Is the EU's single market promoting or holding back employment and social rights? It's arguable that a so-called 'Social Europe' existed during the
Delors' presidency when many core regulations to protect workers were put into place.
Is the EU's single market promoting or holding back employment and social rights? It is arguable that a so-called 'Social Europe' existed during the period of Jacques Delors' presidency of the European Commission from 1985 to 1994, when many core regulations to protect workers were put into place.
Since then, the debate around the relationship between competitiveness on the one hand and the protection of labour and social rights has become shriller and less constructive. Labour rights have been reduced in many nations, including the UK in relation to unfair dismissal. Wages in both the public and private sectors have been squeezed across Europe. In addition, despite sounding like a 1970s pop group gone wrong, many would argue that the Court of Justice's decisions on Viking and Laval have removed some of the capacity for collective action. These judgements clarified the extent to which collective action by trade unions could be used to resist 'social dumping' within the EU -- where businesses transfer their operations from one country with high labour costs, to another with lower costs. As Mario Monti has suggested, Viking and Laval exposed 'the fault lines that run between the single market and the social dimension at national level'.
The author Giandomenico Majone famously described the EU as a predominantly 'regulatory state' due to its lack of fiscal (i.e. tax and spend) powers. However, the EU's various bail-out mechanisms have given it some financial clout, which is predominantly being used as a carrot to promote reductions rather than increases in labour market regulations. In addition, the 2011 'Euro Plus Pact' included requirements to review wage-setting arrangements and the relationship between public and private sector wages, and prioritised the reduction of 'taxes on labour'.
So why has the EU adopted this deregulatory approach? The ascendancy of the Centre Right across Europe provides part of the answer. Things may start to change as the balance of power shifts back towards the pragmatic Left, as in France. In addition though, aside from measures for posted workers, temporary and agency staff, it is arguable that the EU has lacked high-profile political leadership promoting social and labour rights for some time. This has occurred for a variety of (contested) reasons.
Increased worker and capital mobility has been viewed as leading, inevitably, to reduced social protection (and the logic of Viking and Laval seem to confirm this). Nonetheless, until recently, it was the most 'open' small economies which also had the closest relationships between social partners and some of the highest levels of social protection. Relatedly, many have argued that population diversity reduces trust and imperils support for collectivist policies. Yet it was Belgium - a nation so deeply divided that its parties could not agree to form a government for over 500 days -- that was one of the strongest opponents of threats to collective bargaining contained within the Pact.
Just as responses to the financial crisis are socially constructed rather than 'natural' or 'inevitable', the same applies to pressures from worker and capital mobility and population diversity. In an article published in the journal Public Administration, Colin Hay and Nicola Smith suggested, on the basis of compelling survey evidence, that policymakers frequently publicly portray globalisation as necessitating reforms, even when they privately acknowledge their contingency. In the current, politically polarized EU, nothing should be taken for granted about the impact of the financial crisis on social and labour rights.
This post is adapted from a post on the LSE EUROPP blog, reporting on an event organised by the Foreign Policy Centre: see here for the original article.