Respect of national wage and retirement-setting mechanisms (debate)
The first item is the Commission statement on respect of national wage and retirement-setting mechanisms.
Member of the Commission. - Mr President, I would like to thank honourable Members for this opportunity to dispel some widely held misunderstandings regarding the Irish programme.
The S&D Group's question that gave rise to this statement raises honourable Members' concern that certain economic policy conditions set out in the Memorandum of Understanding of the Economic Adjustment Programme for Ireland are in legal conflict with Article 153(5) of the Treaty. That paragraph excludes the adoption of provisions in the field of pay under Article 153, that is, in the field of social policy. However, the Economic Adjustment Programme for Ireland is not a social policy programme and is not adopted under Article 153. It is a financial assistance programme set up, together with the Irish Government, to restore domestic and external confidence and remove the harmful feedback loops between the fiscal and financial crisis. Therefore, it is grounded in Article 122(2) of the Treaty, which allows for Union financial assistance if a Member State is seriously threatened with severe difficulties caused by exceptional occurrences beyond its control.
The role of the MOU is to specify the economic policy conditions that serve as a benchmark for assessing the Irish policy performance during the financial assistance programme. The Member State has full ownership of these economic policy conditions and their implementation. These conditions are commitments of the Member State that are undertaken by the state itself. It is not EU action in the respective fields. Indeed, many of the conditions, such as the minimum wage reduction, were already included in the Irish Government's national recovery plan that was published on 24 November 2010, before the start of the programme.
The aim of the conditions relating to labour market policy is to create jobs and to avoid long-term unemployment in Ireland amongst the most vulnerable groups. The minimum wage reduction is part of this wider package of measures and needs to be seen together with activation policies and efforts to modernise the benefit system. When evaluating the reduction in one of the highest minimum wages in the European Union - it is, for instance, the second highest in the eurozone - and although there was significant wage adjustment in the economy, with the minimum wage, in common with wages in general in Ireland, falling by 3% in real terms in 2008, followed by a rise of 0.3% in 2009, it should be noted that most of the labour market adjustments took the form of job losses. In fact, the minimum wage cut only restored the status quo prevailing before 1 January 2007, i.e. before the crisis.
The other condition mentioned in the question is an independent review of sectoral collective bargaining. The motivation of the review is to discuss the fairness and efficiency of employment conditions for both employees and employers across sectors. I would like to highlight the fact that Ireland has a long-standing tradition of tripartite consultation on economic and social policy and that the successive pacts between the government and the social partners since the 1980s have been widely recognised as major factors in the success of the Irish economy.
The review is an opportunity for the social partners to voice opinions and shape policy, and its announcement was welcomed as such. I am fully confident that the review will be carried out by the Irish Government in a way that recognises the importance of social dialogue, includes all the social partners, and complies with Community law.
Finally, the conditions in the Memorandum of Understanding with regard to structural reform are not only about the labour market. They also contain important measures to open up product markets such as overly regulated sectors and professions. These reforms could have a major effect on customer prices and productivity, which support the purchasing power of households.
on behalf of the PPE Group. - Mr President, I would also like to thank the Commissioner. Yesterday, a new national government for recovery was voted into power in Ireland. Fine Gael and Labour are part of the PPE and S&D groups respectively in this Parliament. One of the issues high up on the agenda of the new programme for government will be the renegotiation of elements of the EU/IMF programme of support to Ireland.
At present, many Irish people fear that the conditions agreed by the then government in the EU/IMF programme of support are too stringent and place a heavy burden on ordinary citizens who have had to bear the brunt for the mistakes of the banks - both Irish and European - and the government. We should note that the new government has agreed to reverse the reduction in the minimum wage. We know, however, that recovery cannot happen without pain. Ireland went down a similar road in the 1980s. Many of the difficult conditions as laid out by the EU/IMF programme are necessary if we are to restore healthy public finances. We must prune the tree in order to allow growth.
I welcome the Commission's support for an interest rate reduction as stated by Commissioner Rehn. This should come about as soon as possible and I urge the Commission to really look at this at an early date. The Commissioner emphasised that all measures are weighed up against their effect on growth, competitiveness and the sustainability of public finances in the long run. I accept that; we cannot carry the entire burden we have been asked to carry at once. The Irish people have taken their responsibilities in this matter; in fact, they have taken other people's responsibilities as well, because we were given no alternative. What they have done is not just for Ireland but also for Europe and the eurozone in particular. We do not need the straw to break the camel's back. Please give the Irish people the tools; we will do the job ourselves, but please do not expect the Irish people to carry a burden that they are not capable of carrying. So I ask the Commissioner to bear those comments in mind in particular in the days and weeks ahead.
on behalf of the S&D Group. - Mr President, this memorandum requires an EUR 1 per hour reduction in the minimum wage in Ireland and a review, as we have heard, of the system of collective pay agreements which protect the low paid.
I do not believe that this interference can be justified. The Treaty requires the Commission to promote social dialogue, not undermine it. Article 152 requires respect for the autonomy of social partners, not this type of interference, and Article 153 expressly excludes EU action in the field of play. The Commission cannot pick and choose the hierarchy of articles in this respect.
The memorandum goes on to insist on cuts in social welfare, the roll-back of key public services, and reductions in public sector employment and public sector pensions. How can those demands be justified in relation to a Treaty that requires the Union to aim to eliminate inequalities, promote a high level of employment, guarantee adequate social protection and fight against social exclusion? The only honest answer to that is that these things cannot be reconciled, and the problem is that these things have now, as a result of the Annual Growth Survey, become the general rule.
The people will reject the idea of a Europe based only on austerity. They will not tolerate the far-reaching implications for social policies with lower wages, lower employment protection, weak social standards, reduced public services and the imposition of higher retirement ages. If we want to continue to swell the ranks of anti-Europeanism, then carry on, Commission. If not, please stop this nonsense now.
on behalf of the ALDE Group. - Mr President, the Commissioner is telling us that the Memorandum of Understanding was drawn up under Article 122, part 2. I would like to ask the Commissioner what happens when one article of the Treaty is in direct contradiction with other articles in the Treaty; as Stephen Hughes has asked, how do we decide on the hierarchy? It is in contradiction with Article 153.
It is also in contradiction with Article 9, the social clause, which I have quoted many times in this Chamber when speaking about the Irish austerity package, where it says that in defining and implementing all its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment and the fight against social exclusion, etc. And what about Article 28 in the Charter of Fundamental Rights, under which workers have the rights to negotiate and conclude collective agreements and, in the cases of conflicts of interest, to take collective action to defend their interests, including strike action? Many Irish workers would see that they are in that position at the moment. How do we deal with the contradiction between the different articles in the Treaty?
Another question for you, Commissioner: are you stating that the Memorandum of Understanding was entirely the responsibility of the Irish Government and that the Commission acquiesced or agreed?
Finally, let us assume here you have the power to do all of this - and you are telling us you have; why then was there no effort to reduce or eliminate bank bonuses? Why was there no effort to ensure that those at the top of the salary scale paid their fair share? Why is it that one euro was deducted from the minimum wage? I agree entirely with what Stephen Hughes has said: this fuels anti-European sentiment. Citizens see what is happening. They see how the Commission is working in this whole process, and what they see is that it is those on the minimum wage, those who are in collective agreements, are being hit with these austerity plans.
Finally my main question, Commissioner, is: who decides? Is it the Court of Justice? Who decides when articles of the Treaty are in conflict or when the Commission acts in such a way as to bring those articles into conflict with one another?
on behalf of the Verts/ALE Group. - Mr President, I understand the urgency of the Commission in addressing the economic crisis and the high levels of debt which are a threat for the stability of the euro. I understand that conditions are imposed on countries that have to make use of the European Financial Stability Mechanism. However, it seems to me that the Commission is being quite selective in the measures and conditions it deems permitted in this crisis.
On the one hand, nearly any measure seems legal when it comes to fiscal consolidation by cutting expenditure. As soon as Ireland made use of the rescue package, minimum wages and pension levels were the first variables to be adjusted, despite the fact that these matters explicitly are not EU competences. On the other hand, the Commission hides itself behind the lack of EU competence to leave the exceptionally low Irish corporation tax untouched, whereas increasing this could also substantially improve public revenues in Ireland. Cutting expenditure is not, after all, the only way to achieve a balanced budget.
I understand that this crisis requires exceptional measures, but why is the Commission in such a hurry to adjust minimum wages, affecting workers who earn the least, while we have to wait and see about measures that make the banking and financial sector pay? I strongly get the feeling that the Commission is interpreting the EU's competences in a very one-sided and, dare I say it, right-wing manner. This blunt approach inspires Euro-scepticism. It seems that the EU acts firmly in the field of employment and social policy only in times of crisis, and then does so by imposing cuts in social spending and wages.
The EU can only regain confidence if the Commission shows the same determination in setting proper minimum social standards and social guarantees for the heavy cuts imposed on people. Yes, we do want economic governance, but we want balanced governance with both fiscal sustainability and social guarantees. If not, the vulnerable will pay the price for a mess that they are not responsible for.
Mr President, ladies and gentlemen, the rescue packages were intended to protect EU Member States from insolvency. However, they are overwhelming citizens with brutal austerity programmes and allowing the perpetrators to get off scot-free. On top of that, the Commission is now interfering in national wage policy, too.
Mr Hahn, it is quite absurd and it brings tears to my eyes when I hear formal arguments like yours that this is not at all intended to be a socio-political measure. Such a position is utterly unacceptable. Wage policy is not the business of the EU. This policy on the part of the Commission is at complete odds with the idea of this European Union. The EU was never intended to be about competition in wages and social dumping. This Commission policy talks about the inflexibility of wages, which is to be reduced. It states that wages should reflect market conditions. This is like a blind man describing an elephant. People who write such things have no understanding of collective agreement systems. They interfere in free collective bargaining and reduce the much talked-about autonomy of the social partners and the social dialogue to absurdity.
I would like to make it clear that this Parliament is called on to ensure that the autonomous collective agreement policy is retained, to protect the social dialogue and to prevent the further dismantling of social security. We need measures to prevent a counterproductive austerity policy, not punitive measures.
on behalf of the EFD Group. - Mr President, this goes beyond Ireland. Only a month ago, I reminded the House that pensions were exclusively the competence of the Member States and here we go again using the same language of coordination and retirement-setting mechanisms. Now pensions are almost always related to earnings, so do we see here an attempt to harmonise wages? I hope not, because the Treaties also say that wages are an exclusive competence of the Member States.
It is all very well to say that 'equal' must mean equal pay, but should all workers doing the same job get the same pay across the EU? As an example, think 'climate': keeping a house warm near the Arctic Circle needs much more money than in Mediterranean countries. Add in winter clothing, snow clearance and all the rest and it is obvious that to pay all workers the same would leave some with more spare cash than others. Of course wages cannot be equal. The Commission's intentions in drawing up plans to encourage Member States to introduce an EU minimum wage policy and set retirement mechanisms are going against the Treaties. I am not surprised: this is the EU at work.
A harmonised wage and pensions policy is not just a dream; it is illegal. Leave it, as the Treaties demand, to the competence of elected governments like mine at Westminster and like that in Ireland.
(DE) Mr President, Ireland is a tragic historical lesson for us. At first, this country was always celebrated as the 'showcase' country and the model for new members of the Union, although at that time, very wrong policies were permitted and encouraged and these resulted in enormous bubbles in the property sector having to be dealt with, the banking sector being allowed to become a law unto itself and no attention being paid to preventing competitive dumping in the area of taxation.
Commissioner, you have the same nationality as me. We know how many Austrian writers, for example, suddenly discovered that they are Irish, because they had to pay hardly any tax there. What did the supposedly extremely pro-European forces do at that time? Absolutely nothing! They said 'this country is a wonderful example'.
All of that has now completely collapsed. This bubble has now turned out to be exactly what many people said it was all along. Once again we have a situation where - and I am not alone in thinking this - anti-European sentiment is being fanned by the fact that we are again allowing the wrong policies to be pursued, in this case by imposing this massive package on Ireland. Commissioner, you say that the Member State is committing itself to this. However, we know from our experience of World Bank and International Monetary Fund programmes - and what we are currently seeing in Ireland is not so very different from this - that in the end, these countries have no choice.
If we were to take a step back and say 'it is a shame that Ireland did not reject the Treaty of Lisbon the second time around', then we could come to a completely different way of thinking. We would then see that, with this European construct, we are dealing with something that could be likened to a vehicle, the front of which consists of a Porsche while the back consists of a bicycle. These two things do not go together. They need to be much stronger.
If we want to prevent this Europe from breaking apart, we actually need something like a Constitution for Europe. We then need clear benchmarks that actually apply to everyone. We need economic governance. This fragmentary approach - forwards, backwards, sidewards - will not work, and in the end, Commissioner, it is more likely to end in disaster than in what you, I and the vast majority of this House are working for, namely, a peaceful, functional and also united Europe.
(FR) Mr President, for the record, with the crisis and the bursting of the housing and credit bubbles, the Irish State has had to intervene to support the banks. The Irish public deficit, the accumulated budget balance of central and local administrations and, in particular, social security administrations, was estimated at 32% of gross domestic product (GDP) in 2010. If the Irish Government, which is finding it difficult to refinance itself on the markets, wishes to access loans from the European Financial Stability Mechanism and the European Financial Stability Fund, it will have to meet requirements for social and fiscal change, even though these areas come under subsidiarity. In our view, there is no contradiction here. As a doctor, I would say that, in the case of fever, there is no point prescribing antipyretics indiscriminately without seeking to treat the cause. As far as the allocation of these funds is concerned, this State should get its finances in order so as to correct its excessive deficit and past mistakes.
This austerity plan should improve GDP by 10% over the next four years. As with an individual, to whom a bank will make a personal loan conditional upon meeting the solvency condition without getting involved in their private lives and management, the European Union can lend to Ireland on the basis of consolidated solvency. Without interfering in their private lives, the bank will encourage an individual to negotiate, for example, an increase in salary, or to borrow elsewhere. Thus, by respecting subsidiarity, the European Union, on the basis of a Memorandum of Understanding drawn up with the International Monetary Fund (IMF), considers that this solvency requires the reduction of the legal minimum wage and an adjustment of pensions, with fiscal measures nonetheless in the mix. It is up to Ireland to choose whether or not to implement these measures. It does not leave the door wide open for the European Union to interfere in areas falling within subsidiarity, making it possible, for example, to impose a European minimum wage, which would be a dangerous thing to do, but rather ensures the protection of the stability of the euro area through a mutual guarantee process. Of course, it is necessary to help Ireland, like other countries in difficulty, which also protects us, but not at any price, especially that of seeing a State unable to pay off its loans, thus weakening its citizens and citizens throughout the European Union.
I should like to mention to all of you that if you make your speeches at a very fast pace, the interpreters have trouble keeping up with you. As I am responsible for matters concerning multilingualism, I would like to point out that the Bureau of the European Parliament is currently studying a new system.
At the moment, the interpreters indicate to the President that they are unable to keep up, but the President then has the difficult task of interrupting you. The system we are now investigating would mean that each of you, in your seat, would have a light to warn you when the interpreters cannot follow the speech, so that the President does not need to interrupt you and you would be informed of it directly instead.
Mr President, the Memorandum of Understanding in relation to labour market issues is very clearly based on a simplistic economic theory that lower wages will 'clear the market', in other words, end unemployment. That is total and utter nonsense. It is not supported by practice on the ground. And I would draw the Commission's attention to the Forfás review of labour cost competitiveness in Ireland, produced late last year, which says that firms generally prefer layoffs to pay cuts because they harm morale less. If you want to look at why we have had more layoffs than wage cuts in Ireland, that is the basis of it.
I would appeal to the Commission to comply with European law and stop interfering in labour market issues in Ireland. As you say, we have a long tradition of social partnership agreements in Ireland. Indeed, they are the basis of the fact that there has been no violence on the streets in Ireland: it is because the social partners and the government have sat down and made arrangements to adjust the labour market and adjust conditions to ensure that we can have some hope of recovery from the current crisis.
That tradition has ensured progress in Ireland, but the programme generally is failing to do what it was intended to do, which was to assist the economy in Ireland to grow. It is not growing. In fact, it is in decline, and that programme has to be generally renegotiated. I would suggest in particular that the issues relating to the labour market have to be removed. As has already been stated, the Irish Government, of which my party is a member, has already declared that it will reverse the minimum wage cut as agreed in that programme.
You may be unhappy with that, but that is going to happen. You can be certain as well that your attempt to interfere with the Registered Employment Agreements Act, which has been in place for more than 50 years, will not be interfered with, as you hope, because the current government is determined that social partnership will play its traditional role in ensuring that we have industrial peace and progress.
(PT) Mr President, the tendency in the EU to increase pressure on the Member States is gathering great pace, under the pretext of the crisis, with a view to devaluing wages and increasing the exploitation of those who work, in order to ensure ever more profits and gains for the economic and financial groups, revealing all the antisocial cruelty of capitalism.
If the irrational criteria of the Stability Pact, with the proposals of so-called economic governance and the so-called competitiveness pact had not been passed, particularly the attempt to prevent wages from rising with inflation and increase the legal age for retirement, we would have even more serious attacks on labour and social rights.
What is already happening in this field in certain countries, such as Portugal, Greece or Ireland, and which is of the utmost seriousness, are salary cuts and pension freezes, even on the lowest pensions and those below the poverty line. In the case of Portugal, a salary cut on the national minimum wage was already planned for the beginning of this year. It was felt that EUR 500 was too much per month, and it was decided to cut this by EUR 15, despite the fact that more than 13% of female Portuguese workers receive only this amount, compared with 6% of male workers. This is a clear example of institutionalised discrimination and the effect of the so-called austerity measures that the Commission, together with the Council and the governments of our countries, is implementing, with the subsequent exacerbation of social inequality, discrimination, the devaluing of work and increased poverty, while the indulgence of financial speculation and tax havens continues. We therefore express our solidarity with the young workers and teachers who are going to protest over the forthcoming weekends, including this Saturday, 12 March, and at the large national demonstration by the General Confederation of Portuguese Workers (CGTP) in Lisbon on 19 March. This will continue the fight against these antisocial policies.
(The speaker agreed to take a blue card question under Rule 149(8))
Mr President, in light of what you are telling us, could you please tell us here in this House how attitudes to the European Union have changed in Portugal? Has the percentage of people in favour of membership of the European Union fallen? How has the general feeling towards the EU changed? Portugal shows a great many parallels with Ireland - at first, there was the great euphoria in the 1970s with the prospect of accession, then the corresponding funding. Are you also seeing similar property bubbles in Portugal to those that were recorded in Ireland?
(PT) Mr President, the issue is interesting in this regard: it is obvious that these EU policies are also sparking a major revolt in Portugal, and next weekend, therefore, young people and teachers will take to the streets to demonstrate against this policy. On 19 March, the General Confederation of Portuguese Workers will hold a major demonstration, which is planned to take place in Lisbon, against these antisocial policies. Of course, this is reflected in the behaviour of the Portuguese people because the country has already entered into a recession, and living conditions are worsening for the workers and the people, inequality is being exacerbated, and poverty is also on the increase. The European Union, the Commission and the Council ...
(The President cut off the speaker)
(SV) Mr President, by setting out requirements for lower wages, the Commission has undermined the negotiating right of the social partners and both directly and indirectly affected wage formation, which is explicitly excluded from the Commission's sphere of competence. This is nothing less than a frontal assault on the social partners' influence and is contrary to the Charter of Fundamental Rights, which includes the right to enter into collective agreements.
This is not an isolated incident restricted to Ireland, either, but is being repeated time and time again. By talking about 'unit labour cost' instead of wages, the Commission is attempting to circumvent the limits established by the Treaty. The European Commission has quite simply redrawn the map. It has drawn up a new map and a new set of regulations in which the Member States and the social partners now have their tasks taken away from them and, contrary to all regulations, find themselves dictated to. This is what the dispute is about and it has only just begun.
By acting in this way, the EU is moving ever further away from a democratic basis and legitimacy, which, in other contexts, are usually the keywords when we discuss the future of the EU. We hear that there are some troublemakers - including in this Parliament - who are already starting to fish in these troubled waters. This is surely not what it is all about.
(NL) Mr President, very few people in the Netherlands have any idea that we, here in Brussels, are discussing their wages and pensions. We are currently witnessing what is happening in Ireland but, at the same time, I am also hearing all kinds of proposals being put forward to the European Council for the abolition of wage indexation and for the maximisation of wage increases, based on increases in labour productivity, etc.
Unfortunately, we seem to perpetually meet with a deafening silence when it comes to agreements on European standards for the minimum wage, nor have I heard any proposals intended to guarantee that workers can get work which pays or that they can get full-time jobs, instead of piecework or standby contracts. I am concerned about the impact of the current discussions on ordinary people, but I am also concerned about the image of the European Union. It really does look like we only pay attention to the interests of financial institutions, to speculators and to big business. Commissioner, is the Commission going to take steps to change that image and is it going to ensure that it is viewed as an institution which also represents the interests of ordinary people?
(EL) Mr President, Commissioner, you have given us a prescription that says two things: firstly, that we should abolish collective agreements and, secondly, that we should reduce the minimum wage still further.
This is the prescription which is being given consistently to every patient. One of the patients is Greece. You recently visited Greece, during an event organised by the socialist party. You saw and felt the prevailing situation and my question to you is this: did you feel that the prescription for Greece was working? I was there and I am from the socialist party currently governing the country and doing what it can to get it out of the very difficult situation caused by right-wing governments and it has had to make concessions on the question of collective agreements and I am telling you that we have not yet seen results. You say that you are doing all this for European citizens, for consumers, but, if consumers are paid lower wages, they will have nothing to spend and will not therefore help to boost growth. You know better than I that it is a vicious circle, because you insist on giving us a prescription which does nothing except destroy the workers' dignity, a prescription which results in a lack of decent and viable jobs. I beg you to include social indicators alongside the economic indicators.
(DE) Mr President, Commissioner, I sometimes have the feeling that you should try out all these solutions on the Commission itself so that you could see what impact you are actually having on Europe. Following your speech, I am left with the impression that the Commission really does sit in an ivory tower. The people of Europe - the workers, the low earners and the pensioners - are really picking up the bill, and you are interpreting legislation and competences however you please.
On 19 October last year, I received a response to a question that I had put to the Commission in which it was explicitly confirmed that minimum wages and wages in general are the responsibility of the Member States. The response states this very emphatically. Please read it. It is not acceptable for you to give me that kind of answer when it is a good thing for employers and then simply change direction when you believe something is good for the other side. That will make the people of Europe really very unhappy. My fellow Member has just mentioned this. You are chipping away at codetermination. You are weakening the trade unions. That is not the way out of the crisis and you are fully aware of that. Those who caused the crisis must also be the ones to pay for it.
(Applause)
(LT) Mr President, faced with the conditions of the economic crisis, countries are having financial difficulties implementing the commitments they have made. There is little doubt that their capacity to overcome the crisis varies and there is a need to find ways of balancing the budget and reducing the budget deficit. However, Commissioner, must we really do this at the expense of those who are worst off? Is it morally right for the European Commission to pressure governments into reducing the minimum wage, pensions or other social benefits? Commissioner, you gave your opinion on the Memorandum of Understanding with Ireland. However, I would like to remind you that you signed a similar memorandum with Latvia, where you pressed the Latvian Government to reduce pensions that were already low. Pensions in Latvia were reduced, but the Latvian Constitutional Court stated that the country's fundamental law does not allow this and the pensions were reinstated. Thus, when taking such decisions and signing such memoranda, it is necessary to thoroughly assess both the legal and social consequences.
(DE) Mr President, Commissioner Hahn, the proposals that are now on the table are like putting a large rucksack on the backs of all those who are already finding things difficult enough and telling them they have to run faster with it on. How is that supposed to happen? The proposals for decentralised wage negotiations are unfair, unimaginative and they are a diversionary tactic, because it is so difficult to tax asset and financial speculation and the Heads of State or Government are not succeeding in getting genuine macro-economic coordination off the ground. In this regard, we in Parliament have already set a very different benchmark this week with our vote on the financial transactions tax.
I would like to remind you all of the principle of the social market economy as laid down in the Treaty of Lisbon. My conception of the social market economy is rather different - it would not include decentralised wage negotiations, quite the opposite, in fact. Decentralised wage negotiation systems are contrary to a wage policy based on solidarity and rather than leading to the gap between rich and poor getting smaller, they will - on the contrary - result in it getting bigger. In other words, we should do the opposite.
I would therefore like to expressly repeat what my colleague, Mrs Steinruck, said - we cannot repeat it often enough: we must take more action to tackle the cause of the crisis; make those who caused the crisis pay to a greater extent; and focus on them for the resolution of these problems, including by means of legislative measures.
(RO) Mr President, in reference to the alignment of unit costs with labour and levels of productivity, I think that we ought to focus on the framework conditions and less on indicators. It is not obvious that we can achieve this alignment. Productivity depends primarily on factors such as accumulated capital stock, which is very different. The clear disparity can be seen between Romania and Germany. This is due to the difference in quality of economic policies over time. Indeed, such discrepancies cannot be made up overnight. My country has made efforts towards reforming pensions and social assistance. I would therefore like to suggest including some provisions of this kind in the competitiveness pact. I support the need for a correlation between the retirement age and demographic trends. The impact which a coherent, realistic pensions policy has on public finances needs to be taken into consideration.
(RO) Mr President, I understand very well the subsidiarity principle, but I believe that pensions have ceased to be a national concern as they are the subject today of an EU-level debate. We are discussing pension systems which are unsustainable as a consequence of common challenges such as the financial crisis, as well as of an ageing population and declining birth rate. The principle of intergenerational solidarity is at risk of becoming obsolete, with citizens being forced to contribute to private pensions. However, what happens to those who no longer have enough time to contribute to such pensions? European citizens also depend on public pensions. In Romania, the gross national minimum wage is approximately EUR 160. This is why I believe that investing in private pensions or saving is just pure fantasy. I think that the European Commission needs to be more involved by proposing both a minimum EU salary and pension level. A first step towards this could be to carry out a comparative pension system analysis.
(PT) Mr President, Commissioner, we are here to talk about salaries and proposals on the age of retirement. These proposals are downright unfair, to say the very least. They are unfair as they insist upon routes that have already been proven, more than once, to end in failure. What is happening in Ireland, Greece, Portugal, Spain, Italy, and who knows in how many other countries as the list is endless, is different in each of these countries, but they have certain things in common. One of the things that we have in common is an unprecedented transfer of the value of work to financial capital. We cannot accept this. The other thing that we have in common is that it is the workers, retired people and pensioners who are paying for this crisis, along with a generation of workers in unstable jobs who do not have any guarantees in the society in which they live. I should therefore like to finish by saying, Mr President and Commissioner, that we cannot continue to condemn people to poverty. I sincerely hope ...
(The President cut off the speaker)
(FI) Mr President, a growing European trend at present is rightwing populism, whose core ingredient is opposition to the EU. Where are these antiEU feelings coming from? They spring from the fact that a social Europe is becoming overshadowed by a 'market Europe'. All the Commission's proposals today attack either the pay or the pension system. The feeling is that pay flexibility might help in some way. It will not: on the contrary, it will result in deflation.
It is very important that all legislation is bound by a permanent social clause, so that the idea of a social Europe will once again come to the fore. It is important to realise that retirement ages will rise if there are improvements in working life, but they cannot be raised through legislation from above.
(LV) Mr President, unfortunately, Ireland is not the only country, and Greece is not the only country either. Latvia was perhaps the first to undergo all this hardship, which was caused by the activities of the banks. The minimum wage has been reduced in Latvia, and it is lower than the subsistence level. Pensions have been reduced, along with the minimum tax-free amount. The people are protesting. Over this period, Latvia has lost one fifth of its population; one fifth has emigrated and is working abroad. The International Monetary Fund, which is supposedly rescuing Latvia, set conditions that are draconian. It permitted money to be used to save the banks, a little money to be left over for the next potential bank rescue, but did not permit ...
(The President cut off the speaker)
(FR) Mr President, Commissioner, I should like to express my support for Mr De Rossa. The recommendations made to Ireland by the International Monetary Fund (IMF) unfortunately reflect a tendency prevalent among our policy makers at the highest level, which is to make European workers pay for a crisis that is not of their making.
Another example is the Commission's annual growth analysis, which recommends raising the legal retirement age by linking it to life expectancy. Parliament recently expressed its disapproval on this subject in its report on the Green Paper on pensions. A further example is the proposed competitiveness pact calling for the abolition of inflation indexation of wages, including in my own country, Belgium.
Faced with this situation, I welcome the involvement of the trade unions, yesterday in Hungary, for example, or in Brussels on 29 September. It is time our Commissioners heeded the message of European workers if they do not wish to widen the gap between themselves and the citizens, who will believe less and less in the European project.
Member of the Commission. - Mr President, first of all, I would like to thank everybody for their contributions. I can promise you that we give serious consideration to each of them. Let me first say a few words about the importance and relevance of social dialogue.
We fully recognise the importance of social dialogue and constructive industrial relations. We have continuously engaged with the social partners, both at EU level and in individual countries. For instance, Commissioner Rehn personally met with Ireland's trade union leaders in early November, as did officials from the Commission, the ECB and the IMF when negotiating the programme in late November. They will continue to engage on the next mission in April and on subsequent occasions. By the way, contrary to some allegations, the Commission did not force Ireland to cut the minimum wage or social expenditure. These measures were already presented by the former Irish Government itself in its national recovery plan, together with other fiscal and structural measures aiming at economic stability, growth and job creation.
The legal basis of the economic policy conditions is Article 3(5) of Council Regulation (EU) No 407/2010 establishing a European financial stabilisation mechanism and Article 2(2) of the Council Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland. Once again, both are grounded in Article 122(2) of the Treaty on the Functioning of the European Union. The mere fact that the Memorandum of Understanding's specific economic policy conditions touch upon various issues that are linked to social policy does not put into question the legal basis of the act. There appears to be no contradiction with Article 152 or Article 153(5). Article 152 is a general provision which does not exclude the possible need for specific measures with social consequences. Moreover, that provision does not create subjective rights for the social partners. Article 153(5) is a limit as regards the content of the measures that can be adopted under Article 153, i.e. social policy. Since the MoU is not adopted on the basis of Article 153, this limit does not apply.
The provisions of Title 10, social policy, cannot be disregarded. They have to be taken into account, but it does not mean that as a consequence of Article 153(5), no measures having an effect on pay can be adopted on the basis of Article 122. The measures adopted on the basis of Article 122 for Ireland do not regulate issues. They provide for conditions linked to the granting of Union assistance. This is explicitly allowed by Article 122(2). Therefore, there is no legal problem as regards the principle of conferral.
More generally, the issue of economic policy conditions is not about EU competences in the field of social policy or wages. The conditions included in the programme cover a wide range of policy areas, and for most of them, the competence lies with the Member State. The economic policy conditions of the programme are Member State commitments agreed with the EU and the IMF on the measures that the Member States will undertake in exchange for EU/IMF financing.
As a final note, the Commission fully acknowledged that any financial assistance programme naturally has social consequences. However, the main goal of the specific economic policy conditions attached to such a programme is to avoid much graver social consequences by setting the country back on the path of sustained growth and job creation.
Mr President, I would have to ask your assistance to identify when a Commissioner stands here in this Parliament and says, on the one hand, that Ireland is not being forced to reduce its minimum wage or to reduce its social protection and then goes on to say that the agreement is a conditionality; that these are conditionalities for receiving aid - is that not a fundamental contradiction and a misleading ...
(The President cut off the speaker)
Excuse me, Mr De Rossa, you know that I have great respect and fondness for you, but we cannot reopen the debate. Your opinion should be respected, as should that of the Commissioner on the matter, and each of us has to deal with any contradictions that may arise.
The debate is closed.
Written statements (Rule 149)
According to Eurostat, in January 2011, the minimum monthly income varied between EUR 123 in Bulgaria, EUR 157 in Romania and EUR 1 758 in Luxembourg. In 20 of the 27 Member States, the minimum income is set by law or by national inter-sector agreement. In 11 Member States, the minimum income is between EUR 100 and 400/month, in 5 Member States, it is between EUR 550 and 950/month, and in 6 Member States, it is more than EUR 1 100/month.
The development and consolidation of the internal market provide businesses with access to Europe's 500 million plus consumers. However, maintaining the disparity in minimum income levels between Member States is a barrier preventing both European companies from having access to European consumers and the latter from having access to high quality products and services. I regard social dialogue as being particularly important in terms of ensuring social fairness and a decent standard of living for all European citizens.
We call on the Commission and Member States to guarantee equal pay for equal work in the internal labour market, the lifting of barriers preventing the free movement of workers and the examination of the possibility of providing a minimum salary agreed by law or based on collective negotiation, which will guarantee European citizens a decent standard of living.


12. A more efficient and fairer retail market (