Germans urge ‘jobs pact’ summits

Date: 13/05/1999

By Tim Jones

GERMANY is pressing for EU economic chiefs, employers and labour unions to hold twice-yearly 'jobs summits' to police its planned European employment pact.

The aim of the regular gatherings of finance and employment ministers, European Central Bank representatives and key players from both sides of industry - backed up by a new official-level working group - would be to ensure that budgetary, monetary and incomes policies complement each other.

" For a consistent policy mix to be implemented successfully, it is helpful to have a fruitful macroeconomic dialogue bet-ween social partners, fiscal policy-makers and monetary policy-makers within existing institutions," states Bonn in a new draft of its treasured pact.

The latest plan, which was modified after a bilateral meeting between French Finance Minister Dominique Strauss-Kahn and Germany's Hans Eichel last weekend, is considerably weaker than earlier versions.

Proposals put together by Eichel's predecessor Oskar Lafontaine had called for EU governments to coordinate incomes policies to ensure that wage growth was kept in line with productivity gains.

But after discussions among Union employment and finance ministers, the latest draft refers repeatedly to the leading role taken by national governments and industrial negotiators in wage-setting.

From now on, it states, the pact should "take account of different systems of wage bargaining, in particular of the fact that the responsibility for wage formation lies on different levels".

The Germans simply urge all sides of industry to ensure that wages "keep to a sustainable path with employment-promoting pay rises which observe the price-stability objective of the European Central Bank".

Apart from ensuring an efficient 'policy mix', the pact will have two overriding objectives: more effective implementation of the EU's existing 19-month-old employment policy strategy and a "strengthening of the structural reforms" agreed at the Cardiff summit last June.

Under the terms of the proposed accord, which is due to be approved by EU leaders at their meeting in Cologne next month, the European Commission would be asked to put greater emphasis on identifying the most effective policies and schemes in member states and advocating imitation when it puts together the Union's employment guidelines every year.

The latest draft text adds that only "where appropriate" should member states set themselves "supplementary verifiable objectives" for reducing jobless figures.

In their version of the plan, Eichel and Labour Minister Walter Riester make a coded plea for member states to reverse the standard policy of the Eighties of creating vacancies by encouraging early retirement.

Given the dominance of public sector pension provision in several member states, including Germany and Italy, this is becoming excessively costly.

" Retirement provision should be placed on a basis characterised by responsibility towards future generations," states the text.

The new proposals also take account of Strauss-Kahn's campaign to hone Europe's cutting-edge in high technology by advocating joint government and industry schemes to develop training policies in favour of innovation and infrastructural improvements, as well as creating an "attractive environment" for such firms.

Strauss-Kahn wants an expert committee to be established to identify top-priority innovative projects for the euro zone, which would then be financed by the Union and the European Investment Bank.