This policy brief by ETUI, entitled “Has the crisis affected social legislation in Europe?”,  reports the main findings of a European project set up by the French association ASTREES (Association Travail, Emploi, Europe, Société) and the research centre ERDS-CERCRID. This project gathered legal experts from eleven countries to address the common trends of the evolution of social legislation in Europe during the crisis, i.e. flexibilisation of the labour market as a “solution” to the crisis as advocated by the European Central Bank, the European Commission and the International Monetary Fund. You can find the main report of this project here (only in French). 

Below we summarise the policy brief by ETUI and comment on the Green vision for a social Europe. 

Labour law and social protection in Europe: an adjustment variable in times of crisis

This report starts by analysing the perception of the crisis and of the remedies put forward in eleven Member States (Germany, Austria, Belgium, Spain, France, Greece, Hungary, Italy, Poland, the U.K. and Sweden), and reveals three groups of countries. 

• In a first group (Austria, Poland and Sweden), the crisis is perceived as the result of external factors, therefore nothing seems to justify changes to their national systems as a possible answer or adaptation to the crisis. In these countries, developments in social legislation can be explained by other factors, such as internal politics or global trends of liberalisation of welfare systems. 
• At the other end of the spectrum, the second group identified is composed of Greece, Hungary and the U.K., where the public debt crisis has exacerbated and/or fuelled the need for changes to social legislation. 
• Finally, in Germany, Spain, France and Italy, the crisis has mainly revealed long-standing structural characteristics of the national labour markets – e.g. fragmentation, high unemployment for youth and elderly – which favoured flexibility in the response to the crisis, by considering employment as the main adjustment variable. 

Though different Member States faced different perceptions of the crisis and thus reacted differently to it, some trends in reforming labour law and social protection can be identified throughout the EU. In a first stage (2008-2009), most Member States reacted quickly by implementing temporary measures in an attempt to maintain employment. These measures translated into partial unemployment (i.e. temporary reduction of working hours and sometimes even closure of an enterprise but with maintained wages thanks to the financial assistance of the state, in order to avoid unemployment), greater flexibility in the organisation of working time (e.g. part-time work on a voluntary basis with financial incentives), subsidising income and purchasing power (by increasing unemployment and other social benefits) or vocational training. In the second stage of the crisis, when it had been identified mainly as a public debt crisis, more large-scale reforms were put in place. Pension reforms, weakening of job protection legislation, reforms to the civil service, and decentralisation of collective bargaining were all legitimised by the perception – and sometimes recommendations of the ECB, the European Commission and the IMF – that labour law and social protection were a too heavy burden to national budgets, and that public spending cuts were required in order not to get back on track with sound public finances. 

Social Europe in crisis?

The ETUI briefing shows that this progressive deregulation of labour law and social protection raises the question of its appropriateness as a response to the crisis, when rising income inequalities have been a cause of this crisis. Furthermore the authors emphasise that way these measures were sometimes adopted – either “imposed” by the Troïka in Greece, or put in place by a technocratic government in Italy – questions the democratic legitimacy of these measures. In any case, a common process of weakening (mainly by decentralizing collective bargaining) and/or of by-passing the negotiation with social partners can be noticed in a majority of EU countries. These common trends put under pressure the social policy of the EU and the national welfare systems as they have been put in place after WWII in Western Europe. 

In particular, the authors highlight that the reform of the EU economic governance could lead and encourage social dumping, since the sole priority is sound public finance and labour competitiveness. The conceptual framework of the European Commission regarding social policy being “flexicurity” (with a stronger emphasis on flexibility than on security), increased retirement age, wage moderation and shift from labour taxation to consumption taxation to increase labour competitiveness, economic and budgetary supervision at EU level could have severe repercussions on national social policies as well as on employment and social protection legislation in the Member States. 

Instead, the authors conclude by arguing for the need of minimum social standards that still suit “the very complex realities of today’s companies and the diversity of people in work”. They emphasise the necessity of accompanying the changes underway with “a proper balance between competition, social protection and social cohesion”. 

You can read the policy brief by ETUI here.

A Green vision for social Europe

The Greens are particularly concerned by the impact of the current crisis on our social models and on the living conditions of the poorest in Europe. They see social inequalities as both cause and consequence of the current crisis. We therefore have a unique opportunity to rethink our development model and to lay down new foundations for the future of the socio-economic policy in the EU. In May 2012 at the EGP 16th Council meeting in Copenhagen, the European Greens adopted a policy paper presenting “the social dimension of the Green New Deal”, focusing on the links between the social dimensions in the transition towards a Green economy and the economic and environmental ones, with three main proposals: Green jobs as an answer to the crisis, fighting against poverty and inequalities, and social innovation as a key factor for sustainability, value creation and participation in society. The Greens/EFA group in the European Parliament recently organised a one-day conference to discuss these proposals and kickstart social Europe.

According to a recent study by the International Labour Organisation, the transformation to a greener economy could generate 15 to 60 million additional jobs globally over the next two decades and lift tens of millions of workers out of poverty. In the EU, the European Commission has estimated that up to 10.7 million new jobs could be created by fully exploiting policies aiming at fighting climate change and promoting resource and energy efficiency. The transition to a green economy thus offers promising perspectives for a European Union struggling with high unemployment. 

The European Greens emphasise that these green jobs should be high-quality jobs, which ensure gender equality, fair wages, good health and safety conditions, equal treatment, and career prospects. In particular, the transition to a greener economy will need flexibility, and sometimes mobility of workers. If the Greens do not oppose the concept of “flexicurity”, they stand against the way this concept is currently implemented at the EU level, i.e. with a main emphasis on flexibility, but not much on security. Instead it should imply flexible but reliable contractual agreements for both employers and workers, a reform of social security systems to flexibly take into account different phases of working time in a worker’s life by promoting a life-cycle approach, a guaranteed right for all workers to benefit from training throughout their lives, and social innovation in the way companies and other organisations handle working time organisation, lifelong training, fare redistribution of wealth, etc. One concrete example is the reform of working time organisation, for which proposals and analyses have been made in GEF’s series report “Work more? Work less? What should be done so that we can all work and perform better?”. 

• ETUI, How has the crisis affected social legislation in Europe?
• ASTREES, Quel droit social en Europe après la crise?
• European Greens, The social dimension of the Green New Deal
• Green European Journal, Inequality as cause and consequence of the crisis
• GEF, Work more? Work less? What should be done so that we can all work and perform better?
• International Labour Organisation, Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
• Greens/EFA group in the EP website