Communication emphasises need to coordinate economic and employment policies

In a Communication on Community policies in support of employment issued in April 1999, the European Commission emphasises the importance of the coordination of economic and employment policy objectives. if the long-term objective of moving to an EU employment rate of 70% (currently 61%) is to be achieved. The Communication sets out the role which EU, national, regional and local authorities and social partner organisations can play in attaining this goal.

At the Luxembourg"employment summit" of November 1997, the European Council endorsed a "European employment strategy" involving the coordination of Member State employment policies on the basis of commonly agreed Employment Guidelines (EU9711168F), implementing the new "employment chapter" of the Amsterdam EU Treaty in advance of the Treaty coming into force. The first such Guidelines were adopted for 1998, and the process was repeated for 1999 (EU9810130F). At Luxembourg and subsequent European Councils, the importance of a coordinated approach to macroeconomic development and employment creation was emphasised. The December 1998 Vienna European Council (EU9812141N) also endorsed the idea of a "European employment pact" to reinforce the employment strategy (EU9902156N), to be discussed at the Cologne summit in June 1999. This concept is currently being defined in more detail in discussions in Economic and Financial Affairs Council of Ministers, the Labour and Social Affairs Council of Ministers (EU9903160N), the Economic Policy Committee, the Employment and Labour Market Committee, the Standing Committee on Employment and the Social Dialogue Committee.

The Vienna summit also invited the European Commission, in the context of strengthening the "Luxembourg process", to present a Communication on the "mainstreaming" of employment policies at Community level, based on Article 127 of the Amsterdam Treaty. This Article provides that the objective of a high level of employment shall be taken into consideration in the formulation and implementation of Community policies and activities. The Commission published the relevant Communication on Community policies in support of employment in April 1999. It examines a range of Community policies in order to highlight their potential contribution to employment, and seeks to identify possible elements of the proposed European employment pact.

Aims of the employment strategy

The new Communication stresses - as the 1998 Joint Employment Report and the 1998 Employment Rates Report had done previously (EU9810130F) - the gap in employment rates (the proportion of the working-age population in employment) between the EU and its key competitors, as as well as between EU countries. The long-term aim of the European employment strategy is to reduce this gap and increase employment rates from a current average of 61% to 70%. This would raise EU employment from 150 million to 180 million, thus improving public finances and making the pensions system more sustainable. In the medium term, the Commission's aim is to work towards halving the gap in employment rates between the EU and its main competitors. In order to achieve this, the reduction of unemployment among disadvantaged groups in the labour market is of prime importance. These groups include older male workers, young workers and women.

Synergy between economic and employment policies

In order to achieve this increase in employment, the Communication emphasises the importance of high levels of sustainable economic growth. The Vienna summit called for greater "synergy" between the EU's Broad Economic Policy Guidelines and its Employment Guidelines. It is argued that this can best be achieved through a broad dialogue between policy-makers at all levels. Particular emphasis is attached to the role of the social partners.

The declared aim of the German EU Presidency of the first half of 1999 is to ensure the conclusion of the European employment pact, due to be discussed at the June Cologne European Council. The Communication highlights the following key elements of such a pact:

  • within the policy framework established by the 1999 Employment Guidelines and the 1999 Broad Economic Policy Guidelines, Member States should continue their labour market reforms by implementing their National Action Plans (NAP s), as well as wider structural reforms. This requires progress on comparable data and indicators at Community level, as well as a stronger regional and local dimension in the NAPs;
  • the social partners should continue to support the European employment strategy, notably through "appropriate wage developments" in line with the 1999 Broad Economic Policy Guidelines, and contribute to the implementation of the Employment Guidelines, including joint initiatives to modernise the organisation of work; and
  • the Commission pledges its full support to Member States and social partners across a range of EU policies and initiatives which can promote growth, competitiveness and employment.

Employment policies and employment indicators

While Member States are called upon to continue in the implementation and updating of their 1998 and 1999 NAPs, they are also working with the Commission to develop a set of comparable indicators and statistical data to measure the performance of these policies in terms of employment creation and the achievement of equality of opportunity. Eurostat and the Member States' statistical offices are continuing to improve the comparability of national labour market data. The need for improved data also applies at the regional and local level, where disparities in employment performance are particularly significant. Employment creation at this level is supported by the "territorial employment pacts", which are currently being evaluated by the Commission. A greater emphasis is also being placed on employment creation in the new programming period of the European Structural Funds.

The contribution of the social partners

The Communication calls upon the social partners at European, national, regional, local and enterprise level to continue to support the objectives of the European employment strategy in wage negotiations and through discussions on the modernisation of work organisation. The Social Dialogue Committee is to remain the principal forum for dialogue between the intersectoral social partners at European level. The new sectoral dialogue committees (EU9902150F) are now taking over from the previous structures to develop the role and contribution of the sectoral social partners to employment. The social partners have also established a dialogue with the European Central Bank on macro-economic and structural policies. The Communication emphasises that the Commission expects the social partners to continue their contribution to the implementation of a macro-economic policy-mix favourable to growth and employment in line with the 1999 Broad Economic Policy Guidelines.

The Commission's contribution

For its part, the Commission states that it will encourage and support investment in capital and human resources, primarily through support from the European Structural Funds, assistance for research and development and the LEONARDO II and SOCRATES II programmes. The Commission will also take forward its work to promote the modernisation of social protection and taxation systems in order to improve access to the labour market.


The Communication was to be presented at the Cologne summit marking the end of the German Presidency, and forms the Commission's contribution to the European employment pact proposed by the German government.

The European Social Dialogue Committee met on 14 April to discuss the proposals for the pact. It was decided that a further meeting was required to discuss the macroeconomic and labour market implications of the pact and to prepare a common view on the matter. The European Trade Union Confederation (ETUC) put forward a list of subjects which it considers to be a priority for future social partner negotiations:

  • temporary work - following the successful negotiation of a framework agreement on fixed-term contracts, ETUC is now keen to start negotiations on the rights of workers employed with temporary work agencies;
  • teleworking - it is hoped that a voluntary framework agreement can be reached on this issue at a forthcoming seminar;
  • access to lifelong learning - ETUC hopes that the social partners will be able to negotiate a voluntary framework agreement on this issue; and
  • additional social protection - ETUC is keen to reach a framework agreement on the transferability of acquired rights.

(Tina Weber, ECOTEC Research and Consulting)

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