Opinion of the Economic and Social Committee on the 'Communication from the Commission on modernizing and improving social protection in the European Union'
Date: 1997-12-10
Institutions: European Economic and Social Committee
Subjects: European social policy, employment policy, social change, social security, social-security harmonisation

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Opinion of the Economic and Social Committee on the ‘Communication from the Commission
on modernizing and improving social protection in the European Union’

(98/C 73/22)

On 18 March 1997 the Commission decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
communication.

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 13 November 1997.
The rapporteur was Miss Maddocks, and the co-rapporteur, Mr Chevalier.

At its 350th plenary session (meeting of 10 December 1997), the Economic and Social
Committee adopted the following opinion by 76 votes to 38, with nine abstentions.

1.

Introduction

1.2. Current trends?

1.1.

International competition?

Social protection and competitiveness can be mutually
reinforcing. Neither should undercut the other, be it in
the internal market or in the world trade organization.
Together, they can form a cohesive and durable base,
along with macro-economic policy, to promote growth
and employment, underpinned by solidarity, enterprise
and inclusion.

Social protection expenditure accounts for 28 % of EU
total GDP. In the United States, net expenditure is 27 %
of GDP. ‘When account is taken of private as well as
public spending, total household expenditure on social
protection, health care and pensions’,
in the Com-
mission’s words, ‘is at relatively similar levels across
a range of developed industrialized countries’ (1).The
Communication clearly states that ‘It is important to
realize that the reasons for a reform of social protection
systems is not competition from third countries’ (2).

(1) COM(97) 102 final, point 1.2, 2nd paragraph. Data
available on public and private social protection spending
in Sweden and in the United States expressed as a percent
of private household expenditure, show that, in 1990,
Swedish households devoted 4,4 % of their income to
private health, education, pensions and day care, and
36,8 % to taxes, for a total of 41,2 % . Their American
counterparts devoted 29,2 % of their income to private
health, education, pensions and day care, and 10,4 % to
taxes, for a total of 39,6 %. Gosta Esping-Andersen, «The
Double Problem of Coordination in Contemporary Welfare
States», paper prepared for the Conference on Social Policy
and Economic Performance, Amsterdam, 23-25 January
1997.

(2) Ibid., 3rd paragraph. ‘Extra-EU exports of goods account
for 8 % of EU GDP — a level which has persisted over two
decades. That means that 92 % of the demand is met with
production in Europe, while 8 % is met through imports
from countries outside the EU’, Commission report ‘Europe
as an Economic Entity’, CSE(96) 8 final, 4.12.1996, p. 8.

EU social protection expenditure increased in the 1980s
and 1990s at a slower rate in relation to GDP than it did
in the 1970s. Increases in relation to GDP occurred
mainly during economic recessions, when GDP expand-
ed slowly or not at all. Some Member States also
increased spending in order to develop their social
protection systems towards the levels of more developed
states in the Union (3). Taken as a whole, EU social
protection expenditure has been relatively stable, except
during cycles of poor economic performance. The
Commission has concluded, ‘there is little sign of any
underlying acceleration in the growth of social protection
spending’ (4). At the same time, EU social protection
expenditure is credited with maintaining social cohesion
and stability in periods of major macro-economic
shocks, industrial change process and restructuring.

1.3. Future sustainability of EU social protection?

1.3.1.
In order to preserve their social protection
systems, while taking account of demographic and
economic trends, many Member States will seek to
adapt their social protection systems over the next
decade, according to their individual circumstances and
cultures. However these adaptations ought to take place
through cooperation in the EU framework.

1.3.2.
The Commission Communication considers
that the real ‘reasons for a reform are internal’. Two
major problems are highlighted: ‘big public deficits and
the lack of real success in social integration’ (5).

1.3.2.1.
It can be argued that the first problem is not
caused by, but does have an effect on, social protection.
Mass unemployment and the corresponding transfers to

(3) ‘Social Protection in Europe’ COM(95) 457 final, Chapter 3,

page 59.

(4) COM(95) 457 final, op. cit., summary, p. 12, penultimate

paragraph.

(5) COM(97) 102 final, op. cit., point 1.2, last paragraph.

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pay for income compensation for people out of work
are problems chiefly relating to economic slowdowns
and the performance of the labour market. Likewise, the
demographic ‘timebomb’ and fears of an unsustainable
dependency ratio in the near future as regards the
numbers of retired people receiving old-age benefit
vis-à-vis the number of the active workforce, can also
be considered as a major distributional problem, relating
more to the replacement ratio on the labour market
than to any inherent failure of social protection. At the
same time, it can also be argued that the economic and
labour market adjustments judged necessary can be
bolstered and supported by certain adaptations of our
social protection systems. The key to progress on both
points would seem to be based around the twin concepts
of flexibility and security, taking into consideration the
‘changing nature of work’ and the importance of
coordinating economic and structural policies as set out
in the Dublin Summit declaration on employment and
outlined in the Commission’s report on ‘Europe as an
Economic Entity’.

1.3.2.2.
The second problem, ‘the lack of real success
in social integration’, is one more intrinsic to social
protection in the EU, especially in relation to mass
unemployment and accompanying social exclusion, the
estimated economic and social costs of which are huge.
There is a general consensus that a major shift is
necessary from (passive) income maintenance to (active)
employment-friendly social protection systems.

1.3.3.
Two additional and important challenges are
highlighted in the Commission Communication: ‘adapt-
ing social protection to the new gender balance’ and
‘improving social protection for people moving within
the Union’. The Committee has endorsed all major
proposals in these fields (1).

2. Specific proposals?

2.1. Social protection as a productive factor

2.1.1.
The Committee has consistently upheld the
view that social protection can help stimulate and
reinforce economic performance, and has drawn atten-
tion to the beneficial effects of an integrated and
coordinated approach at both European and national
levels between social and economic policies (2). The
Commission communication also points out, ‘Members
States with a strong safety net often perform better in

(1) COM(97) 102 final, op. cit., executive summary, points 4

and 5.

(2) ESC Opinion on Social policy and economic performance,

OJ C 287, 22.9.1997, points 2.3 and 3.

terms of GDP per capita or external balance than
Member States with a weaker safety net.’ (3) The
negative, downward spiral, of bad economic perform-
ance being transposed into social protection cut-backs
and therefore lower consumption and reduced demand,
can be turned around into a positive integrated approach,
concentrating on transforming passive into active expen-
diture, generating jobs, services and growth. As pointed
out in the Delors White Paper, this would require
‘restructuring national government
income support
schemes in ways which enable income from work to
be topped up with income from social security, by
developing integrated taxation and income support
systems with appropriate safeguards.’ (4) In this regard,
among the further studies on the links between social
and economic policies which the Commission will
develop, it could undertake studies to establish compar-
able indicators of the employment potential of the care
sector and of the preventive capacity of social protection.
In this framework, a recent study highlights the costs of
not having a developed social model (5). Lastly, as the
Commission points out,
‘a central question (...) is
how to combine obligations and opportunities’ (6). The
Commission rightly points out that ‘the urgent need to
consolidate public finances ... is not in contradiction
with a high degree of social protection nor does it
dismantle the principle of solidarity. On the contrary, it
strengthens solidarity between different generations,
since it reduces the burden on future generations’ (7).
The Committee is aware that the Commission will
submit a study on this issue to the Member States and
would wish to be involved in this debate.

2.2. Making social protection more employment-

friendly

2.2.1.
Developments on the labour market, such as
the increasing participation rates of women and the
spread of flexible forms of work, coupled with the
emerging of new forms of work organization and of
flexible leave arrangements throughout working life
are shaping the world of work towards more varied
individual working patterns (8). Social protection can
back up such developments by facilitating the different
forms of labour market transitions. Various Committee

(3) COM(97) 102 final, op. cit., point 1.2, 2nd paragraph.
(4) White Paper on ‘Growth, Competitivity and Employment:
the challenges and ways forward into the 21st century’, EC
Bulletin, Supplement 6/93, p. 131, point 8.8, c(iii).

(5) German Unemployment and the European Social Model,

Commission Services.

(6) COM(97) 102, point 2.1, 2nd paragraph.
(7) Ibid., point 1.2, 4th paragraph.
(8) Green Paper on ‘Partnership for a New Organization of

Work’, COM(97) 128/9.

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opinions upheld the view that these new developments
must be taken into account in the organization of social
protection (1). The Dublin Declaration on Employment
also called for the ‘developing social protection systems
capable of adapting to new patterns of work and
of providing appropriate social protection to people
engaged in such work’.

subsidized labour. Particular attention is also needed to
ensure that such schemes are designed and based on
criteria effectively conducive to employment. As the
Committee has previously pointed out, ‘by themselves,
education and training are not enough to construct an
adequate policy against unemployment. General and
specific policies aimed at job creation will also be
necessary’ (3).

The potential growth areas for such a turn-
2.2.2.
around in making social protection more employment-
friendly are predominantly in the sectors where public-
private partnerships can be nurtured. For example, the
care sector, transport, energy and the environment are
all areas where investment, through the use of non-wage
income support mechanisms and accompanying safe-
guards, could enable other pressing needs (such as those
of the elderly) to become more economically sustainable
and could be beneficial to growth and jobs. The
high public sector profile of such schemes lends them
considerable importance; hence the Delors white paper
suggestion to maximize the job generation potential of
such measures by their operation through a ‘single
government agency’ is logical (2). The involvement of
the social partners, of the social economy and relevant
NGOs and of local and regional government within
such a framework could also help promote practical
schemes, and ensure proper safeguards and positive
incentives to assist the shift from ‘welfare to work’.
Many long-term recipients of benefit over prolonged
periods have become locked in to their situation and
find it increasingly difficult to break out. This could be
overcome by a positive campaign directed towards
the betterment and improvement of the individual’s
situation as well as a (non-detrimental) adjustment
of the relationship between tax and benefits. Such
incentives could include a higher income ceiling in terms
of benefit entitlement.

Similar public/private partnerships, based on
2.2.3.
part work experience and part income support, and
subject to collective agreements, could be envisaged as
regards the training and re-skilling of unemployed
people seeking to qualify, requalify and enter or re-enter
the labour market. Efforts to promote flexible transitions
between school, training and employment are important.
Again, the involvement of the social partners in negotiat-
ing the framework for such job-training schemes topped
up by income support could ensure incentive-based
rather than compulsory ‘workfare’ schemes, with appro-
priate safeguards against job substitution through cheap

2.2.4.

These policies should be pursued:

— with due respect for the principle of subsidiarity
and, in particular, the ‘acquis’ of each Member State
based on prior negotiations and their different ‘social
cultures’;

— in close collaboration with the players to define the
projects, ensure that they are carried out and evaluate
the results;

— avoiding the creation of a social stratum with

artificial and underpaid jobs.

2.2.5.
Employment-friendly social protection also
includes proposals to reduce non-wage labour costs.
The Delors White Paper proposed the lowering or
exemption of employers’ social security contributions
for less skilled, low-wage labour, with costs being off-set
by compensatory measures such as environmental taxes,
excise duties on consumer products that are damaging
to health, and taxes to make productive investment
more attractive (4). The Committee’s Opinion of Novem-
ber 1996 on the ‘future of social protection’ took a
similar line on compensatory measures, but advocated
that employers could enjoy a partial exemption on their
social security contributions on all wages and salaries
and apply it to those beneath an agreed level (5). The
Committee Opinion of 9 July 1997 on taxation in the
EU also endorsed such alternative sources of finance (6).
that
The Commission Communication points out
‘Several Member States have introduced various
measures to reduce non-wage labour costs (but that)
some studies have shown that they have not led to
significant effects on overall employment levels because
they trigger substitution effects between subsidized and
non-subsidized labour and dead-weight losses. At the

(1) See Opinions on ‘The future of Social Protection’, OJ C 66,
3.3.1997 and on ‘Working Time’, OJ C 18, 22.1.1996.

(2) Ibid., point 8.8 c (iii).

point 5.2.2.

(4) White Paper, op. cit., points 9.4, 9.5.
(5) OJ C 66, 3.3.1997, point 5.
(6) OJ C 296, 29.9.1997, point 2.2.3.

(3) ESC Opinion on ‘Social Exclusion’, OJ C 352, 30.12.1993,

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same time, these studies show that the positive effects
will be greater if measures are carefully designed and
linked to job creation’ (1).The Committee urges the
Commission to continue to work on this issue and
would wish to be involved in this exercise. It is clear
that such schemes should not lead to insecure jobs
substituting secure ones, nor should they undermine the
rights of social security beneficiaries. The subsidiarity
principle should be observed.

2.2.5.1.
In order to promote employment, there is a
widespread agreement on the ‘need to reverse the trend
in taxation structures towards an increasing burden on
labour compared to other tax bases’ (2). This is why the
Committee acknowledges the importance of the global
view of the whole area of taxation undertaken by the
High Level Tax Policy Group set up by the Dublin
European Council. Moreover, the interplay between tax
and benefits structures could be made more neutral with
respect to labour market dynamics.

2.2.6.
Proposals in the Commission Communication
in favour of a more flexible transition from work to
retirement, especially through the use of voluntary
part-time pre-retirement schemes, have been consistently
supported by the Committee, subject to legislative
safeguards and a strong framework of collective agree-
ments adapted to the sectors concerned. ‘Individuals
would progressively reduce their working hours (increas-
ingly part-time activity) whilst simultaneously extending
their working life (a gradual shift in retirement age.’ (3).
Such individualized, part-time working arrangements,
subject to collective agreements, could be designed to
help free-up jobs for the young unemployed, with
consequent savings in social security and unemployment
benefits. However, any such arrangements must not be
to the detriment of older workers. Such savings, plus a
more gradual and staggered recourse to pensions, could
more than off-set income support to top-up the part-time
pre-retirement schemes. The overall costs and benefits
of such arrangements would need to be evaluated, and
examples of good practices across the European Union
discussed between the social partners. The question of
pro-rata rights and the legal status of part-time workers
would also need to be resolved.

The Committee has also consistently advocated
2.2.7.
the need for social protection to promote inclusion. This

(1) COM(97) 102 final, op. cit., point 2.2.3, 4th paragraph.
(2) Commission Communication ‘Taxation in the European
Union. Report on the development of
tax systems’,
COM(96) 546 final, point 6.12. Available data on the
taxation structure according to the economic function
as % of GDP show that for the EU 15, in 1993, tax burden
bore 11 % on consumption, 21,2 % on employed labour,
7 % on capital and 2,1 and 0,6 % on, respectively, energy
and environment. Structures of the taxation systems in the
EU, Eurostat report, 1997.

(3) OJ C 66, 3.3.1997, op. cit., point 6.4.1.7.

requires a guaranteed minimum level of income security,
linked to integration, stability and re-skilling. Jobs and
activity are the best means to sustain social inclusion.
This can include ‘non-market’ jobs in which the vast
savings to public expenditure can easily off-set top-up
allowances, benefits or tax exemptions.

2.3. Adapting social protection to the demographic

ageing of European societies

2.3.1.
The combination of a falling birth rate and
increased longevity means that the ratio of elderly people
to the working population will double over the next
fifty years. This will make it increasingly difficult to
finance pension payments if there is not an adequate
level of contributors in the active workforce. The
development of common forecasting models of long-
term social protection expenditure would help increase
understanding of the challenges posed by the demo-
graphic changes across the Union. The demographic
‘timebomb’ and resulting pressures on and doubts about
the sustainability of pension schemes is in any case a
major distributional problem relating to the replacement
ratio on the labour market, as is also highlighted by the
Commission in its Demographic Report 1997 (4). Various
labour market adjustments can help off-set some of the
problems. For example, the Commission Communi-
cation indicates ‘The trend of increased female partici-
pation in employment will continue during the years to
come and will make a valuable contribution to coun-
tering an impact of the ageing workforce (5)’. Flexible
transition to retirement with voluntary shifts in retire-
ment age, as indicated above, could also lower the
dependency ratio. Moreover, at a time when more than
18 million people in the EU are unemployed, it would
seem rather paradoxical to panic over the lack of an
active workforce. The key issue is not the overall
demographic structure of society, but the share of people
involved in generating GDP. The problem is jobs
more than pensions. Questions arising concerning the
sustainability of pensions, be they ‘pay-as-you-go’
(PAYG) schemes or (‘funded’) capital-stock schemes,
are in the final event inextricably linked to economic
performance. Moreover, as the Commission points out
‘a radical transformation of the public schemes from

(4) European Commission, Demographic Report 1997, p. 3

and passim.

(5) COM(97) 102 final, op. cit., point 1.2.3, 1st paragraph.

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PAYG to funded schemes is not realistic because of the
huge transition costs’ (1).

Providing a ‘secure environment’ for supplementary
pension schemes needs to be tempered by policies
relating to economic performance. PAYG schemes
depend on policies enabling people actively to engage in
creating GDP. Funded schemes are subject to inflation,
investment and capital speculation risks. Irrespective
of the way in which pension insurance is organized
— public, supplementary, or private — there must be
adequate guarantees on their coexistence. Expenditure
involved must in any case be generated by the current
state of national economies and by accompanying
policies on monetary stability and capital investment.
Within such economic constraints, the Committee has
already endorsed proposals in favour of portable sup-
plementary pension schemes.

2.3.2.
The Committee has already supported the
ideas set out in the Commission Communication as
regards meeting new care needs for older people,
especially enabling older people who so wish to stay if
possible in their own homes, rather than in ‘insti-
tutionalized’ care. Enabling conditions, such as home-
help, medical and paramedical care, and access to social
services, all possibly in partnership with the voluntary
sector, are preferable to, and indeed less expensive than,
having to depend on private insurance with possible risks
of ‘adverse selection’ and ‘moral hazard’ (2). Additional
measures have been proposed by the Committee, includ-
ing an inter-generational solidarity levy to finance
structures and assistance for old people as a means of
reducing
protection
measures to cover new risks can also be achieved, even
during periods of recession.

dependence.

Positive

social

2.3.3.
The protection and restoration of health are
an essential aspect of social protection. This chapter
should not be approached solely in terms of the elderly,
but should be studied in its own right. Health care
expenditure, especially for the very old, can be partially
offset by preventive medicine, guidance and home care.
In order to improve health outcomes, and to equip
health care systems to address the factors influencing
the health status of the population, Member States could
pursue a more consistent approach to health policy
along the lines indicated by the WHO (3). Moreover, a
better evaluation of cost-effectiveness of new tech-
nologies and of the impact of Community policies could

be carried out. The Commission also draws attention
to the need to improve awareness of the health aspects
of the changes in work organization (4). The Committee’s
Opinion of November 1996 on ‘the future of social
protection’ highlighted that ‘by adopting the 1992
Recommendation on the convergence of social protec-
tion objectives and policies, the EU Member States have
endorsed the objective of ensuring that all persons legally
resident in a Member State have access to necessary
health care, as well as the maintenance and development
of a high quality health-care system. The concern over
containing health care costs must be tempered by
concern to ensure equitable access to high-quality health
care for all. Measures allowing the selection of risks
(cream-skimming) would endanger solidarity and jeop-
ardize the provision of effective care’ (5).

2.4. Adapting social protection to the change in the
gender balance: towards an individualization of
rights

The Committee has supported proposals for
2.4.1.
reconciling working and family life and for progressively
implementing an individualization of rights, without
thereby jeopardizing the economic situation of women.
The Commission states ‘the idea of a basic old-age
pension supplemented by an occupational pension might
be able to accommodate this very complex problem’ by
taking better account of the current position of women
on the labour market and to more varied patterns of
working life (6). However, taking into account the
differences between the national systems, the effects that
the Commission’s idea could have on contribution-and-
income-related social security systems should be thor-
oughly researched. It would be useful if the Commission
issued a Communication on the individualization of
rights, in which these problems would be covered.

2.4.2.
The Committee has also consistently endorsed
proposals for equal treatment in statutory and occu-
pational social security schemes.

2.5.

Improving social protection for people moving
within the Union

2.5.1.
The Committee has endorsed all up-dates of
Regulation (EEC) No 1408/71, enabling closer coordi-

(1) Ibid., point 2.3.1, 7th paragraph.
(2) COM(97) 102 final, op. cit., point 2.3.3, 3rd paragraph.
(3) WHO, Health for all

in Europe: an Epidemiological

Review, Copenhagen, 1990.

(4) Green Paper on ‘Partnership for a New Organization of

Work’, COM(97) 128/9, points 62 and 63.

(5) OJ C 66, 3.3.1997, point 8.5.
(6) COM(97) 102 final, op. cit., point 2.4, last paragraph.

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nation of statutory social security arrangements for
people moving within the EU. It is also drawing up an
Opinion on the recently published Green Paper on
‘Supplementary Pensions in the Single Market’ (1). The
Committee has already specifically called for similar
provisions for occupational pension schemes, including
a legal framework safeguarding assets and individual
rights, comparable EU-wide transfer values, and an
EU coordination framework for occupational pension
schemes, perhaps based on Article 51 of the Treaty,
analogous to that already in existence for statutory
schemes (2). It has also draw attention to fiscal anomalies
for frontier workers.

3. Supporting the adaptation process through action

at European level

3.1.
The Committee has called for an EU regulatory
framework on pro-rata rights for part-time workers and
for the coordination of occupational pension schemes.
It has also called for a European poverty and social
exclusion observatory and for European-wide data on
the costs of poverty and social exclusion. EU provisions
on equal treatment for women and men in statutory and
occupational social security schemes have been endorsed.
EU-wide measures in favour of growth, competitiveness
and employment, upon which sustainable social protec-
tion depends, have been proposed or endorsed in
numerous Committee opinions. The fundamental inter-
dependence of social policy and economic performance
in the EU remains paramount. This is why the Committee
agrees with the Commission that ‘The reforms of social
protection systems have to be seen in the context of
the European employment strategy and the “Broad
Economic Policy Guidelines”, agreed at the Florence
European Council’ (3). It is also why the Committee
welcomes the Commission’s intention to pursue the
debate with the social partners and through the civil
dialogue, as well as with the European institutions, in

(1) COM(97) 283 final.
(2) ESC Opinion on ‘Supplementary Social Security Schemes’,

26.5.1992 — OJ C 223, 31.8.1992.

(3) COM(97) 102 final, point 2.1, 2nd paragraph.

Brussels, 10 December 1997.

the knowledge that ‘modernizing and improving social
protection in the Union cannot be achieved without the
active participation of all involved’ (4). The Committee
is also aware that the exchange of experience between
Member States represents important added value at EU
level (5) and wishes to see this ‘catalyst’ role pursued. In
this framework benchmarking can represent a valuable
tool in order to identify particularly effective practices
with respect to the objectives set out in the 1992
Recommendation on the convergence of objectives and
policies of social protection.

3.2. However, the Committee notes from the com-
munication that the Commission has set itself a very
busy and tight schedule and plans to carry out numerous
studies and draw up several documents.

For instance:

— analyses: taxation, unemployment benefits, fore-
casting methods, relationship between market and
health care, care of children and elderly depend-
ants ...;

— assessments: costs and benefits of social protection,
impact of policies and means for combating unem-
ployment, minimum income, wage costs, retirement
and pension schemes, prevention- health, cost of
heath;

— the Green Paper on supplementary pension schemes

(see point 2.5.1 above).

For its part, the Committee suggests including
3.2.1.
a study in order to establish comparable indicators on
the employment potential of the care sector and of the
preventive capacity of social protection. The Com-
mission’s schedule is very tight: ‘Amsterdam Summit,
end of June 1997, first half of 1997 ...’. Therefore,
several documents will not have been examined by the
Committee. Furthermore, it will be difficult to consult
the bodies concerned. Considering the scope, nature and
seriousness of the subjects involved, the Committee
would wish to issue its opinion in good time, when the
texts are being prepared and not after their publication.

(4) Ibid., point 3, 2nd paragraph.
(5) Ibid., point 3, 1st paragraph.

The President

of the Economic and Social Committee

Tom JENKINS

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APPENDIX I

to the opinion of the Economic and Social Committee

The following members, present or represented, voted for the opinion:

Mr/Mrs/Miss: ABEJO´ N RESA, ANDREWS, ANGELO, ATTLEY, Dame Jocelyn BARROW, BASTIAN,
BETELU BAZO, BØGH, BRIESCH, van den BURG, BURKHARD, Vasco CAL, CASSINA, CEBALLO
HERRERO, CHAGAS, CHEVALIER, CHRISTIE, COLOMBO, DANTIN, DELAPINA, van DIJK,
DRIJFHOUT-ZWEIJTZER, DRILLEAUD, ENGELEN-KEFER, ETTY, zu EULENBURG, FORGAS I
CABRERA, FRERICHS, FUCHS, GAFO FERNA´ NDEZ, GEUENICH, GLATZ, HAGG, HERNA´ NDEZ
BATALLER, JASCHICK, KALLIO, KANNISTO, KIENLE, de KNEGT, KONITZER, KONZ,
KORYFIDIS, KUBENZ, LEMMETTY, LIVERANI, LYONS, LO¨ NNBERG, MADDOCKS,
MANTZOURANIS, MARGALEF i MASIA´ , MENGOZZI, MERIANO, NILSSON, NYBERG, PELLA-
RINI, POMPEN, QUEVEDO ROJO, RAMAEKERS, REUNA, SA´ NCHEZ MIGUEL, SANTILLA´ N
CABEZA, SANTOS, SCHMITZ, SEPI, SEQUEIRA, SKOUBY, STOKKERS, STO¨ LLNBERGER,
STRASSER, TSIRIMOKOS, TWIST, VOGLER, WAHROLIN, WESTERLUND, WRIGHT, ZUFIAUR
NARVAIZA.

The following members, present or represented, voted against the opinion:

Mr/Mrs/Miss: ANDRADE, BAGLIANO, BARROS VALE, BEALE, BOUSSAT, BREDIMA SAVOPOU-
LOU, BURANI, BYRNE, DE NORRE, DOCK, DONOVAN, FRANZ, GARDNER, GAUDER,
GIESECKE, HAMRO-DROTZ, HORNUNG-DRAUS, JOHANSEN, KIELMAN, KONTIO, LEHN-
HOFF, LEVITT, LINSSEN, LITTLE, MALOSSE, MEGHEN, MOBBS, MORELAND, MORGAN,
NOORDWAL, PIETTE, RAVOET, REGNELL, REITERER, SIMPSON, SIRKEINEN, WALKER,
WHITWORTH.

The following members, present or represented, abstained:

Mr/Mrs/Miss: BENTO GONÇALVES, BOISSERÉE, BROOKES, DECAILLON, HAGEN, LERIOS,
NIELSEN, RETUREAU, SOLARI.

APPENDIX II

to the opinion of the Economic and Social Committee

Following the recorded vote on the opinion as a whole, the following members of the Employers’ Group,
who had voted against the opinion, issued the following statement:

‘The Employers’ Group believes that the Committee’s opinion fails to recognize the problems inherent
in current social protection regimes and understates the necessity for modernization and improvement.

The group fully supports the concept of effective social protection for all our citizens as a key factor in
economic performance but equally affirms that strong economic performance is essential to affordable
social protection regimes.

Current problems in many Member States may be summarized as follows:

1. Social benefit systems have grown piecemeal and are geared to out-dated living standards and

employment patterns.

2. A dependency culture has been created as not enough is done to help long-term recipients to break

out of their situation.

3. Member States are concerned about spiraling costs in the face of their efforts to control budget

deficits.

4. The old-age dependency ratio (65+ as % of 15-64) is estimated to double by the time those starting

work today come to retire.

C 73/92

EN

Official Journal of the European Communities

9.3.98

The group welcomes the Commission’s analysis. It generally supports the proposals for action and hopes
that they will be of help to Member States in their efforts to overcome the problems. In particular the
group believes that the following aspects should be the subject of detailed consideration:

— the benefit structure and the relationship of benefits to one another;

— the targetting of benefits to those in greatest need;

— helping long-term recipients to equip themselves for employment;

— the interface between tax and benefits for the lower paid with better incentives to accept employment;

— encouraging individual responsibility;

— a gradual move towards long-term funding of at least a portion of retirements benefits;

— an increasing partnership between public and private provision.

Finally the group applauds the efforts which the Commission is making to remove remaining obstacles
to free movement in the field of social protection.’

Mr/Mrs/Miss: ANDRADE, BAGLIANO, BARROS VALE, BEALE, BOUSSAT, BREDIMA SAVOPOU-
LOU, BURANI, BYRNE, DE NORRE, DONOVAN, FRANZ, GARDNER, GAUDER, GIESECKE,
HAMRO-DROTZ, HORNUNG-DRAUS,
JOHANSEN, KIELMAN, KONTIO, LEHNHOFF,
LEVITT, LINSSEN, LITTLE, MALOSSE, MEGHEN, MOBBS, MORGAN, NOORDWAL, RAVOET,
REGNELL, REITERER, SIRKEINEN, WALKER, WHITWORTH.

Opinion of the Economic and Social Committee on ‘Cooperation with charitable associations
as economic and social partners in the field of social welfare’

(98/C 73/23)

On 20 March 1997 the Economic and Social Committee decided, in pursuance of Rule 23(3)
of the Rules of Procedure, to draw up an Opinion on: ‘Cooperation with charitable associations
as economic and social partners in the field of social welfare’.

The Section for Social, Family, Educational and Cultural Affairs, which was instructed to
prepare the Committee’s work on this matter, adopted its opinion on 17 October 1997. The
rapporteur was Mrs zu Eulenburg.

At its 350th plenary session (meeting of 10 December 1997) the Economic and Social Committee
adopted the opinion set out below by 75 votes to six, with seven abstentions.

COOPERATION WITH CHARITABLE ASSOCI-
ATIONS AS ECONOMIC AND SOCIAL PARTNERS

Preamble

Charitable associations have helped to shape the welfare
state in the EU. The wide variety of services and facilities
which they provide have historical roots. Economic
progress went hand-in-hand with trends entailing social
inequality and impoverishment. In the 19th century
industrialization led to profound changes in people’s
everyday lives. The churches, and their religious com-
munities, affluent citizens and aristocrats and a great
variety of social organizations, such as workers’ associ-
ations were active in the social welfare field. They

founded social services and social establishments. In
many European countries, the state stood aside, taking
action only at a very late stage and in accordance with
the different ways in which the social security systems
developed in the various states.

Charitable associations do not only provide social
services and facilities; they also motivate people to work
voluntarily for the common good and they see themselves
as advocates of the needy. They are thus promoters of
social justice.

Charitable associations form part of the ‘third sector’,
which is highly important to European economies and
constitutes an extremely multi-faceted phenomenon for
which there is no clear and definitive definition. Differing
national mindsets, differences as regards the levels at