Figuring out a solution for jobs

Date: 30/10/1997

By Chris Johnstone

A SHEEP in wolf's clothing or a wolf dressed like a sheep? EU employers are still trying to work out their views on the European Commission's employment guidelines and decide whether the bark accompanying them is worse than their bite.

Employment Commissioner Pádraig Flynn's communication was widely savaged for being unrealistic when it set out targets to create jobs within specified time limits.

The targets were, rightly or wrongly, interpreted as a Commission attempt to turn the clock back to a discredited era of planned economies, five year plans and monstrous macroeconomics. The jobs targets have become the focus for attack and have drawn the rest of the communication into the firing line.

The paper promises that adherence to the Commission's advice coupled with favourable economic growth should allow an increase in the current employment rate to 65&percent; from 60.4&percent; within five years and a reduction of unemployment to 7&percent; across the EU. This would imply the creation of at least 12 million new jobs.

The long-term aim is to move towards employment levels of more than 70&percent; - which would put the EU in the same frame as its main trading partners Japan and the US.

Unfortunately, the focus on the targets has somewhat clouded a guarded welcome from industry for the rest of the package. “You need to be very careful when talking about Europe-wide job creation targets,” says Zygmunt Tyszkiewicz, secretary-general of the employers' organisation UNICE, adding that the Commission's projections were arrived at by averaging out some very different sets of national statistics.

“Unemployment levels are higher in some member states and lower in others, so trying to come up with figures on a European level is actually rather meaningless,” he insists.

Flynn has defended the figures as achievable and has attempted to play down talk that they were given a rough ride by national ministers when they were first discussed.

“The proposals were accepted very warmly by all the ministers who attended the [informal] meeting,” says Flynn. “Targets were accepted as necessary to meet the Amsterdam Treaty.”

Europe's trade union movement agrees targets are needed to give a clear purpose to the procedure. “People said the same about targets at the start of monetary union but we have got there after some effort,” points out a spokesman for the European Trade Union Confederation (ETUC).

The ETUC already senses hostility to the targets from some EU capitals and does not rule out an attempt to water them down or drown them altogether. But it is taking some encouragement from Luxembourg Prime Minister Jean-Claude Juncker's call for firm criteria to be applied to job creation in the same way as to monetary convergence.

However, business leaders are not impressed by the idea of putting figures on a set of proposals which, by all accounts, have the bite of a poor set of dentures.

The Confederation of German Employers' Associations, the BDA, is clear that setting targets, especially at European level, is not the right approach.

“You have not created a single job by setting a target,” says Alexandra Schoenaich-Carolath, the Brussels head of the BDA. “If you set targets, you will inevitably be asked how far you have reached them.” The BDA verdict follows informal comments from its industry members.

Targets create expectations, but the Commission risks creating disillusionment if they are not met, says Schoenaich-Carolath. Somewhat artificially, responsibility for meeting the targets rests with individual governments which can act or ignore them as they wish. “You have the impression from the guidelines that everything must be done at a European level when neither the EU nor its social partners have the mandate to act,” she insists.

The only sanction contained in the communication for not meeting the targets will be a Commission report at a later date on how far countries have or have not acted on its advice.