27 October Social Affairs Council

Date: 29/10/1998

EU SOCIAL affairs ministers meeting in Luxembourg ended their one-day session by declaring that they would continue to build upon the employment strategy agreed at the December 1997 special jobs summit. They failed again to put aside their differences on a controversial proposal to set up pan-European companies.

SOCIAL Affairs Commissioner Pádraig Flynn presented the institution's annual report on the jobs situation in the 15 EU countries, and initiated a round-table discussion on how best to foster a Union-wide strategy for job creation. During a debate described as “highly constructive”, Luxembourg Prime Minister Jean-Claude Juncker, who is also responsible for social issues, said that EU action on jobs should be “consolidated” by encouraging greater trade union and employee participation.

MINISTERS did not raise any objections to Flynn's proposed changes to the employment guidelines agreed by national governments in December 1997. Their generally positive reaction boosted hopes that the Commissioner's amendments will be adopted as they stand by EU leaders at their summit in Vienna in December.

THE Austrian presidency presented a compromise proposal aimed at breaking the 20-year deadlock over plans for a legal framework for pan-European companies. The initiative has foundered on the issue of worker participation in decision-making, with countries with highly inclusive models of involvement pushing for a similar EU norm. States with little or no tradition of worker participation, however, strongly oppose this. Under the Austrian compromise, European businesses created by a merger between existing companies in two or more EU countries would adopt the most inclusive system of worker participation in operation in their constituent firms. The proposal aims to overcome the objections of Germany, Austria, Luxembourg and the Netherlands, which fear dilution of their common model of worker participation.

WITH the exception of Javier Bocanegra of Spain, ministers welcomed the Austrian initiative as a sound basis for future discussions. Bocanegra insisted that the model of worker participation adopted by a pan-European company created by a merger should be the one applying to the largest number of employees in its constituent firms.