Speech - Sound social dialogue is vital for the future of the European economic and social model
European Commission - SPEECH/13/832 18/10/2013
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European Commissioner responsible for Employment, Social Affairs and Inclusion
Sound social dialogue is vital for the future of the European economic and social model
Fourth Regional Round Table on Social Dialogue in South East Europe/Zagreb,
18 October 2013
Ladies and gentlemen,
I extend my warm greetings to you all and my thanks to the organisers for their invitation.
I believe it is hard to over-emphasise the role of social dialogue in the European social model, which entails a commitment to full employment, social protection for all, social inclusion, and democracy.
Although approaches to social dialogue may differ widely, it is crucial to the competitiveness of our social market economies.
Along with collective bargaining and consultation, social dialogue is — so to speak — in our genes.
This is why I am pleased to address this Round Table in our newest Member State.
The effect of the crisis on social dialogue in Europe
Let me start with the bad news — the way the current crisis challenges social dialogue.
As our latest Industrial Relations in Europe report shows, the crisis has put social dialogue in Europe under great strain.
Back in 2008 and 2009 when the crisis was in its early stages, many countries used social dialogue to find creative solutions to preserve jobs and help companies adapt to and cope with the recession.
But the crisis has gone on and on, affecting public spending in countries both within and outside the euro area.
What is more, it has exposed flaws in the euro’s design and the way it functions.
This has demanded a raft of reforms in many countries.
These measures involve tough, painful transformations, including changes to collective bargaining systems in cases where they are seen to be part of the problem.
There have been arguments about respect for the principles of social dialogue, national wage-setting mechanisms and collective bargaining.
Unfortunately, the reforms undertaken have not always been accompanied by fully effective social dialogue.
This has generated tension and conflicts.
It has undermined efforts to reach agreement on how to share the burden fairly.
As you know, south-eastern Europe has not escaped this wider European trend.
But if structural reform is to succeed in the longer term, close social-partner involvement and a significant degree of consensus on where the reform is going are vital.
Social dialogue and competitiveness
Of course, some claim that social dialogue and strong industrial relations institutions are barriers to competitiveness.
But there is no empirical evidence to back that up.
On the contrary — in the 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.
In fact, the economies where that is true, are Europe’s most competitive ones.
To put it bluntly, social dialogue is not part of the problem — it is part of the solution to the crisis, and genuine social dialogue has added value in economic and social policy-making.
Strong social-dialogue institutions allow the views of all parties to be taken into account, and help identify the sticking points and the areas where people can agree.
This can lead to a balanced policy mix that furthers social justice and competitiveness too.
That's why the Commission attaches great importance to fostering and supporting high-quality industrial relations.
Importance of social dialogue for the social dimension of EMU
The Commission is firmly convinced that social dialogue is not a luxury, but a vital factor in Europe’s competitiveness and cohesion.
But the social component of economic governance at European level is still underdeveloped.
The social partners need to be more closely involved in EU governance in order to shape reforms and contribute to policy responses.
That is why the Commission recently presented practical proposals for involving the social partners more closely in policy debates within the euro area. These were elements of the Commission's Communication on the Social Dimension of the EMU, published on 2nd October.
We propose to consult the social partners more systematically at both national and EU level when reform programmes and policy orientations for the European Semester are being worked out.
We suggest bolstering existing forums for social dialogue at EU level to generate synergy and improve policy coordination and coherence.
This applies in particular to the three principal venues for dialogue at EU level: the Tripartite Social Summit, the Macroeconomic Dialogue, and the autonomous bipartite Social Dialogue Committee.
I am personally committed to promoting the social partners’ involvement as a way of developing more balanced economic and social policy for Economic and Monetary Union and the EU.
At national level, the Commission encourages the Member States to step up the social partners’ involvement in the discussion, design and implementation of reforms.
Only this can ensure the European Union comes out of the crisis stronger.
Importance of strengthening social dialogue arrangements and capacity in South-Eastern Europe
The countries of South-Eastern Europe face a special challenge in strengthening social dialogue.
This is because industrial relations institutions are generally less well developed there, even though national situations vary considerably.
This state of affairs is also the result of the weak and fragmentary structure of both employers’ and workers’ organisations.
Unionisation rates in the region are lower than elsewhere in Europe.
And there are also far fewer members of employers' organisations in South-Eastern Europe.
The implications are clear. Where companies or workers are less organised, they cannot support their interests jointly or make themselves heard effectively.
And even where social dialogue does exist, it generally takes the form of tripartite consultations, not bipartite negotiations or joint action.
This is why I would emphasise the fact that the social partners’ capacity and structural position needs strengthening.
Only thereafter can social dialogue produce sustainable results that reflect the differences in the interests of the employers and the workers.
So I encourage all countries in South-Eastern Europe to develop their national dialogue bodies in order to promote the right of association and facilitate the establishment of trade unions at national, branch, sector, local or company level, and of employer's organisations too.
The results achieved by the EU social partners can have no impact at national level unless they are followed up and implemented by the national social partners.
I therefore encourage all countries in South-Eastern Europe to take full advantage of the potential of autonomous and bipartite social dialogue as demonstrated by the EU’s experience.
The Commission is prepared to support exchanges of experience with social dialogue and industrial relations involving the social partners.
Such exchanges could, in particular, address issues such as representativeness, pluralism, combining social dialogue at different levels, and getting social dialogue at national and European levels to mesh and work together.
The EU also supports initiatives to develop the administrative capacity of social partner organisations.
We do this through the European Social Fund, for instance, and I encourage Croatia’s social partner organisations to take full advantage of these possibilities.
The European Structural and Investment Funds, which are now being fully mobilised in Croatia for the first time following the country’s accession, are a once-in-a-generation chance to modernise its systems, set up essential new structures and invest in people, both at work and in society as a whole.
I encourage you all to take full advantage of these great new opportunities.
Ladies and gentlemen,
I am grateful to the Croatian Government and the Friedrich Ebert Stiftung for holding this conference.
It offers an opportunity to discuss how industrial relations institutions in the region can be strengthened and to mark out the path for social dialogue in Europe tomorrow, and in particular in South-Eastern Europe.
Sound social dialogue is vital for the future of the European economic and social model.
It is not a hindrance, but a help in improving industrial relations.
I am sure that this event will provide further backing for that idea.
I wish you a very successful Round Table.