COMMENTARY

Summer 2009

by Philippe Herzog

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It is welcome news that Ernest Seillière is seeking to lessen the impact on working people of the financial crisis. He is clearly using his considerable influence among employers to avoid redundancies and to praise companies that have instead adopted a shorter working week. And he reminds business leaders that they need to invest more in education and in apprenticeships.

So far so good, but we need to look more deeply into the real changes that need to be made to secure a prosperous future for all Europeans. Seillière speaks of continuity, but capitalism as practised in the West has failed, resulting in an imbalance between output and income that for a time was sustained by an excessive reliance on debt. And now unemployment is soaring despite all the efforts to contain it.

He favours what we might call “continuity”, and as part of that, he wishes to speed up the use of flexicurity. I wouldn’t say that the whole idea of flexicurity is dead, but it’s certainly not in excellent health. It is all about bargaining with staff so that companies will be well placed to take advantage of globalisation, but the strength of managements in many large companies far outweighs that of the employees in most countries, so the reality is that flexicurity isn’t creating much excitement among workers as a key to their futures. The European Commission has argued, in vain so far, for “quality jobs”, and it’s an idea that needs to be persisted with.

Ernest Seillière is right to say that investing in the retraining of Europe’s workforces is an essential first step towards economic recovery. I couldn’t agree more but national and community political commitments at either national or EU level are still lacking, and it was especially shocking that member states cancelled a special European Council meeting on employment that had been due to take place in May. The last time the Council considered the idea of a jobs pact was back in 1997.

The key question is the EU’s future economic performance and how it will affect working people. Although Seillière is rightly critical of the results of the Lisbon strategy, he accepts its principles and method. I disagree with him, and have told him so. The Union’s strategy needs more than an update expressed in a flight of rhetoric. If we are to achieve worthwhile reform we first need to have a wide-ranging pan-European public debate.

Like Ernest Seillière, we at Confrontations Europe we are putting forward proposals to use this downturn in economic activity to train staff for tomorrow's jobs, and we believe they are more positive than Seillière’s. We’re calling on employers to commit to a far-reaching review of their social responsibilities. They need to anticipate the re-structurings that lie ahead and discuss their strategies with their social partners, while also co-operating with institutions to manage transitional arrangements for their employees. Most small and medium enterprises (SMEs) should be included in these arrangements.

The EU will have to take special responsibility for cross-border re-structurings, and must also encourage companies to play their part in stimulating the economic recovery of regions hit by plant closures. The EU must do more to devise industrial policies that promote investment and funnel credit to SMEs.

The EU’s member states must engage in a massive training programme; The Lisbon strategy’s call for ''excellence'' overlooked the fact that there is now an army of industrial workers that needs to be retrained in such skills as new digital technologies. Instead, it sentenced unqualified workers, chiefly in the services sector, to remain as unskilled as ever. At a political level, we have to reconcile the competing priorities of elected representatives, put an end to corporatism and bureaucratic barriers and accept that there is a perfectly understandable reluctance among some employees to sign up for training courses when they know that in the past they have frequently heralded job losses.

The EU is going to have to devise attractive incentives for companies to undertake lasting social investments, and that in turn means reforming the structural funds. The Commission currently makes its recommendations to member states, but doesn’t follow up on how the money is used. Brussels needs to get much more involved on the ground, even if that means a member government may object to being closely monitored.