Bosses counsel caution on social reforms

Date: 06/03/1997

By Simon Coss

EMPLOYERS' organisations are warning the European Commission not to overstep its remit in a report on the future of Europe's social protection systems due for publication later this month.

The document, a much-delayed follow-up to an October 1995 report, is due to be discussed by the full Commission next Wednesday (12 March).

European employers' organisation UNICE says it welcomes the chance to discuss possible problems, but doubts how much can be done at a European level.

“There are huge differences between the member states in the way social security systems are organised and the vast majority of reforms need to be made within those countries. For us, this is very much a question of subsidiarity,” said a UNICE spokeswoman, referring to the principle enshrined in the Maastricht Treaty that the EU should only act in areas which cannot be left to member states.

Commission officials stress they are not trying to tread on any national toes, but feel they can play a useful coordinating role.

“Of course, member states are responsible for their own systems, but at the same time we are facing many of the same problems across the Union. The Commission feels it is of real value to discuss these issues at EU level,” said an aide to Social Affairs Commissioner Pádraig Flynn.

The follow-up report was due last autumn, but the Commission's Directorate-General for social affairs (DGV) received such a huge response to a call for ideas on tackling the problems that it had to delay publication.

The biggest problem facing all member states is the so-called 'demographic time-bomb', which is the direct result of the Union's ageing population.

Advances in standards of living and medicine mean people are living longer after ending their working lives, and pensions and medical care have to be paid for by the decreasing number of people in work - all social

security systems are financed by existing taxpayers rather than from money paid in the past.

One idea likely to be pursued is a general move away from fully comprehensive systems which extend benefits to all citizens as of right to the type of insurance-based schemes already in place in many member states.

The Commission has also been looking at making social security systems 'employment friendly'. This means ensuring such schemes are not so generous that people effectively gain more by collecting benefits than by working, and entails looking at practices such as linking certain payments to training schemes.