Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending, for the benefit of unemployed persons, Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons to self-employed persons and to the members of their families moving within the Community and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71` () (96/C 295/08)

On 8 February 1996 the Council decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Social, Family, Educational and Cultural Affairs, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 20 June 1996. The Rapporteur was Mr Chevalier.

At its 337th Plenary Session (meeting of 10 July 1996), the Economic and Social Committee adopted the following Opinion by 85 votes to three, with ten abstentions.

1. Commission proposal

1.1. On 18 June 1980 the Commission proposed amending the pre-retirement and unemployment benefits' provisions of Regulation (EEC) Nos 1408/71 and 574/72 relating to social security arrangements for migrant workers. This proposal was not, however, adopted by the Council, where unanimity is required, chiefly because it linked the two issues (pre-retirement and unemployment).

1.2. Consequently, the Commission has now replaced the 1980 proposal by two separate updated proposals, and presented them to the Council jointly.

1.3. With regard to unemployment benefits for migrant workers, the Commission recalls that the original Regulations no longer correspond to the economic situation in the Community and do not cover a number of situations. This analysis is still valid.

1.4. There is now a high level of unemployment in the Community and it takes much longer to find work; since there are fewer opportunities for getting back into the labour market.

1.5. Having regard to the objective of improving the European labour market and promoting the free movement of workers, it therefore seems appropriate to propose amendments to the unemployment benefit provisions of Regulation (EEC) No 1408/71.

1.6. The changes are intended, subject to certain conditions, to enable entitlement to unemployment benefits beyond the prescribed three-month period, when a worker goes to a Member State other than the State in which he was last employed, to look for work.

1.7. In order to limit the risk of abuse, administrative checks on unemployed persons will be carried out by the institution of the Member State in which the unemployed person is looking for work, in accordance with the legislation of that State and with the collaboration of the institutions of the Member States responsible for providing the benefits.

1.8. It is proposed that benefits should be provided by the institution of the Member State where the unemployed person is looking for work, on behalf of the institution of the Member State where he last worked. However, it is further proposed that after a period of three months the right to benefits should be maintained, without the total duration of the benefit period or the amount of the benefits (to prevent abuse) exceeding the period or amount provided for by the legislation of the Member State in which the unemployed person is looking for work or the period or amount provided for by the legislation of the State which pays the benefit.

2. General comments

2.1. Several Committee Opinions have analyzed and condemned the deterioration of the economy and the jobs market. They called for further measures to get the economy back on an even keel, provide increased support for the unemployed and their families, and help them get back to work and avoid job losses.

2.2. The Committee endorses the proposal's declared intention of increasing the chances of getting back to work.

2.2.1. The Committee feels, however, that the proposed method is only partly suited to the stated objective.

2.2.2. Whilst the Committee feels that the proposals are a substantial improvement on the existing arrangements for paying out benefits, it also feels that unemployment benefit should be viewed in the context of a dynamic policy for job creation, taking account of the economic and social implications singled out at the preparatory meeting for the IGC in Turin.

2.2.3. Moreover, the proposal's strict limits on extension seriously hinder job-seeking, whereas everything possible should be done to simplify it. However, any extension of the qualifying periods or increase in benefit payments must not lead to a situation in which employment is compromised.

2.2.4. Finally, the calculations for extending entitlement and the arrangements for benefit payment are exaggeratedly complex.

2.3. The Commission proposes to entrust the institution of the Member State in which the unemployed person is looking for work with administrative checks and benefit payment. The latter will be refunded by the Member State responsible for providing the benefits.

2.3.1. The Committee feels that these procedures will be costly and cumbersome, whilst failing to provide any real guarantee of effective checks, although these are of fundamental importance.

2.3.2. As regards the technical procedure for benefit refunds, there are already several bilateral agreements on reciprocity or renunciation which make it easier to process claims; these could be used as an alternative approach.

2.3.3. Concerning the case of unemployed frontier workers, the proposals provide for:

- payment by the State in which the worker is employed, in the case of partial unemployment;

- payment by the State in which the worker resides, in the case of total unemployment, with free choice of the country which seems to offer the best chances of re-entering the labour market.

Whilst the Committee endorses the Commission's aim of attaining greater flexibility in order to promote personal freedom, it would point out the inherent dangers of a system which is open to abuse from several claims being made simultaneously.

2.3.4. The Committee does not, however, endorse the exemption granted to Luxembourg. Moreover, there is no conclusive evidence that other Member States do not also have large numbers of frontier workers, posing similar problems.

3. Specific comments

3.1. The Committee feels that it would have been much easier to evaluate the proposal if it had been accompanied by a comparative analysis of the provisions in force in the Member States.

3.1.1. Whilst it recognizes the case for exporting entitlement beyond the first three months, the Committee would have liked to have been able to assess the impact of this measure in greater detail.

3.1.2. In particular, a more precise assessment would be possible if the new situation resulting from the amended Regulation could be compared to the current rules for migrant workers.

3.2. From a technical point of view, the proposals concern nine Articles of Regulation (EEC) No 1408/71, but the main changes are the insertion of three new Articles: (69a, 69b and 69c), and the rewording of Article 71. The proposed amendments to the remaining Articles merely bring them into line with the new Articles.

3.3. Articles 69a, 69b and 69c lay down the conditions for the retention of the right to benefit, the limits to retention and modification of the rights to benefit. They extend benefit entitlement beyond the first three months, but subject to the limitations set out in Chapter 1 (cf. point 1, above, Commission proposal, last paragraph).

3.4. The reworded Article 71 allows unemployed frontier workers to choose between the State in which they were last employed and the State in which they reside.

3.5. The remaining amended Articles contain the references or procedures resulting from Articles 69a, 69b, 69c, and Article 71.

The amended Articles are:

Article 25(1) and (2),

Article 39(6),

Article 45(6),

Article 47(4),

Article 70(1),

Article 72a.

3.6. The proposal also concerns Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71.

3.6.1. The proposed amendments introduce the administrative procedures and references made necessary by the new text of Regulation (EEC) No 1408/71. These are of a purely technical nature.

The amended Articles of Regulation (EEC) No 574/72 are:

Article 25(1) and (2);

Article 83 (title) and 83(1) and (3).

4. Conclusion

4.1. The Committee endorses the proposal, given that its guiding principle is to make a positive contribution towards job-seeking, considerably improve the lot of the unemployed, promote free movement and remedy a certain number of situations not covered by existing legislation. It would, however emphasize the comments made in this Opinion, particularly the fact that checks should be simpler and more effective, and should only be implemented in conjunction with concrete measures for getting people back to work.

Done at Brussels, 10 July 1996.

The President of the Economic and Social Committee Carlos FERRER

() OJ No C 68, 6. 3. 1996, p. 11.