Sofia: Measures to Alleviate the Impact of the Crisis on the Labour Markets

I am at Sofia airport on my way back to Brussels after a successful meeting (an annual affair) of the Presidents and Secretaries-General of the Economic and Social Councils in the Member States and the European Economic and Social Committee. The theme of the discussions was the current crisis and possible measures to alleviate the impact. Our hosts, the Bulgarian Economic and Social Council, were not only the epitome of hospitality but also the acme of industriousness. They tabled a rich analytical paper based on contributions from all of their fellow Councils as to what was happening in their respective Member States. At the end of the conference they unanimously adopted a declaration (to see it, click on ‘read more’). This cannot be binding on the Councils and Committee but accurately sums the conclusions of the participants in the meeting. The meeting, and the work behind it, was an excellent example of the good work such networks can do.

Draft (rev 3)

Annual Meeting of the Presidents and Secretaries-General of the Economic and Social Councils of the EU Member States and the European Economic and Social Committee held on 26-27 November 2009

DECLARATION

At the invitation of the President of the Economic and Social Council of the Republic of Bulgaria, the Presidents and the Secretaries-General of the Economic and Social Councils of the Member States and the European Economic and Social Committee (EESC) held their annual meeting on 26-27 November in Sofia.

The meeting discussed a document entitled “Activating the European Labour Market: Policy Platform on Anti-crisis Measures”, tabled by the President of the Bulgarian Economic and Social Council. The Meeting recognizes that, in quantitative terms, the most important factor in creating employment in the short term is to stimulate demand and economic growth through an appropriate macroeconomic policy mix. Concentrating more particularly on anti-crisis policies and labour market issues, the meeting made the following declaration.

Anti-crisis Policy and Measures to Alleviate the Impact of the Crisis on the Labour Markets

1. The Meeting appreciates the efforts of the Member States to implement the coordinated approach in the development of anti-crisis policies and measures. The coordinated activities of European and national institutions and the structures of civil society could lay the foundations for a common European platform of policies and measures to mitigate the negative impact of the crisis on labour markets and to facilitate their future recovery.

2. The Meeting supports the conclusion of the European Council of October 2009 that a continued political commitment to active labour market policies is required in view of the expected continued deterioration of the employment situation in Europe. It is indeed necessary to take measures to support the connection to the labour market and to prevent high unemployment levels from becoming persistent, thus ensuring high employment levels and sustainable public finances in the longer run. As the European Council rightly notes, labour market participation is at one and the same time an objective and a prerequisite for economic growth, for the social and economic wellbeing of individuals and for a more socially cohesive Europe.

3. The crisis has affected the Member States’ labour markets differently and during different periods of the time. These differences have influenced the configuration of the national anti-crisis programmes and measures both in structural and temporal terms. Should the stabilization processes in the economies stay, the positive effects on the labour markets will become evident after a time lag, when it is expected that the cyclical nature of economic development will exert the necessary positive impact.

4. The Meeting acknowledges that the anti-crisis measures have been developed and implemented in line with national strategic and operational programmes in compliance with the Lisbon objectives.

Long-term Objectives of Anti-crisis Labour Market Policies and Measures

5. By its nature, the Meeting concentrated on the supply side aspects of the issue it was addressing, stressing needed reforms and heightening flexibility of the labour market. However, the meeting recognized and underlined the need for such policies and measures to be balanced by the consideration that, especially in the current crisis situation, security should take precedence over flexibility. The Meeting notes in this context that the social partners are currently exploring instruments designed to achieve such balance.

6. The Meeting emphasises that combining short-term measures to overcome the immediate challenges and long-term goals for strengthening productivity and competitiveness results in the monitoring of the anti-crisis policies and measures.

7. Maintaining the sustainability and the required range of social protection systems, restructuring and boosting the labour markets towards more and better jobs, and developing the educational and qualification systems to match market needs are main priorities of the long-term integrated European policy. Appropriate coordination between the structural reforms on the labour market and the other markets, as well as the maintenance of a stable macroeconomic environment are of key importance.

8. In order to strengthen the employability opportunities for the low-skilled and unskilled, it is necessary to enlarge and further develop educational and vocational training services, concentrating in particular on qualifications. Higher accessibility, transparency and efficiency of the services and measures, which are in the interest of all stakeholders, should be achieved on the basis of dialogue and cooperation between the administrative bodies and the social partners.

9. Upgrading skills not only of workers, but also of employers and managers, is essential in attempts to improve productivity and competitiveness through innovation, organization, modernization, entrepreneurship and management.

10. The results from the implemented packages of anti-crisis labour market measures have not only quantitative, but also very important qualitative and temporal aspects. The implemented measures should support the required structural changes in the distribution of the labour force and the improvement of its quality resulting in more efficient and productive labour markets. They also should guarantee the necessary increase in the direct expenditure on labour market policies, as well as on investments, which have proved their profound impact on employment.

11. Strengthening the monitoring process and the evaluation, coordination and exchange of good practices, with the active participation of the civil society structures, are of key importance to the increase in efficiency of the implemented policies. The active participation of civil society organisations and the social partners in the activities related to the preparation and implementation of the long-term Lisbon objectives, and the monitoring of their fulfillment, will result in the social synergy needed and will hence guarantee their success.

Fair Distribution of the Burden of the Crisis

12. The Meeting also acknowledges that the anti-crisis packages include diverse programmes and measures, which affect people differently. A main issue is the fair distribution of the crisis burden between the state, business and other individual groups of the population.

13. The anti-crisis policies provide both incentives and support for the employers in terms of social security, taxation, lending and protection measures for the workers and their incomes. The social burden of the crisis has been unevenly distributed between the members of society and most strongly affects the drop in incomes and the living standard of poor families, single persons, the disabled and other vulnerable groups. It should focus on implementing a more flexible and differentiated approach in terms of at-risk groups of the population.

Conclusions

14. The Presidents and the Secretaries-General of the National Economic and Social Councils of the EU Member States and the European Economic and Social Committee share the view that the crisis is an opportunity for the necessary restructuring and reform of the European economy and the labour market toward higher competitiveness, productivity and social standards. Therefore, the developing new solidarity between the European institutions, Member States and civil society in this period of major institutional changes in the European Union has to be used for due coordination of the long term European Union targets and of the pragmatic policies and mechanisms for their achievement.

15. The Meeting stresses the need for careful timing and management in the necessary transition at some future stage of macroeconomic policies from the current stimulus to a more normal monetary policy stance and the necessary substantial fiscal consolidation.

16. The Presidents and the Secretaries-General of the National Economic and Social Councils of the EU Member States and the European Economic and Social Committee declare their determination to be actively involved in this process and will strongly support all efforts and actions for developing a new Europe established on the basis of the EU’s huge economic and human potential but also with the aim of providing better conditions for life, work and the social protection of its citizens.

17. In this context, the Meeting notes the recently-ratified Lisbon Treaty’s provisions on participatory democracy and the obligation of all European Union institutions to engage in open and structured dialogue with civil society and underlines the role that national Economic and Social Councils and the European Economic and Social Committee can play in facilitating such dialogue.

18. The Meeting further notes the 24 November 2009 launching by the European Commission of a broad consultation on ‘EU 2020: a new strategy to make the EU a smarter, greener social market’ (in effect, the successor to the current Lisbon Strategy) and underlines the need for the Councils and Committee to be properly involved.

19. The Meeting points out that understandable concentration on dealing with the current crisis and its consequences should nevertheless not distract from longer-term trends and challenges, such as sustainability, climate change and demographic trends, that the Union and its Member States must address and underlines the importance of continued investment in the ‘knowledge triangle’ of innovation, research and education for future productivity growth and boosting long term economic growth.

20. Looking to the longer term, the Meeting welcomes with interest the recent Stiglitz, Sen, Fitoussi Report on the Measurement of Economic Performance and Social Progress, proposing additional indicators to be taken alongside traditional GDP indicators with a view to establishing a broader definition of well-being and will consider how to be actively involved.

The adopted declaration reflects the coordinated efforts of the network of the National Economic and Social Councils of the EU Member States and the European Economic and Social Committee during 2009 as well as the results of the joint conference held on 5-6 October in Sofia “Jobs and the Crisis: Policy Responses from Europe”.