Is there a European social policy?

'Europe needs a broadly-based, innovative and future oriented social policy, if it is to succeed in taking up the challenges it will face'.

These are the opening words of the White Paper on European social policy' which the European Commission has just forwarded to the Council of the European Union, the European Parliament, the Economic and Social Committee and the Committee of the Regions.

At a time when the problem of unemployment is on the agenda in almost every country in the world, and when the relationships between growth, employment and social protection are being discussed in connection with this, we thought it would be interesting to analyse the European Commission proposals on the subject.

Social policy goes beyond employment. It affects people not only when they are at work, but also when they are outside work or without work. What is at stake is not just the preservation but also the development of the European social model, especially the cohesion between the forces active in society.

Competitiveness and solidarity

The responses to this challenge are given in Article 2 of the Treaty on European Union: 'to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States'.

Is the desirable possible? Europe has never created such a society, but nowhere in the world has so much progress been made towards such objectives. If an explanation for such a phenomenon is sought, the reply is probably that a certain number of common values exist which constitute the basis for the European social model.

In particular, democracy and individual rights, the freedom to engage in collective bargaining, the market economy, equal opportunities for all, social protection and solidarity spring to mind. In a word, competitiveness and solidarity are inseparable. There is a consensus in favour of preserving these common values, even though radical changes are needed with regard to the way in which they are applied in practice.

It is in this capacity that the search for a high level of social protection must not be considered solely as a cost, but also as a crucial element of the rules of competitiveness. Social policy is not a replacement solution for economic development. Confidence is also a competitive advantage; it can only be created from reconciliation between economic and social growth.

Assistance or employment?

Although employment growth in the European Union has been low compared to the United Stat" and Japan, the levels of social solidarity are higher. But this solidarity has been essentially passive. It consists in maintaining the income of certain social groups without preparing them adequately to contribute to economic activity. To move to a more active approach presupposes no longer giving pride of place to assistance, but to job creation.

This is a matter of dignity for individuals, but also of efficiency for societies. Firstly, the financing of social policy schemes depends on jobs. Social progress can only be based on economic prosperity and therefore on the competitiveness of the European economy. But in other respects, the social environment is an essential factor which determines economic growth. Progress lies not only in the competitiveness of economies, but also in the efficiency of society as a whole.

The estabilishment of minimum standards common to the Union as a whole serves as protection against unfair economic competition and the making of unacceptable cuts in social standards to bring about an artificial increase in competitiveness. To achieve these shared objectives, the European Union provides financial support which allows social cohesion to be promoted within it through the Structural Funds. This is particularly true of the European Social Fund. All aspects of social policy are involved: action against unemployment and exclusion, the promotion of equal opportunities, support for the integration of young people, encouragement for workers' mobility and adaptation to industrial change and, in regions where development is lagging behind, the boosting of education, science and technology services and training for the health sector.

The European Commission recognises the need for more effective synergy between the efforts of the Union and those of Member States and the need to step up cooperation in and coordination of the activities concerned. It is also appropriate to promote increased, better structured cooperation and exchanges of experience on questions of common interest, not only between Member Stat", but also at local and regional level, through networks and, in particular, activities which are both innovative and transnational. Finally, the process of change calls for joint reflection and coordinated action, for example, with regard to the future of work itself, the impact of the information society (the dawning of a multimedia world) or the increasingly blurred relationship between work and qualifications.

One priority: employment

For too long, Europe has concentrated on the management of unemployment instead of promoting job creation as a priority. Dynamic structural changes, stronger economic growth and increased flexibility of the market are needed as a matter of urgency.

Recently, the economic outlook for the Union has improved. But there is still a risk that, in the absence of structural measures for job creation, growth will not enable more labour to be absorbed, but will barely compensate for the productivity increase resulting from polices to improve efficiency and competitiveness.

The White Pa,oer on growth, competitiveness and employment (see The Courier, No 145, May-June 1994, pp. 7983) stressed the need to estabilish a new form of solidarity based on the use of productivity gains to create new jobs. Whilst supporting high productivity jobs, the Union must maximise its capacity to create and maintain jobs at other levels.

Education and training

Investment in education and training is now recognised as one of the key conditions for the competitiveness of the Union and the cohesion of our societies. The challenge of long-term competitiveness is in fact to secure a highly skilled, easily adaptable workforce. This is vital because, in the future, workers will be obliged to change jobs more frequently in the course of their lives.

In this field, the Commission intends to formulate the following proposals in 1995:

- to guarantee that no young person under 18 years of age is unemployed anywhere in the Union;

- to eliminate illiteracy and lack of basic qualifications among school-leavers;
- to improve the status of initial vocational training and instruction;
- to extend the range and scope of existing apprenticeship programmes and/or other combinations of jobs and training;
- to improve coordinated guidance and placement services, especially at local level;
- to examine ways of introducing tax incentive measures for companies and private individuals in order to encourage them to invest in their on-going training.

All these measures are being put forward in full knowledge of the danger of training programmes becoming nothing more than mechanisms to control unemployment.

Thanks to a budget of more than ECU 181 billion for the period 1994-1995, the structural funds and the Social Fund will make a substantial contribution to investment in human resources, to action against unemployment and to the smooth functioning of the job market.

The task of the Social Fund is to combat long-term unemployment and exclusion from the job market, to try to provide all young people with the necessary skills and the opportunity to work, to promote equal opportunities and to help the workforce to adapt to industrial changes. The structural funds are there to assist regions whose development is lagging behind.

Standards of employment for a competitive Europe

Improvement in the employment standards and the rights of workers is designed to ensure that the creation of the single market do" not lead to a decline in these standards or distortions of competition and that the workers too benefit from the new prosperity. The priorities are equal treatment for men and women, the free movement of workers, health and safety and labour law.

It will be necessary to take account of the fact that new types of employment have been appearing over the past few years, deriving in particular from changes in production patterns and the services sector and leading to more flexible forms of contracts of employment.

Furthermore, the problem of standards of employment is controversial, since it is at the heart of the debate on the links between competitiveness, growth and job creation. Some maintain that employment standards which are too high generate costs which reduce the competitive advantage of businesses in a country or region. Others think that productivity is the key to competitiveness and that high standards of employment have always been an integral part of this.

With regard to the delicate problems arising from the informal sector of the economy, the Commission will submit proposals on illegal working, including its links with illegal immigration.

A European job market

One of the major success" of European integration has been the transformation of economic migratory movements between Member States into the free movement of persons. During times of high unemployment, it is obviously more difficult to achieve the objective of freedom of movement for citizens of the Union, let alone for immigrants from third countries.

The challenge which the Union must take up today is that of the creation of a true European mobility zone, in which freedom of movement becomes not only a right but also a daily reality. A prerequisite is that European provisions in the field of social security ensure adequate protection so that the disparities between the social security schemes of the various Member States do not have negative repercussions on people going to another country. The comprehensive approach which has been adopted is not intended to harmonise the social protection schemes of Member States, but to achieve effective coordination of these schemes within the Union.

With regard to the integration of immigrants, the object of the policies is to improve the position of nationals from third countries residing legally within the territory of the Union and to strengthen their rights in relation to those of the citizens of the Member States.

Equal opportunities for women and men

The European Union has long been committed to promoting equal opportunities between women and men (Article 119 of the Treaty of Rome). But the economic context of the equality policy has undergone radical changes in recent years. Women's rate of participation in the labour force has increased, even though at the same time their unemployment rate has been higher than that of men.

The balance between the sexes in economic activity will probably be profoundly disrupted by the structural changes in the economy and especially by the growing role of services, the new technologies and the new forms of flexibility sought by public and private enterprises in the organisation of work, working hours and contracts of employment. It is a matter of maximising these possibilities whilst minimising the risks.

Furthermore, the growing participation of women in economic life indicates that it is now urgent, in the interests of society as a whole, to achieve more effective synergy between working life and family life. Lastly, the objective of equality between women and men will remain in vain if women's involvement in decision-making does not progress far more rapidly in all sectors of society.

The emphasis should be placed on equal opportunities and equal treatment, not only on the labour market, but also in society in general. Formal equal opportunities do not automatically lead to equal treatment or to appropriate representation of women at decision-making levels.

An active society for all

Although it is true that the European social model rests on solid foundations, it must nevertheless be adapted to produce a new synergy between the functions of social protection and the creation of wealth. This is all the more important as, in the next 20 years, the European Union is set to experience profound demographical upheavals and social protection schemes will have to adapt to these developments.

The Member States of the Union recognise that a single market can be established whilst preserving the diversity of the existing social protection schemes. It is therefore appropriate to encourage social protection policies centred on common objectives, especially action against exclusion and the promotion of the welfare of all individuals; workers and others. This is a challenge which concerns over 52 million citizens in the Union who live below the poverty threshold. It also entails the integration of disabled people (over 10% of the Union's population) into society, and a reassessment of the economic and social role of the elderly. In addition, measures are planned in the field of public health.

Furthermore, the strengthening of the social dialogue will involve trade unions, employers' organisations and voluntary workers.

To conclude, the European social model is not impermeable to influences from other parts of the world and efforts at international cooperation, both bilateral and multilateral, will continue, particularly as regards the social issues linked to international trade.

D.D.