Thursday, 31 May 2012

What is the European Social Dream?

"There is a deep crisis across Europe," Jacques Guers, President of Xerox Europe, told the State of the European Union conference in Brussels. "And the EU needs flexibility to survive. German people don't want to share in the pain; Greek people don't want to face austerity programs. Both sides see the EU as a threat to the way they are living."

What then is flexibility? It has good and bad connotations depending on where you are living. Nordic countries have a good deal of flexibility because their employees have security - money, income to pay for their rent if they chose to move to take a different job, according to Bernadette Segol, Secretary General of the European Trade Union Council (ETUC). 'This is negotiated flexibility," she said. She added that democracy will not survive of it does not encompass a market economy, referring to the disparity of wages between investment bankers and the average worker and the need to more equitable distribution of pay.

The Senior VP of 3M Europe believes the problem is not one of competitiveness and social spending but one of labor laws. "We need flexible labor laws," added Patrick Deconinck.

Inability to Negotiate
We are seeing a decline in our ability to negotiate on an industrial level as the economic crisis worsens, said Segol. "As negotiations undertaken over the past year or so are overturned by government, we have less confidence in our ability to negotiate and this creates less flexibility out of fear." She advocated money for life-long learning and training as this would help increase flexibility in the work force. Finance Ministers are deciding economic governance that have a direct impact on social issues in Europe.

The regulation of the single market is bound to expand to regulation of the social market according to Laszlo Andor, European Commissioner for Employment, Social Affairs and Inclusion. "When we speak about the European labor market we should first speak about the openness of the individual countries and we see that we still have a lot more do - because we have to create opportunities for people to work. This is one of the most important thing he EU can give to its citizens...why isn't it happening at a scale that helps the entire EU? There are several internal barriers: language, residence, entitlements, recognition of certificates and is not homogeneous like the USA."

Creating harmony in these areas will hep to fix the labor imbalance within the EU by making it easier for people to move to where there are jobs.

Copyright INSEAD Knowledge 2012

No comments:

Post a Comment