German employers set out basic positions on European social policy

In spring 1998, the main German employers' organisation, BDA, published a statement setting out its positions regarding European social policy.

In April 1991, German employers stated their support for European integration, the single market, and a reasonable social dimension. Following the June 1997 Amsterdam summit and the related Treaty changes (EU9707135F) as well as in face of the coming Economic and Monetary Union (EMU), the Confederation of German Employers' Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) published its current positions regarding European social policy in spring 1998 ("EuropäischeSozialpolitik - Die Perspektive der Arbeitgeber, BDA, Cologne (1998)). This feature summarises the BDA statement.

Challenges ahead

Related to the changes in political and economic conditions since the beginning of the 1990s, the BDA identifies five major challenges for the Member States of the European Union and for European integration:

• the globalisation of the economy. The developments in information and communication technologies as well as progress in the worldwide reduction of trade barriers increase the adjustment pressures for European companies and also increase the importance of new markets in other regions of the world. As a consequence, labour relations as well as social and welfare institutions in Europe must change fundamentally in order to be able to compete globally;

• demographic developments. Decreasing birth-rates and increasing life expectancy require reforms of the social security systems;

• unemployment as a symptom of maladjustment and necessary structural change is one of the most serious problems in Europe. This may endanger further progress on the road towards European integration and the political acceptance of EMU;

• the fall of the "iron curtain" will ultimately put the integration of eastern European states into the EU on the agenda. This will also affect European social policy; and

• the variety of social systems has already increased with the integration of new members and will continue to do so in future, especially if further states join.

Principles of European social policy

Against this background, European social policy should, in the view of the German employers' body, be developed according to the following principles.

1. The maintenance of peace and a stable political framework are an indispensable basis for entrepreneurial activity. Thus the process of European integration should be continued.

2. In the medium term, German businesses support the gradual eastward extension of the EU.

3. The social dimension is an important ingredient of EMU. It has already reached a high level due to economic and social achievements. Therefore one cannot speak of a deficit concerning the social dimension at European level.

4. The basis for European social policy is a conviction common to all Member States about the characteristics of a free, liberal social order. These include: free collective bargaining; the distributive mechanisms of pay policy (shaped autonomously by the social partners) and social policy; and the principle of subsidiarity regarding the distribution of competencies and duties between the social partners and the state, as well as between regional, national and European-level regulation.

Since the realisation of these principles differs widely across the Member States, the EU should be more concerned with the creation and increase of wealth than with its distribution.

Requirements for successful European social policy

The above challenges limit the scope for action in the field of social policy. At the moment, all Member States are in the process of reforming their social security and welfare systems in order to meet these challenges. German employers are convinced that European social policy will contribute to the success of European integration and EMU if it adheres to the following requirements.

1. Subsidiarity in European social policy. This means that the only issues which should be regulated at European level are those which address cross-border problems (eg freedom of movement and social insurance), or which lead to the distortion of competition in the common market (eg minimum standards regarding occupational safety) and thus require framework regulation. Furthermore, this means that the shape of social policy regulation at European level should be left to the social partners as far as possible (as foreseen with the consultation and negotiation procedures in the Maastricht Treaty's social policy Agreement).

2. Compatibility with national social frameworks of norms which have been evolved quite differently across the Member States.

3. Uniformity of European social policy for all Member States. "Opt-outs" or the so-called flexible integration are unacceptable in the area of social policy. The principle of uniformity also implies that the economic capacities of all Member States have to be taken into account when shaping European social policy.

4. The "multi-dimensionality" of European social policy with regard to structures and issues has to be taken into account. Considering the fact that, in the field of labour and social law, measures on the coordination of social insurance and on the creation of minimum standards of occupational safety have already been achieved in order to ensure the proper functioning of the Common Market, European social policy should in future preferably address other issues, such as the promotion of cross-border exchange of information and information on social policy. A better coordination of national employment policy, as agreed in Amsterdam, for example, and a Europe-wide exchange of experience in the form of "benchmarking" of social policy norms may contribute to the success of EMU and the improvement of EU competitiveness.

The social dialogue

BDA supports active and constructive participation in the European social dialogue, which will gain in importance due to EMU and the extension of EU competencies in the area of social policy. The social dialogue represents a valuable means of voicing employers' positions in the process of European social policy formulation, and thus helps ensure that the European institutions consider the interests of business.

The positive assessment of the procedure of consultation of the social partners by the Commission and the possibility for the social partners to negotiate at European level has to be seen against this background. This procedure has already proved successful on the issues of parental leave (TN9801201S) and part-time work (EU9706131F), leading to European framework agreements later implemented through Directives. The further success of this procedure will mainly depend on whether both sides succeed in further developing it carefully and responsibly.

Commentary

The BDA statement summarises the challenges to, as well as the principles and requirements for, successful European social policy from the perspective of the German employers.

This set of ideas provides a framework within which European social policy and a European industrial relations system may evolve parallel to, and interconnected with, the future path of European integration. It entails a realistic, flexible, and pragmatic approach towards European social policy, providing much space for the industrial relations actors to find and develop their roles, competencies and areas of authority.

The BDA approach seems flexible enough to be applicable to different potential future paths of European integration, no matter whether the outcome of the economic, political and social integration process leads to a federalist "United States of Europe" or takes a distinctive sui generisform. (Stefan Zagelmeyer, IW)