Gaby Umbach, From Rome to Essen: The Long Way from Supplementing the Single Market towards the Headstone of the Luxembourg Process in:

Gaby Umbach

Intent and Reality of the European Employment Strategy, page 171 - 178

Europeanisation of National Employment Policies and Policy-Making?

1. Edition 2009, ISBN print: 978-3-8329-4128-4, ISBN online: 978-3-8452-1247-0

Series: Studies on the European Union, vol. 1

Bibliographic information
171 3. The Why, When, How, What, and In How Far of European Employment Policy Co-ordination: Genesis, Characteristics, and Limits The present chapter examines the why, when, how, what and in how far of the EES in order to draw conclusions on its Europeanisation potential. Its first sub-chapter sheds light on the why and when of the EES. It, thus, focuses on the overall development of European employment policy-making/co-ordination from the Treaties of Rome to the decisions of the European Council of Lisbon and beyond. It, moreover, highlights important stimuli for bottom-up Europeanisation. The second sub-chapter examines the how and what of the EES. It analyses its structural and procedural aspects (how) in order to present its politics dimension–including its official five year interim evaluation. It, moreover, portrays the underlying policy ideas and paradigms, that is, the overall ‘policy ID’ of the EES (what). The impact of other inter-/ supranational economic policy co-ordination cycles and multilateral surveillance activities on the EES is examined in sub-chapter three, looking at in how far they limit or support the EES. The final sub-chapter presents a first interim assessment on the overall Europeanisation potential of the EES. The aim of this interim assessment is to more closely categorise the EES’s potential to Europeanise member states’ employment policy co-ordination structures and policies. 3.1 Why and When?: The Path towards the EES – From Supplementing the Single Market towards the Lisbon Strategy The path towards the EES can be analytically subdivided into two main periods that are characterised by different understandings and contents of European employment policy-making and co-ordination. The first period covers the EC’s early years until the late 1990s. The second period starts with the integration of the Employment Title into the Amsterdam Treaty in 1997 and leads towards the inception of the Lisbon Strategy and beyond. This second period was heralded by the 1993 Delors White Paper on Growth, Competitiveness and Employment and introduced a shift of policy paradigm. At the same time, it followed a path-dependent development towards the current ‘policy ID’ of the EES. The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 172 3.1.1 From Rome to Essen: The Long Way from Supplementing the Single Market towards the Headstone of the Luxembourg Process In the early years of European integration, employment policy-making was a matter of national concern and sovereignty, with only limited competences assigned to the Community level. Supranational provisions to stimulate national economic growth and labour market performance were concentrated on the establishment of a single market to shape member states’ economic policies. These provisions rather neglected the social regulation of the single market (cf. Jenson/Pochet 2002:3). Already the 1957 Treaty of the European Economic Community (TEEC) obliged member states to take “care to ensure a high level of employment” (Art. 104 TEEC) when pursuing their domestic economic policies. Art. 118 TEEC, moreover, referred to “employment; labour law and working conditions; basic and advanced vocational training; social security; prevention of occupational accidents and diseases; occupational hygiene; the right of association, and collective bargaining between employers and workers” as areas affected by the Commission-led promotion of close cooperation between member states in the social field (cf. Ekengren/Jacobsson 2000:3; Steinle 2001:94). However, these areas remained outside the realm of supranational legislation and were subsumed under the social policy field. Community activities were limited to provisions concerning • the free movement of workers (Art. 48 – 51 TEEC), to enable them “to accept offers of employment actually made” (Art. 48 TEEC), abolishing discrimination due to nationality and ensuring co-operation between national employment services; • the European Social Fund (Art. 123-127 TEEC), aiming to “improve employment opportunities for workers in the common market and to contribute thereby to raising the standard of living” (Art 123 TEEC); and • the establishment of “general principles for implementing a common vocational training policy capable of contributing to the harmonious development both of the national economies and of the common market” (Art 128 TEEC; cf. Pochet 2002:32). Compared to the economic and common market focus of European integration of this early period, employment and labour market policies, albeit partially treatybased, thus, played a subordinate role in Community legislation. They aimed at a high level of employment in order to supplement and support the development of the single market (cf. Steinle 2001:94f., Tidow 1998b:8). Apart from this annex function (cf. Velluti 2002:2), no genuine supranational employment policy competence was foreseen by the TEEC. As first steps of bottom-up Europeanisation and signs of institutionalising employment policy co-ordination, EC member states set up a tripartite advisory committee for vocational training in 1963. As the first institution in the policy field, it dealt with employment-related issues at supranational level, “laying down general The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 173 principles for implementing a common vocational training policy.. consist[ing] of thirty-six members comprising, from each of the Member States, two representatives of the Government, two representatives of trades unions and two representatives of employers' organisations” (Council of the EC 1963:Art 1.1). In 1968, bottom-up Europeanisation continued with the institutionalisation of an expert committee of national officials, providing technical support to the European Commission. The committee was set up to support the implementation of the regulation on the free movement of workers (Art. 24-37 of Council of the EU, EEC 1612/68). As a first expert network on employment policy co-ordination and a forum for discussion, it focused on the development of the single market and the coordination of domestic employment policies (cf. Steinle 2001:99ff.). Following these early institutionalisation steps, the tripartite Advisory Standing Committee on Employment (SCE) was set up under the Council in 1970 (cf. Council of the EC 1970). It comprised representatives of “the Council or where appropriate the Representatives of the Governments of the Member States; the Commission; employers' organisations; workers' organisations” (Council of the EC 1970:Art.2.2). The participation of the latter two groups was limited to 18 delegates for each camp. With this composition, the SCE widened the closed expert networks of the 1960s and initiated a turn towards the development of a broader supranational epistemic community in the field. Its main focus laid on the facilitation and enhancement of co-ordination of national employment policies (cf. Hodson/Maher 2001:719f.; Steinle 2001:100f.). Its tasks were to “ensure, in compliance with the Treaties and with due regard for the powers of the institutions and organs of the Communities, that there shall be continuous dialogue, joint action and consultation between the Council … [,] the Commission and the two sides of industry in order to facilitate coordination by the Member States of their employment policies in harmony with the objectives of the Community” (Council of the EC 1970:Art.2.1). Given its rather insufficient performance over the years, it was formally reformed in 1999, when contacts with the Employment and Labour Market Committee were tightened in the context of the ‘post-Essen’ and ‘pre-EES’ institutionalisation of the Standing Committee on Employment (cf. Council of the EU 1999a:Art.2.1; Steinle 2001:100f.). This latter development provides for evidence of path-dependent institution-building in the field. The “1970s and 1980s saw the end of the post-war ‘golden age’” (Foden/Magnusson 2003:1). This end was caused by the global economic crisis instigated by the “collapse of the Bretton-Woods currency peg, the oil shocks and the onset of ‘stagflation’ combined to undermine the confidence of policy-makers that the tools of Keynesian demand-management could deliver full employment” (ibid.). In the context of these global developments and given that rising unemployment impacted significantly on the economic performance of EC member states, employment policy became a vital topic for all European economies. As a consequence, the area became an important political topic across EC member states, partially instigating fundamental changes in domestic economic, employment, and labour market policy approaches (cf. chapter 2.2.2). Work organisation, health and The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 174 safety at work, gender equality as well as the definition of minimum standards built the policy focus of this period (cf. Pochet 2002:32). This development was followed by a further institutionalisation in the field, including the emergence of common initiatives for employment policy at EC level. As a result, bottom-up Europeanisation continued. The 1972 Paris meeting of the heads of state and government decided to attach a social dimension (‘Social Union’) to the treaty-based aims of the EC. This new dimension was foreseen to strengthen the relevance of employment matters at European level and to improve working and living conditions within the EC (cf. Ekengren/Jacobsson 2000:3; Steinle 2001:101f.). Subsequently, in 1974, the Council adopted the first action programme on social policy, officially setting up measures to create full employment in Europe through the co-ordination of national employment policies and instruments (cf. Steinle 2001:102f.). Based on this Social Action Programme, the European Commission, from 1975 and 1980, adopted ten directives on social policies, focusing on employment-related topics (cf. Ekengren/Jacobsson 2000:3). Even if “[b]etween 1977 and 1997 some countries – such as Denmark, Ireland, Netherlands, Portugal and the United Kingdom – were successful in reducing their fairly high unemployment levels, … in others, such as France, Germany, Spain, Italy, Belgium and Greece, unemployment remained chronic and reforms fell prey to institutional inertia” (Goetschy 2003:82). Thus, during the 1980s “the problem of competitiveness was one of the main motivations behind the Single European Act [SEA] (1986)” (Radaelli 2003b:19). The SEA further sharpened the contours of the policy field by introducing qualified majority voting related “to measures affecting the working environment, particularly as regards health and safety, thus enabling particular elements of social policy to advance despite opposition from individual member states” (Foden/Magnusson 2003:2; cf. Ekengren/Jacobsson 2000:4; Steinle 2001:109f.; van Lancker 2002:23). On the basis of the 1974 Social Action Programme the institutionalisation of the still embryonic employment policy field accelerated during the 1980s with activities such as the 1989 Commission initiative to prepare annual reports on the employment situation in Europe (Steinle 2001:114; cf. ibid.:101f. and 107ff.; Pochet 2002:32). Yet, hitherto, supranational employment policy-shaping still predominantly took place in the framework of supranational economic and social policies. A distinct supranational employment policy field had not been developed so far. Given the increasing globalisation of business relations, the recurrent economic crisis of the 1990s, with weak economic and labour market performance all across Europe (cf. Lund 2002:17), and the efforts to establish EMU (Foden/Magnusson 2003:5f.; cf. chapter 3.4), member states’ governments increasingly lost autonomous control over their domestic economic performance and, hence, over their employment records during the 1990s (cf. van Lancker 2002:24). With 18 million unemployed, one of the highest unemployment rates of OECD regions of that period (Bertozzi/Bonoli 2002:2) coinciding with “technological pessimism, jobless growth, fear of globalisation, or third world competition” (European Commission 2006b) and the Europe-wide loss of nearly five million jobs, new supranational steps to combat The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 175 unemployment by further institutionalising employment policy co-ordination seemed indispensable to safeguard European competitiveness. Therefore, “during the 1990s, it became increasingly obvious to many actors that more coordination was necessary between the EU monetary zone and economic zone if the EU wished to achieve, simultaneously, macroeconomic stability, a high growth rate and high employment “ (Goetschy 2003:77). Moreover, “EMU placed the debate on employment policies in a new setting because it represented a regime change for the economies of participating member states. There would no longer be the ‘safety valve’ of the exchange rate for economies which encountered problems of costcompetitiveness” (Foden/Magnusson 2003:3; cf. chapter 3.3). On this background, the 1992 Edinburgh European Council started to actively tackle unemployment with its Initiative for Growth and Employment that assigned a more independent status to the policy field (cf. European Council 1992:9, 11, 21 and 25). Based on this initiative, the fight against unemployment became one of the major objectives of the EC during that period of economic baisse (cf. Steinle 2001:118). As a consequence, bottom-up Europeanisation continued. The supranational approach towards employment policy-making and co-ordination shifted from supplementing the single market (being a mere, albeit important, facet of supranational social policy-making) towards more strongly supporting supranational economic policy-making. However, also in this period, it was still subordinated to the latter rather than becoming a stand-alone policy area. The Community aim of a high level of employment, laid down already in the TEEC, was formally constitutionalised in 1992, when it was integrated in the legal framework of the EC in Art. 2 of the Maastricht Treaty (cf. ibid.:115). This constitutionalisation step was accompanied by the attachment of a Social Protocol to the treaty. Both developments substantially strengthened employment policy-making and co-ordination at supranational level, which was now beginning to radiate more profoundly into the domestic arenas of EU member states (cf. Ekengren/Jacobsson 2000:4). At the request of the 1993 Copenhagen European Council (cf. European Council 1993b:7), this new treaty base was first transposed into supranational activity by the 1993 Delors White Paper on Growth, Competitiveness and Employment (cf. European Commission 1993). The White Paper suggested “a series of policy guidelines to respond to economic downturn” (de la Porte/Pochet 2003:17) as “a response by the European Union to the social and economic challenges following the crisis of 1992-1993” (van Lancker 2002:24). It was assessed to be “the beginning of ‘social side’ response to monetary union” (Jenson/Pochet 2002:4; cf. European Commission 2006b) and “a springboard for the subsequent European Employment Strategy” (Régent 2002:3). The Delors White Paper was followed by the adoption of an action plan to fight unemployment by the 1993 Brussels European Council that introduced aims for national employment policies (cf. European Council 1993a). With its comprehensive perspective, the “Delors White Paper … presented a new synthesis of economic and social policy concerns, bringing macroeconomic and microeconomic approaches to bear” (Foden/Magnusson 2003:4) for the first time in European integration (cf. Busby 2005:30; Ekengren/Jacobsson 2000:5; The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 176 Régent 2002:3). Within this synthesis perspective, labour market and macroeconomic performance were viewed to be of common concern and interrelated rather than separate phenomena. This new perspective emphasised the need for sustainable growth, while bearing in mind elements such as demographic change, female participation, changing family structures, or globalisation (cf. Foden/Magnusson 2003:4; Lund 2002:17; Régent 2002:2). In this perspective, “[s]tructural unemployment … was attributed to a combination of social and economic exclusion requiring Keynesian and supply-side measures, specifically a mix of proactive policy designed to promote a more inclusive environment and the deregulation of certain aspects of national labour markets” (Busby 2005:30). However, even if it played a most decisive role for the future development of supranational employment policy, for ringing in the era of supranational active labour market policies (Foden/Magnusson 2003:5; cf. de la Porte/Pochet 2003:14) and for overcoming the general legitimacy crisis of that period (cf. Goetschy 2003:71; Tidow 1998b:19), the Delors White Paper did not yet provide for a coherent and comprehensive approach towards the active promotion of employment (cf. Jenson/Pochet 2002:4; Régent 2002:3; Steinle 2001:119). Following the Delors White Paper, the 1994 Essen European Council (European Council 1994:point 1) “produced the embryo of the coordination of the Member States’ employment policies” (van Lancker 2002:24; cf. Ekengren/Jacobsson 2000:5), highlighted “the struggle against unemployment as the paramount and long-term aim for the European Community and identified a number of specific objectives” (Jenson/Pochet 2002:4; cf. de la Porte/Pochet 2003:17). These new priorities initiated a shift of approach from employment protection towards employment promotion (cf. Ferrera/Hemerijck/Rhodes 2000:77f.). The Essen Summit recognised “that the economic downturn of the early 1990s coupled with scepticism about the effects of the completion of the market promised for 1992 were undermining support for the European project” (Jenson/Pochet 2002:4). It settled a more concrete framework for employment policy co-ordination, trying to reconcile the conflicting aspects of “solidarity and competitiveness” (ibid.) by introducing a multilateral monitoring mechanism and by initiating “a decision process on employment … at Community level” (Smismans 2004:2). This mechanism included a strategy for employment policy with special emphasis on social partner integration (cf. Schäfer 2004:8). It obliged EU member states to set up (a) multi-annual employment strategies and (b) annual reports on the progress achieved, followed by (c) the evaluation of these reports by the Council and the Commission and (d) individual recommendations of the Council and the Commission to the member states (cf. European Council 1994). As the resistance of EU member states hampered the introduction of more farreaching supranational competences (cf. Jenson/Pochet 2002:4), five priority areas were identified that followed the main lines of the Delors White Paper (cf. Régent 2002:4). They were integrated into intergovernmental employment policy cooperation within a special co-ordination procedure, which became known as the ‘Essen Strategy’ and which built the headstone of the latter EES. These five areas The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 177 that member states, even if without a legally binding basis, had to take up in their national employment programmes, were: (1) improvement of employment opportunities; (2) increase of employment intensity of growth; (3) reduction of non-wage labour costs; (4) development of active labour market policies and enhancement of their effectiveness; as well as (5) measures to re-activate long-term unemployed and to support youth (cf. European Council 1994:point 1, 1-5; cf. Schäfer 2004:8). At the time of its inception, the Essen Strategy “lacked any legal base, systematised methodology, permanent structures, control process or even long-term vision” (Jenson/Pochet 2002:4; cf. Best/Bossaert 2002:1; de la Porte/Pochet 2003:17). It, thus, rather proved to be insufficient to tackle the EU’s unemployment crisis “probably due to the lack of quantified and measurable objectives, combined with an insufficient political consensus … [and with] soft-law [being] .. less a legal tool promoting convergence of different policies than an instrument to manage social policy pluralism” (Régent 2002:4; cf. ibid.:8) at that particular time. The 1995 Madrid European Council added young people, long-term unemployed, and women as the three priority target groups of the ‘Essen Strategy’. It requested the establishment of an indicator-based evaluation system for the assessment of national progress and put job creation at the focus of the strategy (cf. European Council 1995:C.3; de la Porte/Pochet 2003:18; Régent 2002:5). The 1996 Dublin European Council, while agreeing on the SGP to back EMU, “also generated the Dublin Declaration on Employment, which underlined the need to pursue a macroeconomic policy favourable to growth and employment” (Jenson/Pochet 2002:5; cf. European Council 1996:Annex). Anticipating the negotiations on the Amsterdam Treaty, the Dublin European Council additionally asked member states to develop employment policy monitoring and assessment instruments (cf. European Council 1996:III.1) within respective Council committees (cf. Régent 2002:5). “Actually, the Irish Presidency at the end of 1996 drafted most of what was to become the Employment Title of the Amsterdam Treaty” (de la Porte/Pochet 2003:18). This origin already hints at the roots of the activation approach within Anglo-Saxon employment policy and labour market traditions. With this multitude of constitutionalisation and institutionalisation steps, “the mid-1990s brought new openings for action in the employment and social policy realms by the EU, [even if] … in order to observe these shifts it is necessary to delve into the details of governance rather than the ‘high politics’ of the Social Charter and Social Protocol that sought to impose social policy from the centre” (Jenson/Pochet 2002:3) in a strong top-down Europeanisation manner. The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 178 3.1.2 From Essen to Lisbon and beyond: Path-Dependent Formal Emancipation Arriving at the Luxembourg Process, the EES and the Lisbon Strategy From Essen to Amsterdam: The Formal Constitutionalisation of the EES Caused by the developments in the policy field until the mid 1990s, steps towards formal constitutionalisation resulted in the integration of employment policy and the Essen Strategy in a distinct Employment Title of the 1997 Amsterdam Treaty (Title VIII, Art. 125 to 130). This specific title gave a constitutional basis to the promotion of broader co-ordination, co-operation and, in the long-run, also convergence (cf. Jacobsson/Schmid 2003:119f.) of member states’ employment policies to a newly established EU employment policy model (cf. chapter 3.2.2). Within this new supranational model, national employment policy traditions and labour market systems as well as policy-making competences were to be respected, while, at the same time, a wide range of political and societal actors was to be involved in the reform processes throughout the different levels of the EU polity. The integration of the Employment Title into the Amsterdam TEC was perceived to socially counterweight monetary integration by rendering “it more sensitive to the advantages of treating employment and social protection as productive factors in supply-side management, rather than a simple drain on competitiveness” (Jenson/Pochet 2002:2; cf. de la Porte/Pochet 2003:17). It was, hence, viewed to be “a unifying and popular project easy to ‘sell’ to European citizens” (Smismans 2004:2). It provided the fundament for the later EU employment strategy. This particular constitutionalisation step underlined the (reinforced) relevance of employment policy as ‘a matter of common concern’ of the member states and their willingness to co-ordinate their domestic policy activities at EU level, upgrading a high level of employment from a target of the EC to an overall target of the EU (cf. Art. 2 TEU). Given that some EU member states perceived national differences to represent too huge an obstacle for the stronger co-ordination of their respective employment policies, the formal constitutionalisation of the Employment Title was accompanied by a difficult bargaining process during the IGC leading towards the Amsterdam Treaty (cf. Tidow 1998b:27ff.; van Riel/van der Meer 2002). The foot-draggers of bottomup Europeanisation (cf. chapter preferred to remain with the status quo, that is, competition between the systems with competences to combat unemployment and inflation left with the member states, rather than transferring them to the supranational level to lay the ground for a co-ordinated European Employment Strategy (cf. Schmid 2004:11). Even if employment policy was originally not on the agenda of the IGC for the revision of the Maastricht Treaty (cf. Lund 2002:18), the reflection group for the preparation of the IGC–under the influence of the 1995 EU enlargement “bringing in a number of countries with strong traditions of social dialogue and active employment policy” (Foden/Magnusson 2003:6)–put it on the list of negotiation items (cf. Schäfer 2004:9). Most pace-setting delegations (cf. chapter were convinced

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Mit ihren spezifischen Merkmalen als neues Politikinstrument – wie etwa ihrem rechtlich nicht bindenden Charakter, dem Ziel des gegenseitigen Politiklernens durch Austausch bester Praktiken oder gemeinsamen Evaluierungsprozessen – stellt die Europäische Beschäftigungsstrategie (EBS) und die mit ihr Anwendung findende Offene Methode der Koordinierung (OMK) beschäftigungspolitische Akteure in der EU vor die neuen Herausforderungen von Politik-Koordinierung, die die Politikgestaltung im europäischen Mehrebenensystem neu prägen.

Das vorliegende Buch beschäftigt sich intensiv mit diesen unterschiedlichen Facetten der EBS und ihrer Wirkung. Es geht dabei über bisherige Einzelstudien zur EBS hinaus und befasst sich nicht nur mit deren Entstehung, Entwicklung und Merkmalen. Es kontrastiert vielmehr den eigenen Anspruch der EBS mit ihrer politischen Realität und untersucht theoretisch hoch reflektiert deren Einfluss auf Politik-Koordinierungsstrukturen, Beschäftigungspolitiken und zugrunde liegenden Ideen sowie deren Zusammenspiel mit anderen wirtschaftspolitischen Bereichen. Neben der EU-Ebene dienen Großbritannien und Deutschland als Fallbeispiele für mitgliedstaatliche Anpassungsprozesse. Das Buch verankert seine Wirkungsanalyse sehr fundiert in der wissenschaftstheoretischen Debatte um Europäisierung und Politikkonvergenz, um deren Anwendbarkeit im Falle der EBS kritisch zu analysieren. Es komplettiert damit Europäisierungsstudien zu regulativer Politik durch die Analyse des Einflusses weicher Politik-Koordinierung im europäischen Mehrebenensystem.