Parliament: Jean Lambert (UK; Greens/EFA EMPL Coordinator), Elisabeth Schroedter (Germany; Vice-Chair of the EMPL committee), Marije Cornellissen (Netherlands), Karima Delli (France); Substitute Members: Malika BenarabAttou (France), Sven Giegold (Germany), Emilie Turunen (Denmark) The European welfare state model provides safety nets for those who do not find work and those who cannot work due to health reasons. Furthermore, pension schemes ensure that after their work life individuals do not live in poverty. The financial and economic crisis of 2008 plummeted the EU into an employment and a social crisis. The Euro-wide employment rate is decreasing constantly and also for 2013 the prospects are bleak. This trend is particularly dramatic in the countries hit hardest by the crisis which were also forced to introduce drastic cuts to their social programmes under the pressure of international creditors.
The EU shares competence for social policy and economic policy (related to cohesion) with the Member states, i.e. it only introduces necessary measures, which could not be attained on Member State level. A strong social, economic and employment agenda wins elections nationally, and thus a conferral of this realm to the EU would strongly diminish state governments power and impact – thus far the conventional view. The European sovereign debt crisis however gave a new impetus to efforts on the European level. The Europe 2020 strategy and its targets now constitute the new European frame of reference, although the goals are non-binding. Among the targets one finds goals to increase the European employment rate to 75%, and decrease by 20 million the number of people in or at risk of poverty. Under this framework, 2013 will see the introduction of new legislation for employment and social protection and the continuation of the discussion and elaboration of already initiated policy projects. Especially the discussions on the new multiannual financial framework (MFF) will be a central decisive factor in the shape of policies. In this context, also some of the most disputed EU directives – such as the ones on work time and posted workers - are up for legislation in 2013. Read below about those and other relevant initiatives.
1. Youth (employment) guarantee scheme According to Commission figures, youth unemployment has risen to 20% EU-wide, while in some Member States the number is as high as 50%. To remedy this situation, the Commission presented in December 2012 a youth unemployment package, which includes a call for a so-called ‘youth guarantee’ and a consultation on a quality framework for traineeships. A youth guarantee – a policy which is already successfully applied in Finland, Sweden and Austria – is a state guarantee that young people enjoy continued education, an internship, or an apprenticeship after they either leave formal education, or become unemployed. The Commission package includes a proposal for a Council recommendation which would not be legally binding, but which urges Member States to adopt youth guarantee schemes which make such offers to youth within 4 months.
EU 2013 Policy Priorities: Employment and Social Affairs
The European Social Fund (ESF) will be used to assist in the implementation and funding of the youth guarantee through the support of national public employment services (PES), funding trainings for young people, selfemployment support and language courses. The Commission proposes to support Member States through EU funding, by facilitating the exchange of good practices, monitoring implementation of youth guarantees in the European Semester and awarenessraising. Furthermore, to increase the quality of internships and to end the widespread practice of using interns as cheap labour, a ‘Quality Framework for Traineeships’ is envisaged. The first step is the launch of a consultation on the criteria of a high-quality internship/traineeship. In case this negotiation does not produce substantial results by summer 2013, the Commission will bring forward its own proposal.
National considerations Austria and the Scandinavian countries Finland and Sweden are seen as the countries with the most successful youth guarantee schemes – success rates mount up to 80% (Finland). Denmark, Germany, the Netherlands, Norway, Poland, Sweden and Portugal all have youth guarantees schemes in place, which differ in their design and scope. Countries with far-reaching measures are thus defenders of their models. Austrian actors for example, have recently expressed their dissatisfaction with the scope of the EU proposal. The Austrian Chamber of Labour calls for the introduction of deeper measures such as the binding introduction of a Youth Guarantee system, the determination of a European youth employment target, the clear increase of the European Social Fund by 40 billion euro for the next financial period for youth employment or setting up a separate fund. Yet, Council recommendations should allow Member States to implement more far-reaching measures. The most contentious issue is the funding question. Especially financially weaker Member States call for assistance through European structural funds, as the job positions young shall fill still had to be created. The International Labour Organisation (ILO) calculated that a Eurozone-wide youth guarantee would cost €21billion, so less than 0.5% of government spending.
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Green Response The European Greens have been the first to promote and push the youth guarantee scheme. Greens/EFA employment spokesperson Emilie Turunen introduced in the EP her own-initiative report on the topic in 2009. It already then included the call for a European Youth Guarantee, a European Quality Charter on Internships, and a stronger channelling of ESF funds to youth policies. As the latest Commission proposal takes up most of those points, the Greens support this move. The Greens are however not satisfied with the cautious call by the Commission on the matter as it does not offer a clear plan on how to implement and finance it. This responsibility is mostly left to the Member States, which substantially weakens a coherent realisation of the guarantee. Green MEP Bütikofer points out that especially the southern states will have problems financing the youth guarantee. What is highly important for the Greens is that the youth guarantee will be transposed into national legislation as a legally enforceable right for young people. As a Council recommendation is not binding, the Greens will continue to push for this criterion in the various Member States.
2. New Programming of the European Social Fund The European Social Fund (ESF) is meant to increase employment opportunities through funding of education, trainings and lifelong learning. It supports actions against social exclusion and contributes to the fight against poverty. The ESF is funded by the general EU budget. In October 2011, the Commission proposed new priorities for the ESF, with the intention of concentrating ESF spending on two of the five targets of the Europe 2020 strategy, namely the goal to lift 20 million out of poverty or the risk of poverty and to reach an employment rate of 75%. To this end a €9 billion increase to the current level of the ESF is envisaged1. Additionally, 20% of the fund will have to be spent on measures promoting social inclusion, greater emphasis has to be put on youth unemployment and on the active support of marginalised groups such as the Roma. In July 2012, the European Parliament’s Employment and Social Affairs Committee (EMPL) took a clear stance on 1
This means 20% of the ESF budget, which currently amounts to a total of €75billion for the period 2007-2013.
EU 2013 Policy Priorities: Employment and Social Affairs
the new programming of the ESF, calling for a strong channelling of EU cohesion policy spending to the ESF (25%) and the fight against poverty (20%)2. The committee argued that the ESF should not become subject to spending cuts in the MFF 2014-2020. The issue is currently in trialogue discussion between the European Parliament, the Council and the Commission.
Green Response The Greens have been highly engaged in the design the ESF, as the fund constitutes an instrument for Europewide poverty eradication. They were the main driving force to include the requirement to allocate 20% of the ESF to social inclusion and the fight against poverty. In order to further foster the goal of social inclusion, the Greens have been able to amend the legislative text of the report in the EMPL committee, for which Green MEP Elisabeth Schroedter is the shadow rapporteur. They strengthened the acknowledgement of the importance of an inclusion of social partners and NGOs at all levels of the legislation. They have also promoted the strengthening of education programmes supported by the ESF. Another provision introduced by the Greens makes it possible for refugees and asylum seekers to apply for support under the ESF. For the Greens the fight against discrimination should be part of the ESF’s mandate. Lastly, the ESF has been directed to focus more on youth issues. The Greens were also able to introduce an amendment proposal to ‘mainstream a life-cycle approach to ensure the provision of integrated support to reduce poverty and social exclusion of children and older people’.
3. Revision of working time directive In 2003 the EU put forward certain minimum standards for workers’ rights in the Working Time Directive, from which Member States can only opt-out in special cases. The Directive foresees a limit to weekly working time (to a maximum of 48 hours on average), a minimum daily rest period of 11 consecutive hours, a rest break during 2
Final report of rapporteur Elisabeth Morin-Chartier (EPP): http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?i d=595855
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working time if the worker is on duty for longer than 6 hours, and at least four weeks per year paid annual leave. However, over the past decade, the demands on work have changed: employers face increased competition, shifts of manufacturing, market volatility and perpetual technological change, whereas employees face an increased intensification of work, more precarious jobs, and the negative effects of increased working hours under situations of extreme stress . In this context, both sides have demanded an adjustment of the Directive to their realities and the Commission started the recast of the Working Time Directive, by opening a negotiation with the social partners (management and labour organisations). This process started in early 2010, and went into its second and envisaged last phase at the end of the same year. The Commission Communication of 2010 depicts the progress made in those negotiations, and the contentious points between the partners. ‘Flexibility’ is among the key points of disagreement, as employees fear that it would bring a lowering of worker protection, be it in the form of minimum hours, health and safety provisions, or the quality of work. Yet, the Commission Communication points out that a trend towards greater flexibility is already under way: part-time work, staggered working hours, teleworking, and working time banking are increasingly common practices. On 14 December 2012, the negotiations between the social partners officially failed because of the possible ‘opt-outs’ included. The Commission is thus expected to bring out its own legislative proposal.
National considerations Regulation of working time is a highly important issue for European Member States and attempt to set European standards are very contentious. Under the current regime, the UK for example makes use of the several opt-outs to maintain its lower worker protection. On the other side, France has adopted regulations limiting the maximum working time to 35 hours per week. Any major changes in the working time Directive have to tackle most of the opt-outs and it is therefore hard to imagine that a far-reaching European framework will be agreed upon.
EU 2013 Policy Priorities: Employment and Social Affairs
Green response Elisabeth Schroedter, deputy chairperson of the European Parliament’s employment committee summarised the Green position on the matter: it came as no surprise that the opt-outs were the reason the negotiations failed, as the opt-outs were the factor which deprived the legislation of all its effect. Employers and enterprises had long realised that they could circumvent the Directive’s provisions in concluding individual contracts with trade unions. In this way, none of the safeguards the Directive entails would apply Europewide. The Greens’ main demands is that the opt-out be taken out of the regulation, which they will urge the Commission to include in the upcoming legislative proposal.
4. European Globalisation Adjustment Fund (EGF) The European Globalisation Adjustment Fund (EGF) is a safety net to help workers when structural changes induced by globalisation lead to job loss (e.g. when a large company relocates out of the EU). In contrast to European Structural Funds (like the ESF), the EGF provides more time-limited, individual and direct support. The EGF had been initially introduced only for the period 2007-2013, but given the exacerbating crisis the Commission proposed in 2009 to extend the scope and share of funding by the EGF for the period 2009 – 2011. This was accepted as an emergency crisis tool for the two years. However, seeing that the crisis continued, in June 2011 the Commission tried to extend this revision until the end of 2013, but this was blocked by a minority of Member States in the Council. The continuation of the EGF under the next multiannual financial framework 2014-2020 is unclear3. The Commission proposal of 2011 foresees several adjustments to the fund’s structure, such as providing assistance to farmers affected by international developments. Moreover, the scope of workers being eligible for fund applications is extended from workers with contracts of indefinite duration to include workers with fixed-term contracts, temporary agency workers, and owner-managers of micro, small, and medium-sized 3
This concerns merely the time-frame, as the EGF is funded outside the MFF.
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enterprises, and self-employed workers. The EGF is an employment-creating measure whose goal is that at least 50% of the workers assisted through the EGF should find a new and stable job within 12 months. The current success rate of the EGF - measured in the employment reintegration rate - is of 42%.
National Considerations The continuation of the EGF is currently highly disputed. Under the original Commission proposal for a MFF 20142020 it appears as a budget item of €3billion for the entire 7 years. Yet, when the Danish Council presidency was leading the negotiations for the MFF, the EGF had been scrapped. On the contrary, the previous Cypriot and the current Irish presidency have expressed their support for the fund. Surprisingly, under the current scheme, countries in most severe opposition to the fund, namely Germany, Sweden, the Netherlands and the UK have been the greatest beneficiaries of the fund.
Green Response The Greens are strong defenders of the EGF. They emphasise its essential role in putting redundant workers back into employment and in providing training to assist workers adapt to the needs of a globalised labour market. The main reforms Greens advocate for the fund are firstly a no compensation policy for the negative effects EU free trade agreements have on its agricultural sector. Such trade agreements should be concluded in a way that does not incur such negative effects. The Greens also argue that fund dispersion should be concentrated on active labour market measures rather than on passive ones equally targeting all categories of workers, including farmers.
5. Pensions Large increases in the age dependency ratio (the number of pensioners per employed person), rising life expectancy thus longer pension periods and discouraging employment trends are the key challenges European pension schemes face today. These render a reform in a coordinated European effort inevitable.
EU 2013 Policy Priorities: Employment and Social Affairs
In 2010, the Commission started consulting on the directions such as reform should take according to different Member State stakeholders. Consequently, in February 2012 the European Commission put forward a white paper on the topic that advocates increasing the retirement age and abolishing early retirement schemes, adapting work spaces for older people, and making work more flexible to better integrate older people. Women and men should be treated equally when it comes to pensions and pensions have to be adapted to the changing cross-border character of employment. This means that both public and private pension schemes should be transferrable from one Member State to another. Currently, a Commission roadmap on the review of the IORP Directive (Institutions for Occupational Retirement Pension) exists. The core idea is to abolish legal, administrative and regulatory obstacles to a single market for pensions. Currently, key stakeholders are consulted.
Green Response The Greens in the European Parliament have recently adopted a comprehensive position paper on pensions, which offers a response on how to prepare European pension schemes for the future. The Green Group promotes the idea that pensions have to be much more flexible, and have to respond to the needs of a mobile workforce. This implies that Europeans should have the right to transfer and accumulate pensions in case they move to a different Member State to work. This is the principle of transition security. The Greens will also push the Commission to present a new proposal for a Directive on Portability of Supplementary Pension rights, which would have a strong focus on solidarity based pension schemes. Financed by either tax or individual contributions, the solidarity based pension scheme would ensure that every member of society receives a pension above the poverty line. From which moment an individual would receive a pension would be determined by an individual assessment on how long contributions have been made to the scheme, and which type of work has been undertaken. According to the Greens’ ‘lifecycle approach’, this system would thus respect the new lifestyles of people, who will spend more time on transits between positions, on further education between positions, or on family breaks.
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The Greens reject the definition of a fixed retirement age and put strong emphasis on gender equality: While the White Paper merely refers to an equal retirement age for both sexes, the Greens point out that women should retrieve equal guarantees in their pensions, which account for likely career breaks, transition periods and changes in family situation. In general, everybody should have the opportunity to be a part of the labour force as long as s/he wishes, and as long as health conditions allow. In line with the Commission, the Greens find that today the low share of older people in the labour force is a waste of valuable experience and skill. The demands of older employees should thus be taken into consideration more seriously, age discrimination should be combated and intergenerational solidarity schemes should be set up. Early retirement should be dis-incentivised and only be a valid option for citizens with health problems.
6. Posting of workers directive A ‘posted worker’ is an employee employed in one Member State, but sent to another Member State to carry out work for a certain amount of time. Member States have different standards in social protection of workers and are also faced with different economic realities, resulting in differences in wage levels between EU countries. Several problems thus arise, e.g.: companies have been reported to abuse this system to create fake legal entities in a low wage country to provide a service at lower wage costs and social protection requirements; or, the employee that has to move to the high wage country faces a downgrading of her/his purchasing power. In order to avoid this ‘social dumping’, Directive 96/71/EC guarantees that the host Member States’ social protection standards will be respected in case a worker is posted there. As the implementation of the initial Directive was flawed, the Commission proposed in March 2012 an enforcement Directive. Currently the Directive is subject to amendments in the EMPL committee and a vote in the European Parliament is foreseen in June.
National considerations: The Council’s progress report has been published at the end of November 2012, revealing that several provisions are still unresolved, among which the defence of rights of
EU 2013 Policy Priorities: Employment and Social Affairs
posted workers, and cross-border fines for noncompliance with the Directive. Respect for a minimum wage in the construction sector has been agreed upon, yet Slovenia and Bulgaria call for an application to all sectors. Lithuania, the United Kingdom, the Czech Republic and Hungary are strongly opposed to the introduction of such a measure. One reason for their opposition is that at national level a legal provision for foreign subcontractors to respect national minimum wage provisions already exists in eight Member States. Malta, Portugal, Slovakia, Ireland and Spain have adopted an intermediary solution saying that this system should be set up at the discretion of Member States.
Green Response The Greens welcome that the proposed Directive introduced tougher sanctions, controls and better administrative cooperation to better enforce the rights of posted workers. However, the Greens want to go beyond bare minimum standards in the Directive and address the problem the difference between home and host country wage can pose. They defend that posted workers have a legal right to receive the same remuneration for the same work.
What’s missing? Additional funding to support national efforts on social housing Social housing is housing for people who cannot afford shelter. Rents in social housing are kept very low, which is usually enabled through state contributions. Alternatively, welfare benefits can be paid out to individuals to de facto decrease their rent expenses. In the context of the crisis, the trend is that less and less funds are allocated to social housing while the need is steadily increasing. At Member State level, only France, Austria and Denmark are currently constructing new social housing at a substantial pace, although a promotion of this sector is believed to be a contribution to a departure of the crisis by many actors. The Greens are strongly promoting larger investments in social housing. Green MEP Karima Delli will put forward an own-initiative report in the EMPL committee. Her draft
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report recognises the principal competence of the Member States to offer social housing, yet strongly calls upon amplified efforts and a connection of the housing problem with energy precariousness for more than 100 million European citizens. On the European level, the report foresees an exploration of additional funding support for national efforts. Legislation on the right to strike for posted workers In the EU, every citizen has the right to collective action and bargaining (art 28, Charter of Fundamental Rights). However, case law at the European Court of Justice (ECJ) has qualified this right and made it subject to national restrictions. Posted workers’ right to strike is therefore not entirely clarified. In March 2012, the Commission made an attempt to propose a regulation to clarify this right. Yet, after 12 European states4 had warned the Commission through the yellow card procedure5 that they saw the fundamental principles of proportionality and subsidiarity infringed, the Commission withdrew the proposal in October 2012. This leaves the EU with an insufficient regulation of strike rights for posted workers. Fund for European Aid to the Most Deprived In 2010, nearly one quarter of Europeans was at risk of poverty or social exclusion and recent statistics see an increasing trend. Among those 116 million people, 25.4 million are children. 40 million Europeans suffer from severe material deprivation. The ESF is the main EU tool to counteract these phenomena, yet an important role had been taken over by the less known EU Food Distribution Programme for the Most Deprived People (MDP), which since 1987 had made agricultural surpluses available to states willing to give them out to its deprived citizens. The reform of the Common Agricultural Policy is however gradually reducing those surpluses and taking away the basis for the MDP mechanism, which will be consequently discontinued after 2013. As the needs of the 4
Belgium, Denmark, Finland, France, Latvia, Luxembourg, Malta, the Netherlands, Poland, Portugal, Sweden and the United Kingdom 5 This procedure, which had been introduced by the Lisbon Treaty in 2009, was applied for the first time.
EU 2013 Policy Priorities: Employment and Social Affairs
most deprived prevail, a new tool must be introduced. The Commission recognised this and earmarked €2.5billion for the fight against poverty and social exclusion in its proposal for a multiannual financial framework 2014-2020. With part of this financial backing, a new instrument can be funded. A Commission proposal for such a Fund for European aid to the most deprived (2014-2020) is currently on the floor and a vote is expected in the EMPL committee in April. Green MEP Marije Cornellissen is the rapporteur for opinion in the Women's Rights and Gender Equality committee.
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The Green New Deal website developed and promoted by GEF for the Greens/EFA group, and uniting materials from GEF, the Greens/EFA Group and the EGP, has a section on “jobs and society”, including publications and best practices on how to achieve a fairer and more inclusive society: http://greennewdeal.eu/jobs-and-society.html
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DG Employment and http://ec.europa.eu/social
Social
Affairs:
For more information >
The Greens/EFA Group: http://www.greensefa.eu/economy-and-social-6.html
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Leaflet by Elisabeth Schroedter on the new planning period for structural funds: http://www.elisabethschroedter.de/media/broschuren/BrStrukturfonds_web.pdf
This text is the result of an original research carried out by Jonas Hirschnitz for the Green European Foundation. A big thank you goes to Berta Halmos, Greens/EFA advisor on Employment and Social Affairs, for giving extensive feedback to draft versions of this text. © Green European Foundation The views expressed in this article are those of the authors’ alone. They do not necessarily reflect the views of the Green European Foundation. With support of the European Parliament. Green European Foundation asbl 1, rue du Fort Elisabeth 1463 Luxembourg Brussels Office: 15 rue d’Arlon, 1050 Brussels, Belgium Phone: +32 2 234 65 70 - Fax: +32 2 234 65 79 E - mail: info@gef.eu - Web: www.gef.eu
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