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European Commissioner responsible for Employment, Social Affairs and Inclusion
Consolidating Europe’s Single Market – the key to prosperity for all
"Twenty Years on - the UK and the Future of the Single Market",
Lancaster House/London, 18 October 2012
Ladies and gentlemen,
My warm greetings to you all.
The Single Market is one of the European Union’s greatest achievements by any standard. By opening up access to half a billion consumers and generating foreign investment, it has given a boost to our collective prosperity and well-being.
From 1992 to 2008 the Single Market is credited with boosting EU GDP by 2.13% and creating 2.7 million new jobs.
But we know that further completion of Single Market in various areas could give an additional huge boost to Europe’s growth and prosperity. For the UK alone, this extra boost could be as high as 7% of GDP.
This is an important consideration when so many Member States are in dire financial straits, and Europe's jobless figures are at record levels.
It was in this context that the Commission adopted the second Single Market Act this month setting out 12 key proposals. They concern:
• creating fully integrated networks across the Union;
• fostering cross-border mobility for people and firms;
• strengthening the digital economy, and
• actions to step up cohesion and consumer benefits.
As Commissioner with responsibility for employment, social affairs and inclusion, I want to focus today on what needs to be done in the social sphere to give another big boost to the Single Market.
Social legislation provides a level playing field, ensures minimum standards and protects individuals, workers and businesses from unfair competition. By complying with European social legislation, companies based in the EU and the wider European Economic Area are ensured open access to the world’s richest and largest market.
But as I said, we need to do more to complete the Single Market. This particularly applies to the labour market which will only perform well, be dynamic and work smoothly:
• if employment policy facilitates the transitions that enhance productivity and job quality;
• if the workforce has the right skills, and
• if people are mobile enough to respond to job vacancies in other Member States and regions.
Despite today’s serious unemployment situation, there are sectors and occupations in Member States or regions where vacancies are unfilled due to a lack of qualified workers. We also lack clear information on skills which are in short supply and those that will be needed in the future.
We will therefore create - before the end of the year - a genuine EU-wide recruitment and placement tool, connected to the Network of European Public Employment Services known as EURES. And in December, the Commission will launch the EU Skills Panorama presenting information from both EU and Member State sources on short- and medium-term skills needs, supply and mismatches.
Mobility will only take place if people seeking work — or wanting to study to improve their employment prospects — have the confidence that they will not be penalised for their mobility, for instance by losing their pension entitlements.
The EU rules safeguard social security rights, not by harmonising national social security provisions but by ensuring that people moving from one Member State to another are not penalised in relation to nationals of the country to which they move, travel or retire.
Equal treatment and protection are also at the core of EU legislation on health and safety and working conditions. This legislation is part and parcel of the vital conditions for the creation of a level playing field across the Single Market. This is why health and safety rules are coordinated at EU level.
In areas where UK law was already well established, such as health and safety, the existence of a level playing field across Europe, as provided by EU Directives, helps to ensure that UK firms are not undercut by companies from other Member States applying laxer rules.
And we know that investing in occupational health and safety is good for business. It contributes to company performance, improves staff well-being, reduces absenteeism and staff turnover and leads to greater job satisfaction.
Completing the Single Market is increasingly a matter of enforcing the already existing rules. The Commission monitors the application of EU social legislation in all EU Member States and takes legal action against any Member State that does not apply the rules properly.
But sometimes further legislative action is required. This is the case for posted workers. Each year, around one million workers in the EU are posted temporarily to perform work in another Member State.
This works both ways: the UK, for instance, sends and receives between 30 000 and 40 000 posted workers a year.
The EU Posting of Workers Directive sets out a core of mandatory working conditions applicable to posted workers in the host Member State. It covers for example maximum work periods and minimum rest periods, minimum paid annual leave, minimum rates of pay and equal treatment. These rules facilitate the cross-border provision of services by doing away with the need for firms to know in detail the labour law of the host Member State.
It also ensures adequate protection of posted workers and avoids a race to the bottom in terms of working conditions. It ensures fair competition between service-providers and a level playing field.
But the lack of enforcement of this Directive has led to abuses and insufficient protection of posted workers’ rights. This is why the Commission made a proposal for an enforcement Directive in March of this year, aimed at increasing monitoring and compliance and improving the way the existing rules are applied in practice.
Connected to the functioning of the Single Market, I would also draw your attention to our recent proposal for an upgraded Industrial Policy which has an important human capital component. Preserving our human capital is a key challenge when it comes to restructuring and the relocating of plants. EU rules on worker information and consultation contribute to the proactive, negotiated management of such operations to ensure they are economically beneficial and cause minimum social harm.
The role of social dialogue at national and EU level is crucial to ensuring that restructuring is anticipated effectively and conducted in a socially responsible way.
I am therefore proposing that the Commission consult the social partners on anticipating change and restructuring with a view to introducing a European initiative in this field.
Let me finish by underlining the key role EU financial instruments play in bolstering the social dimension of the Single Market, particularly when national budgets are severely constrained.
In 2007-2013, the European Social Fund is investing €4.5 billion across the United Kingdom. The Fund has played an important role to cushion the impact of the economic crisis, prevent unemployment and reintegrate jobless people into the labour market.
Ensuring that the Social Fund has enough money to continue providing support across the Union is vital for the overall economic and social development of the EU’s human capital and thus the Single Market.
The Commission has put forward a proposal to that end. I will do my best to convince the Member States which committed themselves to raise employment and reduce poverty, to support the continuation of this Fund so that it can help Member States, including the UK, to achieve these targets.
Ladies and gentlemen,
The Single Market has many achievements but requires constant adaptation. These changes should not lead to abandoning its social pillar. I am convinced that Europe’s greatest asset is its human capital. That is why the social dimension of the Single Market needs to continue to develop on a par with the rest.