EU Forum

Social Europe

European businesses: increase employment and labour productivity

22 Jun 2016 - 14:35

Europe has a clear social dimension
Europe stands out in the world as the region with the highest level of social well-being and social equity. We have experienced a rapid increase of life expectancy over the last decades and currently high levels of satisfaction of Europeans with their working conditions.

We also have a very well developed EU social acquis, with over 70 directives protecting workers and providing them with rights in a number of important areas. Not forgetting the national level, where we have comprehensive social systems and where almost two thirds of total government expenditure across  Europe  is  devoted to social spending.

The business community is committed to the objectives of Social Europe – full employment, social well-being, prosperity for all citizens.

Major challenges are linked to structural weaknesses
But we have major challenges, which have been exacerbated by the crisis, not least entrenched levels of unemployment and a persistent problem to get people back onto the labour market. This is linked to insufficient growth and longstanding structural weaknesses.

To maintain our well-developed social model, we need to increase employment and labour productivity. But achieving the objectives of Social Europe not only requires effective employment and social policies - sound macro-economic policies are just as crucial. We can only tackle the social challenges we face and create more jobs, if we have more economic growth. And this is only possible if companies are competitive.

The need for national labour market reforms
And this is why national labour market reforms are so crucial – to make employment an attractive option for employers and job seekers, and ensure a good match between people’s skills and what is needed on labour markets.

Many elements of social policies, and the organisation and financing of social systems, are a national competence, and many of the challenges need to be dealt with by Member States. But the EU should  play a role of coordination and learning between countries, to provide an impetus to reform. The European Semester process has become the main vehicle to shape and deliver the necessary reforms, but we need to make sure that this process really has an impact, by better implementation of country specific recommendations and respect of budgetary rules.

Call for a fresh approach on benchmarking and coordination at European level
To steer the reform process, we have been calling for the EU to set up a fresh approach on benchmarking, where we are ready, jointly with the Council, Commission and the other European Social Partners to see how to progress on a limited number of key labour market, educational and social challenges through stronger learning and coordination at European level. 

The proposed European Pillar of Social Rights is an opportunity that we should not miss towards defining such benchmarks. We see this as part of a comprehensive EU/EMU economic and social strategy fostering increased competitiveness of economies, better performing labour markets and education systems leading to growth, employment and social cohesion across Europe. If the pillar is to be useful, it should be used as a tool to support national reforms and achieve the ownership that is needed to reduce the longstanding implementation gaps in the context of EU economic governance processes.

Social Pillar should not be about addressing ‘gaps’ in EU social legislation
However, up until now we’re not sure that this really is the ultimate aim of the pillar – it’s unclear. The business community is adamant that the pillar should not pave the way to changes to ‘address gaps’ in EU social legislation, according to ‘common high level standards’, which seems to be part of the objectives.  We will no doubt in the future discuss where further EU social legislation or revisions may be needed – this is part of our daily work in BUSINESSEUROPE. But we strongly believe that the pillar is not the right framework for these discussions.

The focus needs to be on providing the best possible employment opportunities for all. As part of the social pillar, we would therefore like to see a renewal of the flexicurity principles with a focus on fair, dynamic, mobile and inclusive labour markets, as set out in more detail by the European social partners in our in-depth employment analysis last year.

Revision of the Posting of Workers Directive a bad idea
On labour mobility, the main focus of our work at the moment is on the proposal to revise the directive on posting of workers. BUSINESSEUROPE is against the Commission’s decision to revise the Directive. This will trigger a prolonged period of debate and political divisions between Member States in times when the EU needs actions promoting unity.

The existing Posting Directive provides a fair and level playing field and adequately protects posted workers. To promote fair competition, the focus should be on fighting illegal practices, including through the implementation of the 2014 Enforcement Directive.

The challenge for EU mobility policy more broadly in the coming years will be to facilitate mobility through concrete EU actions and to sustain and improve political acceptance of worker mobility by addressing the loopholes in the relevant EU and national regulations on free movement of workers in order to prevent abuses and avoid adverse effects on countries of origin as well as on countries of destination.

Maxime Cerutti is BusinessEurope Director for Social Affairs