Widening the EU safety net

Date: 14/03/1996

THE only certainty about the future shape of EU social policy is that almost nothing is certain.

While there is broad agreement that the fight against unemployment is the biggest single challenge facing the Union, opinions vary widely on how specific the EU's aims should be.

Social Affairs Commissioner Pádraig Flynn has repeated his wish for the updated Maastricht Treaty to include a more solid base for social policy.

This has been made more pressing by the intense difficulties which the Commission has experienced in pushing through social legislation under existing treaty provisions.

Flynn's 'Comité des Sages' under former Portuguese Prime Minister Maria de Lourdes Pintasilgo will report to this month's Social Policy Forum on whether the social chapter should extend beyond social rights to cover economic and cultural, or even civil and political rights.

“We'll see how much we take their suggestions on board. Having got them to do the thing, we're not just going to tear it up and throw it in the bin,” says a Commission official.

While more specific treaty provisions would give increased support to future social policy measures, the Commission has moved away from new legislative initiatives under President Jacques Santer's motto of “doing less but better”.

In the social field, this approach was endorsed in consultations leading up to the latest Social Action Programme. Privately, however, officials admit to frustration at the lack of enthusiasm from above.

Indeed, the first major legislative initiative from the current Commission - an attempt to ease the cross-border mobility of supplementary pensions - has not even made it past the college of Commissioners, because of resistance from Germany's Martin Bangemann and Monika Wulf-Mathies.

Flynn is also pushing for the Maastricht Treaty's Social Protocol to be written formally into the treaty and for the UK to surrender its much-publicised 'opt-out'.

This would bring a much wider range of social policy under qualified majority voting, which would be anathema to the current UK government.

It would also, according to some member state officials, run into opposition from other EU governments who, until now, have conveniently been able to hide behind British opposition to social policy measures.

Germany is slowly emerging as a serious rival to the UK as the 'bad boy' of EU social policy.

Fear of court action at home has made Bonn very resistant to Commission attempts to push through legislation - including the latest equal opportunities programme - under the 'catch-all' Article 235 of the treaty, which allows it to propose measures in areas not covered by specific treaty provisions. Broadening the scope of the treaty's articles on social policy would remove this problem.

But officials believe Bonn could face similar problems from the Karlsruhe Constitutional Court over the parental leave deal negotiated by the social partners, due to be discussed at this month's meeting of social affairs ministers.

This results partly from a perceived democratic deficit in the way the agreement was reached and partly from Commission attempts to build additional elements into the draft directive.

Several members of the European Parliament are also concerned about the form the social dialogue takes.

According to Stephen Hughes, chairman of the Parliament's social affairs committee, there must be a stronger role for MEPs in the process, preferably at the stage when the Commission formulates its initial proposals.

Hughes has joined the chorus of opinion calling on the UK to end its opt-out, not least because of mounting evidence that it is effectively being forced to take on board European social legislation 'by the back door', without having any input into the negotiations.

The European Works Council Directive is held up as the prime example of this. Some 108 UK companies are expected to fall under the directive's terms, out of about 1,200 all over Europe, and many have already indicated that they are unwilling to risk the potential public relations damage of providing consultative bodies for their workers on continental Europe while denying UK employees the same rights.

Several high-profile firms, including United Biscuits and Coats Viyella, have already taken the plunge.

According to the personnel director of one leading company, “UK companies had no intention of excluding British workers, and politicians who sought to make capital out of the question were totally out of touch with reality”.

While admitting that many British companies will extend works councils to their UK employees, officials at the Confederation of British Industry (CBI) nevertheless reject the 'back door' argument. “We don't accept Flynn's claim that it's been a rip-roaring success - that's pushing it a bit. By its very nature, the Works Council Directive had a cross-border element. We'll see whether the parental leave has anything like the same impact,” says one.

Santer has made the Commission's view on the opt-out quite clear. “We don't want a Europe à la carte. That is not the Europe we understand and will lead to Europe's collapse,” he insists.

But Commission hopes are quickly dashed by British officials. “London has made it quite clear that the opt-out is not negotiable, no matter how much the Commission and Parliament make their ritualistic criticisms of our position,” retorts a senior UK official.

Dan Corry, of the Institute for Public Policy Research, is scathing of the UK's view, claiming that a two-speed social policy could unravel the single market. “If EU countries don't have the same minimum standards and some start undercutting others, the whole project starts falling apart and the single market is in danger.”

This criticism is rejected by the CBI. “The opt-out has helped protect British industry from some of the potentially damaging parts of European social policy. The EU should ensure freedom of movement and remove barriers, but beyond that there is no need for harmonisation,” claims one official.

But change is on the cards in the shape of UK opposition leader Tony Blair. In its contribution to the IGC debate, Blair's Labour Party - hot favourite to wrest power at the election due before May 1997 - makes its position plain.

“Labour will sign up to the Social Chapter to strengthen employment rights and give British employees the same rights in European law enjoyed by their counterparts in the rest of Europe,” it states, claiming that UK business is starting to take “a healthier attitude to the European social dimension than the British government”.

Both the European Trade Union Confederation (ETUC) and a majority of MEPs insist that the UK must fall into line with the other 14 member states.

“We simply have to put an end to the opt-out. There has to be a place for a stronger social dimension in the treaty, and it must specify basic rights,” insists an ETUC official, calling for co-decision powers for the Parliament on all questions of social policy and an end to unanimous voting in this field.

Hughes echoes such sentiments, although he is sensitive to the diversity of views within his institution. “We need basic social rights written into the treaty, widening its scope to forbid all forms of discrimination, and to cover the rights of third country nationals. Unanimous voting has to go because nothing can possibly happen under this system,” he argues.

The employers' federation UNICE remains determined, however, to limit the reach of EU social policy. “In some areas where the Community has taken action, it's been a shambles. Court action on the transfer of undertakings has led to enormous uncertainty for companies,” says a UNICE official.

EU employers are calling for a clear division between free movement and health and safety - which they believe should be decided centrally - and working time, pay and social security, which should be left to national competence.

While it will fight attempts to write the Social Protocol into the treaty, UNICE admits the need for legal clarity, claiming that passages in the protocol on equality directly contradict provisions in the treaty.

Views on the legal basis for European social policy may vary hugely, but on one issue there is virtual unanimity. Unemployment is, and will remain, the greatest problem facing the Union.

While there has been little sympathy for Swedish calls for employment to be considered one of the criteria for economic and monetary union, the battle against unemployment will undoubtedly be given a firmer footing in the revamped treaty, probably based on the approach outlined at successive summit meetings.

Hughes is convinced that there is no contradiction between the battle for jobs and improved social protection policies.

But cynics wonder how much practical difference a paper commitment to jobs will make, particularly as member states struggle to meet the single currency's convergence criteria.