Social partners welcome Danish political agreement on EU Constitutional Treaty

In November 2004, the Danish government and three opposition parties concluded an agreement on the EU Constitutional Treaty, which will be put to a referendum in Denmark. The agreement states that Denmark will retain a veto on EU matters with vital significance for its welfare state, notably labour market issues, social affairs and tax policy, and any move to be qualified-majority Council voting in these areas can be vetoed by all five signatory political parties. The LO trade union confederation and DA employers' confederation strongly support this national compromise. However, some critical voices claim that qualified-majority EU voting on such issues would represent an advantage for the Danish agreement-based model of labour market regulation.

On 2 November 2004, the coalition government of the Liberal Party (Venstre) and the Conservative Party (Det Konservative Folkeparti) and three opposition parties - the Social Democratic Party (Socialdemokratiet), the Social Liberal Party (Radikale Venstre) and the Socialist People’s Party (Socialistisk Folkeparti) - agreed in parliament (the Folketing) a 'national compromise' concerning the Danish referendum on the EU Constitutional Treaty (EU0406204F). This is a repetition of a first national compromise reached on a similar theme in 1993, when the last party to accept the deal was - as also this occasion - the Socialist People’s Party. Under the new agreement, referenda on Denmark's current 'opt-outs' from various aspects of EU cooperation (eg including non-participation in the third stage of Economic and Monetary Union - DK0004175F) have been postponed for several years. The five parties agreed that no vote can take place concerning one or more of the Danish opt-outs at the same time as the referendum on acceptance of the EU Constitutional Treaty. According to the agreement, all parties have a right of veto and the accord may be changed or abolished only unanimously. The parties have agreed that the agreement shall run for the same period as the new Treaty.

In the agreement, presented in a paper entitled Political agreement regarding Denmark in the enlarged EU, the five parties welcome the possibility, under the Constitutional Treaty, of qualified-majority Council voting on more EU matters. However, Denmark will keep the right to veto on matters with vital significance for the Danish welfare state. Thus labour market issues, social affairs and tax policy will not, in the first instance, be subject to majority voting. Any change will be subject to a possible veto by all five signatory political parties.

Contribution by industry social partners

Shortly before the Constitutional Treaty was signed in October 2004, the Central Organisation of Industrial Employees in Denmark (CO-industri) and the Confederation of Danish Industries (Dansk Industri, DI) employers' organisation jointly published a booklet entitled EU on the drawing board - a Constitutional Treaty for the new Europe. This seeks to explain, in easily understood language, the background to the Constitutional Treaty and its content. Both parties unreservedly support the new developments and the simplification that the Treaty reflects. The booklet is a joint contribution from the two parties to the general debate concerning approval of the Constitutional Treaty. The parties avoid - deliberately or not - taking a position as regards qualified-majority voting or unanimity in the EU Council concerning decisions in the labour field. The publication was printed before the conclusion of the national compromise, but it may be presumed that the social partners in the industrial sector are satisfied with the compromise.

Satisfaction on the part of LO and DA

Both the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO) and the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA) expressed satisfaction with the conclusion of the compromise between the five political parties. As the president of LO, Hans Jensen, stated: 'The fact that the agreement clearly states that the Danish labour market model is central and will not be given up due to the stronger EU cooperation also means that the political parties will respect the central role and importance of the trade union movement in Denmark.' Jørn Neergaard Larsen, the president of DA, expressed the same view, stressing the importance of the fact that the compromise emphasises that a broad political majority wants to safeguard the Danish model and consequently, does not want to see the role of the social partners replaced by legislation, Thus, there is strong backing from the two main social partner organisations for the protection of the Danish model of labour market regulation.

Disagreement in SiD

A stronger EU with more qualified majority voting is thus supported by the national political compromise and LO and DA, except in fields such as labour matter and social policy where unanimity will still be required for binding measures. This appears to be a strong coalition.

Against this background, it is seen as a little surprising that criticism of the compromise came from the ranks of the trade unions. The international secretary of the General Workers’ Union (Specialarbejderforbundet i Danmark, SiD), Sune Bøgh, does not believe that EU labour issues should be excluded from qualified-majority voting and that such voting would mean the end of the Danish model of labour market regulation. He sees majority voting as a protection and as representing a possibility of diffusing the Danish model rather than locking it in. He mentions the example of health and safety at work, where majority voting has made it possible for Denmark to leave its mark on EU work and made the EU very active in this field.

Mr Bøgh does not fear that qualified-majority Council voting on labour matter would eventually undermine the Danish collective bargaining system. The Treaty foresees a higher degree of involvement of the social partners, he states, and furthermore EU action is not permitted on national wage conditions, the right of association and the right to take industrial action. The fact that one of the parties to the national compromise may demand a Danish veto in the labour field will obstruct other countries’ possibilities for obtaining better minimum conditions, he argues. Furthermore, Mr Bøgh points out that the Treaty upholds unanimity in connection with decisions on the regarding social security and the social protection of workers, termination of employment contracts, and representation and collective defence of the interests of workers and employers.

Mr Bøgh argues that there is a need for transnational regulation in order to curtail the activities of multinational companies. He sees EU minimum regulations as an instrument that employees in individual enterprises may use to obtain influence on decisions that are otherwise traditionally taken in boardrooms.

The international secretary of SiD is not unconditionally supported by his own organisation. Four branch leaders have argued that EU regulation may jeopardise the Danish collective bargaining model and weaken the influence of trade unions. They argue that if larger areas of labour market regulation are based on legislation, trade unions will not be needed anymore.

Commentary

The classic problem of the relationship between the Danish model and the EU is again in the spotlight. What is the most adequate strategy in order to secure the key characteristics of Danish labour market regulation as European integration deepens? Should the Danish model be fenced in or is it able to adapt to deepened integration? Might it even be possible for the rather successful Danish system of labour market regulation to serve as a 'good practice' example for future European policy-making. Seen from this perspective, it is interesting that some support for increased majority voting in Council on EU labour matters comes from within SiD. This union's relationship to the EU has been characterised by a sort of 'damage control' and it has seen it as more important to listen to branch leaders than to EU representatives.

In connection with the negotiations over a revised Community Treaty in 1985 it was proposed to introduce qualified majority voting in the field of the environment. Denmark was opposed, expecting that majority voting would be used to undermine Denmark's high environmental standards. The reality was different, with a tendency to increase the level of standards in EU vetoed by a minority of Member States. Is this picture applicable to the strong defence of the Danish industrial relations model? Or as a political analyst put it in relation to the protection of social and labour market policy: 'The experience shows that although we may take aim at the enemy, we risk shooting ourselves in the foot.' (Carsten Jørgensen, FAOS)

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