No C 126/2 Official  Journal  of the  European  Communities 28. 5. 77 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on the  communication  from  the Commission  to the  Council  in connection 
with  the  review  of the  rules  governing  the  tasks  and  operations  of the  European 
Social  Fund 
The text  referred  to the Committee  has  not yet been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 6 April  1977,  the  Council  referred  the  abovementioned  communication  to the 
Economic  and  Social  Committee  in accordance  with  Articles  126  and  127  of the Treaty 
establishing  the European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
148th  plenary  session,  held  in Brussels  on 27 and  28 April  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE. 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Articles  126  and  127  thereof, Having  regard  to the  opinion  issued  by the  Section 
for Social  Questions  on 21 April  1977, 
Having  regard  to the  report  drawn  up  by  the 
rapporteur,  Mr Laval, 
Having  regard  to the  request  for an opinion  which 
the Council  of the European  Communities  made  on 6 
April  1977, Having  regard  to the discussions  at its 148th  plenary 
session  held  on 27 and  28 April  1977  (meeting  on 
28 April  1977), 
Having  regard  to the decision  which  its Bureau  took 
on 27 February  1977  in anticipation  of the Council's 
request,  instructing  the Section  for Social  Questions 
to draw  up an opinion  and  report  on the matter, Whereas  the  Commission  has  not  proposed  any 
radical  changes  to the provisions  which  have  been  in 
force  since  1 February  1971;  and  whereas  it is chiefly 
concerned  to improve  the Fund's  working  methods, 
28.5.  77 Official  Journal  of the European  Communities No C 126/3 
in particular  by  overhauling  its  financial  and 
administrative  procedures; 
Whereas  the  Fund  can,  under  no circumstances, 
continue  to be  a mere  back-up  instrument  of 
Community  employment  policy,  concerned  only  with 
training  and  retraining  and  operating  in a labour 
market  which  is stable  and expected  to remain  so; 
Whereas  the measures  taken  to stimulate  mobility  of 
labour  will  be effective  only  if suitable  jobs  are 
created; 
Whereas  it is absolutely  vital  that  the Fund  be given 
the resources  which  it needs  to fulfil  its task,  and 
especially  re-establish  full  employment,  which  is an 
objective  called  for  by the  Economic  and  Social 
Committee  on many  occasions,  particularly  in its 
opinion  on the draft  fourth  medium-term  Economic 
Policy  Programme, considerably  since  the Social  Fund's  tasks  were  laid 
down. 
1.3. While  leaving  room  for further  changes,  the 
Commission  proposes  that,  apart  from  a small 
number  of improvements,  the Social  Fund's  current 
structure  should  be left  substantially  intact.  The 
proposed  improvements  are designed  to enable  the 
Social  Fund  to adapt  better  to labour  market 
requirements,  and  to concentrate  on  the  most 
pressing  Community  problems.  Furthermore, 
administrative  and  financial  procedures  are  to be 
changed  in order  to speed  up the  processing  of 
application  for  assistance,  and  the  paying  out  of 
grant-in-aid. 
1.4. The  Committee  endorses  these  guidelines  but 
considers  that  the  Commission  should  have 
submitted  a large  number  of concrete  proposals  to 
follow  up the extremely  lucid  analysis  in the first  part 
of its review. 
HAS  UNANIMOUSLY  ADOPTED  THE  FOLLOWING 
OPINION: 
The Committee  endorses  the Commission  proposals, 
subject  to the comments  set out below. 
1. General  comments 1.5. The  Committee  has repeatedly  requested  that 
the social  Fund  be assigned  a more  important  role  in 
employment  policy  and  — as an instrument  of 
Community  solidarity  — be given  the  task  of 
synchronizing  national  and  Community  priorities. 
The Committee  has  also  stated  that  the  functions 
assigned  to the Social  Fund  should  become  part  and 
parcel  of the Community's  structural  policies. 
1.1. The  Committee  commends  the  Commission 
for submitting  proposals  calculated  to improve  the 
Social  Fund's  working  procedures  and  efficiency. 
Nevertheless  it is doubtful  whether  the proposals  go 
far enough,  given  the scale  of the problems  besetting 
the Community.  More  attention  should  have  been 
paid to the current  economic  situation  in the Member 
States,  and  its  social  repercussions.  The  labour 
market  has,  after  all, changed  radically  since  the 1971 
reform. 1.6. The  Social  Fund  is an important  instrument 
set up by the  Treaties  establishing  the  European 
Economic  Community.  Its task,  as stated  in Article 
123, is: (a) to promote  employment;  (b) to increase 
the geographical  and  occupational  mobility  of 
workers.  The  Social  Fund  therefore  has a role  to play 
in Community  employment  policy,  in general  and 
further  vocational  training  policy,  and  in regional 
development  policy  which  must  make  for  better 
working  conditions. 
1.2. The  Commission  analyses  the  positive  and 
negative  aspects  of the  Social  Fund's  track  record 
since  it was  reformed  in 1971,  and draws  conclusions 
about  the  Fund's  role  and  efficiency  in the 
employment  field.  This  analysis  could  have  prompted 
the Commission  to consider  radical  changes  in the 
tasks  assigned  to the  Social  Fund.  After  all,  the 
economic  and  social  context  has  changed 1.7. In  this context  the Fund  must  be synchronized 
with the other  financial  instruments,  in particular  the 
European  Regional  Development  Fund,  the European 
Agricultural  Guidance  and  Guarantee  Fund,  ECSC 
loans  and  the  European  Investment  Bank.  The 
Committee  considers  that  synchronization  of the 
No C 126/4 Official  Journal  of the  European  Communities 28. 5. 77 
activities  of the  Social  Fund  and  the  Regional  Fund 
would  provide  a golden  opportunity  for  cooperation 
between  two  Community  financial  instruments,  the 
one designed  to create  employment  and  the  other  to 
stimulate  job  creation  and  enable  the jobs  created  to 
be filled.  Steps  must  therefore  be taken  to ensure:  (a) 
that the  Social  Fund  does  not  become  a mere 
appendage  to the  Regional  Fund;  (b) more  generally 
that it is not stripped  of its specific  role  and  does  not 
play  second  fiddle  to instruments  of a more  political 
or economic  nature. 
1.8. The  Social  Fund  should  implement 
employment  policy  guidelines  which  are  more 
commensurate  with  the  scale  of  the  problems 
besetting  all the Member  States.  This  will  require  an 
increase  in the Fund's  resources  if its former  work  is 
not to be neglected. 
1.8.1.  In  view  of the  new  objectives  and  the  scale 
of the  present  problems,  the  Fund's  manifestly 
inadequate  resources  will  have  to  be  increased 
substantially.  Simply  increasing  resources  will  not 
suffice;  in addition  a policy  of using  the Social  Fund 
to further  employment  must  be adopted. 
1.9. The  Council  is responsible  for  laying  down 
(at the  Commission's  proposal)  the  general  criteria 
and objectives  to be followed  in determining  the 
types  of scheme  eligible  for assistance  and  the type  of 
aid to be granted  by the  Fund.  The  Committee  has 
however  always  taken  the  attitude  that  it is up to the 
Commission:  (a) to identify  the  sectors,  regions  and 
social  groups  which  should  be eligible  for Fund  aid; 
(b) to fix rates  of contribution  (1). Selection  would  be 
made  on a case-by-case  basis  after  consultation  of the 
representatives  of the  economic  and  social  sectors 
involved. 
1.10.  If  this  approach  is adopted,  the  Community 
will have  to choose  between  a number  of possible 
courses  of action.  This  will  entail  close  cooperation 
between  the  various  relevant  bodies,  including  the 
European  Parliament,  the  Economic  and  Social 
Committee,  Tripartite  Conference  and,  in particular, 
the Standing  Committee  on  Employment.  Such 
cooperation  would  be  particularly  necessary  in 
connection  with  the  definition  of new  tasks  and  aids 
along  the lines  indicated  by the Economic  and  Social 
Committee  in its opinion  of 26 May  1971  on the proposal  for  a Regulation  implementing  Council 
Decision  71/66/EEC  of 1 February  1971  (2): 'The 
Regulation  must  state  in particular  that  in the light  of 
the periodic  reviews  of the  employment  situation,  the 
Standing  Committee  on Employment  will:  (a) make  a 
careful  analysis  of the difficulties  affecting  or liable  to 
affect  certain  sectors,  regions,  or  categories  of 
workers;  (b) take  steps  to ensure  that  the Community 
institutions  propose  the requisite  measures.' 
1.11.  The  Committee  takes  the view  that  the Fund 
should  part  finance  assistance  to the  following,  in 
line with  the Council  Decision  of 1 February  1971: 
(i) backward  regions  and  regions  in decline; 
(ii) industries  which  have  been  particularly  hard  hit 
by structural  imbalances  and  changes  but  which 
are still  capable  of providing  employment; 
(iii) vulnerable  groups  on  the  labour  market,  in 
particular  women  and  young  people  looking  for 
their  first  job. 
1.12.  The  Committee  would  like  to see  the  Social 
Fund's  activities  in the  area  of vocational  training 
and retraining  become  part  and  parcel  of the  new 
education  and  training  blueprint,  many  aspects  of 
which  are  still  being  worked  out.  The  Committee's 
attitude  is prompted  by the fact  that  youth  unemploy-
ment  is both  widespread  and  persistent  and  there  is 
a growing  mismatch  between  the qualifications  which 
job seekers  possess  and  the  qualifications  employers 
are looking  for. 
1.13.  The  following  aspects  of the problem  require 
attention: 
— the  mismatch  between:  (a)  training;  (b)  labour 
market  requirements,  including  social  infrastruc-
ture needs, 
— the  need  for  appropriate  training  and  career 
guidance  within  the  basic  educational  system. 
Social  policy  instruments  should  not  have  to plug 
the gaps  in the  traditional  educational  system; 
they  should  be  used  primarily  to  facilitate 
adjustments  to technological  progress,  economic 
change,  etc, 
— the  feasibility  of introducing  special  training  for 
newly-created  jobs,  open  to  both  men  and 
women. 
(!) OJ No C 26, 4. 3. 1970. (2) OJ No C 88, 6. 9. 1971,  p. 6. 
28. 5. 77 Official  Journal  of the  European  Communities No C 126/5 
1.14.  Generally  speaking,  the  Fund  should  give 
priority  to training  schemes  which  offer  trainees  a 
genuine  prospect  of employment;  in particular, 
priority  should  be given  to schemes  catering  for the 
most  vulnerable  social  groups,  or for  sectors  and 
regions  which  have  job  problems  but  where,  at the 
same  time,  job  opportunities  either  exist  or can  be 
stimulated  in other  branches. 
2. Specific  comments  on the  proposed  amendments 
to Decision  71/66/EEC 
(Appendix  I to the Commission  communication) 
2.1. The  Committee  recognizes  the  value  of the 
Commission  proposals  for  granting  assistance  to 
private  bodies.  In view  of the  new  conditions  for 
granting  this  aid,  the  Committee  welcomes  the  fact 
that the  public  authorities  are  to be given  sole 
financial  responsibility  for such  operations.  Since  the 
Member  States  and  the  Member  States  alone  are 
authorized  to forward  requests  for  aid,  it would 
appear  essential  to indicate:  (a) to what  extent  the 
two sides  of industry  have  been  involved  in the 
taking  of decisions  on aid;  (b) the  levels  at which 
they have  been  consulted  (firm,  sectoral,  regional, 
governmental). 
2.2. The  Committee  agrees  with  the  Commission 
that if the  Community  is really  serious  about 
showing  its  solidarity  with  Member  States  and 
regions  suffering  from  structural  unemployment,  then 
the Fund  must  be able  to make  a larger  percentage 
contribution  where  necessary.  The  Committee, 
therefore,  agrees  that  the Fund  should  be able  to make 
a larger  contribution  (65%  instead  of 50%)  (i) to 
schemes  in regions  with  the  most  pronounced 
structural  imbalances,  and  (ii) to schemes  in regions 
where  one  or more  key  sectors  are in decline. 
2.2.1.  The  Committee  welcomes  the  Commission 
proposal  to introduce  aids  in areas  other  than 
vocational  training  and  labour  mobility.  The 
Committee  is likewise  in favour  of a 35 % ESF 
contribution  towards  schemes  designed  to improve 
working  conditions  or to help  to create  or preserve 
jobs,  although  the  Commission  proposals  only  go 
part of  the  way  to  meeting  the  Committee's 
oft-expressed  request  that  the  Fund's  terms  of 
reference  should  be extended.  The  Committee  will, 
therefore,  play  its part  in defining  and  implementing 
any new  aids  which  the Commission  may  propose  to 
the Council  under  Article  8 (as amended)  of Decision 71/66/EEC.  This  applies  particularly  to aids  designed 
to alleviate  the  problems  created  by  the  current 
persistent  recession. 
2.2.2.  The  Committee  regrets  the  Commission's 
intention  to put  off introducing  new  types  of aid in 
areas  other  than  vocational  training  and  labour 
mobility,  until  an unspecified  time  in the future.  The 
serious  employment  situation  in all EEC  regions  calls 
for the  immediate  approval  and  implementation  of 
new types  of aid so that  Article  123  of the Treaty  of 
Rome,  which  gives  the  Fund  the  primary  task  of 
'rendering  the employment  of workers  easier'  in the 
Community,  can be fully  implemented. 
2.2.3.  Subject  to these  reservations,  the Committee 
approves  the proposal  to amend  Article  8. 
2.2.4.  The  Commission  proposes  that  the  Fund 
should  part-finance  schemes  'intended  to maintain, 
for a fixed  period,  the income  of persons  who  have 
lost their  jobs  or whose  activities  have  been  reduced 
or suspended,  and  who  are  awaiting  training  or 
employment'  (Cf.  Annex  II, Article  3 (2) (a)).  The 
Committee  endorses  this  proposal  but points  out that 
in view  of their  purpose,  such  schemes  are not to be 
confused  with  unemployment  benefits.  In  this 
connection,  the Committee  would  point  out  that  the 
ESF is not  an instrument  for  offsetting  differences 
between  the  unemployment  benefits  paid  in the 
Member  States.  Other  instruments  must  be used  to 
achieve  the  objective  of standardizing  levels  of 
unemployment  throughout  the Community. 
2.3. The  Committee  stresses  that  the Fund  should 
be flexible  enough  to be able  to react  promptly  to 
cyclical  and  other  trends  on the  labour  market.  But 
its regional  impact  should  not  be  reduced,  and 
neither  should  it neglect  structural  problems  on the 
labour  market  (this  would  be in conflict  with  the 
very essence  of the Fund  and  with  the tasks  assigned 
to it by the Treaty;  the Treaty  in fact  sees  the Fund 
primarily  as an instrument  to solve  the  structural 
aspects  of employment  problems  whereas  other 
employment  policy  instruments  can  more  effectively 
be used  to tackle  short-term  economic  problems).  It 
is only  subject  to these  reservations  that  the 
Committee  could  agree  to abolishing  the  hard  and 
fast rules  for  allocating  appropriations  between 
Articles  4 and  5. 
No C 126/6 Official  Journal  of the European  Communities 28. 5. 77 
2.3.1.  The  effects  of such  a measure  should  be 
assessed  in the light  of the aims  set out above  and  the 
annual  report  due  to be presented  to the  Economic 
and Social  Committee.  ' 3.3. The  Committee  has  no  objection  to the 
proposal  to abolish  the list of types  of aid eligible  for 
assistance  from  the  Fund  (Regulation  (EEC)  No 
2397/71). 
2.4. The  Commission  has  stated  categorically  that 
it will  be possible:  (a) to amend  Decision  71/66/EEC 
at a future  date;  (b) if necessary  assign  the Fund  new 
tasks  falling  within  the terms  of reference  laid  down 
by EEC  Treaty  Article  123.  The  Committee  therefore 
considers  that  it will  be possible  to review  the Fund's 
operating  rules  again,  under  Treaty  Article  126. 3.4. The  Committee  considers  that  basing  Fund  aid 
on 'fixed  unit  costs'  is a significant  improvement  on 
the existing  procedure.  This  new  procedure,  however, 
presupposes  that: 
— the  average  costs  of operations  are  evaluated  in 
advance, 
3. Specific  comments  on the  proposed  amendments 
to the  Regulations  implementing  Decision 
71/66/EEC  of the Council precise  guidelines  on employment  are laid  down, 
so that  Fund  aid can be properly  channelled, 
the two  sides  of industry  are  consulted  when 
decisions  are being  taken. 
(Annexes  II  and  III  of  the  Commission 
communication) 
3.1. The  Committee  endorses  the  proposal  to 
widen  the  range  of female-employment  schemes 
eligible  for Fund  assistance. 
3.2. The  Committee  also  endorses  the  proposal 
that the Fund  should  part-finance  'operations  carried 
out on behalf  of persons  who  set up and  run  small 
undertakings,  and  small-scale  craft  undertakings  in 
particular',  and  'persons  directly  engaged  in a 
self-employed  capacity  in agriculture,  who  are  to 
pursue  activities  as self-employed  persons'. 
3.2.1.  The  Committee  would  also  like  the Fund  to 
cover  persons  directly  engaged  in a self-employed 
capacity  in agriculture  who  are to pursue  activities  — 
including  agricultural  ones  —  as  self-employed 
persons. 
3.2.2.  Finally,  the  Committee  considers  that  the 
Fund  should  give  particular  support  to information 
and training  projects  designed  to help  young  people 
or wage-earners  who  have  resolved  to: 
— set up as self-employed  persons,  particularly  in 
the crafts  sector, 
— found  a business,  or take  over  the management  of 
a business. 3.5. The  Committee  considers  that  there  is a case 
for grouping  applications  by area  of intervention  and 
submitting  them  in advance,  so that  they  can  be 
approved  at the  beginning  of the  financial  year  in 
which  the  relevant  schemes  are  to be carried  out. 
Nevertheless,  the Committee  draws  attention  to the 
dangers  of such  a practice,  which  might  increase  the 
influence  of the  national  authorities  and  thus  make 
for adoption  of a quota  system.  The  proposed  new 
arrangements  should  not reduce:  (a) the essential  role 
of the  two  sides  of industry,  either  at national  or 
Community  level;  or (b) the Commission's  role  as the 
instrument  of Community  solidarity. 
3.6. The  Committee  notes  the Commission's  desire 
to commit  the bulk  of available  appropriations  at the 
beginning  of the  financial  year  in which  operations 
are to be executed.  The  idea  is that  this  will  allow  the 
Fund  to disburse  financial  assistance  earlier. 
3.7. Before  the beginning  of each  financial  year, 
the Commission  is to lay  down  annual  guidelines 
(also  containing  criteria  valid  for three  years)  for the 
order  of priority  of schemes  eligible  for  assistance 
from  the  Fund.  The  Committee  welcomes  this 
proposal.  It means  that  operators  will  know  \yhat 
criteria  the Commission  will  employ  when  it assesses 
application.  Steps  should,  however,  be taken  to ensure 
that such  guidelines  do not  stop  the  Fund  reacting 
quickly  to changes  on the labour  market. 
3.8. The  Committee  is also  in favour  of the 
payment  of advances,  provided  the  conditions  laid 
down  under  3.4 are observed. 
28. 5. 77 Official  Journal  of the European  Communities No C 126/7 
4. Specific  comments  on Annexes  IV to VIII 
4.1. The  Committee  endorses  the  proposed 
decisions  set  out  in Annexes  IV  to VIII  of the 
Commission  communication.  These  proposals  have 
to a large  extent  been  necessitated  by: (a) the changes 
which  the  Commission  is proposing  to Regulation 
(EEC)  No  2396/71;  (b)  the  proposed  repeal  of 
Regulation  (EEC)  No  2397/71  (Annex  II of the 
Communication). 
4.2. The  Committee  approves  the  proposal  to 
delete  the  stipulation  that  if schemes  have  not  been 
approved  by the  Commission  by a specified  date, 
they cannot  receive  assistance  under  decisions 
covered  by Annexes  V, VI,  VII  and  VIII.  (Mention 
should,  however,  be  made  of the  fact  that  the 
Committee  had  been  consulted  on  proposals  to extend  the  decisions  in question).  The  Commission 
now proposes  that  in future  these  decisions  should  be 
reviewed  in the  light  of progress  in implementing 
them.  This  progress  will  be recorded  in the  annual 
report  submitted  by the  Commission  to the  Council 
and the  European  Parliament.  The  Committee 
considers  that,  logically  it too  should  receive  the 
Commission's  report. 
5. Specific  comments  on Annex  IX 
5.1. The  four  decisions  state  that  schemes  will  not 
be eligible  for  ESF  aid unless  they  are  approved  by 
the Commission  by specified  dates.  The  Committee 
agrees  that  it is necessary  to prevent  any  interruption 
in Fund  aid  and  therefore  endorses  the  proposed 
extension  of the deadlines  to 31 December  1977. 
Done  at Brussels,  28 April  1977. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
Opinion  on the GATT  multilateral  trade  negotiations 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  in 
accordance  with  the  fourth  paragraph  of Article  20 of its Rules  of Procedure,  at its 
148th  plenary  session,  held  in Brussels  on 27 and  28 April  1977. 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the decision  taken  by its Bureau  on 
16 December  1976,  acceding  to the  Section  for 
External  Relations'  request  to be allowed  to make 
known  the  views  of the  economic  and  social  interest 
groups  represented  in the  Committee  on the  GATT 
multilateral  trade  negotiations,  as these  negotiations 
progress,  and  instructing  the  Section  to prepare  the 
work  on this  subject, 
Having  regard  to its Rules  of Procedure  and,  in 
particular,  the fourth  paragraph  of Article  20 thereof, Commission  to the Council  on the development  of an 
overall  approach  to trade  in view  of the  coming 
multilateral  negotiations  in GATT  (*), 
Having  regard  to the  oral  report  made  by  the 
rapporteur,  Mr Claude  Evain, 
Having  regard  to the  opinion  issued  by the  Section 
for External  Relations  at its meeting  on 19 April 
1977, 
Having  regard  to the discussions  at its 148th  Plenary 
session  of 27 and  28 April  1977  (meeting  of 27 April 
1977), 
Having  regard  to its  previous  opinions  on  the 
GATT  negotiations  and,  in particular,  its opinion  of 
24 May  1973  on  the  memorandum  from  the (!) OJ  No C 115,  28. 9. 1974.