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European Commissioner responsible for Employment, Social Affairs and Inclusion
Rebuilding social dialogue
European Commission-ILO High-Level Seminar /Athens
25 June 2013
Ladies and gentlemen,
It is my pleasure, on behalf of the European Commission, to welcome you to this high-level seminar organised jointly with the ILO.
It is also a pleasure to meet up again with ILO Director-General Guy Ryder.
We had a very good discussion in the margins of the International Labour Conference in Geneva last week.
The Commission sets high store by our working relationship with the ILO, the leading authority on international labour standards and the only international organisation bringing together government, employer and worker representatives.
We work together in a continuous policy dialogue and undertake joint activities and projects. And that naturally extends to social dialogue.
Social dialogue – meaning discussions, negotiations and joint action between employers and trade union organisations - was high on the political agenda of this year’s International Labour Conference, which devoted its “recurrent discussion” to this pillar of the Decent Work Agenda.
It reaffirmed the added value of genuine social dialogue in economic and social policy-making.
We are therefore supportive of all efforts to achieve policy coherence between international organisations acting in this field.
This seminar is the third in a series that looks at the role of social dialogue in responding to the crisis in the programme countries.
These countries face big challenges, and among the toughest is the topic on today’s agenda — the jobs crisis in Greece.
Throughout the EU, social dialogue is under great strain for various reasons.
They are all linked to the current crisis, the recent enlargement of the EU and the difficult macro-economic situation.
Back in 2008 and 2009, when the crisis was in its early stages, many countries used social dialogue to find creative solutions to preserving jobs and helping companies adapt and cope with the recession.
But the crisis has lasted longer than expected, it has grown wider, and it has got deeper.
It has affected public budgets and exposed flaws in Europe's Economic and Monetary Union.
The systematic nature of this crisis was recognised too late.
The vicious circle between bank debt and public debt was not broken early enough.
Solidarity and the determination to end the crisis through collective action were lacking.
Thus, following a short lived and uneven recovery on 2010-2011, we ended up in a double-dip recession.
This long and complex crisis has increased tension and generated conflict.
The reforms undertaken have not always gone hand in hand with fully effective social dialogue, and this has led to a lack of consensus on how to share the cost fairly.
The Commission's Industrial Relations in Europe 2012 report published in April analyses in detail the challenges for social dialogue.
Social dialogue in the programme countries
Given the scale and depth of the crisis in the programme countries, the impact has been even greater there.
Here in Greece, the effect of the crisis on social dialogue has been particularly harsh.
Policy-makers sometimes see social dialogue as a luxury a country cannot afford when urgent decisions are needed.
The fiscal consolidation measures being implemented in the programme countries involve tough, painful reforms.
These extend to collective bargaining systems in cases where they have been seen as part of the problem.
There have been arguments about respect for the principles of social dialogue, national wage-setting mechanisms and collective bargaining.
These problems have all been especially severe here in Greece.
The ILO expert panel has concluded that ILO Conventions regulating certain fundamental rights — to which Greece is a signatory — have not been respected.
This is symptomatic of the challenges created by the crisis and the reforms needed to tackle it.
Such approaches are all the more regrettable as the social partners’ involvement and some degree of consensus are essential if structural reforms are to succeed in the longer term.
The reforms needed cannot be carried through without the support of the majority of the stakeholders.
For various historical reasons, approaches to social dialogue vary widely from one Member State to another.
But despite these differences, social dialogue is crucial to the competitiveness of all our economies and to our European way of life.
It is also a key component of the European social model.
Social dialogue, collective bargaining and consultation are — so to speak — in our genes.
Some claim that social dialogue and strong industrial relations institutions are a barrier to competitiveness.
There is no empirical evidence to back that up.
On the contrary — in EU Member States where social dialogue is well established and industrial relations institutions are strong, the economic and social situation tends to be more favourable and subject to less strain.
Most of those countries are not up against the same challenges as the programme countries.
The Commission attaches great importance to fostering and supporting high-quality industrial relations.
We believe the reform programmes will be all the more successful in the long run if the social partners are involved in both their design and their implementation.
We are convinced of the great importance of constructive social dialogue in Greece — not only to safeguard social peace here, but also to allow the country to stand firmly on its own feet.
This seminar will address these issues, paying special attention to the situation in Greece and to the need for any further reforms to be developed on the basis of a fully functioning social dialogue.
Strengthening the social dimension of EMU
Ladies and gentlemen,
Lack of confidence and trust in our institutions can undermine the whole European integration project and unravel its achievements.
We cannot build a united Europe without people’s support. And that includes the social partners.
The stakeholders — and not just the elites — need to be involved in and support European integration.
Only this can help the European Union come out of the crisis stronger.
But the social component of economic governance is often underdeveloped.
A debate is currently going on about the social dimension of Economic and Monetary Union — or EMU for short — including social dialogue.
With the growing divergence between the Member States and increasing polarisation of society, the rationale for a strong social dimension to EMU is clear.
Severe employment and social problems in one part of a monetary union also have negative spill-overs for the rest.
Individual Member States have fewer instruments for mitigating asymmetric shocks and preventing them from triggering employment and social crises.
So “boom and bust” dynamics may have a bigger social impact within a monetary union than on countries with their own currencies.
The crisis has shown how dependent the Member States' economies are on each other.
Employment and social problems in individual Member States are increasingly a matter of common concern, especially within the euro area.
In a deeper EMU, we must first detect and collectively recognise the issues that could lead to imbalances.
This calls for a trigger for collective action before such socio-economic imbalances develop disproportionately at national and EU level — for instance, through a scoreboard of employment and social indicators.
At some stage, hopefully in a not so distant future, it will also have to be discussed what forms of fiscal capacity and economic stabilisers will be needed in order to make the monetary union truly sustainable and legitimate.
It goes without saying that strengthening the social dimension of EMU also implies a stronger role for the social partners.
Involving them properly in discussion of policy and decision-making is critical — not only to bolster “ownership” of policy adopted in response to EU recommendations, but also to step up the effectiveness of policy coordination at euro-area level.
The social partners should therefore be involved more closely in macro-economic governance of Economic and Monetary Union.
We are using all the instruments available to bolster this dialogue with the European social partners.
Social dialogue and competitiveness
Ladies and gentlemen,
The economic crisis has been a stress-test for EMU.
The way we reform EMU is now a test for the European integration project as a whole.
The euro may lose support among EU citizens if it is perceived as a purely economic and budgetary project that ignores the challenges facing the European social model and the Welfare State.
Of course, there are those who argue that EMU has highlighted the disparities in competitiveness among euro-area countries.
But competitiveness is not just about macro-economic variables.
And definitely not just about unit labour costs!
It is also a question of productivity and the way a country’s productive life is organised.
The social partners are in the real economy and know what is necessary — and what is achievable.
That is why they must be involved in designing reforms to improve the EU’s economic competiveness.
Cooperation with ILO and conclusion
Ladies and gentlemen,
The ILO and the Commission have organised this high-level conference to analyse and discuss the big challenges facing Greece and the other programme countries, and the role of the social partners and social dialogue in finding long-term solutions through consensus and dialogue.
I want to take the opportunity to stress our excellent, longstanding working relationship with the ILO and our joint efforts to promote social dialogue.
I also want to thank the ILO for organising this seminar, and for its analytical work on social dialogue in both the programme countries and those in the Central and Eastern Europe.
The ILO has made a big effort to analyse fiscal consolidation programmes and their effect on the world of work.
This seminar is only one aspect of that work, which will continue in other countries and for another year in order to pull together all the conclusions and policy recommendations.
I look forward to two days of open and frank discussion.