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European Commission

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso at the Employment Policy Conference "Jobs for Europe"

The Employment Policy Conference /Brussels

6 September 2012

President of the European Parliament,

President of the European Council,


Distinguished guests,

Ladies and gentlemen,

This Conference comes at a vital moment for Europe; a moment where we need to face a crisis which is not just a financial and economic crisis, but also a crisis of confidence in our future, of credibility of our institutional framework, of respect for our values. The subject of this conference, employment, is one of the issues at the very heart of our attention at this difficult moment.

There are many factors which have contributed to the current situation. But at the core is the sense that - for the first time in 50 years - our citizens look to their long term economic future with great uncertainty, rather than the expectation of a better life. As a result, there are many people for whom our European social model is in danger of not delivering.

Employment is at the heart of citizens' concerns. Jobs are increasingly hard to find if you are unemployed. If you are employed then your situation is likely to be more precarious than before.

Over 10% of EU workers — and over 11% of euro-area workers — are out of a job. Not only are the overall jobless figures worryingly high, they are also spread unevenly across the EU. Over half of the EU’s unemployment occurs in the Member States most affected by the systemic euro crisis.

Behind these headline figures there are specific acute problems. First, nearly a quarter of young people looking for a job in the EU cannot find one. That figure rises to over 50% in some Member States. Many other youngsters are working in precarious positions with very uncertain prospects. We risk losing the productive talents of a whole generation of young people.

Second, long-term unemployment is rising fast. The latest data show that 4.5% of our active population — more than 10 million people — have been unemployed for over a year. Long-term unemployment not only undermines people’s chances of getting back into employment, but also shows a structural weakness of the EU labour market — its inability to reabsorb job losses.

Lastly, the crisis is also affecting the quality of employment. Segmentation of the labour market, wage polarisation and low wages feeding the phenomenon of "in-work poverty" are further driving factors of inequality in our workforce. 8.4% of employed people in the EU today fall below the poverty line. So beyond all these statistics what is important to recognise and I am not exaggerating in the words, is that we have, at least in some parts of Europe, a real social emergency crisis.

And this worsening of labour-market conditions has badly hit the incomes of many Europeans. And while people's incomes were protected by automatic stabilisers in most Member States during the initial phase of the crisis from 2009 to 2011, household income has recently declined in two out of three Member States — substantially weakening aggregate demand, and EU growth prospects.

Dealing with these issues and solving the employment crisis is one of the fundamental elements in resolving the broader European crisis. At the last June European Council, the Heads of State and Government adopted a Compact for growth and jobs which emphasises the need to tackle unemployment, to address the social consequences of the crisis and to boost employment. This is also recognised in the report on the creation of a genuine economic and monetary union prepared for the June European Council by its President in close cooperation with myself, the President of the European Central Bank and the President of the Eurogroup. Within the report, strong and sustainable growth, employment and social cohesion are identified as the objectives which will orientate our efforts towards a truly economic and monetary union.

Ladies and gentlemen,

So employment policy will be a fundamental element as we work towards a true monetary and economic union. More integration in the economic area has to also mean additional efforts in the areas of social and labour policy. The European Union has the best social protection systems in the world. We also have social dialogue, collective bargaining and consultation as part of our DNA.

We do not want social cohesion, social rights, be put into question or diminished in Europe for those who need them more.

Yet, in this time of crisis it is only right and proper that we examine each and every policy area to see what can be done to make Europe stronger and more competitive. This includes our social and employment policies.

We need to have the mechanisms in place to handle changes better but, at the same time, we need reassurances and instruments to address the effects of the economic and financial crisis on the most vulnerable.

This means more help for young people, and we are already working on this. In December 2011 the Commission adopted the Youth Opportunities Initiative. We have established action teams to work with the 8 Member States with the highest levels of youth unemployment. €7.3 billion of structural funds to support 56 000 SMEs have been reallocated and over 450 000 jobs have been created through these efforts.

Furthermore, in the coming months the Commission will launch a "Youth package" establishing a youth guarantee scheme and a quality framework to facilitate traineeship.

We also need to look hard at new mechanisms to use EU funds to help deprived and poor people to have access to food or other aid instruments. And the Commission will continue to fight for the continuation of a Fund that can help workers in all sectors to cope with the effects of the economic globalisation.

Indeed I have to make it very clear, it is quite disappointing that some member states are now proposing to put an end to the fund for adjustment to globalisation that was created some years ago at the initiative of the Commission.

These are all instruments that the Commission is defending and proposing also in the context of the Multiannual Financial Framework.

As you are no doubt aware discussions between the Commission, the Member States and the European Parliament are progressing. We are close to reaching a moment of truth, a moment where Member States' political commitments such as those in the Compact for Growth and Jobs will be measured against decisions taken and resources allocated.

The Commission will continue to work for the adoption of a European Union budget for growth and investment, adequate to deliver on our cohesion and social objectives. A budget that will be the tool to implement our economic and social growth strategy – Europe 2020 Strategy – to make Europe a smart, sustainable and inclusive economy by the end of this decade.

I have to say that I am very indeed concerned about the current way the negotiations are going. I believe that the social responsibility lies of course at the national level but it would be unthinkable not to have a social dimension at European level. But the policy needs to be sustained by proper resources and this is indeed part of our problem because we have seen in the recent past some countries attacking the very principles of solidarity when they have called in to question the programme of aid for the most deprived persons created decades ago by the Commission.

They seem to forget that there are some citizens in Europe now that do not have enough to eat. They seem to forget that there are now social emergency situations in some of our member states. And are we at the European level going to close our eyes before that situation? Cannot we complement the member states' actions; also show that the Europe we want is a Europe of solidarity? This is a fundamental issue.

So I hope now that member states not only are coherent in their commitment for growth, in terms of investments for growth, they accept that we need some instruments of investment at the European level, that they do not forget that there is also a social dimension in the European policies, and that means from the solidarity fund to the social fund to the globalisation adjustment fund and to the help for the most deprived persons among others. This is critically important if we want the EU and the European ideal to remain also in the hearts of our citizens and not to be seen just as a project for diplomacy or bureaucracy.

Distinguished guests,

Our Europe 2020 Strategy sets a target employment rate of 75%, with fewer people dropping out of education and more achieving higher education qualifications. The EU has also made a collective commitment to reduce the number of those living in poverty and social exclusion by at least 20 million.

Those targets form the basis for the economic and social model we are striving to build — a Europe that is smart, sustainable and inclusive. We know the Member States’ labour-market institutions and practice, and we know that their social priorities are quite different. There are very different situations and traditions, labour market relations and economic and financial cultures in these issues. But I believe that overall we all face the same type of challenges and we should all share the same values, so we need a united response to the employment and social crisis.

National actions need to be supplemented by action at European level. That was the background against which the Commission unveiled, in response to the urgency of the situation, its Employment Package in April — to redouble efforts to bring about a job-rich recovery, to respond to the deterioration in conditions and to meet the key structural challenges. It sets out a medium-term agenda, based on a job-centred approach to recovery, covering three main areas:

First, it emphasises the need to refocus on the demand side of the labour market and support job creation. Supply-side labour market policies like training and activation are important, but fundamentally we need to boost demand for labour, in particular in areas with the greatest employment potential (green jobs, ICT and health services).

Secondly, it makes the case for a more dynamic EU labour market and identifies and offers support for balanced labour-market reform in the Member States. A dynamic labour market is one that enables people to progress in their careers and improve their situation. That means creating the conditions for a true common labour market by removing barriers to free movement and promoting mechanisms that can enhance skills-matching across borders. The job mobility scheme recently launched by the Commission ('Your first EURES job') aims at helping people to find their first job in any of the 27 Member States.

Thirdly, the Employment Package sets out ways of stepping up coordination and multilateral surveillance of employment policy at EU level — with greater social-partner involvement in the process. Making progress on employment governance is crucial.

This year the Commission issued a larger number of country-specific recommendations in the employment area. Stricter governance is crucial to ensuring that labour market reform needed takes place, that the investments necessary are made, and that employment policy realises its potential in terms of lifting Europe out of stagnation.

But this is only a start. Turning to the next European Semester, we need to aim for an integrated EU policy approach and better coordination of employment and social policy at national and EU level. Not only employment and social policy, but also education policy, because part of the problem is the mismatch between the skills available and the job opportunities and I know that some Member States are now also looking again to their education systems, so that they can make them also more job friendly. We have seen during this crisis that some countries have been performing better also because of the capacities of their education systems to respond to the demand for jobs and training. Employment policy is an area of common concern, so it has to have a stronger European dimension and we must work together to ensure that across the Member States it is an essential tool for coordinated adjustment and boosting growth.

The role of social partners in putting national employment policies and reforms into action is vital. In full respect for their autonomy and national traditions, social dialogue in the Member States has to be strengthened.

At European level, a wide system of social dialogue, able to promote social pacts and agreements, will also help us to get us through and out of the present crisis. I am happy to note that in Europe we have the privilege of having on employers' side Business Europe and on the workers' side ETUC. They are very committed to the European project, but now it is important not only to reinforce this level of social dialogue, but also in all Member States we have a culture of social dialogue and the Member States are ready to make the necessary compromises in these extremely difficult times. I believe that if social pacts are used, we will also have strengthened the European social model.

Ladies and gentlemen,

Europe is facing very important challenges; the economic and financial crisis has thrown its shadow over Europe's growth and our society as a whole. It has made very clear that we must complete our economic and monetary union, but also pursue greater economic integration, social coherence and deeper political and democratic union with appropriate mechanisms of accountability.

These efforts will bring us a sustainable growth and, in doing so, we will safeguard the sense of fairness and solidarity that make Europe unique.

Some people say that because of our challenges of competitiveness, we should put into question our social market economy, our social model. I disagree. The Commission disagrees with this analysis precisely because we know and we can see that in practice some of the most competitive countries in Europe and in the world are the ones that are more active in terms of the social Europe we want to build. So, what we have to do is adapt our model to new challenges and new constraints. We have a really important task of improving our competitiveness, specifically in some of our Member States, but it would be a mistake from all points of view to try to dismantle the welfare state and our social models and this is especially important for countries that are under programme and that now feel the pressure of the economic and budgetary constraints. So, our policy at European level defined by the Commission is very clear –we need to adapt, we need structural reforms in many of our areas, but not at the price of putting at risk our values, the values of the social market economy that are enshrined in the Lisbon treaty.

Beating unemployment is a very critical challenge, if not the most critical, from a social point of view. To succeed we need all the actors at every level to pull together, to reach agreement and to proceed on a common front. We need a Social Europe adapted to our modern European economy; we need to move to a genuine European labour market; we need to reinforce the systems that were invented in Europe and that represent the European Social way.

I am certain that this conference and your work over the next two days, will greatly help in developing the policies and actions which we need to put in place to ensure that Europe tomorrow will be stronger than it has ever been and capable of delivering the future which our citizens expect and our young people also deserve.

I thank you for your attention.

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