The European Employment Strategy: assessing the status quo.

Author:Weishaupt, J. Timo
 
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1 Introduction (1)

When it comes to employment-related issues, 2010 was a critical year for Europe in at least two ways. First, following the "Great Recession" of 2009, only few European economies showed early signs of economic recovery, while most continued to struggle with sluggish growth and some even had to be "rescued" by the European Union (EU) and International Monetary Fund (IMF) to avoid state bankruptcy. For most, the bleak employment situation of 2009 - i.e., employment rates were down 1.9% or approximately 4.5 million jobs and the demand for labour shrank by roughly 30% (Pena- Casas 2010: 103) - was there to stay for the foreseeable future. To make matters worse, literally all governments had to prepare their policy responses to mitigate the socio -economic impact of un- and underemployment in times of severe financial austerity. Second, with the expiration of the Lisbon Strategy in June 2010, a decade-long process of European policy co -ordination in the social sphere had come to an end, and a new path toward "smart, sustainable and inclusive growth" had to be agreed upon (European Commission 2010b). All hope lay in the new Europe 2020 Strategy, a European "phoenix" that should rise from the ashes to bring macro-economic, labour market, social, educational and environmental policies together in a synergetic way, thus "promoting growth for all" while delivering "high levels of employment, productivity and social cohesion" (European Commission 2010b).

As both of these developments pose "critical junctures" for the evolution of European labour market governance, a short assessment of the status quo of European employment policy co-ordination is warranted. The main vehicle for the EU to co-ordinate employment policy is the European Employment Strategy (EES) first launched in 1997. The EES received great attention after its inception, resulting in a variety of academic scholarship (e.g., Goetschy 2007; Heidenreich 2009; Lopez-Santana 2009a, 2009b; Mailand 2009; Weishaupt 2009; Zeitlin/Pochet/Magnusson 2005; Zeitlin/Trubek 2003; Zirra 2010) and official assessments (Kok 2003, 2004; OPTEM 2007). However, despite this rather long list of publications, the research on the EES is almost entirely limited to the "early years", i.e., roughly covering the time span until 2005. This "analytical gap" further underlines the need to review recent developments in order to make an assessment of its future development in the context of the Europe 2020 Strategy. This article is structured as follows. First, we briefly review the origins of the EES, and subsequently trace the evolution of the EES, distinguishing two phases: a first phase (EES I, 1997-2005) during which the EES was launched, evaluated, and revised; and a second phase (EES II, 2005-2010) during which the EES was first re-directed and embedded into the larger, revised Lisbon Strategy with a clear focus on economic growth, and subsequently fine-tuned both to address the criticism of its new lop-sidedness in favour of economic concerns and to "cope with" the consequences of the global economic and financial crisis. In the following section, we describe the main procedural and substantive changes of the EES within the new Europe 2020 Strategy, and offer an assessment of the opportunities and risks of this new architecture. Before closing the paper with a discussion of the main findings, a succinct analytical part offers an overview how the EES is expected to work theoretically and provides some evidence about its practical impact.

2 Origins of the European Employment Strategy

Throughout the 1950s-80s, the process of European integration with respect to the social sphere had been rather limited. European integration was mostly described as "negative integration", or the retrenchment of national regulatory capacity, rather than "positive integration" associated with European-level capacity building (Scharpf 2000). Accordingly, the EU's achievements in social policy making were considered "at best - weak" (Pochet 2005: 37), and "EU social policy remained limited and secondary" (Geyer 2000: xiii). Only during the 1990s, the EU began to gradually expand its capacity to monitor and guide national labour market and social policy. The first step was taken with the conclusion of the Treaty on the European Union, signed in Maastricht on 7 February 1992, which declared "a high level of employment and social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States" as core EU principles and priorities (cf., Art. 2). In June 1993, the European Council then invited Commission President Jacques Delors to present a White Paper on a medium-term strategy for growth, competitiveness and employment. This White Paper paved the way to formulate the so-called "Essen Process" that entailed both a monitoring framework and a set of common goals for employment policies (Council of the European Union 1994: 2-3).

While the "Essen Process" was seen as a temporary solution, a "careful political compromise" emerged after years of deliberation and negations as to how this process of non-binding co-ordination could be institutionalised and formally adopted (Mosher/Trubek 2003: 67). This compromise formally created the EES at the Amsterdam Summit in June 1997, which institutionalised a multilateral surveillance process and established a permanent, treaty-based Employment Committee (EMCO), promoting policy co-ordination among Member States' employment and labour market policies. The precise institutional design of the EES, in turn, was to be decided at an extraordinary European Council meeting held on 26-27 November 1997, prior to the ratification of the Amsterdam Treaty. The box below summarises the key features of the newly created EES.

Box 1: Institutional Components of the EES

* Employment Guidelines (EGL): following a Commission proposal, the Council agrees annually to a series of Guidelines that establish common priorities for Member States' employment policies;

* National Action Plans (NAPs): every Member State draws up an annual National Action Plan that describes how these Guidelines are put into practice on a national level;

* Joint Employment Report (JER): The Commission and the Council jointly examine each National Action Plan and present a Joint Employment Report. The Commission presents a new proposal to revise the Employment Guidelines accordingly for the following year;

* Recommendations: The Council may decide, by qualified majority, to issue country-specific recommendations upon a proposal by the Commission.

Source: Weishaupt 2011: 162.

The Employment Guidelines, in turn, were organised along four pillars, which were to "guide" the Member States' reform efforts. Arguably the most important pillar was the employability pillar, which focused on activating and labour market policies (and included a number of quantified targets), while the other three pillars were centred on entrepreneurship, adaptability and equal opportunities (Council of the European Union 1997: annex).

RELATED ARTICLE: Box 2: The Four Pillars of the EES (1997)

Employability Pillar (Guidelines 1-7)

* Implementing preventative and employability-oriented strategies, building on the early identification of individual needs and ensuring that young/long-term unemployed persons are offered a new start in the form of training, retraining, work practice, a job or other employability measure after six/twelve months respectively.

* Shifting people from welfare dependency to work and training by increasing the number of unemployed people in active labour market policy (ALMP) measures, gradually achieving the average of the three most successful Member States, and at least 20%.

* Developing partnerships as a framework for the provision of training and lifelong learning.

* Facilitating the transition from school to work.

Entrepreneurship Pillar (Guidelines 8-12)

* Reducing overhead costs and removing the administrative burden to promote business activities, especially for small and medium-sized enterprises, exploiting all of the available opportunities for job creation, including the social economy; encouraging self-start ups.

* Making the tax system more employment friendly by reducing labour and non-wage labour costs, in particular on unskilled and low-paid work.

Adaptability Pillar (Guidelines 13-15)

* Inviting the social partners to negotiate flexible working arrangements and to examine the possibility of more adaptable types of work contract.

* Re-examining the obstacles to investment in human resources and possibly provide for tax or other incentives for the development of in-house training.

Equal Opportunities Pillar (Guidelines 16-19)

* Reducing the gap in unemployment rates between men and women and actively supporting the employment of women.

* Improving access to care services.

* Facilitating the return to work after child bearing.

* Giving special attention to people with disabilities.

Source: Council of the European Union 1997: annex.

3 The EES in Action: The Early Years (1997-2005)

After its formal launch in 1997, the EES experienced its first "upgrade" in 2000, when it became part of the ambitious Lisbon Strategy. With this strategy, the - at the time predominantly Social Democratic - EU heads of state or government committed themselves to become "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion" (Council of the European Union 2000). At the heart of this Lisbon Agenda lay a modernised European Social Model with three elements, including "making more investments in people, activating social policies and strengthening action against old and new forms of social exclusion" (Rodrigues 2003: 17). At the time, it was often argued that the "Lisbon Summit in 2000 marked a 'true watershed' in employment and...

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