About European Social Model

1. About European Social Model Denis STOKKINK Fondation pour la Solidarité Budapest, January 14th 2005

2. European Social Model is a common specific and collective history taking in account • economic needs • social aspects • European Institutions • Public Authorities • Companies • TUC • NGO's Role of 2

3. European Social Model concretises at European Union Level through/in • Successive steps from the Treaty of Rome to now • dynamic process • progressive process • Instruments • Different themes 3

4. The instruments available to European Authorities • Directives • Regulations • Legislation : • Structural Funds • Actions Programs • Social Dialogue • Open Method of Coordination 4

5. European Social Model concretises in themes such as • Free circulation of workers • Equality between men and women • Health and security at work • Work conditions • Fight against all sorts of discriminations • Social Protection • Social Inclusion 5

6. The Maastricht Treaty 1992 Two types of democracy recognised • Representative democracy • Social democracy • Social dialogue 6

7. The Luxembourg process (1997) Objectives • Coordinated strategy for skilled, trained and adaptable workforce and labour markets responsive to economic changes • Based on four pillars : • Employability • Entrepreneurship (make it easier for enterprises to employ people) • Adaptability (modernisation of work organisation, lifelong learning) • Equal opportunities (for women and men) How ? Dialogue, exchange of information, peer pressures • Employment guidelines (adopted by the Council) • National Action Plans for Employment (submitted by the MS and describing how they implement the EG) • Joint Employment Report (Commission + Council) 7

8. The Cardiff process (1998) • Objective : • Light procedure for monitoring economic reform in product and capital markets • Cover also the wide range of structural reforms • How? Dialogue, peer pressures, monitoring and reporting and evaluation system • MS submit National Progress Reports on structural reforms in product and capital markets (mid-November deadline) • Commission produces the Cardiff Report on the functioning of product and capital markets at the Community level • Commission prepares the peer review or country examinations in the Economic Policy committee • No specific guidelines : conclusions of these reports feed into the Broad Economic policy Guidelines instead 8

9. The co-ordination of structural policies : The Cologne process (1999) • Objectives : • To promote wage developments consistent with the objective of price stability • To reinforce the consistency of wage developments and fiscal and monetary policies • How?  Dialogue • Taking place twice a year (spring and autumn) between : • Social partners • Council + Committees : representatives of Ecofin and Employment & Social Policy Councils, of EFC, EPC and Employment Committee • Monetary authorities (ECB + representative of monetary authorities outside the euro area) • Commission • This forum in which the main players can discuss issues in a frank and informal manner (no minutes) helps each other to be clear on the other’s view 9

10. The Broad Economic Policy Guidelines (BEPG) • Provide the overall framework for economic policy co-ordination • Strong legal and political weight : • Treaty based : Art. 99 of Maastricht Treaty • Involvement of the European Council • But Treaty is silent on concrete application of the procedure (no specification of objectives, scope, periodicity) • Yardstick for ex-post assessment of the implementation of recommendations on macro-economic and structural policies • Legally not binding but the ECOFIN Council can issue a recommendation to MS whose policies are judged to be inconsistent with the BEPGs or risk jeopardising the common market (for the first time used in the early 2001 in the case of Ireland) and make it public • BEPGs both draw on and inspire other more detailed processes (SGP, Luxembourg, Cardiff) which deal with their respective subject matter in greater detail 10

11. The Broad Economic Policy Guidelines (BEPG) • Broad = cover the whole range of economic policies andEconomic= give the key economic policy messages • Cover macro-economicandstructuralissues • Includegeneralandcountry-specificrecommendations • Based on: • Assessment of the implementation of the recommendations of year t-1 • Inputs from other reports (SGP, Joint Employment Report, Cardiff report) • Contributions from other Council formations (Employment and Social Affairs, Competitiveness, Spring European Council) 11

12. The Broad Economic Policy Guidelines • Substance has evolved over time: • Focus was initially on sustained economic convergence, but was subsequently widened to encompass objectives of sustained high growth and job creation and recently on long-term issues such as population ageing and sustainable development • Change in focus has been reflected in the gradual establishment of a comprehensive economic policy strategy • General guidelines applicable to all MS were supplemented with more concrete country-specific recommendation to all individual MS (first time in 1999) • Enhanced surveillance of honouring of commitments: Implementation Report (since 1999) 12

13. The BEPG policy strategy 1. Ensure growth and stability-oriented macroeconomic policies 2. Improve the quality and sustainability of public finances 3. Invigorate labour markets 4. Ensure efficient product (goods and services) markets 5. Promote the efficiency and integration of the EU financial services market 6. Encourage entrepreneurship 7. Foster the knowledge-based economy 8. Enhance environmental sustainability 13

14. The Lisbon strategy (2000) Lisbon conclusions Employment rate in Europe lower than in the US (64% against 77%) and lack of qualification of the workforce Ageing of the population put at risk the viability of social security systems and pensions Lack of dynamism of the European economy Why? Markets still too fragmented Barriers to entrepreneurship R&D expenditures insufficient EU lagging behind in the development and use of new technologies  EU unable to match the US performances in terms of employment rate, productivity and GDP per capita 14

15. Comparison EU - US 15

16. The Lisbon strategy Lisbon objective : To transform the EU into the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion  Economic reform is part of a more general strategy to promote growth and employment, create a KBE and maintain social cohesion  Economic reform is part of a more general strategy to promote growth and employment, create a KBE and maintain social cohesion Decision to dedicate the annual Spring Council to structural reform Also aimed at convincing that the EU is serious about undertaking structural reforms Adoption of a new « open method of coordination » 16

17. Lisbon strategy The « open method of coordination » includes : Agreements on targets with timetables Translation of these targets into national policies Use of indicators and benchmarks Periodic evaluation of progress made 17

18. Does the open method of co-ordination work? Soft coordination relies exclusively on peer pressure and lacks disciplining instruments Too early to conclude about the effectiveness of this method It can be effective in 2 ways : Exchange of information and best practice can contribute to convince about the usefulness of reforms and to create a consensus on a common approach Peer pressure may help MS to overcome vested interests at national level 18

19. European Social Agenda (2001-2005) Strategic orientations approved at the Nice Council (December 2000) For more and better jobs Development of new balance between flexibility and security Fight against all forms of exclusion and discrimination (social integration) Modernise the social protection Promotion of equality between men and women Strenghten the social part of enlargement and foreign relations of the EU 19

20. Charter of Fundamental Rights of the European Union Approved at the Nice Council (December 2000) one chapter of the Treaty Recognises civic, political, economic, social rights for the European Citizens Six categories of rights : • Dignity • Freedom • Equality • Solidarity • Citizenship • Justice 20

21. Laeken Summit (December 2001) Open Method of Coordination for Pensions Strategy for Social Inclusion Resolution on CSR 21

22. New Treaty 2004 Three types of democracy recognised • Representative democracy • Social democracy (social dialogue) • Participatory democracy (civil dialogue) 22

23. Fondation pour la Solidarité Rue Coenraets, 66 B-1060 Brussels - Belgium info@fondation-solidarite.be www.fondation-solidarite.be 23