US embassy cable - 05BRUSSELS666

UNCLAS SECTION 01 OF 03 BRUSSELS 000666 
 
SIPDIS 
 
DOL FOR BLS AND ILAB BRUMFIELD 
STATE FOR DRL/IL 
 
E.O. 12958: N/A 
TAGS: ELAB, EUN, USEU BRUSSELS 
SUBJECT:  EU COMMISSION PROPOSES "NEW SOCIAL AGENDA" 
 
REF: STATE 26878 (notal) 
 
SUMMARY 
------- 
 
1.  The EU Commission on February 10 adopted the 
"New Social Agenda," designed as a framework for EU 
policy in the area of employment and social issues 
for the next five years.  Further to reftel request, 
the blueprint outlines the priority concerns of 
Commissioner Spidla, who holds responsibility for 
Employment, Social Policy and Equal Opportunities. 
Among other initiatives under the New Social Agenda, 
which remains subject to approval by the EU 
governments, the Commission will table a proposal to 
enable workers to switch occupational pension 
schemes when moving to another Member State.  The 
transition periods imposed for the free movement 
into the former EU-15 of workers from the Central 
and Eastern European countries that joined the EU 
last year may also be reviewed.  Commissioner Spidla 
also addressed the challenge of EU demographic 
changes, arguing that Europe needs more, not fewer, 
economic migrants despite public fears and high 
unemployment in major EU economies (para 7 below). 
END SUMMARY. 
 
2.  EU Commission President Barroso and Commissioner 
Spidla, who holds responsibility for Employment, 
Social Policy and Equal Opportunities, on February 9 
announced Commission proposals for a New Social 
Agenda of the EU as "the social policy dimension of 
the refocused Lisbon Growth and Security Strategy." 
Responding to accusations from trade unions and 
members of the European Parliament that the 
Commission's plan for revitalizing the EU economy 
(announced a week earlier) was too focused on 
business-friendly policies, Spidla said the New 
Social Agenda would "help to provide what citizens 
most want: decent jobs and social justice."  The 
Commission wanted the revised Lisbon Strategy to 
maintain "a balance between three areas: economic 
growth, social cohesion and sustainable 
development."  Stressing that the New Social Agenda 
"does not present anything that would undermine 
business activities," Spidla said the draft was 
"designed to preserve and modernize" the EU's 
"valued social model as the essential tool 
underpinning Europe's drive to boost growth and 
jobs." 
 
3.  The current Social Policy Agenda was launched at 
the end of 2000 (during the French Presidency) as a 
first catalogue of EU measures for a five-year 
period.  Spidla presented the new draft, which will 
be submitted for endorsement by EU leaders, as "a 
work plan for the EU in the area of employment and 
social issues for the next five years."  According 
to a Commission statement, "By modernizing labor 
markets and social protection systems, it will help 
people seize the opportunities created by 
international competition, technological advances 
and changing population patterns while protecting 
the most vulnerable in society."  As outlined by the 
Commission in a press release, the New Social Agenda 
has two key priorities: a) employment ("more and 
better jobs") and b) combating poverty and extending 
equal opportunities to everyone in society ("social 
inclusion").  The paper underlines the role of 
partnerships involving public authorities at local, 
regional and national levels, as well as employer 
and worker representatives and NGOs, in securing 
results and promoting support for reforms.  A brief 
"external dimension" section sets the goal of 
promoting "decent work for all" as "a global 
objective at all levels." 
 
EUROPEAN LABOR MARKET 
--------------------- 
 
4.  The Commission recognizes that the 2010 target 
for achieving full employment (as set under the 2000 
Lisbon strategy) is not realistic but maintains that 
6 million new jobs can be created by then.  A key 
instrument for implementing the Social Agenda is the 
European Employment Strategy, based on the four 
priorities also set out in a 2004 report by a high- 
level panel (Kok report): 
 
--   Increase the adaptability of workers and 
     enterprises; 
--   Attract more people to enter, and remain in, 
     the labor force; 
--   Invest more, and more effectively, in workers; 
 
--   Ensure real implementation of reforms through 
     better governance. 
 
5.  Under the stated goal of "Creating a European 
labor market," and improving worker mobility in the 
EU, the Commission proposes to: 
 
--   Make proposals to remove obstacles to labor 
     mobility, in particular those arising from 
     occupational pension schemes; 
 
--   Set up a high-level panel this year to assess 
     the impact of enlargement on labor mobility 
     across Europe.  This could lead to a review of 
     the limitations to the free movement of workers 
     from eight Central and Eastern European 
     countries that joined the EU in May 2004.  In 
     an interview with Reuters, Spidla said he 
     expected that some of the EU-15 would not 
     extend curbs allowed under the Accession Treaty 
     when the first two-year period expires next 
     year; 
 
--   Look at the issue of an optional framework for 
     collective bargaining across frontiers at 
     either enterprise or sectoral level; 
 
--   Analyze in a Green Paper the new work patterns 
     and look at the role of labor legislation in a 
     changing economy.  The Commission announces "an 
     initiative concerning the protection of the 
     personal data of workers."  The Commission will 
     propose to update existing Directives on the 
     transfer of undertakings (maintaining workers' 
     contracts following a change of company 
     ownership), and collective redundancies, as 
     well as the consolidation of EU provisions on 
     worker information and consultation; 
 
--   Propose a new EU strategy for health and safety 
     at work to run from 2007 to 2012: this will 
     emphasize that prevention pays off (fewer 
     accidents means more productivity); 
 
--   Steer the coordination of Member States' 
     national pension policies under the Open Method 
     of Coordination (a framework under which the 
     Commission monitors progress with national 
     action plans that set objectives and timetables 
     for meeting them).  Spidla advocated a more 
     flexible retirement system to encourage 
     Europeans who were able to work later in life 
     while providing pensions for those who needed 
     to retire. 
 
FIGHTING POVERTY AND PROMOTING GENDER EQUALITY 
--------------------------------------------- - 
 
6.  Under the second major heading, the Commission 
will: 
 
--   Engage in consultations on the national minimum 
     income schemes; 
 
--   Assess the need for and feasibility of 
     supplementing existing legislation to tackle 
     discrimination in an enlarged Europe.  This 
     will address the question of minorities, 
     especially Roma, who will make up a 10 million- 
     strong minority once Bulgaria and Romania join 
     the EU in 2007; 
 
--   Update its Action Plan on people with 
     disabilities; 
 
--   Tackle issues such as the gender pay gap 
     (Spidla noted that the average difference is 
     still 15 percent), getting more women onto the 
     labor market, training, balancing work and 
     family life; 
 
--   Propose the establishment of a European Gender 
     Institute to support implementation of 
     Community objectives for promoting equal 
     treatment of men and women.  This will "provide 
     a clearing-house for information and exchanges 
     of good practices"; 
--   Clarify the role of social services of general 
     interest and draw up a list of Community 
     policies that relate to them.   While 
     supporting the Commission's aim to liberalize 
     the EU market for services (the purpose of the 
     draft "Bolkestein Directive" tabled by the 
     Prodi Commission), Spidla conceded there were 
     "well founded fears that cannot be swept aside" 
     about preserving social services of public 
     interest such as in healthcare. 
 
THE CHALLENGE OF DEMOGRAPHIC CHANGE 
----------------------------------- 
 
7.  The New Social Agenda advocates a policy 
approach that "takes account of the needs of the 
different generations as Europe's populations age." 
A "European initiative for Youth" will mark this 
commitment.  The Commission will issue a Green Paper 
analyzing the demographic changes in Europe and 
suggesting ways of coping with the problems caused 
by the aging of Europe's populations.  "Over the 
next 20 years, there will be 20 million fewer 
workers in Europe, even including migrants," he 
said.  Dismissing EU citizens' fears that Europe is 
already "full-up," Spidla suggested people should 
take a longer-term view instead: "Naturally, if you 
only look at the next two weeks, things look 
different.  But in the EU we have to work on the 
long term and we definitely need immigration." 
Spidla acknowledged that calling for an increase in 
labor migration was politically difficult at a time 
when unemployment in Germany has topped five 
million, reaching the highest level since the 1930s. 
However, it would be wrong to blame immigrants for 
the problem: "Would the post-WW II German economic 
miracle have been possible without 'guest workers'? 
Certainly not." 
 
8.  While accepting that labor market policy 
essentially remains a national responsibility, 
Spidla publicly stated that barriers to free 
movement have an economic cost as preventing the 
enlarged EU market from working efficiently.  "If 
you don't achieve free movement of people as well as 
capital and goods, you don't get a proper allocation 
of labor, one of Europe's key resources -- qualified 
workers," he said. 
 
REACTIONS 
--------- 
 
9.  The European Trade Unions Confederation (ETUC) 
praised the "positive" framework of social measures 
while hoping that it will not remain a list of pious 
aspirations.  Secretary-General John Monks welcomed 
the fact that the plan "places again on the agenda, 
managing restructuring and promoting European Works 
Councils as tools to cope the challenges of 
globalization."  The European employers' 
organization UNICE was concerned that some of the 
proposals announced "could undermine the Lisbon 
goals of enhancing growth and employment," calling 
on the Commission to be "consistent" in its 
approach.  According to UNICE, there was no need for 
an additional layer of EU collective bargaining over 
and above the national, sectoral, regional or 
company level.  The idea of codifying existing 
legislation on information and consultation was seen 
as disregarding "the fact that information and 
consultation vary depending on the issue and level 
at which it is best organized."  UNICE Secretary 
General Philippe de Buck said the Barroso Commission 
was "walking a very thin line." 
 
10.  The full text of the Commission Communication 
on the Social Agenda is available from: 
http://europa.eu.int/comm/employment_social/s ocial_p 
olicy_agenda/social_pol_ag_en.html 
 
SCHNABEL