Editor's note

International Internet Magazine. Baltic States news & analytics Thursday, 23.11.2017, 16:50

“Social Europe”: problems and realities

Eugene Eteris, BC, Riga/Copenhagen, 31.10.2017.Print version

The EU member states’ ministers almost unanimously agreed on the European Pillar of Social Rights. That was a good sign to end almost three years’ marathon in dealing with social damping problems, fraud and abuse about workers from low-wage states. It seems that the Pillar has not resolved other serious socio-economic problems.

At the Employment, Social Policy, Health and Consumer Affairs Council (23 October 2017, Luxembourg), the EU member states’ Ministers of Employment and Social Affairs expressed their almost unanimous endorsement of the European Pillar of Social Rights. The Council’s decision marked an important step forward for creating a social Europe: it means that, generally, the EU is committed to striving for better working and living conditions, in light of such challenges as ageing society, globalisation and digitalisation.

 

As to the agreement on posting of workers, the Commission’s position is that workers should earn the same money for the same work in the same place. It is a fair decision on both sides: e.g. for the posted workers, who deserve equal working conditions, and for local workers and employers who do not want to be undercut on wages. 

Twenty years plus three…

For the European Commission, creating a deeper and fairer internal market has been an essential component of building a more “social Europe”. Reforming the existing rules on the posting of workers was one of the key initiatives to achieve this; it was outlined in President Juncker’s Political Guidelines of 2014 to review the Posting of Workers Directive to ensure that social dumping had no place in the EU states. The common denominator was that in the modern EU “the same work at the same place should be remunerated in the same manner”.  

 

In the 2015 State of the Union address, President Juncker first mentioned the idea of a European Pillar of Social rights, arguing that social rights should “take account of the changing realities of European societies and the world of work”

 

The Commission put forward a formal proposal to amend the 1996 Posted Workers Directive in March 2016. The proposal was built on the principle of “equal pay for equal work at the same place”, and set out that posted workers would, generally, benefit from the same rules governing pay and working conditions as local workers. The proposal complemented the Enforcement Directive on Posted Workers-2014, which introduced new instruments to combat fraud and abuse, and to improve administrative cooperation between national authorities in charge of posting.

 

After the first outline of the Pillar on 8 March 2016, a broad consultation took place with the member states, EU institutions, social partners, civil society and citizens. In April 2017, the Commission presented a final text, which contained 20 principles and rights to support fair and well-functioning labour markets and welfare systems, serving as a compass for a renewed process of convergence towards better working and living conditions among EU states.


In the State of the Union on 13 September 2017, the Commission specifically added that “in the Union of equals, there should be no second class workers”.

 

See: European Pillar of Social Rights: better working and living conditions in EU and Baltics. 03.10.2017. In: http://www.baltic-course.com/eng/modern_eu/?doc=133744&ins_print

Small problems – linguistic…

There was, however, a serious stumbling block in the Pillar’s text, which might bring down the whole member states’ employment ministers idea of social rights in Europe. It is about a single word — “would” — in the text. The offending sentence read: “For them to be legally enforceable, the principles and rights would require dedicated measures or legislation to be adopted at the appropriate level.”

 

The use of the conditional tense is believed by some MEPs would render the whole proclamation meaningless; some MEPs demanded the word “would” be removed. Socialist MEPs, and one of the Parliament’s most active, Maria João Rodrigues, believed that extra word would water down the text.

 

EU member states’ national governments, other MEPs and the Commission started to ask the “initiators” to back down. But argumentation goes that it is not “just a word”; the new “social law” should make it clear that the new legal instruments are going to be real.

 

Discussions about the word “would” bother the EU authorities as well: thus at the European Council’s summit some argued that such linguistic issues “running the risk of losing everything”. Some quite “really elegant” solution had been found, which involved re-ordering the words and keeping “would” out of the text. But such linguistic details, it seems, are just a beginning… 

More serious problems…

However, in the “social-liberal” dominance in the European values, there is a difficult problem to solve retaining the balance between social justice and economic productivity, while improving administrative cooperation between national labour market authorities. This is why it needed almost 20 years to come to the important solution, since the1996 Posted Workers Directive. In fact, up to 2004, the biggest EU’s enlargement, things went on quite smoothly: the free movement of workers in the old EU-15 member states didn’t arise many problems. The reason for that was simple - labour costs among the “old EU states” were almost equal. Main problem occurred only when the “new EU-10” after 2004 realised that it is several times better to get an occupation in the “old ones” (e.g. 5 times higher wage in Germany than in Latvia).  

 

Therefore, four EU member states’ governments (Poland, Latvia, Lithuania and Hungary) voted against the Pillar. To a certain degree they were not only being nervous about EU’s invasion into member states’ sovereignty. They saw that inherent problem is not really about “social Europe” but went about the present West-East divide in the quality of life: e.g. the Baltic States are at the level of 55-60% of the general EU level.

 

See: Commission’s report “Labour Market and Wage Development in the EU”. 16.10.2017. In:

http://www.baltic-course.com/eng/analytics/?doc=134126&ins_print;

 

Besides, another main issue was seen behind the Commission’s proposal: the present Pillar masks the western labour market’s advantages in “legally” keeping out “cheap labour” from eastern EU (so called social dumping), while putting more nationals into active workforce. However, for the eastern Europeans the major problem is to be more serious: to combat possibly increasing unemployment, if these states would not come ahead with the right structural reforms and “smart specialisation”.  

See: http://ec.europa.eu/regional_policy/en/newsroom/news/2012/12/smart-specialisation-strategies-for-innovation-driven-growth

 

There are already plenty of eastern and central EU states’ workers in the “old EU-15”: about 0, 5 million polish workers are in other EU states, 127 thousand from Slovenia, about 100 thousand from Slovakia, 63, 6 thousand from Hungary, etc. It’s true, that workers from western EU states are “stationed” in the eastern states too, but that’s a different story: they are either owners of companies there or having higher salaries.

 

Some states are for a transitional period or a mixture of old and new rules: e.g. “stationed” period suggested by Denmark is for two years, by France –for 12 months. Bottom-line: actually, western labour market has had definite advantages in employing cheap but rather able workforce from eastern and central EU; e.g. Danish national labour organisation is disappointed about the new Pillar.       

 

With the UK, Ireland and Croatia abstained, according to qualified decision-making in the Council, the new Commission’s proposal was adopted; the opponents needed at least three more states to reject the proposal.   

Perspectives

In order to become a EU law (either a directive or a regulation), the Pillar must be approved by the European Parliament and the Council (on the text from the Commission) with a final proclamation at the Social Summit for Fair Jobs and Growth, taking place on 17 November 2017 in Gothenburg, Sweden. The three main EU institutions shall also agree on a general approach regarding the Commission’s proposal to revise the rules on the posting of workers.

 

In 2018 the Commission will establish a special EU agency - European Labour Authority, with the aim of strengthening cooperation between labour market authorities at all levels and better managing cross-border labour situations.

 

The Commission will also propose other initiatives in support of fair mobility, including a European Social Security Number, to make social security rights more visible and (digitally) accessible.

 

A strong political commitment to make the EU internal labour market fairer with easier rules to enforce has been formed. Now it is the turn of the European Parliament to swiftly finalise the Commission draft and Council’s agreement and formally adopt it. In this way the Parliament will both show the European legislators’ ability to reach a fair/balanced agreement and willingness to pursue a perspective path for European social agenda. However, the option is clear: are the EU states competing on “lower standards” or they are taking a more progressive path.


See some other publications in “The Baltic Course” on EU’s social issues
: - Investing in social transformation: European perspectives. 25.09.2017. In:  

http://www.baltic-course.com/eng/modern_eu/?doc=133512&ins_print;

- Social innovation: adapting Baltic States’ research. 29.09.2017. In:

http://www.baltic-course.com/eng/editors_note/?doc=18486&ins_print;

- Towards social Europe: the EU states agreed on European Pillar of Social Rights. 25.10.2017.

In: http://www.baltic-course.com/eng/good_for_business/?doc=134424&ins_print





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