MEP targets measures to get EU back to work

Date: 30/10/1997

WHILE national governments seem reluctant to commit themselves to concrete EU job creation targets, the European Parliament's rapporteur on unemployment has no such qualms.

Socialist MEP Wim van Velzen's pre-summit report, which was formally presented at the Parliament's plenary session in Strasbourg last week, contains a host of specific measures which he feels should be adopted by member states as part of their drive to get Europe back to work.

Van Velzen agrees with Social Affairs Commissioner Pádraig Flynn that member states should commit themselves to creating 12 million new jobs and reducing unemployment from 10.6&percent; to 7&percent; over five years.

But he believes that this is just the tip of the iceberg.

The Dutch parliamentarian also deplores the fact that 9 million Europeans are currently working overtime, and he would like the practice to be discontinued, arguing that the hours saved could be used to create new jobs.

Van Velzen is in favour of other schemes to reduce the number of hours worked in Europe, such as France's proposed 35-hour-week law.

He believes that most employees would also be in favour of such legislation and that many would even be prepared to accept reductions in salary to help the jobless get back to work.

“In my country, workers have given up some of their hours to help the unemployed. They have even reduced their pay slightly,” he says.

On the question of funding EU job creation programmes, the MEP stresses that it will not be possible to solve unemployment solely by throwing money at the problem. At the same time, he argues, some cash will need to be set aside if changes are to be made.

“Anyone who says that you can reactivate the labour market on a cost-neutral basis is lying,” he insists.

The MEP argues that job creation funds could be found in EU budget surpluses, a better targeting of the Union's structural funds and an increased role for the European Investment Bank.

One way funds could be used to create jobs would be by setting up a system of loan guarantees which could encourage banks to lend money to small businesses, says Van Velzen.

While Europe's small and medium-sized enterprises (SMEs) are continually singled out by national politicians and the European Commission as one of the Union's biggest sources of new jobs, the sector as a whole still finds gaining adequate access to financing very difficult.

“Everyone is convinced the future is in SMEs, but banks are not prepared to give out risky loans,” says Van Velzen. He argues a loan guarantee system should encourage a change in what many regard as an overly cautious attitude.

The Socialist MEP warns against trying to follow the US model for job creation, even though it is often held up as a paragon of how to create a booming economy.

“We can learn some things from the US, but I think it is more interesting to learn from countries which give serious consideration to social issues. The US system has created an enormous number of poor people, many of them working in two jobs,” he points out.