No C 286/4 Official Journal of the European Communities 24. 10. 83 
Article 10(2) 
To clarify the scope of the Directive in terms of 
what is said in the general comments, the Com­
mittee proposes that the beginning of this point be 
worded as follows: 
'This structure, provided it is not of the "two pil­
lars mounted at the front" type, must comply 
with The Committee draws the attention of the Commis­
sion to various imperfections in the various lan­
guage versions and calls for the necessary altera­
tions to be made. 
Annexes 
The Committee has also collected a number of tech­
nical comments which will be included in the report. 
Done at Brussels, 6 July 1983. 
The Chairman 
of the Economic and Social Committee 
Francis CEYRAC 
Opinion on the economic situation in the Community (mid-1983) 
A. LEGAL BASIS FOR THE OPINION 
Council Decision of 18 February 1974 on the attainment of a high degree of con­
vergence of the economic policies of the Member States of the European Economic 
Community ('). 
At its 203rd plenary session held on 15 and 16 December 1982, the Committee, acting 
on a proposal from its Bureau in accordance with the fourth paragraph of Article 20 of 
its Rules of Procedure, decided to deliver an opinion on its own initiative on the 
above matter. 
Procedure 
The Section for Economic and Financial Questions was asked to prepare the opinion 
and appointed Mr Alois Pfeiffer as rapporteur. 
The Section adopted its opinion on 21 June 1983 by 45 votes in favour with one 
abstention. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee's opinion was adopted at its 209th plenary 
session, held on 6 and 7 July 1983, unanimously, less six abstentions. 
The full text of the opinion is as follows: 
(') OJ No L 63, 5. 3. 1974, p. 16. 
24. 10. 83 Official Journal of the European Communities No C 286/5 
1. Introduction 3. Analysis of basic economic factors 
Since poor economic growth (with its multiple 
causes) is still with us in the Community in 1983, the 
competent national and Community authorities 
must respond with a mixed economic strategy that 
not only embraces action on both the supply and 
the demand side, as well as specific labour market 
measures, but also takes account of the international 
dimension of anti-crisis policy. Better ways must 
also be found of coming to grips with the social and 
economic consequences of unemployment. The 
close connection between economic and social 
problems is self-evident at a time of persistent low 
growth. The opinions to be drawn up on the social 
and economic situations in the Community in 1983 
are therefore complementary and should be seen as 
a general statement of the Committee's position. 3.1. Long-term growth trends and employment 
There will be a net influx of about 700 000 persons 
onto the labour market in each of the next three 
years at least. An average annual growth rate of at 
least 3,5 % in all the Member States would be 
required for years to come just to prevent a further 
rise in unemployment. 
It is clear, however, that the decline in growth is a 
long-term, world-wide phenomenon affecting not 
only individual industrialized countries but also the 
major industrialized countries as a group. 
2. The most important features of the present econo­
mic situation 
The signs so far indicate that the stagnation that 
characterized 1982 (0,3 % growth in GDP) is in the 
main likely to continue in 1983, albeit with a slight 
improvement (forecast growth in GDP 0,5 %). The 
slight increase in growth compared with the pre­
vious year is expected to result from a gradual pick-
ing-up of economic activity in the second half of 
1983. A gradual recovery over the year could — 
provided the circumstances are right — result in a 
growth rate of 0,6 to 0,7 %. 
Such a low growth rate will not reduce unemploy­
ment in the Community. Since the rise in productiv­
ity per worker in the Community is expected to be 
about 2 % in 1983, the divergence between growth 
and productivity trends will be only slightly differ­
ent from the previous year (1982: GDP + 0,3 %; 
productivity + 1,4%). A decline in total employ­
ment and an increase in the number of job-seekers 
mean a rise in the unemployment rate from 9,6 % 
(1982) to 11 % (1983), which represents a total of 
around 12 million unemployed (as against about 11 
million in 1982). 
Viewed from today's perspective, the key indicators 
do not suggest that there is likely to be any real con­
vergence between the economic performances of the 
Member States. While inflation rates seem to be 
moving slightly closer together in 1983, there is a 
greater tendency towards a rise in unemployment 
rates. Conclusion: Although optimum economic growth 
must be a fundamental aim of any economic policy, 
since without it the fight against unemployment 
would be doomed to failure from the start, there are 
at present no discernible growth strategies which 
could by themselves lead to a high level of employ­
ment in the Community. In view of the structural 
changes taking place in Europe, the Community 
needs not only all feasible growth-strategy 
measures, but specific action on employment as well. 
3.2. Growth and productivity 
It is true that in the long term productivity gains 
have declined as growth rates have dropped, but in 
many countries productivity gains have decreased 
less than the growth rates themselves, which means 
that whatever growth was obtained was achieved 
with fewer workers. In other words, the shedding of 
labour has been going on for years in the Member 
States. One of the reasons for this is that modern 
technological development in the industrialized 
countries is labour-saving. This remark is not 
intended as a criticism of technological develop­
ment and productivity increases, but is merely an 
observation against the background of the pervasive 
problem of unemployment. Moreover, dispensing 
with modern technology and its development is 
quite out of the question, if only because of the 
need to maintain international competitiveness. A 
country that does not itself develop advanced tech­
nology but has to import it in order to be able to 
apply it is at the same time importing the problem 
of unemployment without being able to create jobs 
by developing advanced technology itself. 
Conclusion: Investment and technological develop­
ment have been, are and will be the driving force 
No C 286/6 Official Journal of the European Communities 24.10.83 
behind economic development; and they can push 
up employment. But in the present circumstances 
they cannot on their own bring about and sustain a 
high level of employment. 
3.3. The competitiveness of the Community 
The considerable difficulties that have arisen 
recently in sensitive sectors such as steel, textiles, 
car manufacturing and consumer electronics have 
created a strong impression that the competitiveness 
of European products has deteriorated. 
On the whole, however, this presumption is not con­
firmed by the facts. On the basis of their long-term 
share of world trade, none of the three major econo­
mic powers (EEC, USA, Japan) can claim a decisive 
lead or shows any significant lagging behind. On the 
internal Community market the Member States 
were, however, increasingly obliged to import in 
particular capital goods in order to meet a domestic 
demand for goods that could not be supplied — or 
could only be supplied at non-competitive prices — 
by Community industry. It should be noted that 
although Japan (in common with Germany and the 
USA) is one of the world's three largest exporters of 
machinery and equipment, it is among the smallest 
importers and thus participates only one-sidedly in 
the international division of labour. 
On the basis of the trend in unit labour costs in 
national currency, there has been an improvement 
in competitiveness in the case of Belgium, Germany 
and the Netherlands, but France, Italy and the UK 
show up less favourably. The competitiveness pic­
ture changes, however, if one takes into considera­
tion the movement of exchange rates. 
3.4. Fiscal policy 
Because they feared a further rapid rise in public-
sector deficits, in 1982 the Member States intro­
duced painful remedial measures in the area of fiscal 
policy, the effects of which can still be felt today. 
Most governments saw little scope for action to 
stimulate the economy and growth. 
3.5. Interest rate trends 
The importance of the level of interest rates both for 
private investment and for State borrowing is not to be underestimated. From both points of view a sus­
tainable fall from present levels is desirable. For 
this, monetary policy must be geared to the trend in 
real interest rates. A decline in interest rates which is 
less than the fall in inflation is equivalent, in real 
terms, to a rise in interest rates. 
While interest rates have fallen throughout the 
industrialized western world, they remain relatively 
high compared with, say, the average trend during 
the seventies. Real interest rates have everywhere 
fallen less than would appear from the nominal rate. 
US rates have been the main cause of the high level 
of interest rates in the past and will remain the 
major source of uncertainty in the future. Real 
interest rates are even showing an upward trend in 
the United States. Further success in stabilizing 
prices in some Community countries might also 
increase the possibility of pushing interest rates 
down further. 
3.6. Global economic problems 
At present the most important global economic 
problems are: 
— the growing number of heavily indebted coun­
tries, with a tendency towards destabilization of 
world trade and the world monetary system, 
— substantial fluctuations and uncertainties in 
exchange rates, in particular between Com­
munity currencies and the dollar, with corres­
ponding effects on both trade and prices, espe­
cially the prices of all commodities paid for in 
dollars, 
— the growing tendency towards protectionist mea­
sures, particularly non-tariff barriers to trade, 
and 
— distortions of competition due to the non-
observance of minimum working conditions 
such as long hours, low pay, health and safety 
hazards whether in local, national or interna­
tional companies and businesses. 
3.7. Conclusion 
The multitude of negative factors which characterize 
the present economic situation — poor levels of 
economic activity and growth, growing potential 
labour force, elimination of industrial jobs, poor 
financial situation of businesses, etc. — means that 
24. 10. 83 Official Journal of the European Communities No C 286/7 
there can be no patent remedy to solve all the prob­
lems. The different causative factors call rather for a 
combination of countermeasures to attack the roots 
of the crisis. The basic starting points for such a 
mixed economic strategy must be steps to improve 
the general economic parameters, on both the sup­
ply and the demand side, as well as measures with a 
direct impact on the labour market. Member States in accordance with the provisions of 
Article 92 et seq. of the Treaty. 
4.3. Subsidization policy 
4. Supply-side policy 
4.1. In vestment policy The aid policies of individual Member States must 
not be such that jobs are preserved or created in one 
Member State at the expense of jeopardizing jobs in 
others. Therefore only those national subsidies 
which are temporary and taper off over time, and 
which are part and parcel of an economic conver­
gence policy, should be permitted. Priority must be 
given to the advanced technology growth sectors 
which offer scope for new products and new pro­
cesses, e.g. robot and sensor technology, recycling 
processes, biomass technologies, microprocessors, 
energy storage technology, etc. The Community 
must support the coordination of research, produc­
tion and marketing here. 
On the basis of a coordinated economic policy 
Member State governments should create the right 
environment for private-sector investment, with 
special emphasis on job-creation. This policy will 
begin to show tangible benefits when it succeeds in 
creating a climate of confidence in real economic 
recovery. Public investment alone cannot create a 
sustained recovery even though it is needed in cer­
tain areas. The conversion of old industries and structures 
(including agriculture) to modern production should 
be promoted in the same way and special considera­
tion given to those sectors with a high level of sub­
contracting. Subsidies should also be continuously 
monitored to ascertain whether they achieve their 
aims. 
4.2. Creation of a viable internal market 
One of the most urgent fundamental tasks is the 
creation of a real internal market in the Community 
and the systematic exploitation of the resultant 
opportunities for investment, technological develop­
ment, stabilization of sales and improved competi­
tiveness vis-a-vis major rivals (the USA and Japan). 
An important starting-point is the EMS, which, 
while not yet ideal, has brought an appreciable mea­
sure of stability for its members compared with the 
fluctuations on the international exchanges. The 
ESC stresses that measures to complete the common 
market, particularly the elimination of technical bar­
riers to trade and obstacles in the area of administra­
tion and transport, form the central elements of a 
Community strategy for promoting growth and 
employment. 4.4. Small and medium-sized enterprises 
Falling interest rates are of course of special import­
ance for SMEs on account of their extremely high 
level of borrowing. The Community and the Mem­
ber States should also encourage the setting-up of 
new SMEs and promote the stabilization of existing 
competitive SMEs in their various legal forms (one-
man firms, producer cooperatives, etc.) by measures 
to facilitate access to venture capital, by providing 
training for managers and basic and advanced train­
ing for workers as part of technology policy, by sup­
porting SMEs' technological innovation capacity 
and creativity in the discovery and exploitation of 
market opportunities. 
4.5. Income distribution — costs 
The creation of a single internal market calls for 
coordination of the subsidization policies of the A fall in production costs can — just like new tech­
nologies and innovation, declining energy prices or 
interest rates — lead to a revival of economic activ-
No C 286/8 Official Journal of the European Communities 24. 10. 83 
ity. Special attention should be given to the possibil­
ity of reducing costs by better utilization of existing 
production capacity. The two sides of industry are 
urged to pursue strategies on factor incomes that (a) 
leave sufficient profits to make provision for and 
finance high-risk investments, and (b) ensure sales 
(and hence better utilization of production capacity 
with a corresponding reduction in costs) through 
stabilization of households' purchasing power. In 
connection with the distribution of income, the 
attempt to increase competitiveness in the Com­
munity must not lead to competition between the 
Member States in income reductions, which would 
result in a deflationary trend at international level. 
5. Consolidation of demand and growth 
5.1. Steps to improve conditions on the supply 
side must be backed up by government investment 
initiatives. 
Since the present recession in the Community is 
combined with a persistent lack of growth, such a 
government investment policy to support demand 
cannot consist of short-term anti-cyclical pro­
grammes of the type used previously. What is 
needed rather is a policy aimed at stabilizing invest­
ment demand in the medium term, on which the 
budget policies of the Member States and the Com­
munity should be aligned. In its opinion on the 
economic situation in mid-1982, the ESC mentioned 
several major areas of collective need in which 
medium and long-term programmes for the promo­
tion of public and private-sector investment could 
provide an impulse for growth: 
— investments in energy conservation and the 
development of alternative energy sources, 
— investments in restoring and safeguarding the 
natural environment, 
— investments in improving living conditions and 
strengthening the house-building sector, 
— investments in improving short-distance public 
transport and infrastructure in general, 
— investments in the use of advanced technologies 
in public administrations and public services, 
— investments in research. 5.2. The need for coordination in the Community 
The stimulus for growth provided by government 
investment initiatives will be all the greater the more 
the Community succeeds in coordinating such 
initiatives and implementing them in concerted 
fashion. Such coordinated initiatives will lead to a 
faster flow of tax revenue and thus a faster sub­
sequent self-financing of the deficits due to the pre­
financing of investment initiatives. Impetus for the 
implementation of medium-term programmes for 
the stimulation of investment demand must be pro­
vided by those countries which have relatively low 
inflation rates and budget deficits and whose bal­
ance of payments is nearly in equilibrium. All in all, 
investment initiatives should be on a large a scale as 
possible and set in train immediately. In certain 
areas it is becoming increasingly evident that there 
is insufficient coordination of the measures taken by 
the Member States to achieve economic converg­
ence. Consequently the Member States must jointly 
step up their efforts in these areas. 
6. International cooperation 
Over and above Community-wide coordination, the 
aim should be world-wide economic cooperation, 
with a special effort being made to achieve an align­
ment of economic policy with the USA and Japan. 
The most important aims of such an alignment 
would be: 
— to reduce the excessively high real interest rates, 
with the USA playing a leading role here, 
— to stabilize exchange rates, in order to restore 
predictability in international trade and capital 
transactions, 
— to prevent the collapse of the international credit 
networks by means of joint support measures 
combined with a strengthening of the IMF and 
the World Bank and an agreement to expand, 
not reduce, national and supranational develop­
ment aid in order to ensure the long-term stabil­
ity of the world economic and political system, 
— to regulate world commodity prices through 
international agreements, this being in the inter­
ests of both the industrialized nations and the 
developing countries, 
— to fight protectionism and achieve agreement 
between the Community, the USA and Japan 
that over a certain period no new barriers will be 
put in the way of their trade with each other and 
24. 10. 83 Official Journal of the European Communities No C 286/9 
with other countries; to secure Japan's willing­
ness to open up its markets more to international 
trade and capital transactions. show imagination in determining the most suitable 
kind of reduction of working time in each indivi­
dual case. 
7. Specific employment policy 
At present it is impossible to discern any growth 
strategies which could by themselves achieve and 
sustain a sufficiently high level of employment. 
Thus, if any successes are to be won in the fight 
against unemployment, we need not only a policy to 
promote investment and growth, but also specific 
measures to boost employment, including shorter 
working hours. As an integral part of the 'policy-
mix' on growth and employment, shorter working 
hours can lead to a fairer distribution of work. At 
the same time more leisure-time will create new 
needs and these needs will also have to be satisfied 
— in other words the policy on shorter working 
hours can also be regarded as part of the policy on 
growth. 
The scale of the possible impact on employment, 
however, will vary greatly according to the nature 
and size of the reduction in working hours and 
according to the special circumstances prevailing in 
each country, sector and firm. It is therefore up to 
the two sides of industry in the Member States to The Committee also notes the Commission's efforts 
to find out whether and how it can persuade the two 
sides of industry at European level to move closer 
together on shorter working hours and the reorgani­
zation of working time. The Committee considers 
that such efforts are in the interests of a viable 
domestic market and would help to preserve the 
international competitiveness of all EEC countries. 
The Committee would also emphasize that measures 
to reduce working hours can only have a positive 
impact on employment if they do not lead to an 
increase in unit costs and hence an impairment of 
international competitiveness. To this extent, the 
value of shorter working hours depends on the con­
ditions under which they are introduced. 
If shorter working hours are to have the desired 
effects, they must not be sabotaged by an increase in 
overtime. 
In order to prevent bottlenecks on the labour mar­
ket, these measures must be accompanied by steps 
to promote occupational and geographical mobility. 
Done at Brussels, 6 July 1983. 
The Chairman 
of the Economic and Social Committee 
Francois CEYRAC 
Opinion on social developments in the Community in 1982 
A. LEGAL BASIS FOR THE OPINION 
On 4 July 1983 the Commission referred the abovementioned subject to the Economic 
and Social Committee in accordance with Article 198 of the Treaty establishing the 
European Economic Community (•). 
(') Having noted the Commission report on the social situation in the Community in 1982 the 
Committee singled out a few of the large number of problems for detailed discussion. The 
Committee has already issued separate opinions on other topics including: 
— review of the European Social Fund (plenary session of March 1983) (OJ No C 124 of 
9 May 1983, page 4) 
— vocational training and new information technologies: new Community initiatives during 
the period 1983-1987 (plenary session of January 1983) (OJ No C 77 of 21 March 1983, 
Page 7) 
— draft Council resolution concerning vocational training policies in the European Com­
munities in the 1980s (plenary session of March 1983) (OJ No C 124 of 9 May 1983, 
page 9) 
— youth employment (plenary session of June 1983) (OJ No C211 of 8 August 1983, 
page 50).