Creating Social Europe? From EMU to the EES and the EU Social Policy Agenda

Structure of lecture European Monetary Union and its problems National Action Plans and the European Employment Strategy The Open Method of Co-ordination: new remits for ‘soft law’ Towards a ‘Social Europe’?

Forces promoting economic integration & fear of social dumping Globalisation and international financial institutions (World Bank liberalism) Multi-national corporations and international financial markets EMU and Growth and Stability Pact –Agreed limits on debt –Member states lose interest rate / devaluation options –Cuts in welfare (esp. pensions) –‘social insurance destroys jobs’ = competitive restructuring ‘the drive to the bottom’?

Maastricht promotes negotiated solutions ‘Social Pacts’ –match wage control for job creation and welfare protection –Holland, Italy, Denmark, Finland and Ireland 1999 Cologne Protocol –States to co-ordinate wages with monetary & fiscal policies and productivity agreements –Structured social budgets Gender: EU reinforces women’s rights and participation rates rise.

For specific questions on the gender equality ESF expenditure on gender equality Share of ESF assistance ( ) for equal opportunities in % Denmark has no specific allocation for gender equality as gender has been fully mainstreamed. Source: Communication from the Commission on European Social Fund support for the European Employment Strategy, , COM (2001) 16 final/2

Amsterdam (1997), Luxembourg Process and Lisbon Amsterdam: European Employment Strategy –National Action Plans for Employment –EU to draw up guidelines and monitor performance –Objects: Create ‘more and better jobs’ Raise productivity Promote regional and social cohesion –Not legally binding: no sanctions Lisbon (2000): –attack on social exclusion –promotion of ‘knowledge based society’ Barcelona (2002): raise participation older workers

EU Social Policy Agenda Directives on: –Work / life balance –Lifelong learning –Active aging Open Method of Co-ordination (‘soft law’) –Benchmarks performance –Enables policy learning EES and OMC recreates division between ‘good’ and ‘bad’ social expenditure

Kok 5-year report on EES (2005) Target: 70% male: 60% female (inc. 50% older workers) to be reached by 2010 Main findings: –EU 15: employment up by 12 million –But male rate = 64% and female rate = 55% –EU 25 need 22 million jobs & 2% p.a. growth –Labour productivity slowed (poor quality jobs) –Black markets have grown –Long term unemployment grows –‘working poor’ emerge

Kok report: priorities Problems: –low domestic demand + strong Euro –Better governance (weakness of OMC): more mutual learning NAPEs need more political legitimacy 3 priorities –Attract (& keep) people (esp. older) in jobs by ‘making work pay’ (tax incentives) –Raise adaptability of workers (multi-tasking) –Invest in human capital (education)

UK performance Weakness: –Like elsewhere, job quality neglected –Working poor –Gender pay gap widest in EU –Skill shortages / low productivity (training) –No social dialogue on EES Strengths –High female participation rates –Lower ‘unemployment’ (but incapacity and NEETS)

Open Method of Co-ordination: shifting strategies From EES to other social agendas –Pensions –Health care –Social inclusion –Role of ECOFIN in identifying welfare priorities Target setting and benchmarking as means to co-ordinate social Europe? –Lack of sanctions –‘naming and shaming’ –Performance to statistical target, not social objective

EU welfare futures? Leibfried: EU member states ‘saturated’ in welfare –Liberalisation is partial: little convergence –Welfare regime retain national identities (no multi- national solidarity to defend welfare) –EU still contains Sweden and UK. Rhodes and Ferrera –Focus on negotiated flexibility (Netherlands & Denmark) –Tax-funding of social support –Help to focus on placement of unskilled & marginal –Reconstruct retirement

Remaining problems Expansion of EU membership to 25 states (and new members view USA as paradigm) Refugees and migrant labour (Offe) without ‘hard’ EU law, voters resurrect national barriers of protection –UKIP in UK –Le Pen in France –Dutch & Swedish & East German equivalents Dwindling influence of OMC: current crisis