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Speech: The crisis as a catalyst for change

European Commission - SPEECH/13/293   09/04/2013

Other available languages: none

European Commission

László ANDOR

European Commissioner responsible for Employment, Social Affairs and Inclusion

The crisis as a catalyst for change

High level tripartite ILO/IMF/EC panel discussion on “Recovery from the crisis, coherent policies for growth and jobs” at 9th ILO European Regional Meeting/ Oslo

9 April 2013

Ladies and Gentlemen,

It is an honour for me to participate in this debate addressing the way forward for policy action in Europe. The focus on policy coherence is extraordinarily important today, as the prolonged financial, economic and social crisis threatens to undermine consensus for the European social model and for European economic and monetary integration as a whole.

We all know that the employment scenario for the EU still looks grim. In February 2013, unemployment rates further rose to 10.9% in the EU (26.3 million) and 12% in the euro area (19.1 million).

What concerns us most are the dramatic differentials in economic and employment conditions within the Euro area, as Southern European countries seems to be trapped in a never-ending spiral of recession and unemployment.

This harsh reality should encourage Europe to react with even more determination.

I am convinced that this crisis has been a catalyst for profound change in the EU. Latest developments show that we are in fact heading towards a more balanced architecture for the European Monetary Union.

The Commission and the Member States are developing a strategy that combines fiscal consolidation efforts with an integrated strategy for economic and employment growth, and social cohesion.

Let me sketch three key elements of this strategy to get Europe back on track for sustainable and inclusive growth:

  1. a social dimension for a genuine EMU

  2. fostering demand for jobs, investing in skills and providing opportunities for youth

  3. a reorientation of social policy towards social investment.

With its blueprint for a deep and genuine EMU, the Commission has kicked off a European debate over the necessary redesign of our common strategy for growth and jobs.

Recent developments show that there is agreement for strengthening the social dimension of the EMU, alongside closer surveillance of macroeconomic policies.

Severe employment and social problems in one country of the currency union have negative economic spill-overs and politically destabilising effects for the EMU as a whole.

Moreover, socio-economic divergences are a bigger problem for the stability of the currency union than they are for the stability of the Union. When unilateral currency devaluation is not possible, individual Member States have fewer economic adjustment tools available.

The economic governance of a genuine EMU needs to allow to collectively act on employment and social problems before they develop 'disproportionally' at Member State and EU level. A scoreboard of employment and social indicators can help us in alerting us better on mounting employment and social changes.

The social dimension of EMU is also about reinforcing the role of the social partners. Adequate involvement and participation of social partners in policy debates and decision-making is critical.

The road to a genuine EMU will be still long and winding, but it is highly encouraging that the path towards a more social Europe seems marked.

Ladies and Gentlemen,

These measures may still take time to be completed, but the Commission has already taken action to stimulate job demand and re-launch employment.

One year ago we launched the Employment Package, an ambitious plan to support Member States' effort to foster new hiring and invest in workers' skills for new and quality jobs.

One year later I am glad to show the tangible results of that plan.

  1. the reform of the EURES network for stronger cooperation of public employment services in the EU;

  2. the EU Skills Panorama – an advanced monitoring system of the actual skills needs in given sectors across EU countries;

  3. the Grand Coalition for Digital Jobs bringing together companies and organisations to develop digital skills and workers' mobility;

  4. The Youth Guarantee, a commitment by Member States to offer young unemployed quality opportunities for jobs, education or training, which the EU will financially support with at least 6 billion euros.

These actions, among others, integrate Member States efforts to proceed with structural labour market reforms with a concrete support.

The Employment Package shows how the Commission strongly believes in proactive government to overcome the employment crisis.

Ladies and Gentlemen,

The social consequences of the crisis, growing divergences between the Member States, and an ageing population have made it clear that we need to modernise our welfare systems.

The recently adopted Social Investment Package provides guidance to Member States on reforming their social protection systems with a focus on their social investment component.

The Social Investment Package is based on three pillars:

  1. increasing the sustainability and adequacy of social systems through simplification and better targeting at emerging social needs

  2. pursuing activating and enabling policies through targeted, conditional and more effective support

  3. ensuring that social policies cover the most crucial risks throughout the individual's life, from childcare for the new born to long-term care for the elderly.

The EU funds will be increasingly targeted to support Member States in the implementation of these priorities.

The Social Investment Package will lend a new impetus for the fight against poverty and social exclusion, and represent an essential pillar of a more inclusive Europe.

Ladies and Gentlemen,

We are aware that concrete results of our employment policy will probably show in the medium to long term, and will highly depend on country-specific conditions.

But I firmly believe that the reforms Europe needs will have a stronger legitimacy and will be better implemented if they are the outcome of a genuine social dialogue.

Constructive social dialogue has been a key factor in the successful management of economic crises and structural change at EU as well as national level.

We need to save the industrial base of Europe.

A proper social dialogue on policies to enhance the competitiveness of European industry and its capacity to create jobs is fundamental to respect the key tenets of the European social model as a social market economy.

I am very much looking forward to hearing your views on these thoughts. Our partnership will be essential for us to face the difficult challenges that still lie ahead of us.

Ladies and Gentlemen,

Unemployment, in particular for young people, is a global challenge and not only a European issue.

I welcome the outcomes of international fora in 2012, in particular in the G20 context, which emphasised that jobs with labour rights, social security coverage and decent income contribute to a more stable growth, enhance social inclusion and reduce poverty.

Important commitments were made on policy coherence between employment, social and economic policies, and on social protection floors and we see that this work is to continue.

I appreciate cooperation between the EU and the ILO in the framework of the G20 process and we count on further cooperation and exchange, also in the context of the UN.

I very much welcome the priority the Russian G20 Presidency gives to employment.

The G20 Labour and Employment Ministers meeting will be held back to back with the G20 Finance Ministers Meeting, including a joint meeting of both Labour and Finance Ministers. This is an important signal as regards policy coherence, underlying this principle that should be at the heart of the G20 process and of other international fora.

To conclude

Just a few months ago, the European Union was awarded the Nobel Peace Prize. I see it as recognition that in times of crisis and hardship, we must stand by our political and social achievements. And also as an incentive to find new ways to achieve our goals.

I observe a strong correspondence between the ILO, the IMF and the EU developments and priorities. In these difficult times, I see therefore a strong opportunity to strengthen our cooperation.

I look forward to exchange views and further reflect on these issues with you.


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