THE INTERNAL POLICIES OF

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• THE INTERNAL POLICIES OF
• THE EUROPEAN UNION
• Social Policy in the EU
• Prof. D-r Jovan Pejkovski

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• European social policies have played a central
  role in building Europe's economic strength,
  through the development of a unique social model.
  
• This has proven to be both flexible and dynamic
  in responding to rapid changes in Europe's
  economy and society over the past decades.

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• The European Community has a longstanding
  commitment to and record on social policy.
• Since the 1970s it has supported Member State
  policies in this area.
• In the context of the development of the
  Treaties, the relationship between economic and
  social policies of Member States has undergone
  substantial change.

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• The Treaties have also enshrined the principle of
  subsidiarity which in the social area is based
  both
• on the interaction between the Community and
  Member State level - including regional and local
  - and
• between the social partners and public
  authorities at all levels.

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• Harmonization of working conditions many
  directives were adopted for improvement of living
  and working conditions in the EU countries.
• The Single European Act (1987) much of the
  social issues were addressed with commitments to
  the harmonization's of the national legislations
  for creation of the Single European Market.

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The Social Chapter of EU

• -conditions necessary for the completion of the
  Single European Market
• -attempted to create the social guarantees as
  essential to political support for fundamental
  social rights
• -agreement on social policy
• -the social dialogue
• -Community policy.

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• The Social Action Programmes of the 1990s pursued
  an agenda, which had employment at its core.
• The Amsterdam Treaty gave a fresh impetus to
  European social policy. It introduced the new
  Employment Title and incorporated the Social
  Protocol. It identified new areas and tools for
  action in this field and has contributed to

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• - putting employment at the centre of the
  economic policy agenda of the Union and making
  its promotion a matter of common concern which
  started the process of open policy co-ordination
  in matters of employment and labour markets. This
  new Community policy has gained pace, driven by
  the strategy launched by the Luxembourg Jobs
  Summit
• - requiring Member States and the Community to
  better co-ordinate economic and employment
  policies in order to ensure consistency and
  improve synergy

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• - making use of the Social Title of the Treaty by
  developing collective bargaining between the
  social partners
• - launching initiatives on new aspects of the
  Treaty such as social exclusion and
  anti-discrimination
• - making the equality between men and women in
  all aspects of social life, an aim of the
  Community.

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• EU social situation report - published annually
  since 2000 - offers a prospective overview of the
  key social and economic developments in Europe
  and looks at most principal areas of European
  social policy
• population
• education and training
• the labour market
• social protection
• income, poverty and social exclusion
• gender equality
• health and safety at work.

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• With enlargement, social conditions within the EU
  have become more diverse, and the differences
  between the majority of the EU-15 countries and
  the new Member States are significant in both
  their degree and character.
• The inherent challenges of the present
  enlargement are therefore proving particularly
  extensive due to the wide scope of socio-economic
  inequalities.

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• The European Union has made considerable progress
  in strengthening its economic fundamentals and
  fostering job creation.
• However, unemployment remains high. At present,
  around 9 of the European workforce is
  unemployed. The average employment rate was only
  62 in 1999.
• Employment is still relatively low in certain
  activities - like services. Participation among
  women as well as certain groups like elderly and
  disabled people is too low.

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• The main features of Europe's employment deficit
  are
• - A services gap - the European Union has a much
  lower level of employment in the services sector
  than the US. The European Union has an enormous
  employment potential in virtually all services
  sectors
• - A gender gap - only half of the women in the
  European Union are in work compared to two-thirds
  in the US.
• - An age gap - the rate of employment in the
  55-65 age group is too low.

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• - A skills gap - skill requirements in the
  European Union are not matched by existing
  supply. This is particularly noticeable in
  information technology across Europe. The IT
  skills shortage in Europe is increasing.
• - Long term structural unemployment - half of
  those out of work have been unemployed for more
  than a year.

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• - Marked regional imbalances both in Europe and
  within Member States - European Union
  unemployment is concentrated in Eastern Germany,
  France, Southern Italy, Spain and Greece.
• It is highest in certain less developed regions,
  outlying regions and declining industrial areas.

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• The European employment strategy has proven to be
  an effective tool for structural reform in the
  national labour markets.
• In some Member States, once the levels of
  employment are rising, the availability of a
  labour supply which reaches the standards
  demanded by the market is of crucial importance
  for sustained economic development and
  non-inflationary growth.

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• The development of human resources, in particular
  upgrading skills and extending life-long
  learning, is crucial in the knowledge-based
  economy.
• In addition, equal access to - and quality of -
  education and training are of utmost importance
  in providing people with real opportunities to
  prepare for rapidly changing working conditions
  and the requirements of the knowledge-based
  economy.

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• The initiative on "e-Learning" will mobilise all
  relevant actors, and will require Europe's
  educational and training systems to adapt to the
  knowledge-based society.
• Given that the knowledge-based economy will be
  very dynamic, improving insight in its
  functioning will be essential.
• Research in the conditions for the development of
  the knowledge-based economy will underpin policy
  efforts.

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• In the longer term, new family structures,
  persistent gender inequalities, demographic
  changes and the requirements of the
  knowledge-based economy will strongly affect the
  structure of the labour market and labour supply
  and will put heavy pressure on pension and health
  systems.
• This calls for a reflection on the role of
  immigration as part of a strategy to combat these
  trends. Failure to adapt and modernise social
  protection systems would increase the risk of
  more unemployment, poverty and social exclusion.

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• The modernisation of social protection systems is
  essential to underpin the transformation to the
  knowledge-based economy and to cater for the new
  needs in society.
• Whilst social protection remains Member States'
  competence, co-operation at European level will
  facilitate a collective reflection on how best to
  address the challenges in modernising and
  improving the various social protection systems.

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• A key challenge is now to move from an agenda of
  tackling social exclusion to one which fosters
  social inclusion and mainstreams it into the
  heart of all policy making.
• Unemployment is the single most important reason
  for poverty. Nearly two out of three of those
  unemployed are at risk of poverty. This is why a
  job is the best safeguard against social
  exclusion. However, employment alone does not
  solve all problems.

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• A comparison of employment rates with poverty
  rates shows that poverty may be relatively
  widespread even in some Member States with high
  employment rates.
• Raising employment rates and lowering
  unemployment would reduce significantly poverty
  and social exclusion, especially in those Member
  States which have low employment rates at
  present.

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• In this respect, it is important to focus
  attention on those at the margins of the labour
  market, by investing in people to increase their
  employability and by reducing barriers for labour
  market entry.
• Confronting these challenges requires
  multi-faceted policies, which go beyond labour
  market issues, and which aim to increase social
  inclusion and participation.

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• The new Social Policy Agenda revolves around a
  series of actions designed to ensure that the
  full benefits can be reaped from as well as
  contribute to the dynamic interaction between
  economic, employment and social policy.
• A key message is that growth is not an end in
  itself but essentially a means to achieving a
  better standard of living for all. Social policy
  underpins economic policy and employment has not
  only economic but also a social value.

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• The overall focus will be the promotion of
  quality as the driving force for a thriving
  economy, more and better jobs and an inclusive
  society strong partnership, dialogue and
  participation at all levels, access to good
  services and care, social protection adapted to a
  changing economy and society.
• Extending the notion of quality - which is
  already familiar to the business world - to the
  whole of the economy and society will facilitate
  improving the inter-relationship between economic
  and social policies.

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• Such an approach means striving to achieve
  competitiveness, full employment and quality of
  work, quality in industrial relations and quality
  of social policy
• - Full employment means promoting more jobs
  Quality of work includes better jobs and more
  balanced ways of combining working life with
  personal life. This is to the advantage of the
  individual, the economy and the society.

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• It implies better employment policies, fair
  remuneration, an organisation of work adapted to
  the needs of both companies and individuals.
• It is based on high skills, fair labour
  standards and decent levels of occupational
  health and safety and includes facilitating
  occupational and geographical mobility.

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• - Quality of social policy implies a high level
  of social protection, good social services
  available to all people in Europe, real
  opportunities for all, and the guarantee of
  fundamental and social rights.
• Good employment and social policies are needed to
  underpin productivity and to facilitate the
  adaptation to change. They also will play an
  essential role towards the full transition to the
  knowledge-based economy.

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• - Quality in industrial relations is determined
  by the capacity to build consensus on both
  diagnosis and ways and means to take forward the
  adaptation and modernisation agenda.
• This also includes coping successfully with
  industrial change and corporate restructuring.

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• Common priorities and individual objectives for
  member states' employment policies, are set out
  in multi-annual Employment Guidelines agreed
  jointly by all member states.
• The current guidelines cover the period
  2005-2008. They are part of the Integrated
  Guidelines for Growth and Jobs for 2005-2008,
  which also include economic management.

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• The employment guidelines are the basis for
  national reform programmes and the employment
  component of the EUs Lisbon Programme, which
  covers all EU action to promote
• knowledge and innovation,
• make Europe a more attractive place to invest and
  work, and
• create more and better jobs.

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• The Employment Guidelines address the need to
  implement employment policies which aim to
  achieve full employment, improve quality and
  productivity at work, and strengthen social and
  territorial cohesion.
• They also cover ways of improving the match of
  labour market needs and available skills.

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• They recognise that labour market flexibility
  needs to be combined with employment security and
  recognise the role of social partners.
• They advocate employment-friendly labour cost
  developments and wage-setting mechanisms,
  expansion and improvement of investment in human
  capital and adaptation of education and training
  systems to new skill requirements.

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• The Social Agenda 2005-2010 covers policies
  designed to provide jobs, fight poverty and
  promote equal opportunities for all.
• In partnership with public authorities at every
  level from local to national, employer and worker
  representatives, and non-governmental
  organisations, the Agenda is a framework for

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• promoting portability of pension and social
  security entitlements in order to create a truly
  European labour market,
• getting more people particularly young people
  and women into work,
• updating labour law to reflect new forms of work,
  such as short-term contracts, and
• manage restructuring through social dialogue.

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• It is also a framework for supporting member
  states in reforming pensions and health care,
  tackling poverty and the employment and social
  issues emerging as populations age, as well as
  fostering equal opportunities, inequality and
  discrimination.

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• The European Social Fund plays a major role in
  funding the necessary investment in human capital
  with 60 billion available between 2000 and 2006
  to develop both the work skills and the social
  skills which make it easier for people to find
  work or set up businesses of their own.
• Special attention is paid to funding for areas of
  the EU with particularly high levels of
  unemployment or low average incomes.

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Minimum standards for all

• The EU has a long tradition of ensuring a decent
  working environment throughout the EU and of
  protecting workers' rights through common minimum
  rules on working conditions, and health and
  safety at work, e.g. protection from noise or
  exposure to chemicals, for regnant women and
  workers under 18.

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• Other legislation spells out basic rights on
  working hours, parental leave, the basic
  information all employers must supply to new
  employees about the job and the terms on which
  they have been hired, the terms of any collective
  redundancy and the same treatment for part-time
  or temporary workers as for permanent full-time
  employees.
• Equal pay for equal work and protection against
  sexual harassment are also enshrined in EU law.

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• The EU has outlawed discrimination on the basis
  of gender, racial or ethnic origin, disability,
  sexual orientation, age, and religion or belief.
• This is bolstered by legislation banning
  gender-based discrimination in access to goods
  and services (with some exceptions for
  insurance), policy strategies on combating
  discrimination and xenophobia, and on ensuring
  that gender issues are taken into account in all
  EU policies.

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• The EU also promotes modern labour relations and
  dialogue between worker representatives and
  employers. Sound labour relations not only
  further worker protection, but contribute to
  competitiveness.
• The European Commission encourages corporate
  social responsibility by promoting the concept
  that social and environmental concerns should be
  an integral part of business strategies.

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Pan-European mobility for all

• The right to work anywhere in the EU is a
  fundamental right of all EU citizens, subject to
  some transitional arrangements for countries
  which joined the EU in 2004.
• The Public Employment Services of the EU,
  Iceland, Norway and Switzerland are linked
  through a single service, Eures, which acts as a
  one-stop shop for job-seekers.

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• The EU encourages worker mobility for the
  benefits it brings to the individual in terms of
  personal and vocational or career development and
  as a means to match skills to demand.
• 2006 is the European Year of Workers Mobility.

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• The ability to work in another EU countries
  carries with it the right to most social benefits
  for the whole family rights which generally
  extend as well to retirees living in a different
  EU country from the one in which they spent their
  working life.
• The right to health care anywhere in the EU also
  applies to emergency care for travellers.

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This card is making it easier to get healthcare
in other European countries.
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Social inclusion and social protection

• Social security systems in the individual EU
  countries reflect specific traditions, social
  advances and cultural heritage and are a matter
  for national laws.
• Member states co-ordinate their policies,
  however, on the basis that everyone should have
  access to social benefits, which
• provide a safety net, but make it financially
  more attractive to work wherever possible  
• provide pensions and quality health care at a
  sustainable cost
• promote social inclusion and fight poverty.

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Technical back-up

• Three agencies provide technical input into EU
  work on employment, carry out research and
  disseminate best practice. They are the
• European Agency for Health and Safety at Work in
  Bilbao
• European Foundation for Living and Working
  Conditions in Dublin
• European Monitoring Centre on Racism and
  Xenophobia in Vienna.

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• The Lisbon European Council has identified a
  fresh set of challenges which must be met so that
  Europe can become "the most competitive and
  dynamic knowledge-based economy in the world
  capable of sustainable economic growth with more
  and better jobs and greater social cohesion".

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• Major socio-economic disparities persist between
  different regions of the Union.
• For example, the per capita gross domestic
  product (GDP) of Portugal is twice that of
  Greece. Similarly, Hamburg is Europe's richest
  region with a per capita income four times that
  of Alentejo.
• These regional disparities are prejudicial to the
  Union's cohesion.

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• Economic and social cohesion has been one of the
  EU's priority objectives for some years now.
• By promoting cohesion, the Union is encouraging
  harmonious, balanced and sustainable economic
  development, creating employment and contributing
  towards environmental protection and the
  elimination of inequality between men and women.

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• In order to implement the drive for economic and
  social cohesion, the European Commission has
  created financial instruments
• the Structural Funds and
• the Cohesion Fund.
• These funds part-finance regional and horizontal
  operations in the Member States.

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STRUCTURAL FUNDS

• Four types of Structural Fund have been
  introduced over the years, as the process of
  building Europe has progressed
• The European Regional Development Fund ( ERDF )
  contributes mainly to assisting the regions whose
  development is lagging behind and those
  undergoing economic conversion or experiencing
  structural difficulties
• the European Social Fund ( ESF ) mainly provides
  assistance under the European employment strategy
  

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• the European Agricultural Guidance and Guarantee
  Fund ( EAGGF ) Guidance Section helps in both the
  development and the structural adjustment of
  rural areas whose development is lagging behind
  by improving the efficiency of their structures
  for producing, processing and marketing
  agricultural and forest products
• the Financial Instrument for Fisheries Guidance (
  FIFG ) supports restructuring in the fisheries
  sector.

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• The total budget for the Structural Funds amounts
  to EUR 195 billion in 2000-06, 5454

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Exclusion and discrimination

• European societies are witnessing a growing trend
  towards ethnic, cultural and religious diversity
  that, post enlargement, will continue due to a
  combination of factors such as the ageing of the
  population, labour shortages in certain regions
  and sectors, political instability and poverty,
  among others.
• Measures to promote the inclusion and
  participation of ethnic minorities are therefore
  needed.

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Policies for people with special needs

• The Community approach to disability does not
  identify separate categories of people, but
  rather is based on individual needs, an approach
  that is more conducive to social inclusion.
• Accordingly, trends in the EU-25 countries are
  generally positive in this area, although several
  obstacles still exist (of a physical, legal or
  administrative nature), requiring further
  efforts.

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Civil society and civic participation

• The extent of civic mindedness, trust and
  participation of the population forms the basis
  of a civil society that influences the economic,
  social and political performance of a country.
• In most of the new Member States of central and
  eastern Europe, civil society is marked by sparse
  participation in public life and distrust of
  public institutions, a legacy of the previous
  centralised regimes. Even if civic participation
  has improved since the beginning of the
  transition period, it is still lower than in the
  EU countries.

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Social dialogue

• Despite sustained efforts to develop industrial
  relations and social dialogue in the ten new
  Member States, the social partners in these
  countries still face challenges with a view to
  fully participating in economic and social
  governance which the European social model
  attributes to them.

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• Differences between the industrial relations
  regimes and the existing social dialogue between
  the ten new Member States and the EU-15 are
  substantial, especially as regards the density of
  employer organisations, which is lower in the ten
  new countries.
• Collective bargaining at bipartite and tripartite
  level is also fairly limited in the new Member
  States.

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• In many of the new Member States, disability
  policies still tend to be orientated towards
  segregation rather than integration.
• It will therefore be necessary to adopt the
  Community approach for social inclusion in the
  directive on equal treatment in employment and on
  the need to take appropriate action for disabled
  people.

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• This Social Policy Agenda forms part of the
  integrated European approach towards achieving
  the economic and social renewal outlined at
  Lisbon.
• Specifically, it seeks to ensure the positive
  and dynamic interaction of economic, employment
  and social policy, and to forge a political
  agreement which mobilises all key actors to work
  jointly towards the new strategic goal.

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• At the heart of the Agenda is the modernisation
  of the European social model and the conversion
  of the political commitments made at Lisbon into
  concrete action.
• A wide range of actions are outlined in the
  Agenda
• some are targeted at realising Europe's full
  employment potential by creating more and better
  jobs, anticipating and managing change and
  adapting to the new working environment,
  exploiting the potential of the knowledge-based
  economy and promoting mobility

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• others will centre on modernising and improving
  social protection, promoting social inclusion,
  strengthening gender equality and reinforcing
  fundamental rights and combating discrimination.
• there are also initiatives devoted to preparing
  for enlargement and promoting international
  co-operation and making the social dialogue
  contribute to meeting the various challenges.

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• Sustained economic growth with low inflation and
  sound public finances is crucial for increasing
  employment and social cohesion.
• Fiscal co-ordination at European level is an
  important aspect of the completion of the
  internal market and plays a key role in
  preventing the erosion of tax revenues through
  harmful tax competition.

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• Well-targeted social protection is essential for
  adapting the economy to change and providing for
  an efficient and well-trained labour force.
• High quality education and training, which is
  accessible to all, strengthens social inclusion
  and competitiveness.

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• Raising the employment rate will underpin the
  sustainability of the financing of social
  protection systems.
• Social cohesion prevents and minimises the
  under-use of human resources.
• The management of the interdependence of policies
  should lead to a "policy mix", which will sustain
  economic and social progress.

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• In order to confront successfully technological
  and societal changes, the modernisation and
  improvement of the European social model is
  required to underpin economic dynamism and pursue
  employment-generating reforms.
• Europe's performance in an internationalised
  economy is affected by the quality of goods and
  services it produces and delivers and their added
  value.

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• Further strengthening the internal market and the
  reform of goods, services and capital markets
  will be of great importance in this regard.
• Improving the quality of work increases the
  quality of output of that work and thus
  strengthens the competitive position of European
  companies.

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• The European Union needs to continue to combine
  good social conditions with high productivity and
  high quality goods and services.
• This is a key feature of the European social
  model. More and better employment in a dynamic
  and competitive economy strengthens social
  cohesion.
• The pursuit of wage moderation by the social
  partners plays an important role in sustaining a
  favourable macro-economic environment.

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• The employment guidelines are presented in an
  integrated policy instrument covering both the
  macroeconomy and the microeconomy of the European
  Union.
• It gives a clear strategic vision of the
  challenges facing Europe and enables the
  Commission to channel Member States' efforts
  towards priority measures. Certain employment
  guidelines are to be implemented in line with the
  corresponding guidelines in other areas in order
  to mutually strengthen the different areas of the
  economy.

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Integrated guidelines for growth and jobs
(2005-2008) Macroeconomic guidelines

• (1) To secure economic stability. (2) To
  safeguard economic sustainability. (3) To
  promote an efficient allocation of resources.
  (4) To promote greater coherence between
  macroeconomic and structural policies. (5) To
  ensure that wage developments contribute to
  macroeconomic stability and growth. (6) To
  contribute to a dynamic and well-functioning EMU.

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Macroeconomic guidelines

• (7) To extend and deepen the internal market.
  (8) To ensure open and competitive markets. (9)
  To create a more attractive business environment.
  (10) To promote a more entrepreneurial culture
  and create a supportive environment for SMEs.
  (11) To expand and improve European
  infrastructure and complete agreed priority
  cross-border projects. (12) To increase and
  improve investment in RD. (13) To facilitate
  innovation and the take-up of ICT. (14) To
  encourage the sustainable use of resources and
  strengthen the synergies between environmental
  protection and growth. (15) To contribute to a
  strong industrial base.

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Employment guidelines

• (16) To implement employment policies intended to
  achieve full employment, improve quality and
  productivity at work, and strengthen social and
  territorial cohesion. (17) To promote a
  lifecycle approach to work. (18) To ensure
  inclusive labour markets for job-seekers and
  disadvantaged people. (19) To improve matching
  of labour market needs. (20) To promote
  flexibility combined with employment security and
  reduce labour market segmentation. (21) To
  ensure employment-friendly wage and other labour
  cost developments. (22) To expand and improve
  investment in human capital. (23) To adapt
  education and training systems in response to new
  competence requirements.

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• The Commission may revise these guidelines in
  2006 and in 2007, if necessary.
• It presented the Integrated Guidelines as part of
  the mid-term review of the Lisbon Strategy .

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• The modernisation of the European social model
  seeks to ensure that the mutual re-enforcement of
  economic and social policy will effectively be
  maximised in the changing environment.
• In this sense, the new Agenda will play a
  fundamental role for both economic and social
  reforms as part of a positive strategy, which
  combines dynamism, innovation and competitiveness
  with more and better jobs and social cohesion.