The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 230 first supranational arena for this broadening of the employment policy-related epistemic community. Subsequent developments–such as the Luxembourg Jobs Summit, the Cologne decision on the ‘second policy mix’ and, finally, the Lisbon Strategy– further advanced European employment and economic policy co-ordination towards a new integrated approach. The specific European policy paradigm, reconciling economic and social policies, that resulted from this combined approach, allowed “the EU level and member states to tackle a policy field in a much more comprehensive manner … providing a broader scope of policy solutions” (Goetschy 2003:91). These developments and especially the shifts during the Amsterdam IGC underlined the relevance and impact of the above mentioned intervening variables (cf. chapter 2.2; Tucker 2003:14) on the processes of up-loading or bottom-up Europeanisation. In a nutshell, the institutionalisation and constitutionalisation processes leading towards the establishment of the EES mirror the up-loading potential of the respective integration period as well as the preferences of EU member states to keep employment and labour market policies close to the heart of their national sovereignties. Yet, at the same time, they did not necessarily continuously increase the appreciation for the benefit of a supranational employment policy field in its own right, even though, meanwhile, it belongs to conventional political wisdom “that employment will be on the agenda, no matter the governments in power or the economic situation” (Jenson/Pochet 2002:12). 3.4.2 How?: New Ways of Europeanisation – Networking, Mutual Exchange and Learning as the Key to Domestic Change Outlining the structural-procedural provisions, that is, the how of the latter EES, the Essen Strategy and its constitutionalisation within the Amsterdam Treaty Employment Title established “a comprehensive system of monitoring a common action plan consisting of a number of Council policy guidelines, and building on annual procedures with strict dead-lines, national reporting mechanisms, benchmarks, peer reviews and Commission recommendations” (Jacobsson/Schmid 2001:2). The 2003 and 2005 structural-procedural adaptations of the EES did not alter these treaty provisions on the institutional set up of the strategy. They, yet, put more emphasis on results than on methods or annual reporting exercises. The reforms introduced the streamlining of socio-economic policy co-ordination cycles in 2003, the simplification of reporting obligations and the merger of economic and employment cycles into one single Lisbon Action Programme in 2005. Given that these reforms also reaffirmed the relevance of the BEPG for other socio-economic policies and, thus, the de facto subordination of the EGs under the BEPG, they did not shake up the predominance of the BEPG over the EES. The EES–in its old as in its new set up–can be regarded as “an open structure based on an innovative dynamic that relies on the dialogue between different actors at different levels, and on an evolutionary approach trying to reconcile potentially The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 231 conflicting policy themes” (Régent 2002:8). The strategy is labelled open and flexible “because a) European guidelines can be adapted to the national level, b) best practice should be assessed and adapted in the national context, c) there is a clear distinction between reference indicators to be adopted at European level and concrete targets which are to be set by each member state for each indicator, d) monitoring and evaluation should take the national context into account, and e) the method should be open to civil society actors at its various stages” (Jacobsson/Schmid 2003:122f.). So, the EES opens up various new ways for the Europeanisation of national employment policies and their adaptation to its overall ‘policy ID’ by offering an adaptable framework for mutual exchange, policy and institutional learning and for the integration of all relevant levels and actors of the EMLG system (cf. de la Porte/Pochet 2003:30). In this way, “labour market reforms emerging from the Luxembourg process make labour markets more responsive than hitherto to policy stimulus” (Foden/Magnusson 2003:9). So, as the main instrument of European employment policy co-ordination, the EES is characterised by the use of exchange of information, discussion of best practices, common and individual guidelines, as well as peer review instead of legally binding provisions. It can be assessed to be a means of dissemination of best practices across Europe and of adaptation of national employment policies to targets jointly set by intervention at European level in the EGs and recommendations. It fosters down-loading, that is, top-down Europeanisation, through policy learning and transfer (cf. Goetschy 2003:83f.). Yet, this also “may be where the paradox lies. If the measures and the strategy as a whole have proved less than effective, but are leading to more open debates and the move towards more scientifically grounded evaluations, then the analyses of the EES that concentrate on learning, notably at the cognitive level, could at least be partially confirmed” (de la Porte/Pochet 2003:14). As main difference to previous attempts of co-ordination in the field, with the Amsterdam Treaty employment (policies, rates, and situations) has become a matter of common concern with policy co-ordination no longer left to EU member states alone. With this development, employment became a policy priority of European and national co-ordination, favouring the integration of supranational approaches into domestic employment policies. With these features, the EES follows a ‘Third Way’, albeit strongly inter-/transgovernmental and “decentralised approach … [constituting] a radicalisation of the subsidiarity principle” (Smismans 2004:4) both with a view to the openness of policy goals and the integration of a broad range of actors of different political levels and origins. It, moreover, respects “national diversity by leaving policy competency to the national level and not imposing a centralised European common policy” (ibid.:1; cf. Jenson/Pochet 2002:4). The strategy, thus, “entails important ‘vectors’ favouring convergence: externalisation of constraints; common EU guidelines; comparative evaluations in the joint report; recommendations; peer reviews; recurrent yearly procedures; long-term EU employment perspectives” (Goetschy 2003:93f.) and aims at “voluntary convergence of national policies towards common objectives” (Best/Bossaert 2002:3) causing Europeanisation of domestic employment policies in the end. Finally, the EES “gives institutional The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 232 resources to put pressure on national governments for policy co-ordination and to serve as assets for actors in employment policy .. to allow to stand up to the steamroller of EMU” (Jenson/Pochet 2002:9). Through annual reporting and monitoring within the JER, the European level evaluates the however voluntary compliance of the member states with the EGs and recommendations in order to measure Europeanisation in terms of convergence towards the European model, i.e. ?-convergence. This annual evaluation also aims to highlight national performance and to offer the empirical basis for country-rankings concerning compliance with the EES.81 The strategy, thus, also disposes over elements to measure -convergence (alteration of policy-related country-ranking) (cf. Schmid 2004:13). As it additionally supports bad performers to reach the ambitious Lisbon targets by means of mutual exchange, peer review and continuous monitoring, it also aims to promote -convergence (worst performers pull alongside best performers) to make Europe “the most competitive and dynamic knowledge-based economy in the world” (European Council 2000a:point 5). ?-convergence (increasing policy similarity) might follow (especially through the peer review exercise flanking the EES) from increasing -convergence. As the responsibility for the implementation of the EGs and recommendations adopted at the European level rests with the member states, the EES also disposes over “numerous ‘vectors’ for respecting national diversity: … employment remains essentially a national responsibility; legal sanctions are lacking in case of noncompliance; most guidelines issue general norms and are not linked to quantitative objectives; member states can define their own objectives in several fields” (Goetschy 2003:94). With this approach, the EES is “co-ordinating national policies that neither interact nor are interdependent. Therefore, co-ordination is not necessary in order to enhance effectiveness of national policies but rather means the harmonisation of preferences, standards or the exchange of tacit knowledge. In this respect, coordination can be regarded as something in its own right but cannot be derived by economic rationality” (Heise 2004:6). The Europeanisation potential of the EES is also influenced by the OMC and the policy mix of economic and social policies it applies. This response is “so far the most subtle answer in the search for a new balance between convergence and respect of national diversity” (Jacobsson/Schmid 2003:114). It offers flexibility while introducing new reform elements to adapt domestic labour markets. It, thus, serves “as a catalyst for the efficiency of national employment policies … by establishing certain constraints and targets ..., by aligning such targets on the best performing countries, by putting employment policies to the test of national comparison” (Goetschy 2000:4). The Europeanisation impact of the EES most strongly relies on the typical elements at hand for the OMC, such as common indicators and benchmarks, (multi-) 81 The JER, moreover, provides for basic information on country-rankings carried out by thinks tanks and research institutes (such as the so-called ‘Lisbon-Scoreboard’ of the Centre of European Reform (CER), cf. Wanlin 2006:9). The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 233 annual reporting and monitoring cycles, peer reviews, European recommendations and the ‘naming, blaming and shaming’ effects of the annual JER (cf. chapter 2.1.1.3.2; Schmid 2004:12). Yet, taking into account the restrictions of the OMC as a legally non binding policy instrument (cf. chapter 2.1.1.3.3), the employment policy co-ordination cycle could more critically be regarded as “merely an exercise in benchmarking, introducing reporting obligations, creating procedures for target setting, monitoring and evaluation, and assigning responsibilities (to the Commission and the Employment Committee) for managing the exchange of information, consultation, and review” (Jachtenfuchs/Kohler-Koch 2004a:107f.) without any major impact on actors’ involvement and policy change. Given that the strongest pressure exerted by the Council is constituted by non-binding recommendations to the member states, the EES itself does not exert any powerful politically pressure to obey on the domestic level. So, it could be assessed to be a rather fettered new policy instrument compared to other economic policy co-ordination cycles such as the SGP. The analysis has shown that the treaty-based institutional set up and the structural-procedural provisions of the EES constitute “a way of networking decentralised decision-making units by a common system of benchmarking” (Smismans 2004:5) in order to improve “EU-level knowledge of national realities and develop a real and deeper cooperation between the Commission and the Council through the multiplication of ‘joint reports’, thereby enhancing the legitimacy of the EU project as a whole” (Goetschy 2003:91). At the same time, the EES inspired the development of local and regional actions plans for employment (LAPs/RAPs) as well as territorial employment pacts (TEPs), vertical employment (policy) partnerships, and (local) learning processes and centres (cf. Jacobsson/Schmid 2003:128f.; Régent 2002:17). So, it strengthened both the territorial and the actors-related dimension of the EMLG system. “Through the focus on participation, there has in particular been an ‘emphasis on informal, loose structures that extend across and beyond hierarchies’, notably epistemic communities” (de la Porte/Pochet 2003:34). With this extension of network structures the EES obeys to the EU’s inherent EMLG characteristics and logics (cf. chapter 2.1.1.2). It establishes a new arena for the integration of a broad variety of European, national and non-governmental actors and levels into European employment policy co-ordination, reconfiguring policy network logics and building the basis for a new type of EES/OMC-PCN (cf. chapter 4.1) that is likely to influence and Europeanise domestic employment policy formation structures. Due to these regular multilevel network relations within the annual policy coordination cycle of the EES, institutional isomorphism, indicating at a change of institutional and organisational structures to facilitate co-operation, decrease divergence and increase similarities caused by lasting and institutionalised connections within the EMLG system (cf. chapter 2.1.2.3.2) can, thus, be expected to occur and has been acknowledged by the 2002 official interim assessment. The EES can, thus, not only exert Europeanisation pressure on political institutions, inter- and inner-governmental relations or administrative co-ordination structure of state-society relations. It, moreover, has the Europeanisation potential to The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 234 impact on processes of interest formation, aggregation, and representation (cf. chapter 2.1.2.3). In view of such change, especially the peer review/mutual learning programme has the potential to further Europeanise domestic institutions through vertically offered opportunities for horizontal cross-loading by exchange between national officials and experts. In this context, also the presentation of different national experiences within Art. 129 TEC activities offer insight into member states’ institutional practices and policy innovations (cf. Régent 2002:20). Following the characteristic features of the OMC (cf. chapter 2.1.1.3.2), the EES, hence, provides for a strong stimulus for epistemic community-building, policy as well as institutional learning, and exchange of best practices in employment policy (cf. Best/Bossaert 2002:4). It has the potential to open up the political co-ordination process to actors not formally integrated into domestic or supranational employment policy-making and to include them into the debate on (future) policy choices. With these particular characteristics, the peer review/mutual learning programme sets up a formal platform for Europeanisation through cross-loading and tries to establish a broad advocacy coalition for policy learning and institutional adaptation by supranationally, that is, vertically inspired horizontal policy transfer (cf. Natter 2003:93; cf. chapter 2.1.2.2). The programme “has been characterised as the qualitative component of the EES, set out to complement the quantitative approach based in indicators and benchmarks” (de la Porte/Pochet 2003:27). It offers a learning platform for policy diffusion and transfer as well as for institutional adaptation to enhance ?-convergence, that is increasing policy similarities among states via horizontal cross-loading, as well as -convergence (worst performers pull alongside best performers). By aiming at ?-convergence (similarity towards a common model), the latter potentially leads towards -convergence (alteration of policy-related countryranking) as worst performers are inspired by best performers’ examples, even if– according to its own intent–the EES only explicitly aims at ?-convergence (cf. Natter 2002:87; cf. chapter 2.1.2.3.1). In terms of real outcome, it, yet, became evident from the 2001 peer review programme evaluation that policy diffusion, transfer, and convergence under the EES did not quite work the way initially envisaged. This effect resulted in a weaker Europeanisation concerning the diffusion and transfer of entire policy approaches between member states. Single employment policies were, moreover, partially strongly de-contextualised and transfer focused on specific details rather than on broader reform approaches (cf. chapter 3.2.3.1). This de-contextualisation was assessed by the peer review programme participants themselves to be caused by “a battery of institutional constraints – in the form of their country’s legal, industrial relations, political, social security or tax systems – that might require overhaul if a particular programme were to be transferred” (Casey/Gold 2005:30). Thus, missing or limited Europeanisation through policy learning was explained by the multitude of intervening variables arising from the diversity of the member states’ political systems, restrictions related to national attitudes or financial and administrative burdens (cf. ibid:32 and 36; cf. chapter 2.2.2). Among these intervening variables, the legal and The Why, When, How, What, and In How Far of European Employment Policy Co-ordination 235 political systems, labour market paradigms, social dialogue structures, and socioeconomic policy traditions stand out. As a result of these constraints, the first cycle of the programme “was, at best, a learning process for a limited community of labour market technicians and experts. It might have produced a degree of ‘tweaking’ of existing policies, but it hardly acted as a catalyst for policy transfer” (Casey/Gold 2005:36), limiting also the overall Europeanisation potential of the EES in this area. 3.4.3 What?: A New ‘Policy ID’ to Europeanise National Employment Policies – The Activation Paradigm’s Potential to Attain ?-Convergence With its focus on active labour market policies, the what–that is, the underlying ‘policy ID’ of the EES–roots in an integrated approach combining aspects of lifelong learning, employability, adaptability and preventive measures to bring unemployed persons back into employment and to create employment. Apart from its multidimensional focus on activation, including “an important terminological shift in relation to unemployment … understood in terms of lack of employability” (Serrano Pascual 2003:154), the EES has also been designed to be “an element in a job creation strategy, [even if it] .. cannot realistically provide a comprehensive solution in its own” (Begg 2004:3). Its strong focus on employment creation and macro-economic growth pays tribute to this aim. As a result of these shifts, its ‘policy ID’ turns economic participation into a core element of the understanding of European citizenship, making “social policy … a tool of economic development” (Serrano Pascual 2003:157). Regarding this specific ‘policy ID’ and aims, the EES owes much to the history of its path-dependent integration into the supranational treaty framework (cf. chapter 3.1). This integration took its starting point in social policies and, later on, amended as well as counterweighted macro-economic policy co-ordination within EMU. As a result, the EES reflects a compromise between a neo-liberal approach and the Nordic social welfare state paradigm and can be judged to be “a ‘discursive regulatory mechanism’…that redefines social policy in the light of economic performance” (Laffan/Shaw 2005:9). So, in view of its focus on “the labour demand side the EES, with its attention for entrepreneurship and adaptability, is inspired by the liberal model emphasising labour market deregulation and tax reductions; whereas on the labour supply side the EES is inspired by the Nordic model focussing on employability via training and active labour market policies” (Smismans 2004:15; de la Porte/Pochet 2003:42). Yet, the weight of the latter seems to prevail as the EES’s policy paradigm concentrates on “the transformation of social and labour policy analysis from demand to ‘supply’ focussed, from ‘passive’ to active” (Jenson/Pochet 2002:4). It, moreover, seeks to combine flexibility with security (cf. ibid.:9) with its inherent ‘flexicurity paradigm’ in which “the notion is not that of ‘work first’, or ‘any job is a good job’, in the North American sense. It is rather, that quantity and quality most go together” (Jenson/Pochet 2002:9). This approach links the employment related part of the EES with education and training, entrepreneurship as well as