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SPEECH/11/200

Mr. László ANDOR

EU Commissioner responsible for Employment, Social Affairs and Inclusion

"Industrial relations in Europe - 2010 report"

Presentation of the Industrial Report

Brussels, March 17 2011

Ladies and gentlemen,

It is my pleasure to welcome you to this conference on industrial relations in Europe.

I believe it comes at the right time — close on the heels of the worst economic crisis in the history of the European Union and some considerable turbulence on the financial markets. It also comes as we are acting on the lessons these tumultuous times have taught us.

Next week, the European Council will hold its spring meeting to agree on the overall priorities for reform and a set of measures to preserve financial stability, and lay the foundations for sustainable, job-creating growth.

In this environment it makes sense to focus on the Union’s industrial relations systems today. I want to look briefly at three points of importance for the past, present and future of the Union:

The first point I want to make is that the European social model owes much to social dialogue between workers and employers.

At European level, the Treaty provides for the social partners’ active participation in the design of EU social policy. Through their autonomous dialogue, the European social partners can negotiate and reach agreements on subjects ranging from health and safety at work to improvements in working conditions.

The past two years have brought major social-partner agreements on such issues as parental leave, inclusive labour markets and protecting healthcare workers from injuries. Those examples show that this uniquely European model of social governance works and delivers tangible benefits for workers and companies alike.

I therefore encourage the social partners — both at cross-industry and at sectoral level — to make full use of the potential offered by European social dialogue, even if achieving results may appear difficult.

On a whole range of other topics, too, we should harness the problem-solving potential of social dialogue. For example, the 2010 Industrial Relations in Europe report highlights the fact that the social partners at both national and European level are paying greater attention to the transition to a low-carbon economy.

In the long run, social dialogue will be crucial for managing the transition to a low-carbon economy properly and in a socially fair way. The social partners are taking up the challenge. Our report points to several examples of trade union and employers' organisations contributing practical proposals to investing in green technologies and skills as part of recovery plans in several Member States — such as Spain and Belgium.

The second point I want to emphasise is that one key lesson of the recent past is that high-quality social dialogue has played a significant role in alleviating the effects of the recession.

The 2010 Industrial Relations in Europe report shows in detail how the EU’s diverse systems of social dialogue have proved to be a vital factor of resilience during the crisis.

As the crisis spread in 2008 and 2009, the social partners quickly agreed on the need for action to safeguard jobs. In many countries, they negotiated and proposed new solutions, such as employee-leasing arrangements or the introduction or extension of short-time working programmes.

The social partners were active at many levels. Most attention tends to be paid to social dialogue at national level, where, of course, agreements reached affect a large number of companies and workers. But several European sectoral social dialogue committees were also active in responding to the crisis.

Our report shows that much was also achieved at sector, region or individual enterprise level. Workers and employers were often able to design tailor-made solutions that offered a win-win outcome: workers were able to keep their jobs, while companies were able to manage the crisis successfully.

Overall, our report shows that in 12 Member States, consensus between the social partners predominated during the first phase of the crisis. They include Member States where the national social partners and governments reached agreements for the first time on dealing with the crisis at cross-industry level.

This was the case in particular in Poland, the Czech Republic and Slovakia.

I find it very encouraging that social partnership was used to tackle the challenges arising from the crisis, not only in Member States with a long tradition of strong industrial relations, but also in those with little tradition of negotiations at national cross-industry level.

However, the report shows that overall capacity for social dialogue is often still too weak in many Member States that joined the Union in 2004 and 2007. I therefore encourage the social partners and governments in those countries to heed the lessons of the crisis, and make use of support for social-partner capacity-building which is available through the European Social Fund or transnational projects.

Our report shows clearly that Member States where social partnership is strongest — such as Austria, Belgium, the Netherlands, Germany, the Nordic countries and Poland — are managing to get through these challenging times better.

Employers’ and workers’ involvement in shaping practical policy responses to the crisis is one of the most important tools for the recovery. Throughout the crisis, these tools have allowed companies to adjust through internal flexibility. As working hours declined, labour productivity in the EU fell by 2.5% in 2009, compensating in part for the decline in economic activity.

The employment results speak for themselves. Despite a dramatic decline in economic activity, the labour markets fared better across the EU than we may have feared, given historical precedents. And they also compare favourably with the United States, where unemployment has risen more than here.

But not all developments have been positive. Unemployment in the Union is 7 million higher than some two years ago. Youth and long-term unemployment is also worrying. We must spare no effort to prevent the recovery from becoming jobless, and current unemployment from becoming structural.

Equally worrying is the very uneven strength and success of social dialogue across the Union. In some Member States, where the institutional capacity for social dialogue is undeveloped and trust between the actors is limited, talks between social partners were ultimately unsuccessful. That was the case in Hungary, the Member State I know best.

The third point is that, as anti-crisis measures are phased out and public-sector fiscal consolidation is implemented, social dialogue is vital in working out the timing and striking a balance for reforms.

Public stimulus measures were a key component of the Union’s response to the crisis, but they have also piled up public debt unsustainably. Governments should implement austerity programmes and reform labour markets and social protection systems in close consultation and partnership with employers and trade unions.

In countries that are now under pressure from financial markets and that are undertaking painful reforms, social dialogue and collective bargaining once again face big challenges.

Discussions between the social partners and governments are, of course, difficult in countries like Greece and Ireland. Yet it is precisely in these testing circumstances that social dialogue can play its role to the fullest.

Some recent examples — like the agreement on pension reform in Spain — show that consensus on some issues is possible even under difficult circumstances.

The social partners can help governments design the right policy mix, as anti-crisis measures are phased out and austerity programmes are phased in. We need to strike the right balance to avoid stifling the beginning of recovery. Timing is therefore crucial, and the social partners’ input should be taken fully into account.

For its part, the Commission is keen to involve all stakeholders — and especially the social partners at European and national level — in designing and implementing future policy to achieve higher employment and strengthen social cohesion.

Just last week we had the opportunity to debate in depth some of the key issues with the social partners at the first Tripartite Social Forum. The Commission’s aim in holding the Forum was to offer a venue for a frank and open exchange of views on its proposals and practical actions and on ways of involving the social partners.

Our intense discussions with the social partners on flexicurity, skills, quality of work and job creation showed us where consensus exists and where further dialogue is needed if we are to come to a common understanding.

Next week’s Tripartite Social Summit will be an opportunity to continue that dialogue at the highest level.

Ladies and gentlemen,

The Commission's 2010 Industrial Relations in Europe report looks back on what has been a very turbulent time in relations between employers and workers.

On the one hand, we can say with satisfaction that our social model with strong industrial relations at its core has served us well and has been a factor of resilience.

On the other hand, we need to keep working to make sure that social dialogue remains strong and relevant in the future — in the face of continuing risk and uncertainty about the economic outlook. Without strong social dialogue and the institutional capacity to make it work at all levels, the Europe 2020 Strategy simply cannot succeed.

We must come out of the crisis with more — and not less — social dialogue. That will also help bolster the competitiveness of the EU economy.

That is why the Commission will continue to pay close attention to developments in industrial relations across the EU, encouraging all actors — employers, workers and governments — to participate actively in strengthening social dialogue structures at all levels.

In the current climate of fiscal consolidation, we will pay special attention to social dialogue in the public sector and focus the 2012 edition of our Industrial Relations in Europe report on this issue.

I wish you all a very successful conference.


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