Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank Action for stability, growth and jobs’ COM(2012) 299 final
Date: 2012-12-13
Institutions: European Economic and Social Committee
Subjects: economic growth, economic integration, economic reform, economic stabilisation, integrated development, job creation, single market








C_2013044EN.01015301.xml










15.2.2013   


EN


Official Journal of the European Union


C 44/153





Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank Action for stability, growth and jobs’
COM(2012) 299 final
2013/C 44/27
Rapporteur-General: Mr VERBOVEN

On 14 August 2012 the Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank Action for stability, growth and jobs

COM(2012) 299 final.
On 10 July 2012 the Committee Bureau instructed the Europe 2020 Steering Committee to prepare the Committee's work on the subject.
Given the urgent nature of the work, the European Economic and Social Committee appointed Mr Verboven as rapporteur-general at its 485th plenary session, held on 12 and 13 December 2012 (meeting of 13 December 2012), and adopted the following opinion by 114 votes to 40 with 9 abstentions.
1.   Recommendations

At the request of the Commission, the European Economic and Social Committee agreed to produce an opinion on the Communication on Action for stability, growth and jobs. The EESC underlines the close interconnection between these three aspects each of which requires specific responsibilities for the parties concerned. This opinion focuses in particular on the common responsibility of social partners and organised civil society, and on the contribution that they, and in particular employers and workers, can provide. It highlights the role they can play in formulating and applying policies to relaunch economic growth, create more and better jobs and restore financial stability.






1.1


The Committee highlights the fact that participation and involvement are essential in order to develop, shape and implement policy changes and structural reforms properly.
The Committee emphasises that:






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Structural changes to social and economic policy may change existing and future job opportunities between various groups and very often have an important impact on the distribution of incomes.










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Social and civil dialogue improve the credibility and social acceptability of intended social and economic measures.










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Participation is also important in order to keep a close eye on the policy that is actually implemented and its results, allowing civil society organisations and social partners to make evaluations and give timely warnings wherever appropriate.










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In many cases, it is also social organisations, particularly the social partners, which have to translate policy proposals into practice.














1.2


The Committee emphasises the importance of stronger European economic governance, to make monetary union work better and in the interests of all. However, there is a pressing need to draw lessons from reality. Social and civil dialogue are essential in this respect, covering economic issues and the public finances as well as social cohesion.










1.3


The Committee welcomes the Commission's proposal for a scoreboard and benchmarking in relation to employment, as well as the monitoring of national job plans in a structured way. The European social partners should be closely involved in establishing the scoreboard and benchmarks, as well as the criteria for evaluating the national job plans.










1.4


In relation to wage-setting, the Committee points out to the Commission that wages and wage bargaining come within the remit of the social partners, as is indeed laid down in the EU Treaty.










1.5


The Committee therefore calls on European policy makers to embed social dialogue and participation in the structure of the various policy processes that form part of the Europe 2020 process. Experience on the ground shows that the focus has shifted from the national to the European level, weakening the role and quality of social consultation and participation at national level.










1.6


In the context of the European Semester, the Committee proposes that the European social partners (through the European social dialogue) and organised civil society should be involved at an early stage in the preparation of the Annual Growth Survey. Such involvement is also urgently needed in relation to establishing the priorities for the employment policy guidelines and the broad economic policy guidelines.




2.   Introduction







2.1


On 30 May, the European Commission issued a communication on Action for stability, growth and jobs (COM(2012) 299). The communication comes at a critical stage in the European Semester, which begins with the Annual Growth Survey produced by the Commission and ends with the country-specific recommendations approved by the European Council.










2.2


At the request of the Commission, the European Economic and Social Committee agreed to produce an opinion on the Communication on Action for stability, growth and jobs. This opinion focuses on a specific aspect, in particular on the common responsibility of the social partners and organised civil society and on the contribution they can provide. The EESC underlines the role they can play in formulating and applying policies to relaunch economic growth, create more and better jobs and restore financial stability.
In this opinion, and following an analysis of certain policy fields, the Committee intends to make recommendations as to how the social partners and the representatives of organised civil society can play a greater, better, decisive role in the European Semester. As a next step, the Committee will produce an opinion on the Annual Growth Survey 2013 in which all major policy areas brought up by the Commission will be analysed.










2.3


The Committee notes first of all that the Commission communication refers to the role of the social partners and organised civil society in relation to only three subjects, namely human capital, pay and the general issue of ‘change’ (see further point 4.1). In this respect, the Committee wishes to emphasise at once that social and civil dialogue cover many other areas and issues, including innovation, economic reform, industrial policy, sustainable development, entrepreneurship, more and better jobs, combating poverty and social protection. In this opinion, the Committee will therefore begin by highlighting the importance of social and civil dialogue (see section 3), before examining the three specific areas in which the Commission communication refers expressly to the role of consultation and dialogue (section 4). In the final section, the Committee makes further suggestions on how to embed consultation and participation in the structure of the Europe 2020 policy agenda.




3.   Social and civil dialogue are key to successful policies







3.1


The Committee stresses that participation and involvement are not a luxury: they are essential in order to develop, shape and implement policy changes and structural reforms properly.






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Structural changes to social and economic policy may change existing and future job opportunities between various groups and very often have an important impact on the distribution of incomes. In this respect, organised social dialogue can ensure that efforts to put the economy back on the right track are shared fairly. Consultation and participation are therefore very closely linked to social justice.










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That also implies that if social and civil dialogue take place, they can improve the credibility and social acceptability of those social and economic measures, thus ensuring the success of policies. Indeed, a policy that, because of the broad social consensus around it, is expected to be maintained consistently over time will substantially improve the climate of confidence and actually lead to innovation and investment. On the other hand, a policy that brings about a major shock, but whose decisions have to be quickly reversed because they lack the support of stakeholders, will create doubt and confusion, ultimately depriving the policy of much of its impact and relevance. In other words, investment in social dialogue is also a good investment in the social capital of a society.










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Participation is also important in order to keep a close eye on the policy that is actually implemented and its results. In this respect, civil society organisations and social partners provide an early warning system: they can spot recent trends and unforeseen or undesirable consequences of a policy at an early stage and can raise those issues with policy makers.










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Finally, in many cases it is also social organisations, particularly the social partners, who have to translate policy proposals into practice. For a policy to be implemented well, it is essential that those who have to implement that policy also support it.














3.2


The Committee specifically points out to the Commission, the European Council and other policy makers at both European and national level that social and civil dialogue must be strictly observed. This is not about making fine-sounding pronouncements about the importance of participation and then implementing the policy that was planned in the first place, without taking account of the contribution and proposals of the social actors on the ground. That sort of behaviour leads to a loss of social capital and trust, ultimately resulting in a breakdown in both economic and social communication.










3.3


The ‘horizontal clause’ (Article 9 of the Treaty on the Functioning of the European Union) is also relevant in this respect. That clause requires the European Union to take account of specific social criteria and objectives in defining and implementing its policies and activities. Specifically, those are the promotion of a high level of employment, adequate social protection, the fight against social exclusion, a high level of education and training and a high level of protection of health. Participation of social actors in policy is a logical and necessary consequence of the horizontal clause.




4.   Specific policy fields in respect of which the Commission mentions social and civil dialogue







4.1


The Committee notes that in three places, the Commission communication points to the importance and the role of the social partners and of organised civil society. The Committee is referring specifically to the following passages from the communication:






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Governance, page 3, second paragraph - We need to build consensus and confidence in the need for change and in the choices to be made. The social partners will play an important role in this dialogue.












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Tapping into the potential of human capital - page 6, fourth paragraph - In its recent employment package, the Commission has proposed a set of concrete measures for a job-rich recovery across the EU. Cooperation between the Commission, the Member States, the social partners as well as public and private stakeholders will be needed to implement the specific actions proposed to tap into the job creation potential of key sectors as ICT (information and communication technologies), healthcare and the green economy. The enhanced monitoring of national job plans through the benchmarking and scoreboard proposed by the Commission will further strengthen the impetus for job creating reforms (...).











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Tackling unemployment and the social consequences of the crisis – page 14, sixth paragraph - Some Member States have introduced far-reaching reforms of their wage-setting and indexation systems to ensure that wage developments better reflect productivity developments over time. Limited progress has been made in other countries where the functioning of certain wage indexation systems has been identified as a possible threat to competitiveness. These countries will need to find ways, in consultation with social partners, to reduce this handicap in future. In countries with current account surpluses, some rebalancing in favour of domestic demand, including through wage increases is noticeable and should continue.















4.2


First of all, the Committee welcomes the Commission's decision to involve the social partners and social organisations, at least in the three specific areas mentioned above. However, the Committee wishes to make the following comments.










4.3


The Committee emphasises the importance of stronger European economic governance, to make monetary union work better and in the interests of all. However, there is a pressing need to draw lessons from reality. If a particular economic policy is holding back growth and various European economies are back in recession, threatening both stability (since deficits and debt ratios remain high) and social cohesion (with high and growing unemployment), policy makers must take that seriously and must change policy course. Social dialogue helps produce a better policy supported by the society at large, rather than stubbornly persisting, against one's better judgement, with a policy that has proved to have harmful consequences for the economy, public finances and social cohesion.










4.4


The Committee welcomes the Commission's proposal for a scoreboard and benchmarking in relation to employment, as well as the monitoring of national job plans in a structured way. The European social partners should be closely involved in establishing the scoreboard and benchmarks, as well as the criteria for evaluating the national job plans.










4.5


The third area in which the Commission specifically mentions the role and involvement of social actors and the social partners concerns pay, in relation to which, in the words of the Commission, the social partners should be ‘consulted’ on the reform of wage-setting systems. In this respect, the Committee wishes to draw the Commission's attention to the fact that in many Member States, not only wages and wage-bargaining, but even the wage-setting system itself, come within the autonomous remit of the social partners, which negotiate and conclude collective agreements in this respect. This autonomous negotiation role of the social partners cannot be reduced to mere consultation. Nor can the right to take part in dialogue be restricted to a mere advisory role. Indeed, the autonomy of the social partners and of social dialogue is confirmed in Articles 152 and 153(5) TFEU, which, among other things, state the principle that the EU must respect the national systems of industrial relations. In this context, ‘consultation’ of the social partners in relation to, for example, reforms to indexation mechanisms is wholly inadequate and even inappropriate, particularly where, in the relevant national model of social dialogue, such indexation mechanisms are negotiated and agreed by the social partners themselves by way of collective agreements.
On the substance of this issue, the Committee wonders whether the Commission is not attributing rather too much importance to the role played by downward adjustments of wages. Closer analysis of the country-specific recommendations that accompany the Commission communication shows that, of the 17 Member States that have received Commission recommendations concerning pay, 16 of them have recommendations aimed at reducing wage growth, whether by reforming indexation, limiting minimum wages, decentralising wage bargaining or increasing the flexibility of the lowest wages. However, the imbalances that characterise European monetary union are primarily structural and are mainly linked to the fact that globalisation has different effects on different members of the monetary union (Footnote: Reference to IMF Working Paper 12/236, External Imbalances in the Euro Area, 2012). The fact remains that the competition with low-wage countries cannot be won by reducing wages.




5.   Structurally embedding social dialogue and participative processes







5.1


Finally, the Committee calls on European policy makers to embed social dialogue and the idea of social participation in the structure of the various policy processes. Experience on the ground shows that for a number of reasons, not least the institutional reforms that the Commission keeps making to these policy processes, European decision-making is having more and more impact on consultation and social participation at national level. In this context, the Committee finds it absolutely unacceptable for consultation and social participation at national level to be reduced to a sham, by hollowing out national traditions of consultation or even disregarding them altogether (there is a problem of the timing that must be taken into account in relation to consultation procedures, and the drafting of reform programmes is centralised in the hands of national bodies that have little or no link with social and participatory dialogue).










5.2


In line with the timetable of the European Semester, the Committee makes the following proposals:






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The European social partners (through the European social dialogue) and organised civil society should be involved at an early stage in the preparation of the Annual Growth Survey.










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Such involvement is also urgently needed in relation to establishing the priorities for the employment policy guidelines and the broad economic policy guidelines.










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A broad, more participatory dialogue should be put in place with the social partners and organised civil society in connection with the drafting of the national reform programmes. That implies a review of the timetable to give sufficient time for an in-depth debate allowing well-founded alternative proposals and approaches to be produced. The Committee also proposes that a final report be prepared on the dialogue at national level, setting out the various viewpoints and suggestions, and that it be attached to the country reports prepared by the Commission. That will make it possible to see where social participation is playing a significant role.










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Another step in the European Semester process is the Commission's publication of country-specific recommendations. The social partners and organised civil society should be informed and consulted about these in a timely fashion.










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Finally, in relation to social participation, the country-specific recommendations under the Europe 2020 strategy and the analyses and recommendations under the excessive macroeconomic imbalances procedure should be made consistent with one another. Here too, the social partners and organised civil society should have an extensive opportunity to be heard and to make their views known.









Brussels, 13 December 2012.


The President of the European Economic and Social Committee

Staffan NILSSON