The future of the European Social Model and soft law in the new member states

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The future of the European Social Model and soft
law in the new member states

• Seminar 4

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The European Social Model under attack the
neo-liberal offensive

• The ESM founded on social democratic values (a
  social welfarist Europe a balance of market and
  social priorities)
• Attack from within the EU
• - powerful individual member states such as UK,
  Italy and Germany hostile to ESM, especially
  during the 1980s and 1990s, but still today (the
  Third Way of Tony Blair, Germany Hartz IV
  reforms).
• - UNICE the European Employers Federation
  afraid of too much regulation as a burden on
  business

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ESM under attack

• Major international financial institutions (IMF,
  World Bank, European Bank for Reconstruction and
  Development) argue that European competitiveness
  depends on being able to compete in the global
  market place ie with cheaper sourced products
  from SE Asia, China etc

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The rationale of neo-liberal offensive on the ESM

• - New forces of globalisation claim the ESM an
  outdated concept of the 1960s and the 1970s
• - Social welfarist approaches stifle individual
  initiative and free market enterprise (the nanny
  state)
• - Social protection measure introduce harmful
  rigidities into the labour market which
  undermine necessary flexibility and
  competitiveness (eg minimum wages, too high
  unemployment benefit levels, unwillingness to
  accept lower pay and benefits eg reduced state
  pension rights and increased working age).

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The EU response to neo-liberalism

• EUs post-Lisbon retreat from securing employee
  rights, in favour of promoting growth and
  competitiveness, and a consequent downplaying of
  the social dimension of Europe
• Adoption by EU of many neo-liberal assumptions
  about regulation and the burden it imposes on
  business
• European Commission programme of updating and
  simplifying the acquis
• Health and safety at work legislation being
  subjected to a detailed scrutiny for their
  simplification potential

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Policy constraints on the ESM in the new member
states

• Implementation Theory-
• - veto points in policy implementation
• - Severe regulatory accession syndrome (SARFS)
• - lack of domestic reform fit internal elites
  do not subscribe to the ESM and accept
  neo-liberalism.

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Internal policy constraints

• Support among accession state business and
  political elites for European labour protection
  regulation, especially in the area of OHS, is
  limited (absence of reform fit)
• Regulatory authorities in new member states may
  be subject to post-accession regulatory fatigue
  and depletion of capacities

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External policy constraints on the ESM

• External agencies (IMF) appear to favour
  deregulation and differentiated standards of OHS
  protection in Central and Eastern Europe
• overregulation of conditions of employment will
  diminish the comparative advantage that CEE
  workers enjoy over their more highly paid western
  counterparts (Washington-based Cato Institute)

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External policy constraints on the ESM

• EU criticized because it rejects the
  possibility of different levels of safety and
  health protection of labour within the Union and
  advocates the need to harmonize health and
  safety standards irrespective of the different
  needs of the member states (Cato Institute,
  2003)
• Health and safety regulations contribute to
  worsening of the workers lot, by creating an
  artificial increase in labour costs (Cato
  Institute, 2003)

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5. Regulatory reform at European level -
Better regulation or (de)-regulation?)

• Traditional EU Directives replaced by more
  efficient, flexible and proportionate instruments
  (for example, framework directives, new approach
  directives or softer regulatory alternatives)
• This encourages autonomous processes of
  adjustment and confers rule making-powers to
  self-regulatory processes ie., stakeholders
  in the regulation process voluntarily agree to
  frameworks of rules eg sectoral agreements on
  safety and health

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Soft law in action The Open Method of
Co-ordination (OMC)

• Open Method of Co-ordination endorsed (Lisbon
  Council) as-
• an important tool of EU governance in achieving
  social and employment policy goals includes
  health and safety at work
• Notions of benchmarking and best practice -
  securing a flexible and decentralised approach to
  policy creation and implementation

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OMC, subsidiarity and social partnership

• The principle of subsidiarity embodied in the OMC
  implies devolving policy inputs to regional and
  local levels, thus spreading horizontally
  outwards to the social partners and civil society
  representatives.
• These actors will be actively involved, in the
  policy process using variable forms of
  partnership (European Council 2000, para.38).

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OMC and Corporate Social Responsibility

• OMC appeals to companies' sense of corporate
  social responsibility regarding best practices,
  on such matters as
• work organisation
• equal opportunities
• social inclusion
• safety and health

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From rhetoric to reality - safety and health at
work in the CEE new member states

• In the CEE new member accession states many
  employers do not see good health and safety
  necessarily as good business
• Little interest in good practice voluntary
  initiatives and corporate social responsibility

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Regime competition

• Scope for regulatory experimentation (soft law
  and the OMC) very limited at a domestic level in
  the new member CEE states.
• Emergence of regulatory regime competition and
  a race to the bottom between new and older
  member states
• CEE new member accession states in danger of
  providing a reservoir of cheap labour and an
  inferior high hazard work environment.

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Alternative regulatory strategies to the OMC and
soft law

• End the pro-business anti-regulation bias in
  policy circles and reaffirm Community-level
  regulation in the enlarged EU
• New resources to domestic monitoring agencies to
  ensure implementation, enforcement powers
  sufficient to stimulate compliance-seeking by
  member states and domestic actors.
• Higher commensurate fines for safety violators
  and criminalisation of health and safety offences
  where necessary (corporate killing laws)
• Resourcing and empowerment of social partners,
  trade unions and employers organisations, within
  the health and safety and social dialogue process

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Policy implications OMC for health and safety in
an enlarged Europe

• The problems and issues in the new member states
  require that strategies are tailored to realities
  that exist on the ground
• Current weakness of trade unions and employers
  organizations will not be overcome in short term
• This makes the introduction of soft law and
  self-regulation (corporate social responsibility,
  best practice models, partnership strategies)
  inappropriate in the short to medium term (5-10
  years, and possibly longer)

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Soft law regulatory innovation or opening
the way to de-regulation?

• European Commission programme of updating and
  simplifying the acquis - Better regulation
  (or de-regulation?)
• Health and safety at work legislation being
  subjected to a detailed scrutiny for their
  simplification potential

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• Traditional EU Directives replaced by more
  efficient, flexible and proportionate instruments
  (for example, framework directives, new approach
  directives or softer regulatory alternatives)
• This encourages autonomous processes of
  adjustment and confers rule making-powers to
  self-regulatory processes ie., stakeholders
  in the regulation process voluntarily agree to
  frameworks of rules eg sectoral agreements

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Soft law in action The Open Method of
Co-ordination (OMC)

• (OMC) endorsed at the Lisbon European Summit
• an important tool of EU governance in achieving
  social and employment policy goals includes
  health and safety at work
• Notions of benchmarking and best practice -
  securing a flexible and decentralised approach to
  policy creation and implementation
• Direct involvement of social actors in the
  regulatory process - employers and employee
  representative organisations

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Strengths of the OMC model

• Leaves open key aspects for local adaptation by
  member states (the principle of subsidiarity)
• virtues of adaptability and flexibility in policy
  making within a common framework.
• Recognises the diversity of local and national
  conditions (multi-level governance and decision
  making processes)

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OMC in the new member CEE accession states

• OMC appeals to companies' sense of corporate
  social responsibility regarding best practices,
  inter alia on such matters as work organisation,
  equal opportunities and social inclusion
• Little evidence of interest in corporate social
  responsibility towards employees in CEE new
  member states

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Soft law approaches and the OMC

• Scope for regulatory experimentation (soft law
  and the OMC) very limited at a domestic level in
  the new member CEE states.
• An intermediate period necessary - risk
  assessment, employee involvement and workplace
  consultation need to be established in CEE states
• Strengthening of employee organisations in social
  dialogue needed at all levels

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Innovative Regulation or Deregulation? Policy
Choices for the Enlarged Europe

• Reaffirm the need for effective Community-level
  and domestic regulation to ensure approximate
  implementation
• Enforcement powers to stimulate
  compliance-seeking behaviour by all member
  states and domestic actors
• Commensurate fines and criminalisation of health
  and safety offences (corporate killing laws)
• Empowerment of workers within the OHS process

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The need for caution

• Regulatory regime competition and a race to
  the bottom between new and older member states
• CEE new member accession states in danger of
  providing a reservoir of cheap labour and an
  inferior high hazard work environment.

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Conclusions for an enlarged Europe

• Regulatory strategies should be tailored to
  realities that exist on the ground
• Introduction of soft law and OMC may be
  inappropriate and open the door to further
  neo-liberal de-regulation in safety and health at
  work

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Discussion the European Social Model - A
realistic agenda for the enlarged Europe?

• Can the ESM be transposed into the CEE new member
  states?
• Can the internal political, economic,
  administrative, social barriers to transposing
  the ESM be overcome?
• Can the external political, economic,
  administrative, social barriers barriers to
  transposing the ESM?
• Do we need a European Social Model?