DGB proposes integrated EU economic and social policy

In October 2002, the German Federation of Trade Unions (DGB) submitted a statement to the European Convention which is considering the future structure of the EU. It proposes a new 'social contract' for the EU, involving an integrated economic and social policy which seeks to coordinate policies and strengthen social and participatory aspects.

On 8 October 2002, the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) issued a statement to the European Convention- the body charged with preparing for the next Intergovernmental Conference by proposing a new framework and structures for the EU, notably in the light of enlargement (EU0201231N) - containing proposals for a new 'social contract' for Europe. This initiative is a contribution to the ongoing debate on a new EU 'constitution', and it seeks to face the challenges of enlargement and of persistent unemployment, and to introduce an integrated economic and social policy. DGB proposes: the creation of a higher level of social rights for EU citizens; the strengthening of the participation of the European Parliament (EP) and the social partners; and the introduction of a more coordinated macroeconomic policy mix.

Created following the Laeken European Council in December 2001, the European Convention is composed of representatives of the governments and national parliaments of the Member States and candidate countries, along with representatives of the EP and the European Commission. It has also invited observers from the European Economic and Social Committee, the Committee of the Regions and the social partners. In 2003, the Convention will submit its proposals for a new framework for the EU to the European Council.

In its recommendations to the Convention, DGB develops an initiative proposed immediately following his election in May 2002 (DE0206201N) by its new chair, Michael Sommer, calling for a new 'social contract' in Germany, and adapts it to European conditions.

According to DGB, an integrated EU economic and social policy should contain the following reforms in the fields of co-determination, economic, social and gender policy.

• Economic and social policy should aim at full employment, sustained growth, price stability and a high level of social protection. In order to achieve these aims, DGB recommends ensuring that the European Central Bank’s monetary policy takes growth and employment objectives equally into account, in addition to its current inflation and stability orientation. DGB believes that there is a need for policy coordination, which can be satisfied by including more detailed descriptions of macroeconomic, structural and employment policy in the EU’s Broad Economic Policy Guidelines. Furthermore, the 'macroeconomic dialogue' (the dialogue between the social partners, Member States and EU institutions set up in 1999 - EU9906180N) as a central coordination body should be enshrined in the EU Treaty. The budgetary rules for a common fiscal policy must be amended in such a way that: 'automatic stabilisers' are allowed (ie accepting public deficits in economic recession in order to stabilise demand); public investment is no longer considered in applying the 'Maastricht' rule limiting public deficits to 3% of GDP; and the single currency 'euro-zone' is awarded formal Treaty status. Moreover, 'services of general interest' should be included in the Treaty as an equal alternative to market services. Instead of an 'appropriate level of social security', as currently stated in the Treaty, DGB proposes that the EU should aim for a 'high level of social protection' and the establishment of 'internationally recognised social and environment standards'.

• In order to promote co-determination and the position of the social partners, workers’ rights to be represented and informed in their companies and involved in company decisions should be enshrined in the Treaty. Furthermore, the social partner’s ability to act should be improved, thereby strengthening the social dialogue.

• Gender policy should be extended and specified, and explicit references to men and women and more detailed points relating to equality are seen as necessary in the Treaty. Furthermore, a separate policy area dealing with women and equality should be established alongside existing gender mainstreaming provisions.

In all policy fields, DGB emphasises the need for more democratic legitimacy and consequently calls for a broader inclusion of the social partners and the EP in the EU’s decision-making procedures and institutional bodies. The EP should be strengthened and given the right to initiate legislative measures. To improve transparency and participation, the social partners and EP should be integrated into the 'open method of coordination'- ie the process of developing EU strategies (such as the European employment strategy) through the setting of common objectives and agreed indicators, regular reporting and the identification of best practice.