Santer to study effects of aid policy on jobs

Date: 06/06/1996

By Michael Mann

The Commission President Jacques Santer has pledged to take a close look at the possible detrimental effect of existing state aid policies on EU employment.

Launching his widely-publicised 'confidence pact' for employment, Santer claimed the majority of state aids currently went to large corporations and suggested this could be extremely damaging for SMEs, widely recognised as the major motors of job creation.

Unveiling his proposals just one week before the Italian presidency hosts a tripartite conference on employment in Rome, Santer yesterday (5 June) called for courage from member state governments.

“Faced with the terrible unemployment statistics, the greatest danger is to lack the courage to do anything at all. The Union really must treat employment as a matter of common interest,” he said.

Among four priorities picked out for particular attention, Santer has pledged to reinforce efforts to complete the single market, enhance the competitive environment in the Union and increase assistance to SMEs.

But in stressing the importance of the internal market, Santer was careful to underline the importance of balancing the twin aims of liberalisation and maintaining universal service.

He singled out three measures for particular attention - agreement on the European company statute, the single market in electricity and a sound legal framework for biotechnology inventions.

Santer warned member states to transpose directives on public procurement, investment services, intellectual property, insurance and company legislation into national law, and called for a definitive decision on extra financing for the Trans-European Networks.

Claiming that three-quarters of the 170-billion-ecu Structural Fund payments for 1994-99 still has to be firmly committed, the Commission also wants this money to be specifically targeted at fighting unemployment.

Member states will be asked to devote the extra 5.5 billion ecu which will be added to the Structural Funds over the next four years to make up for inflation specifically to job creation and concentrate the 8 billion ecu already available under the latest phase of Objective 2 on similar purposes.

Besides efforts to improve monitoring of the five priorities identified at Essen, the Commission sees the pact as a springboard to activate national employment policies and to integrate better the diverse tax and social security systems.

Santer's proposals will get their first airing at next week's tripartite meeting between the unions, employers and member states in Rome. But grave doubts are being expressed that it will achieve anything substantive.

While the European Trade Union Confederation (ETUC) is heralding the conference as a “red-letter event for employment”, the European employers' federation UNICE is warning the Italian government not to set over-ambitious goals.

Although enthusiastic about the raft of initiatives to fight EU unemployment, Commission officials nevertheless talk of “messy organisation by the presidency” and say they do not anticipate “anything terribly concrete” being decided in Rome on 14-15 June.

Certainly the Italians have invited a high-profile set of speakers, including Santer, WTO Director-General Renato Ruggiero, International Labour Organisation Director-General Michel Hansenne and labour ministers from Italy, Spain and Ireland - the so-called troika.

But few other member states have shown much interest in sending a high-powered team.

The ETUC remains optimistic about the possibilities offered by the conference, but UNICE will take the opportunity offered by the social partners' meeting with the presidency today (6 June) to urge Italy to adopt a realistic agenda and develop some draft conclusions ahead of the conference.

“There are areas where the Community has competence. We've asked for the completion of the single market before the end of the century and stressed our commitment to EMU, enlargement and liberalisation. But specific actions such as a follow-up to Essen have to be done at national level,” said a UNICE official.