23.12.2009   

EN

Official Journal of the European Union

C 318/1

1.1

The Commission has defined ‘flexicurity’ as ‘an integrated strategy to enhance, at the same time, flexibility and security in the labour market.’ In this position paper the EESC highlights certain aspects of the Flexicurity concept which it regards - in these times of crisis - as especially relevant for keeping as many people as possible in employment and giving people outside the labour market as many chances as possible to find a new job as quickly as possible. Employers and employees must work together in the context of the social dialogue to ensure that as many workers as possible are retained in the labour market.

1.2

In these times of deep crisis and soaring unemployment it is more important than ever that flexicurity should not be understood as measures to facilitate the dismissal of workers currently in employment or to undermine social protection, either in general or for the unemployed in particular. The EESC considers that measures enhancing the security side (in the broadest sense) of flexicurity must currently be the top priority.

1.3

The EESC has highlighted the significance of internal flexicurity in previous opinions. The crisis underlines the importance of internal flexicurity measures to allow companies to adapt to the sharp decline in orders without being forced to dismiss employees. Companies with working time accounts agreed by the social partners are much better able to react quickly to the new market situation brought by the crisis than companies which are lacking these types of instruments. One of the clear lessons learnt from the crisis is that working time accounts and flexible working time arrangements have to be promoted by the social partners. The EESC regards it as necessary to make these instruments as attractive as possible for companies and employees.

1.4

Flexicurity can only work if employees are properly trained. There is a strong link between new skills and the creation of new jobs. It is in companies’ full interest to invest in the continuous training of their staff. It is the employees’ responsibility to continue to undergo training. It is to be hoped that the ‘Lisbon 2010 +’ strategy will provide solutions to these problems.

1.5

The crisis underlines the importance of social dialogue. The last months have shown how committed the social partners are to finding joint solutions for the pressing problems. The EESC proposes to the Swedish EU-Presidency and the EU Commission that a web-based platform be established to foster the exchange of experience with regard to these initiatives of the social partners, bearing in mind the range of different situations at national, regional and local levels.

1.6

At European level social partners are currently negotiating an autonomous framework agreement on inclusive labour markets. The EESC believes that a future agreement can have real added value for helping the most vulnerable people who have lost their jobs as a result of the crisis to get back into employment. The EESC also looks forward for the joint monitoring and assessment of the implementation of flexicurity, to which European social partners have committed themselves in their work programme for 2009-2010.

1.7

The great speed and drastic nature of the economic downturn make many employers think back to the boom years, when they discovered how hard it is to find adequate numbers of sufficiently qualified people. Since they are now looking further ahead into the future and contemplating the economic upswing that will surely come, they are not rashly shedding too many jobs as they might if they were motivated by short-term cost savings. However, no company can ignore basic economic rules. Ultimately, every company is primarily concerned with ensuring its survival. For the affected workers it is of crucial importance to get back into employment as quickly as possible. The EESC stresses the need to provide them with rapid and high quality assistance. Member States should seriously consider increasing the quantity and the quality of staff in the employment agencies in order to help people get back into employment as quickly as possible.

1.8

Given the national and regional specificities and the differences between sectors of industry, the Committee urges the Union to continue its work using a European approach and in compliance with the principle of subsidiarity. This would create the European framework necessary for ensuring the strengthening of a European social model which is in full transition from a theoretical model to an unavoidable reality (1). It is necessary to plan for a post-Lisbon process (Lisbon 2010 plus) to meet the goals not already attained and those that will emerge during the crisis, which may prove long and painful. Flexicurity should certainly play an important role. The Committee believes that there should be balance in the scale on which flexicurity is applied.

1.9

The EESC stresses that the reform of the labour markets in the Member States should ensure that the number of insecure jobs offering more flexibility than security, which has steadily increased over the past few years, does not increase further. The EESC shares the concerns expressed in the Committee of the Regions’ opinion of 7 February 2008 (2). A weighting of the balance towards external flexibility might ‘allow for extensive deregulation of normal working conditions so as to increase precarious employment’.

2.1

The Swedish Presidency is calling on the EESC to issue an opinion on ‘flexicurity’, on which it has already given its view (3), but which is presented in a different context. The urgent need for taking another look at the subject in the light of the financial crisis was confirmed during a hearing held by the Swedish Presidency in Stockholm on 7 July 2009.

2.2

Flexicurity is interpreted differently. In its communication COM(2007) 359 final, the European Commission has defined it as ‘an integrated strategy to enhance, at the same time, flexibility and security in the labour market (4).’ Since this definition was also used in the conclusions to the special summit in Prague on 7 May 2009, this opinion is also based on this shared interpretation.

2.3

The EESC stresses that, in accordance with the principle of subsidiarity, labour market policies are the preserve of the Member States. Any attempt to harmonise labour laws would run counter to this principle and would prove inappropriate, by harming traditions and geographical structures that have proved their worth and solidity. Moreover, it should be borne in mind that the Member States do not all enjoy the same level of economic development and this is reflected in their respective social systems. In this context, the EESC feels that the EU should focus primarily on:

3.1.1

The short-term effects of the greatest economic crisis in the Community’s history are fairly obvious. Public debt in the EU Member States is growing at an unprecedented rate. Although the world’s central banks have flooded markets with liquidity, the banking system is still not operating normally. In particular, small and medium-sized enterprises (SMEs) and self-employed workers are finding it extremely hard to secure access to new credit. It will not be long before the deleterious impact of unemployment on societies and the internal market begins to be felt. At the same time, there are far fewer opportunities for job creation, and far more difficulties involved.

3.1.2

The EESC believes that it is essential to adapt the flexicurity model in the short term in the light of the serious current socio-economic situation, even though its last opinion on the matter dates from spring 2008. The Committee welcomes the Swedish Presidency’s request for an assessment of how the Member States might use flexicurity for restructuring against the backdrop of global development. Global development refers to the financial crisis and its tragic repercussions on the real economy and on employment. This crisis has already proved to be the worst for 80 years. Its effects will very probably mark the whole of the 21st century. It is all the more serious for occurring in parallel with two other crises that represent major challenges at global level: the climate crisis and the demographic crisis.

3.1.3

The crisis is changing the socio-economic environment for any potential labour market reforms. This is clearly true whatever one thinks about the appropriateness and feasibility - or indeed the necessity or impossibility - of such structural reforms at a time of crisis. Nevertheless, the EESC emphasises that reintegrating the unemployed back into the labour market and getting them back to work must be an absolute priority.

3.1.4

Nevertheless, the Committee intends to draw conclusions from its observations, with a view to formulating specific, positive proposals on the constituent elements of ‘flexicurity’, namely flexibility and security. The Committee stresses that the balanced management of flexibility and security measures is vital if we wish to avoid further social conflict of the kind that has already arisen in Europe.

3.2.1

Internal flexibility must flow from the social dialogue between management and the workforce, or its representatives, the social partners, in the company or sector in question. It prevents job losses and can thus be a major stabilising factor for social cohesion in Europe in difficult times. Good relations between business and the workforce are essential to guarantee businesses’ commitment to social responsibility and to keep workers in the labour market by increasing employment. The role of governments is crucial in supporting these measures, but they should not intervene at the expense of their capacity to provide basic social services, such as safety (be this in the context of food products, air traffic, the universal nature of public services or policing) or education, which is now seen in terms of life-long learning.

3.2.2

Any social reform must be set in its socio-economic and political context. In fact, the aspects of ‘flexicurity’ highlighted by the European Commission describe an ideal and model situation that can serve as a reference and example for any structural reform of the labour market. There is no doubt that at a time of crisis, ‘flexicurity’ raises many serious issues, if there is no guarantee that the sacrifices required for hypothetical employability will actually bear results. Therefore, it must be borne in mind that flexicurity will only be useful if it is jointly understood by the social partners and not just by one of them. In this context, it is essential to look very closely at security and the balance between security and flexibility. The Committee believes that the European Commission should focus its analysis more on the options of internal flexibility which could be a useful tool in flexicurity to combat unemployment (5).

3.2.3

The Committee believes that these aspects need to be balanced and that flexicurity must not be applied to the detriment of security. Yet, how can Member States ensure this balance in a time of crisis? The Committee proposes that reforms based on the flexicurity model be examined extremely carefully at this time to avoid undesired social and political repercussions. In the case of ‘external’ flexicurity, there is a need for more precautions.

3.2.4

In accordance with the above, every aspect of the flexicurity measures and particularly the budgetary aspects must be credible. This will probably lead Member States to change their spending priorities – and perhaps also to a strengthening of Community aid, since there can be no flexicurity without security.

3.2.5

Unlike the prudent use of various kinds of internal flexibility, it would be risky under current circumstances to undertake labour market reforms with the aim of promoting more external flexibility. Hitherto, the European Commission’s analyses have stressed this aspect of flexicurity. In Europe, many collective agreements include provisions covering the internal organisation of flexibility within companies. Such flexibility can take various forms, including organising working time to incorporate periods of training.

3.3.1

The EESC continues to urge that the social partners be the key players in a forum designed to facilitate regular dialogue on reform, so that both ends of the spectrum – employers and employees – can work to ensure that a balance is consistently maintained between flexibility and security. This approach is important and useful for the future of employment in Europe. It is for this reason that civil society must also be involved in the debate. Any employment policy or reform of the labour market has a major impact on society. Moreover, these reforms must not be seen in isolation from the economic, social and sustainable development of society.

3.3.2

Flexicurity is an important tool for mitigating the impact of the financial crisis and the crisis in the real economy on work and jobs. However, it must not be abused, for example by being used to facilitate redundancies in countries which have labour legislation giving a certain level of protection against ‘hire and fire’ practices. The Committee welcomes the clarity with which the European Commission has stated that flexicurity may in no circumstances become a right to fire workers.

3.3.3

The Committee strongly emphasises that any reform of labour law must be conducted together with the social partners, or it will be doomed to failure. Social dialogue is a guarantee of modern, social participatory democracy. Changes to labour legislation must be the result of negotiations between the social partners. Moreover, social dialogue also allows the adoption of diverse forms of internal flexibility, giving enterprises considerable latitude to adapt, regardless of whether they are experiencing an upward or downward trend in business activity.

3.3.4

The EESC welcomes the joint initiatives and efforts made by Europe’s social partners in connection with flexicurity. The Committee is pleased that the European social partners have included monitoring and assessment of the implementation of flexicurity on their work programme for 2009-2010. The Committee awaits the report on this assessment and expects the joint evaluation to have a considerable impact on shaping the ways in which flexicurity is applied in the various Member States.

3.4.1

In the short term, the analysis of flexicurity and the ways in which it might be applied must – whilst always taking account of the existence of social dialogue at all levels, the financial constraints and the role of governments – focus on the objective of preserving as many jobs as possible with the highest possible added value and on strengthening the overall level of social protection for all workers, whatever their situation on the labour market.

3.4.2

The EESC draws attention to the conclusions of the Council report of 8 and 9 June on flexicurity in times of crisis. It is essential for the unemployed to find work again as quickly as possible. The EESC emphasises the need to give them help, support and effective guidance very quickly. Member States should be encouraged to make better use of the existing European funds and they must be absolutely committed to improving the quality of instruments for encouraging employment, for example, agencies offering quality jobs, to strengthen their services and effectiveness.

3.4.3

The EESC shares the Commission’s opinion that the agreements on allowances for lay-offs can be an effective short-term tool for preserving jobs, avoiding unemployment and maintaining purchasing power. These provisions have a threefold impact, ensuring that businesses do not lose workers’ know-how and skills, that workers are not excluded from the labour market and that national economies are not destabilised by preventing a wave of unemployment. The crisis has highlighted the need for promoting ‘working time accounts’ and the flexible management of working hours. Companies with ‘working time accounts’ are much more capable of reacting quickly to new market situations and adapting to sudden falls in demand. The EESC calls on EU Member States to make this instrument as attractive as possible to employees and companies.

3.4.4

The EESC encourages the social partners at all levels, including the micro-economic level, to focus the social dialogue and the compromises that it will require from all the partners during this severe crisis, on maintaining and creating jobs whilst upholding workers’ overall purchasing power. Governments must find the means to act as catalysts and promote or even reward such agreements. The EESC proposes to the Swedish Presidency and the European Commission that a web platform be set up to increase exchanges of information and experiences of practical initiatives by the social partners, taking account of the different range of situations at national, regional and local level.

3.4.5

The EESC believes that the four dimensions of flexicurity and its principles as defined by the European Commission could effectively contribute to reducing unemployment in Europe. Nevertheless, it is essential to ensure that high-quality jobs are created. Real social protection plays an important role in this respect and is essential for social cohesion in the EU. In this context, the EESC stresses that labour market reforms in the Member States should stem the steady rise noted over the past few years in the number of precarious jobs, characterised by too much flexibility to the detriment of security. The Commission should carry out periodical evaluations of how the principles of flexicurity are being applied in legislation and regulatory provisions relating to the labour market. The EESC believes that the principles of flexicurity should be further integrated into the post-Lisbon agenda. Moreover, the EESC suggests that the work of the European social partners be coordinated with this agenda.

3.5.1

The EESC feels that it is appropriate for the Swedish presidency to be launching a debate on the aspects of flexicurity which could, judging from the example of a number of Member States which have introduced it, help the Union to get through this global financial and economic crisis while safeguarding as many jobs as possible, so as not to endanger its social cohesion. The EU has much to gain from ensuring that workers are not deskilled, since it will need their skills after the crisis, especially since demographic changes will lead to a considerable reduction in the potential skilled labour force in most European countries.

3.5.2

Making skilled workers redundant during a recession is a threat to future recovery. It risks compounding lack of know-how. Worse still, many European companies seem to be cutting their apprenticeships or posts intended for young graduates. In doing so, they are endangering their own future. Moreover, flexicurity itself can only function if employees are properly trained. Therefore, putting a halt to training would run counter to this reform tool. There is a strong link between new skills and creating new jobs. The ‘Lisbon 2010 plus’ strategy must provide solutions for these problems. Companies are supposed to invest in ongoing training for their employees. At the same time, it is clear that individual workers are responsible for continuing their own training.

3.5.3

The countries within the EU must set a global example by making life-long learning, as a component of flexicurity, part of a sustainable development approach. Worker training must be focused on Europe’s objectives of creating more, better quality jobs and endeavouring to develop a sustainable economy.

3.5.4

The bedrock of flexicurity is greater employability, which is determined by the quality of education systems and the effectiveness of ongoing training. As long as the Member States continue to declare their support for lifelong learning without reforming their education systems or attaching more importance to preschool education, without allocating more resources to education and without encouraging work-based vocational and ongoing training and putting in place tax incentives to that end, a key condition for flexicurity cannot be met. The Committee calls on national governments to make all these education-related issues an absolute priority. The Committee supports joint action by the Member States to promote the education and training sector in Europe.

3.6.1

Under the Lisbon Treaty, which the Committee supports and hopes to see adopted by the EU’s 27 Member States, the internal market is defined as a social market. Article 2 of the Treaty establishing the European Community cites ‘a social market economy’ as one of the objectives of the Community. This is an important new development. This new direction, which gives far more space to social interpretations of community law, cannot fail to have an impact on future European legislation and, above all, on the case law of the European Court of Justice.

3.6.2

It is true that some political developments in a minority of European countries are leading to concerns about the likelihood of the Treaty ever being adopted at all. Nevertheless, the Committee remains optimistic, since there is no alternative, no ‘plan B’. In a 27-strong Union, especially during a time of crisis, the institutions need to be able to work more effectively than the Treaty of Nice allows. The Committee therefore feels that the European institutions need to work on the flexicurity file in the expectation that the Lisbon Treaty will enter into force this year or in 2010 at the latest – and with an eye to the ongoing development of the crisis. One of the consequences of the Treaty entering into force will be that a new and more current dimension of ‘security’ will be reflected in Community law.

23.12.2009   

EN

Official Journal of the European Union

C 318/6

1.1

The EESC supports the aims embodied in the four pillars of the Baltic Sea Region strategy, to make the region a prosperous place, a safe and secure place, an environmentally sustainable place and an attractive and accessible place.

1.2

The EESC recognises the comprehensive consultation process that preceded the finalisation of the strategy and the role played in the process by the social partners and stakeholders. The EESC re-emphasises the crucial role of organised civil society in the implementation of the Baltic Sea Region strategy and reaffirms its support for the establishment of a Baltic Sea Civil Society Forum that would help to embed civil society in the evolution of the strategy.

1.3

The EESC welcomes the strategy’s Action Plan which comprises 15 priority actions each of which will be the responsibility of a Baltic Member State to implement.

1.4

The Baltic Sea Region strategy has both strengths and weaknesses. Its major strengths are that it is comprehensive in its intended coverage and that it will be reviewed regularly by the Commission and the European Council. Its weaknesses stem from its complexity and from governance issues surrounding its implementation. The strategy encompasses the remit of 21 Directorates General as well as 8 Member States plus Russia. Taken with the 4 pillars, 15 priority actions and numerous horizontal actions, there is a complex ‘variable geometry’ at the heart of the strategy which might make it unworkable. The EESC believes that every effort should be made to simplify the governance arrangements for the implementation of the strategy.

1.5

The EESC has an important role to play in ensuring a spirit of cooperation during the development and implementation of the strategy. The creation of a Baltic Sea Civil Society Forum goes some way towards giving organised civil society a stake in the future evolution of the strategy.

1.6

The Baltic Sea Region strategy poses a major challenge to the EESC in general and in particular to those committee members from the Baltic region. It obliges them to take the initiative in representing organised civil society in the evolution of the strategy through the operation of the Civil Society Forum. In view of the fact that the Baltic Sea Region strategy will operate for several years there is a compelling case for setting up a permanent group within the EESC to ensure that the committee can participate effectively in what may become the template for macro-regional cooperation across the European Union.

2.1

The issue of macro-regional cooperation has grown in importance in recent years. Within the EU macro-regions are now seen as having the potential to make a significant contribution to cohesion policy and the achievement of comparable levels of development across Member States. Europe already embraces forms of macro-regional cooperation. The Visegrad Group, for instance, which comprises the Czech Republic, Hungary, Poland and Slovakia, represents the efforts of the countries of the Central European region to work together in several fields of common interest in the spirit of European integration (1). More recently in 2008 the Euro-Mediterranean Partnership, formerly known as the Barcelona Process, was re-launched at the Paris Summit for the Mediterranean. This Partnership comprises all 27 Member States of the European Union together with 16 partner states across the southern Mediterranean and the Middle East and it aims to tackle common problems such as maritime pollution and maritime safety, energy issues and business development (2).

2.2

In November 2006, the European Parliament adopted a resolution to draw up a Baltic Sea Strategy. This strategy for the designated Baltic Sea macro-region was adopted by the Commission on 10 June 2009 and was submitted to the European Council on 19 June 2009. The Swedish Presidency will take if forward for further discussion ahead of adoption by the Council in late October 2009. This exploratory opinion has been requested by the Swedish Presidency as it forms an important element of its work programme. The purpose of this opinion is to assess the proposed Baltic Sea Strategy, its preparation, its structure and its Action Plan from the perspective of organised civil society. The opinion builds upon the analysis set out in the recently adopted EESC opinion ‘Baltic Sea Region: the role of organised civil society in improving regional cooperation and identifying a regional strategy’ (3).

2.3

The call for a Baltic Sea Strategy stems from the view that there is a need to achieve greater and more effective coordination between the European Commission, Member States, regions, local authorities and other stakeholders in order to bring about a more efficient use of programmes and policies. The Baltic Sea is one of the busiest and most congested maritime regions in the world as can be seen from the mapping of daily ship movements set out in the Appendix to this opinion. The Baltic Sea region comprises eight Member States which border the Baltic (Finland, Sweden, Denmark, Germany, Poland, Estonia, Latvia, Lithuania) along with Russia. The European Council, when it asked the Commission to undertake the production of the strategy, determined that the external relations aspects of the strategy should be linked to the existing Northern Dimension framework (4). The EESC supports the move to produce a macro-regional development strategy that includes all the Baltic Sea states.

2.4

The process that led to the development of the strategy is unprecedented. The Commission's view is that, if the Baltic Sea Strategy is valid and workable in the Baltic, a similar approach may be applicable to other macro-regions such as Danube Region (5), the Alpine region and the Mediterranean:

2.5

The strategy is accompanied by an Action Plan which comprises 15 priority areas across the four pillars. Each priority area is to be coordinated by a Baltic Member State and they are expected to work on its implementation together with all relevant stakeholders (6).

2.6

The Baltic Sea Strategy and its proposed actions are to be funded from existing sources of funding, namely the EU Structural Funds (EUR 55 billion between 2007-13), funding from each Baltic Sea state, NGOs, private sourcing as well as funding from financial institutions such as the EIB, NIB and the EBRD.

2.7

In addition to the four pillars, the strategy also contains horizontal actions designed to develop territorial cohesion. These include:

3.6.1

In the meantime, however, the strategy should make use of the opportunities provided by existing European initiatives such as the Joint Programming in Research, which has received strong support from the EESC. This initiative will contribute to the Commission's recommendation contained in the Baltic Sea Strategy, namely to exploit the full potential of the Baltic Sea Region in research and innovation in order to make it a prosperous place.

4.1

The EESC has already put forward a proposal to establish a ‘Baltic Sea Civil Society Forum’ and has indicated its readiness to begin preparing the groundwork for such a Forum (10). This Forum should run in parallel with the strategy and it should make an input into the Bi-annual strategy Review. The success of the consultation conferences leading to the preparation of the strategy lends further weight to the need for ongoing public discussion and awareness raising about the strategy’s implementation.

4.2

The EESC together with the Economic and Social Committees of the Baltic Member States have important roles to play in ensuring an atmosphere of cooperation and working together during the implementation of the strategy. In order to strengthen institution building and participatory civil society structures especially in new member countries and in neighbouring states such as Russia, it might be useful to establish cross-border relations and cooperation between sister organisations such as trade unions, consumer bodies and community and voluntary sector organisations. The membership of the EESC from the eight Baltic Member States in particular should develop the roles of emissary, interlocutor and rapporteur to enable the Committee to maintain an informed position on the strategy's progress, successes and challenges and can therefore support the achievement of its objectives.

4.3

The EESC welcomes the serious attempt being made in the Baltic Sea Region Strategy to develop an integrated approach to macro-regional cooperation. The Committee has been an advocate of such an approach for some time, as has the European Parliament.

4.4

The EESC supports the broad approach to implementation advocated in the strategy whereby Member States take the lead in coordinating implementation of the 15 priority areas and the associated flagship projects.

4.5

It could be argued that the Baltic Sea Region strategy represents an important test of the role of the EESC. It challenges the Committee to play a full part in the evolution of the strategy, notwithstanding the difficult governance issues discussed earlier in this opinion. It throws down a challenge in particular to those members of the EESC from the 8 Baltic Member States covered by the strategy. It obliges them to take the initiative in representing organised civil society in the ongoing implementation of the strategy through the operation of the Baltic Sea Region Civil Society Forum. Given that the strategy is likely to operate for many years to come, there is a strong argument for the establishment within the EESC of an ad hoc Baltic Sea Region observatory or study group so that the entire EESC can participate effectively in what is sure to become a template for macro-regional cooperation across the Union.

23.12.2009   

EN

Official Journal of the European Union

C 318/10

1.1

Drawn up in response to a request by the Swedish Presidency to the EESC, this exploratory Opinion focuses on how to make the EU strategy on alcohol related harm sustainable, long-term and multisectoral (1). The goal of the Swedish Presidency is to support the implementation of the horizontal EU alcohol strategy and the establishment of long-term preventive work at both EU and national level.

1.2

This Opinion builds on the previous EESC Opinion on alcohol related harm, which looked at five priority themes: protecting children; reducing alcohol related road accidents; preventing alcohol related harm among adults and in the workplace; information, education and raising awareness; and common evidence base (2).

1.3

The Opinion highlights the following four priorities of the Presidency:

to achieve a comprehensive approach, all of the themes dealt with in both opinions and other relevant matters should be taken together.

1.4

Drinking patterns vary significantly across countries, but most consumers drink responsibly most of the time (see 3.2) (3). Having said that, the EESC is concerned that 15 % of the EU adult population are estimated to drink at harmful levels on a regular basis, and that children are the most vulnerable to the harms caused by alcohol. Policy measures should be designed to reach those already drinking at harmful levels.

1.5

Alcohol marketing is one of the factors that increases the likelihood that children and adolescents will start to use alcohol, and will drink more if they are already using alcohol. Given this, the EESC calls for a reduction in the exposure of children to alcohol marketing.

1.6

Appropriately designed alcohol pricing policies can be effective levers in reducing alcohol related harm, particularly among low income and young people. The EESC believes that regulation governing the availability, distribution and promotion of alcohol is needed; self-regulation in this area is not enough.

1.7

To raise awareness about the risk of Foetal Alcohol Spectrum Disorder (FASD), the EESC supports national and EU level awareness-raising campaigns.

1.8

The EESC believes that more information is needed about the effects of harmful alcohol consumption on healthy and dignified ageing at an EU level.

1.9

The EESC recognises that alcohol policies should be comprehensive and include a variety of measures for which there is evidence of reducing harm.

2.1

The European Union has competence and responsibility to address public health problems related to harmful and hazardous alcohol use on the basis of article 152 (1) of the Treaty (4), which states that Community action shall complement national policies.

2.2

Following the Council Recommendation of 2001 on the drinking of alcohol by young people (5), it invited the Commission to follow and assess developments and the measures taken, and to report back on the need for further actions.

2.3

In its Conclusions of June 2001 and of June 2004, the Commission was invited to put forward proposals for a comprehensive Community strategy aimed at reducing alcohol-related harm which would complement national policies (6).

2.4

In 2006, the Commission adopted the Communication: An EU Strategy to support member states in reducing alcohol related harm (7). It aims to ‘map actions’ put in place by the Commission and Member States, and explains how the Commission can further supports and complements national health policies. The EESC believes that the Communication falls far short of a ‘comprehensive strategy’ (8) as it does not provide a comprehensive and transparent analysis of all the relevant policy areas and of the difficulties some Member States have experienced in maintaining quality public health alcohol policies due to EU market rules (9). The Strategy also fails to acknowledge that alcohol is a psychoactive drug, a toxic substance when used to excess, and, for some, an addictive substance.

2.5

The European Court of Justice has repeatedly confirmed that reducing alcohol related harm is an important and valid public health goal, using measures deemed appropriate and in accordance with the principle of subsidiarity (10).

2.6

The EESC acknowledges the work performed by all relevant stakeholders within the European Alcohol and Health Forum since its launch in 2007. The EESC welcomes similar developments at local levels.

3.1

Globally, the European Union is the region where most alcohol is consumed, with 11 litres of pure alcohol consumed per person each year (11). Overall consumption declined between the 1970s and mid-1990s, since when it has remained relatively stable; however there are still differences between countries in terms of both consumption and harm, also in terms of the form the harm takes (12); however, harmful drinking patterns remain significant (13).

3.2

Most consumers drink responsibly most of the time. However, the EESC is concerned that 55 million adults in the EU (15 % of the adult population) are estimated to drink at harmful levels on a regular basis (14). Harmful alcohol consumption is estimated to be responsible for approximately 195 000 deaths a year in the EU due to accidents, liver disease, cancers and so forth. Harmful alcohol use is the third biggest cause of early death and illness in the EU (15).

3.3

The EESC believes that harmful alcohol consumption by individuals is not a problem that develops in isolation, but rather one that can have a variety of causes including poverty, social exclusion, family environment, and work-related stress.

3.4

While different cultural habits related to alcohol consumption across Europe exist, it can also be observed that different cultural habits related to harmful and hazardous alcohol consumption, including among children and adolescents, exist (16). The EESC urges the Commission and the Member States to take account of these national and local patterns when defining policies.

3.5

Children are particularly vulnerable to harms caused by alcohol. It is estimated that in the EU 5 to 9 million children in families are adversely affected by alcohol. Alcohol is a causal factor in 16 % of cases of child abuse and neglect, and an estimated 60 000 underweight births each year are attributable to alcohol (17).

3.6

Harmful alcohol consumption can cause harm not only to the individual but also to third persons. Alcohol-related harm should also be addressed in the workplace, in the framework of health and safety regulations, which is primarily the responsibility of the employer. Workplace alcohol policies could help reduce alcohol-related accidents, absenteeism and increase working capacity. The EESC urges employers, trade unions, local authorities and other relevant organisations to closely cooperate and to undertake joint actions to reduce alcohol-related harm in workplaces.

3.7

Alcohol is an important commodity in the Europe creating jobs, generating revenue through taxes and contributing to the balance of trade. However, harmful alcohol drinking also affects the economy, due to increased health care and social costs, and loss of productivity. The cost of alcohol related harm to the EU’s economy was estimated at EUR 125 billion for 2003, equivalent to 1,3 % of GDP (18).

4.1

The EESC urges the Commission to acknowledge the WHO European Charter on Alcohol (19) adopted by all EU Member States in 1995 and, in particular, the ethical principle that all children and adolescents have the right to grow up in an environment protected from the negative consequences of alcohol consumption and, to the extent possible, from the promotion of alcoholic beverages.

4.2

The EU Council recommendation urged Member States to establish effective mechanisms in the field of promotion, marketing and retailing and to ensure that alcohol products were not designed or promoted to appeal to children and adolescents.

4.3

Binge drinking by young adults (15-24 years) is a growing concern at EU and Member State level; 24 % of drinkers in this age group reported binge drinking at least once a week in 2006 (20). Beer (40 %) and spirits (30 %) are the most often consumed alcoholic drinks among teenagers (21), followed by wine (13 %), alcopops (11 %) (22) and cider (6 %). Alcohol sales promotions such as ‘happy hour’ and ‘two for one’ promotions also increase alcohol consumption and the likelihood of binge drinking among youth (23). As a step forwards, the stricter enforcement of legal drinking age by authorities is required.

4.4

Alcohol advertising and marketing are influential in shaping young people’s attitudes to and perceptions of alcohol, and encouraging positive expectations of alcohol use amongst young people (24). A review of longitudinal studies by the Science Group of the European Alcohol and Health Forum found ‘consistent evidence to demonstrate an impact of alcohol advertising on the uptake of drinking among non-drinking young people, and increased consumption among their drinking peers. This finding is all the more striking, given that only a small part of a total marketing strategy has been studied’ (25).

4.5

The EESC is concerned that alcohol marketing attracts underage drinkers (26), and draws attention to consistent findings that exposure to television and sponsorship that contains alcohol predicts the onset of youth drinking and increased drinking (27).

4.6

The WHO Expert Committee considered that ‘voluntary systems do not prevent the kind of marketing which has an impact on younger people and that self-regulation seems to work only to the extent that there is a current and credible threat of regulation by government’ (28).

4.7

Actors in the alcohol beverage chain have declared their willingness to be more proactive in enforcing regulatory and self-regulatory measures (29). They have a role in working together with the Member States to ensure their products are produced, distributed and marketed in a responsible manner, contributing to reduce alcohol related harm.

4.8

The Audiovisual Media Services Directive helps set minimum standards for alcohol advertising. It specifies that ‘[…] alcohol advertisements shall […] not be aimed specifically at minors, shall not link the consumption of alcohol to enhanced physical performance, social or sexual success and shall not claim that it is a stimulant, a sedative or a means of resolving personal conflicts’ (30). The EESC believes that this Directive alone is not sufficient to fully protect children from alcohol marketing.

4.9

The EESC urges that a reduction in the exposure of children to alcohol products, advertising and promotions be stated as a specific objective by the Commission, and that tighter regulation in this area be introduced.

5.1

There is increasing pan-European interest in measures to combat alcohol related harms. Alcohol is an important commodity in Europe, creating jobs, generating revenue through taxes and contributing to the EU economy through trade. However, an estimated 15 % drinks at harmful levels generating harm for individuals and societies. In 2003, the cost of alcohol misuse in the EU was estimated at EUR 125 billion, equivalent of 1,3 % GDP (31).

5.2

Based on the RAND study, there is a trend across the EU towards more off-trade alcohol consumption, which tends to be cheaper than alcohol sold on-trade (32). However, it should be noted that the study focused only on off trade alcohol prices and did not compare off trade prices to on trade prices.

5.3

Studies show that alcohol became more affordable across the EU between 1996 and 2004, in some countries by more than 50 % (33). Evidence shows that there is a positive relationship between alcohol affordability and alcohol consumption in the EU (34).

5.4

Young people are sensitive to alcohol price increases, which lead to reduced frequency of drinking among young people and, to smaller quantities drunk in each drinking event (35). However, other studies show that young people may turn to more harmful drinking patterns in response to price increase, e.g. pre-drinking (36) where people consume cheaper alcohol at home before going out. This finding has important implications for alcohol policy in the EU, particularly given the increase in harmful youth drinking.

5.5

An estimated 3.8 % of all global deaths and 4.6 % of global disability-adjusted life-years are attributed to alcohol. There is a positive relationship between alcohol consumption and traffic injuries and traffic deaths (37). Alcohol is the sole cause of some diseases such as alcoholic liver disease and alcohol-induced pancreatitis, and is a contributory cause of other diseases and injuries (e.g. certain types of cancer, heart disease and strokes and liver cirrhosis) (38). Harmful alcohol consumption is a contributory factor for crime, violence and family deprivation, risky sexual behaviour and sexually transmitted disease (39).

5.6

It is estimated that across the EU heavy episodic drinking contributes to 2 000 homicides, 17 000 traffic deaths (or one in three of all traffic fatalities), 27 000 accidental deaths and 10 000 suicides (40).

5.7

Alcohol pricing policies can be effective levers in reducing alcohol related harms (41). The EESC nevertheless believes that pricing policy should be considered when developing strategies to address alcohol related harm in a long-term, sustainable and multi-sectoral way.

5.8

Alcohol policies should be comprehensive and include a variety of measures for which there is evidence of an impact in reducing harm, such as drink drive policies and primary health based interventions. The EESC recognises that no single measure can solve alcohol related harm.

5.9

The EESC believes that efficient enforcement of regulation governing the availability, distribution and promotion of alcohol is needed. Self-regulation in this area is part of the solution, but in itself not sufficient. Restrictions on sales below cost and on sales promotions should be possible without being trade restrictive or in contravention with EU law.

6.1

The destiny of Europe depends on a healthy and productive population. The evidence that a higher proportion of the disease burden from harmful and hazardous alcohol consumption is experienced by young people is therefore of grave concern to the EESC (42).

6.2

The Commission recognises that children have a right to effective protection against economic exploitation and all forms of abuse (43). The EESC strongly supports this position.

6.3

The EESC notes that harmful and hazardous alcohol consumption impacts negatively not only on the drinker but on people other than the drinker, especially in relation to accidents, injuries and violence. In families, the EESC recognises that the most vulnerable group at risk are children.

6.4

It is estimated that 5 to 9 million children in families are adversely affected by alcohol, that alcohol is a contributing factor in 16 % of cases of child abuse and neglect, as well as contributing to an estimated 60 000 underweight births each year (44). Further negative effects for children include poverty and social exclusion, which can affect their health, education and well-being both now and in the future.

6.5

Domestic violence, a serious problem in many countries (45), is strongly linked to problems of heavy drinking by the perpetrator (46). While domestic violence can occur in the absence of alcohol, heavy drinking can contribute to violence among some people. A reduction in heavy drinking benefits the victims and perpetrators of violence, and the children living in such families.

6.6

Alcohol can affect children even before they are born. Foetal alcohol spectrum disorder (FASD) describes a continuum of permanent birth defects (physical, behavioural and cognitive) caused by maternal consumption of alcohol during pregnancy.

6.7

Awareness about FASD and its effects is low. Disseminating evidence-based examples of preventive programmes to reduce alcohol harm during pregnancy is critical. The EESC supports the use of targeted EU and national Government campaigns to raise awareness about the risk of FASD.

7.1

Older people are more sensitive to the effects of alcohol. Specific problems include balance and risk of falling and the onset of health problems that can make older people more susceptible to alcohol. About a third of older people develop drinking problems for the first time in later life, often due to bereavement, physical ill-health, difficulty getting around and social isolation (47).

7.2

Harmful alcohol consumption can affect older people’s mental health in the form of: anxiety, depression and confusion.

7.3

Alcohol Use Disorders are common among older people, particularly among males who are socially isolated, and living alone (48). Problematic alcohol use is associated with widespread impairments in physical, psychological, social and cognitive health. Around 3 % of those over 65 years suffer from these disorders (49), though many cases may go undetected as diagnostic criteria and screening are directed at younger adults. However, treating older people for alcohol problems is often easier than treating younger adults.

7.4

Alcohol can add to the effects of some medications, and reduce the effects of others. Raising awareness among care professionals, informal carers and older citizens of potential interaction between medication and alcohol is important.

7.5

The EESC believes that more needs to be done to address the wellbeing of the ageing population in the EU, including information about the effects of harmful alcohol consumption on healthy and dignified ageing at an EU level.

23.12.2009   

EN

Official Journal of the European Union

C 318/15

1.1

The issue raised by the Swedish presidency – exploring the links between gender equality, growth and employment – is a useful one in that it provides an opportunity to step back and take stock. Gender equality has been the subject of a large number of reports, studies, directives, laws, recommendations and agreements. Yet real life has proved doggedly resistant and the inequalities remain – legacies of bygone centuries that have been challenged only in the past fifty years. Gender equality may now be enshrined in law, but mind sets and practices – both of individuals and of society as a whole – still need to be changed. This opinion proposes a change of outlook in three areas in particular: organisation of time, the recognition of qualifications in jobs providing services to individuals, and gender balance in professional sectors and decision-making posts.

1.2

The Committee’s recommendations are thus addressed to the Member States, the European Commission, the social partners and all those playing an active role in society.

To the Member States:

1.3

Growth is measured in terms of rising GDP. However, this indicator is not sufficient to reflect the economic contribution made by women. For the purpose of studying the links between gender equality and growth, it would be helpful to look again at how the latter is calculated.

1.4

Working for gender equality must be considered as a means:

To the Commission:

1.5

Request to monitor and evaluate Member States’ efforts to implement the roadmap for equality between women and men, and request to become a forum for exchanging good practice and experience.

To the social partners:

1.6

Request to implement their common framework for action on gender equality by focusing on gender roles, promoting women in the decision-making process, supporting work-life balance and closing the pay gap;

1.7

to improve knowledge and instruments for combating job segregation and promoting gender balance;

1.8

to professionalise jobs providing services to individuals by better recognising the skills needed to carry them out.

To all civil society actors and political leaders:

2.1

The need for measures aimed at improving female participation in the labour market is an integral part of the Lisbon Strategy, the purpose of which is to make Europe a more competitive, knowledge-based society.

2.2

The Commission’s 2008 report on equality between women and men in Europe (1) states: ‘Female employment has been the main factor in the steady growth of employment in the EU in recent years. Between 2000 and 2006 employment in EU-27 grew by nearly 12 million, including more than 7.5 million women (…). [The] employment rate for women with dependent children is only 62.4 %, compared with 91.4 % for men, a difference of 29 points. More than three-quarters of part-time workers are women (76.5 %), corresponding to one woman in three, as against less than one man in ten.’

2.3

The 2009 report (2) puts the female employment rate at 58.3 % compared to 72.5 % for men, and the proportion of women in part-time work at 31.2 % compared to 7.7 % for men. It points out that women are over-represented in sectors with lower wages, and highlights the unequal distribution of power in institutions and businesses.

2.4

Although gender equality has not yet been achieved, the situation of working women in Europe is among the best in the world; the European Union deserves credit for having tackled this issue from the start and for putting in place statistical tools, studies, analyses and legislation.

2.5

Despite the progress made and the positive results achieved, the economic potential of women has not been adequately realised. Moreover, the unprecedented international economic and financial crisis will probably have a different impact on men and women, given their different situations in the economic, social and family circle.

2.6

As a very large number of studies are available, recommendations have been made, and decisions have been taken by the European institutions and social partners – in nine years, the Committee has adopted 14 opinions on subjects related to gender equality (3) – this opinion deliberately does not attempt to deal with the entire subject of gender equality. Instead, its scope is limited to the subject’s link with growth and jobs, focusing on the goals set by the Lisbon Strategy on increasing female participation in the labour market (4).

3.1.1

Female employment has risen steadily since the 1960s. Women accessing jobs in large numbers since the 1970s has been a big step towards gender equality. As soon as women were able to choose when to have children and to access higher education, they, like men, wanted to use their skills in society and not just in their families, and to become financially independent. Paid work means personal income, better social security and pension benefits, and a cushion against poverty in the event of separation, divorce or widowhood.

3.1.2

The entry of women into employment created new needs that the market had to satisfy. Women used to work in the home, which was not accounted for in gross domestic product. As women moved beyond the domestic sphere, jobs were created to carry out the tasks that they had been doing at home. One thinks of childminders or cleaners, but not exclusively.

3.1.3

Female employment created needs that helped boost economic development. As women went out to work, couples bought themselves household electrical appliances and a second car; they bought ready meals; children and parents ate out; families needed services and care homes for invalids, people with disabilities and elderly people, who had previously been looked after by housewives; and children needed looking after before and after school. With two salaries, couples were able to purchase a home, enjoy cultural activities, travel, etc. Jobs were thus created in industry (domestic appliances, cars and food), mass catering, health and social care, the extra-curricular activity and pre-school sector, and in education, as well as in construction, tourism, leisure, culture, passenger transport, etc.

3.1.4

Over the last forty years, this trend, which has transformed domestic work into jobs, has been a driver of growth. But is this genuine growth – or merely a reflection of the method used to calculate it? The economy takes no account of domestic and family work, which is, nonetheless, necessary for society to function. This makes one wonder about the way growth is calculated.

3.2.1

According to an EU analysis note (5), the contribution of gender equality to the economy should not be measured purely in terms of the profitability of businesses. It is a productive investment that contributes to overall economic progress, growth and employment. Gender equality can contribute to development 1) through increased female labour market participation, which means that better use is made of the investment put in to their education and training; 2) through greater economic independence; 3) through the integration of women into the fiscal system, thus contributing to the welfare state.

3.2.2

Despite the economic contribution being regarded as wider than the business approach and diversity management at the company level, there is some evidence of positive economic outcomes associated with the business approach. Companies with more women on the boards are more profitable.

3.2.3

Equality policies can be seen as an effective investment in human resources. Even if the aims of economic development are limited to economic growth, from an investment perspective equality policies have the potential for a positive impact on individuals, firms, regions and nations. The more effective use of women with higher levels of education has also potential economic benefits.

3.2.4

A greater economic independence of women has benefits through their contribution as consumers of goods and services in the economy and the purchasing power of households. The economic contribution of women should be more recognised in the economic policies at national, regional and local level.

3.3.1

At a time when the economic and environmental crises are raising the question of what type of development is desirable, some voices are questioning the use of GDP as the sole indicator of growth. Other indicators should be considered (6).

3.3.2

Whatever indicators one uses, the situation of women remains unequal, and this has a cost for society. Governments invest the same amount in education for boys as for girls – yet 60?% of graduates from European universities are girls. It is not logical that countries do not then do more to support women in the labour market. Equal public spending on education for both sexes should enable women to attain the same levels of responsibility and pay as men. Women should take advantage of the changes currently under way to acquire the new skills needed for new jobs. However the contributions of women, their high education and their potential to address the future labour market needs remain undervalued and unrecognised.

3.3.3

Combating gender inequality is not just a moral issue: it is also a matter of better managing human resources. A larger number of women in employment will create more wealth and consume more goods and services, and will help to increase tax receipts. Mixed teams in the workplace give more potential for innovation. Giving couples the means to fulfil their desire to have a child by enabling parents to keep their jobs is a way of combating the demographic deficit. If Europe wants to invest in people, it must first address the disadvantages women suffer (7).

3.3.4

Women’s development potential is held back in particular by:

3.3.5

Focusing efforts on the conditions whereby women can enter the labour market and stay there, and closing the pay gap between men and women, promises more growth and better jobs, a means of preventing poverty, and a reduction in the cost of dealing with the consequences of social breakdown. Poverty in Europe can mainly be found among single women with children (9).

3.3.6

In the past, the division of tasks was such that the man earned an income that financed the family-related, social and domestic work done by his wife. When couples have two salaries, they do not devote one of them to financing services to carry out work that the housewife used to do, but instead prioritise the consumption of goods.

3.3.7

The unpaid work done by housewives was priceless, but when it becomes paid work, it has a cost that users are unwilling or unable to pay. Child minders, home helps and domestic cleaners are paid the lowest wages and work part-time for multiple employers (they are employed by private individuals for a few hours a week) and often in the informal economy. Domestic work is the largest sector of undeclared work in Europe.

3.3.8

Parents entrust that which is most precious to them, their baby, to people who earn much less than average, though they would like them to have a high level of skills. Similarly, cleaners are trusted with the key to people’s homes, yet are not paid a salary that reflects that trust. It is difficult to get these skills recognised, because families consider tasks that they can do themselves to be ‘easy’. Yet, whilst looking after one’ own children is not a profession, looking after other people’ is (knowledge of psychology, dietetics and hygiene; concentration; a listening ear; attention; constant watchfulness, etc.). The required skills, often considered ‘naturally’ feminine and therefore overlooked in the ‘professional’ sphere, are usually passed on informally within the family rather than taught in school.

—

because the female employment rate may rise, which will create additional needs for services;

—

because women’ salaries may be reassessed, which will increase spending power, the ability to consume and tax receipts;

—

because women will be able to occupy more political and decision-making positions, which will have a positive impact on the performance of businesses and institutions;

—

because more female entrepreneurs will add value and financial contributions to the economy through innovation and job creation.

4.2.1.1

The main obstacle to gender equality is currently job segregation. There are ‘male’ and ‘female’ professions. Salaries in female-dominated professions are often lower, and involuntary part-time work more widespread.

4.2.1.2

For as long as a profession is restricted to one gender, stereotypes will be associated with it. It has now been proven that men and women can do any kind of job. Women are now becoming dominant in professions that have traditionally been the preserve of men (such as those of teacher, judge and GP). Why is it so difficult to establish gender balance in employment? More research is needed in this area to tackle job segregation and promote gender balance. This will also alleviate the labour shortages from which some sectors suffer.

4.2.1.3

The obstacles to gender balance in jobs and functions are unintentional and have to do with perceptions. They have their roots in the education system, where boys and girls choose different careers. Parents and teachers need to be made more aware of the consequences of the career choices young people make. Management and union representatives who negotiate wage structures, which determine a hierarchy of skills during pay negotiations, have a key role, which means that they need to understand the value of the skills learned in the domestic and family sphere. Gender balance is also lacking in leadership roles. Steps must be taken to foster greater gender balance in large businesses and the senior civil service.

4.2.2.1

Jobs in services to individuals need to become real professions with recognised skills, training, qualifications, and career progression. To move away from the individual relationship between families and home helps, businesses and public bodies providing services to individuals should be created. Families should no longer be employers, but clients or users, who buy or receive a number of hours of cleaning, care for an elderly person, childminding, scholastic assistance, etc. Action is needed to roll out a system that already exists in a number of European countries, whereby the employing business or public body is responsible for the safety and security of property and people and must check the qualifications of staff sent to people’ homes. Said staff thus have a single employer, are paid for the journey time between two homes and have access to vocational training and applicable collective guarantees. A European frame of reference for home help services should be drawn up, including the psychological dimensions of these roles (trust, empathy, attention, listening, watchfulness, etc.), the necessary skills (dietetics, impact of products used on health and the environment, etc.) and not only the material and technical aspects of domestic work.

4.2.2.2

The recognition of qualifications will increase the cost of such services, which are already unaffordable for most families. Public financing and contributions from businesses – in cases where this is part of the business-level agreements – could make these services more affordable for all.

4.2.2.3

Professionalising jobs in services to individuals and improving salaries will make it possible to develop gender balance in the sector. Once men want to work as cleaners, childminders and home helps, a big step towards gender equality will have been taken.

4.2.3.1

Fathers spend less time than mothers on domestic and family tasks. Raising fathers’ awareness of the importance of their role vis-is their children, and encouraging men to take responsibility for their elderly parents and for those in the family who are sick, is a prerequisite for equality.

4.2.4.1

Developing early-years childcare should be seen not as a cost but as an investment. According to G Esping-Andersen (10), in the long term, working mothers pay back the subsidy ‘thanks to the increase in their lifetime earnings and the taxes they pay’. This revenue reimburses the initial public subsidy and has a beneficial impact on the child that attends a cre. Such investments could also help mitigate Europe’ demographic decline.

4.2.5.1

Developing these services also means funding them collectively (State, businesses, customers) (11). Some recent company-level agreements offer such services to staff as an alternative to pay rises. Offering services that help to improve work-life balance is part of corporate social responsibility.

4.2.6.1

Services alone are not sufficient to reconcile work and family life. Bringing up and educating children takes time over part of one’ life. Although part-time work, where chosen, can help family carers better reconcile their professional, family and private life, this must not make women less secure in their jobs, and in their lives, particularly when they are heads of family, or discourage fathers from devoting time to family life. Both parents need to be able to look after their children.

4.2.6.2

Other members of the family need time: those whose life is coming to an end, people who are sick, elderly parents. At a time when pensions are being reformed at all levels, we need to move away from the notion that life is divided into three segments: studies, work and retirement. Everyone needs to be able to study throughout his or her life and to have a sufficient number of years of time credit for family, social, voluntary, political and civic activities. It should be possible for people to choose to put back their retirement age if they prefer to take time out (financed in the same way as retirement) during their working lives.

4.2.7.1

Women are under-represented in all forms of leadership positions: political leadership, the senior civil service and corporate boardrooms. At the same time, the companies where women are most strongly represented at board level are also the companies that perform best financially. Women set up fewer businesses and are less likely to head companies. Men are under-represented in the family circle and are less likely to take parental leave.

4.2.7.2

Women who have succeeded in male-dominated environments could mentor women who aspire to the same career. Binding measures may be necessary: big public-sector institutions and large private enterprises should act to ensure that a significant number of their management positions are held by women.

—

24.3.2009 on the Proposal for a Directive of the European Parliament and of the Council on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity and repealing Directive 86/613/EEC, rapporteur: Ms SHARMA (OJ C 228, 22.9.2009)

—

13.5.2009 on the Proposal for a Directive of the European Parliament and of the Council amending Council Directive 92/85/EEC on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding, rapporteur: Ms HERCZOG, CESE 882/2009 (OJ C 277, 17.11.2009), (OJ C 277, 17.11.2009)

—

22.4.2008 on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Tackling the pay gap between women and men, rapporteur: Ms KÖSSLER (OJ C 211, 19.8.2008)

—

11.7.2007 on Employability and entrepreneurship — The role of civil society, the social partners and regional and local bodies from a gender perspective, rapporteur: Mr PARIZA CASTAÑOS (OJ C 256, 27.10.2007)

—

11.7.2007 on The role of the social partners in reconciling working, family and private life, rapporteur: Mr CLEVER (OJ C 256, 27.10.2007)

—

12.7.2007 on the Employment of priority categories (Lisbon strategy), rapporteur: Mr GREIF (OJ C 256, 27.10.2007)

—

13.9.2006 on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - A Roadmap for equality between women and men 2006-2010, rapporteur: Ms ATTARD (OJ C 318, 23.12.2006)

—

14.2.2006 on the Representation of women in the decision-making bodies of economic and social interest groups in the European Union, rapporteur: Mr ETTY (OJ C 88, 11.4.2006)

—

14.12.2005 on the Proposal for a Decision of the European Parliament and the Council on the European Year of Equal Opportunities for All (2007) — Towards a Just Society, rapporteur: Ms HERCZOG (OJ C 65, 17.3.2006)

—

29.9.2005 on Poverty among women in Europe, rapporteur: Ms KING (OJ C 24, 31.1.2006)

—

28.9.2005 on the Proposal for a Regulation of the European Parliament and of the Council establishing a European Institute for Gender Equality rapporteur: Ms ŠTECHOVÁ (OJ C 24, 31.1.2006)

—

15.12.2004 on the Proposal for a Directive of the European Parliament and of the Council on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation rapporteur: Ms SHARMA (OJ C 157, 28.6.2005)

—

3.6.2004 on the Proposal for a Council Directive implementing the principle of equal treatment between women and men in the access to and supply of goods and services, rapporteur: Ms CAROLL (OJ C 241, 28.9.2004)

—

25.1.2001 on the Proposal for a Directive of the European Parliament and of the Council amending Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions, rapporteur: Ms WAHROLIN (OJ C 123, 25.4.2001).

23.12.2009   

EN

Official Journal of the European Union

C 318/22

1.10.1

For this reason, the EESC calls on the Commission and the Member States to foster the creation of statistical registers of the above-mentioned forms of enterprise. In particular the preparation of satellite accounts, according to the harmonised criteria of the 1995 European Accounting System (ESA) detailed in the Manual for drawing up the satellite accounts of companies in the Social Economy: Cooperatives and Mutual Societies  (1) and in the EESC's Report on the Social Economy in the European Union  (2).

2.4.1

It is also possible for some large enterprises not to have shareholder members and to allocate their financial profits to reinvestment or to social objectives of public benefit, as occurs in the savings banks of some European countries (7).

2.4.2

Besides, in many locally based, micro-enterprises and SMEs, the generation of value is not only expressed in financial profit objectives but also in social purposes such as working conditions, or self management, etc.

2.9.1

As a rule, SMEs should be supported, and not only through the Small Business Act (11). SMEs often offer a way to keep jobs, since the interest groups that start up and control these enterprises are people with strong links to the area in which they operate, having shown great ability to create and sustain employment. SMEs ‘are the natural incubators of enterprise culture’, permanent training grounds for enterprise executives and leaders.

3.2.1

Whether large or small, these enterprises are located in areas and/or social spheres with problems and challenges that jeopardise the internal market and social cohesion, where they internalise social costs and generate positive externalities.

3.2.2

Because they are rooted in the local communities and because their priority aims are to meet people’s needs, these enterprises do not relocate, effectively combating the depopulation of rural areas and contributing to the development of disadvantaged regions and municipalities (23).

3.6.1

Some of the sectors mentioned above have already participated in sector talks, such as the Association of European Cooperative and Mutual Insurers (AMICE) in insurance, and some members of Cooperatives Europe (26), and the European Association of Co-operative Banks (EACB) and the European Savings Banks Group (ESBG) in the banking sector (27).

4.1.1

The formation and development of the internal market cannot make the ends justify the means and a legal and regulatory framework that reflects the characteristics of the different economic operators in the market should consequently be established so that a level playing field is created between all different forms of enterprise, taking into consideration the characteristics of each form. At present, this framework is generally designed for large listed companies and its application to all types of enterprises creates obstacles for smaller enterprises. This framework should be effective in encouraging operators to behave efficiently, which in turn will help to make the system more equitable. This framework will be applied through company law, accounting, competition and tax law, statistical harmonisation and enterprise policy.

4.2.1

European Public Limited Companies and European Cooperatives have their own statutes, but other types of enterprise face various barriers in the internal market owing to the lack of European statutes. European SMEs need flexible European legislation to make it easier for them to operate across national borders. Cooperatives also need the European Cooperative Society (ECS) regulation to be simplified, as its complexity is hampering progress in this field.

4.2.2

The lack of legislative cover prevents foundations that operate at a European level from working on an equal footing with other corporate legal forms. The EESC therefore welcomes the results of the feasibility study for a European Foundation Statute and calls on the Commission to conclude the impact assessment in early 2010 by presenting a proposal for a regulation that will enable foundations of European scope to operate on a level playing field in the internal market (28).

4.2.3

For similar reasons, the EESC also requests that the Commission start work on approving European statutes for European associations and European mutual societies.

4.3.1

Accounting standards should be adapted to different forms of enterprise. The obstacles that introduction of the new International Accounting System (IAS) is causing for listed enterprises are another example of limitations in connection with accounting law. European accounts cannot be harmonised at the expense of abolishing the essential characteristics of some of the different types of enterprise that exist in the European Union.

4.3.2

In the specific case of cooperatives it is obviously difficult to define a concept of shareholders’ equity that can be generally and indiscriminately applied, which could have negative and destructive effects on entrepreneurial diversity. The EESC urges the Commission to respect the cooperative identity in accounting matters and treat the members’ share capital as shareholders’ equity rather than debt as long as the member does not become a creditor by leaving the cooperative (29).

4.3.3

The Committee agrees with the de Larosière Group’s (30) recommendation, which argues that accounting standards should not bias business models, promote pro-cyclical behaviour or discourage long-term investment and the stability of enterprises.

4.4.1

Each corporate legal form should be able to conduct its business while preserving its own modus operandi. Consequently, competition law cannot be based on a single, uniform model of entrepreneurship and must avoid discriminatory behaviour and value good practice at the national level. It is not a matter of establishing privileges but of promoting equitable competition law. The EESC, in consonance with previous opinions (31), therefore advocates that the competition and tax rules should provide for the differential costs of enterprises that are not bound to inefficient production processes but to the internalisation social costs to be regulated in a compensatory manner.

4.4.2

Certain competition policy tools are not neutral towards the different types of enterprise, as the EESC has already pointed out: ‘the social economy sector needs tailor-made solutions as far as taxation, public procurement and competition rules are concerned’ (32). For example, public support for private investment in R&D&I to increase the competitiveness of the production system mainly favours large enterprises, which are the ones that mostly conduct these activities. Also, since large enterprises have greater freedom of choice in the location of their production facilities they can take better advantage of public investment in infrastructure for the manufacturing sector. This sometimes generates competitive disadvantages for small enterprises which have few real possibilities of choosing between different business location options.

4.4.3

Competition rules should also consider the singularity of social enterprises, which produce and distribute non-market goods and services to marginalised people or those at risk of social exclusion and bring important altruistic resources into their production processes.

4.5.1

Frequently, in some Member States, some enterprises are subjected to situations of competitive inequality for reasons which are unconnected with production processes in themselves but derive from market assignment failures (33), in other words, situations in which the market itself is inefficient, assigning resources in a non-optimum way. The EESC supports the directive on reduced VAT rates for services supplied locally, which essentially involve SMEs and reiterates its agreement with the principle formulated by the Commission whereby the tax advantages granted to a type of enterprise must be proportionate to the legal limitations or proven public value added that are inherent to that form (34). The EESC consequently requests the Commission to encourage Member States to study the possibility of granting compensatory measures to enterprises on the basis of their confirmed public value or their proven contribution to regional development (35). In particular, solutions should be sought to the problem facing not-for-profit organisations arising from the fact that they cannot claim back VAT paid on the acquisition of the goods and services they need to carry out their activities of general interest in those countries where this situation is a problem. The tax regimes applied to NGOs that conduct economic activities unrelated to public benefit purposes should also be mentioned.

4.5.2

At present, SMEs have few real opportunities to invest in R&D&I, which is an important element to make production efficient and keep business competitive. This creates a competitive disadvantage that should be balanced through tax benefits rewarding SMEs investing in this field. The recommendations include a broad range of compensatory measures, varying from state to state, of which the following should be mentioned: special tax concessions for making a number of different investments in R&D, repayments should profits not materialise and lower social security contributions. Taking account of the strategically important role SMEs have in the Community's economy, the EESC recommends that each Member State use the best possible combination of compensatory measures to assist the survival and growth of SMEs in their economies. By far the greatest impact that these programmes have is seen in their support for the development of specialist R&D SMEs in their early years.

4.6.1

The aggregate figures for the different types of enterprise are drawn up in the Member States and in the EU as a whole according to criteria approved by the European System of National and Regional Accounts (ESA 95). However, economic statistics on cooperatives, mutual societies, associations, foundations and other similar enterprises are very limited and are drawn up according to heterogeneous criteria, making it difficult to analyse and assess their contribution to the great macro-economic objectives. Consequently, the Commission commissioned a Manual  (36) which will make it possible to prepare national statistical records of these enterprises based on homogeneous criteria in national accounts terms. The EESC calls for these new analytical instruments to be used to draw up harmonised statistics for the above-mentioned types of enterprise in all the countries of the European Union and for more effective policies to be implemented in this respect.

It would also be advisable to establish the methodology to give impetus to a European observatory for micro-enterprises.

23.12.2009   

EN

Official Journal of the European Union

C 318/29

—

launch a process of economic development (structuring production chains, organising branches of activity, etc.);

—

establish a process of social development (setting up health and education services, etc.);

—

start addressing environmental management (preserving biodiversity, managing CO2 emissions, etc.).

1.4.1

These certifications seek to respect the multi-dimensional nature of fair trade:

1.4.2

Despite the progress made on self-regulation, the EESC would draw attention to the need to base the model on the European certification system which, among other things, requires compliance with technical requirements to be subject to external monitoring by an independent, accredited body - without prejudice to the requirement to comply with general legal provisions governing the marketing of food products.

2.1

This opinion deals specifically with fair trade itself, that is to say the alternative trade partnership linking producers and consumers which has been built up over recent decades by the fair trade movement. There are other programmes which aim to assess the sustainability of trading activities but they are not dealt with here, since they do not meet all the criteria for fair trade referred to in point 1.4.1.

2.2

Fair trade was developed with the ambition of building trade relations with producers from developing countries sidelined by international trade. Aimed at achieving sustainable development, it makes a major contribution to society in southern countries. It seeks to help reduce poverty, including through support for producer organisations. In northern countries, it aims to foster a more sustainable model of consumption.

2.3

Still young and evolving, the sector is expanding rapidly with increasing interest from European consumers.

2.4

However, consumer confidence needs to be consolidated for while consumers are attracted to fair trade, many say that they lack information and may feel that large companies or retailers may abuse the system.

2.5

Specialised networks continue to be important outlets for fair trade products. There are many such structures, which are small in scale and appreciated by consumers.

3.1

Article 23 of the 1948 Universal Declaration of Human Rights states that: ‘Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity’.

3.2

Fair trade activities began in the 1950s in the USA and then the UK, followed by the rest of Europe, in response to a growing awareness of the social and environmental damage caused by industrialised countries’ import chains.

3.3

In 1964, UNCTAD (the United Nations Conference on Trade and Development) denounced inequality in the terms of trade and alerted the international community to the unsustainable nature of the rules governing international trade from a human and social point of view. Southern countries stress the need for more equitable commerce (‘Trade, not aid’).

3.4

Landmarks in fair trade:

3.5

The World Trade Organisation rules do not take human, social or environmental concerns into account. The need to redress this situation encourages people to support a form of trade which promotes human values. For them fair trade is proof that it is possible to change the world. Fair trade promotes transparency, good governance and accountability and in this way contributes to sustainable development.

4.1

The aim of fair trade, and more generally of ethical, responsible and civic-minded consumption, is to define the means to entrench the success achieved among the general public by:

4.2

The EESC notes that basic labour rights (ILO), respect for environmental standards and biodiversity and a better return for producers in international trade relations have been taken into account in formulating fair trade standards.

4.3

To some, the expression ‘fair trade’ may seem an oxymoron, since market laws are devoid of human values. However, linking trade to social dialogue, with a view to achieving greater equity in world trade, will be a challenge for the 21st century and the EESC would like to make a contribution. This new paradigm can make sustainable development possible by offering better trade conditions and guaranteeing the rights of producers and workers sidelined by the Doha round.

4.4

New players’ labels and codes of conduct which claim to follow the principles of fair trade also engender confusion among consumers. By watering down the concept, its principles and defining criteria, the multitude of reference and guarantee systems opens the door to opportunistic trading arrangements based on guarantee systems which are less onerous on those who bear the costs, often downstream of the industry, but which also involve less support for the development of emerging countries. The Committee is committed to an international certification system operated by fair trade organisations (see previous proposals on terminology), subject to the establishment of an independent, accredited supervisory body and, obviously, compliance with current food legislation.

4.5

The EESC calls for all fair trade products to meet the same criteria throughout the European Union. There is currently no official European definition of fair trade with legal force. The EESC wishes to support the joint definition adopted by FINE (a network comprising FLO, IFAT, NEWS! and EFTA) and used by the European Commission in its recent communication on fair trade (1):

‘Fair trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, disadvantaged producers and workers – especially in the South.

Fair trade organisations (backed by consumers) are actively engaged in supporting producers in awareness raising and in campaigning for changes in the rules and practices of conventional international trade’.

5.1

Fair trade ensures that producers are paid as well as possible, on a stable footing, so as to provide a sufficient income by which to live decently, as determined by producers’ organisations and unions in each region and country concerned.

5.2

Price must be determined by average production cost, depending on:

5.3

Fair trade must carry certain requirements such as a ban on exploitative work, particularly involving children, and adherence to International Labour Organisation (ILO) standards, even when that is not required by national social legislation.

5.4

Fair trade secures the partial pre-payment of foodstuffs in order to enable producers to finance raw materials.

5.5

It is of the utmost importance that the manufacturing process for foodstuffs be respectful of the environment, natural resources and the laws in force in the European Union.

5.6

Fair trade enables the creation of socially useful jobs both up and downstream (and also enables the most vulnerable members of society to recover their dignity through employment).

5.7

Fair trade provides genuine traceability and total, permanent and public transparency regarding activities at all stages in the process chains (context, price, margin, etc.).

5.8

Fair trade must enable the emergence of a solidarity-based economy with its sights on sustainable development.

5.9

Fair trade should be judged by specific acts and commitments only and not simply by good intentions.

5.10

Fair trade is a well-established way to initiate a new global food policy which respects human rights.

6.1

Foodstuffs make up the bulk of fair trade’s turnover. Coffee ranks first among these products, which include tea, chocolate, dried fruit, spices, rice, cereals, sugar, honey and jam. Fresh produce has recently appeared on the market and is still marginal in fair trade networks owing to the low rate of turnover. Sales have risen considerably, however, since consumer cooperatives and other private retailers began selling fair trade products.

6.2

Fair trade aimed at helping to improve the situation of small producers in developing countries should enable the establishment of complex food production chains in order to create socially sustainable employment.

6.3

Fair trade must be in a position to concentrate on influencing a larger segment of the supply and distribution chain so as to give greater political weight to this process, while respecting producers’ interests.

7.1

All countries involved in fair trade agricultural production are southern countries. Fair trade, through the relative transparency of its trading process, has highlighted the low proportion of the consumer’s purchase price that benefits the producer (for every EUR 100 spent, only EUR 20 are ploughed back into the local economy) and how much of the added value (for example in processing and retailing) is retained in the developed world. The real issue at stake is whether fair trade is capable of effecting a lasting change in the rules of international trade.

8.1

The Committee feels that certification offers the best guarantee for consumers. Certification is a process of verification by an independent body which is accredited (having completed a process of accreditation) and impartial, attesting that a service, product or process meets the stated requirements (which may or may not be required by law). So, while certification and accreditation are both verification procedures, accreditation checks competence whilst certification checks compliance with a set of requirements. The aim of fair trade, and more generally of ethical, responsible and civic-minded consumption, is to define the means to entrench the success achieved in order to:

8.2

Fair trade has therefore instituted guarantees which are negotiated and involve various stakeholders, conferring legitimacy on the system:

8.3

FLO and WFTO are endeavouring to ensure that their guarantees are complementary. This involves identifying where their approaches converge and agree. So far, it has been limited to taking stock of the situation.

8.4

These verification systems are vital. The high level of guarantee is essential to avoid the proliferation of differing legislative systems in northern countries and in the interest of consumers. Fair trade bodies have already established an international set of requirements and agreed on a Charter of Fair Trade Principles; they must continue to cooperate on a shared certification system for producers.

9.1

Fair trade helps reduce poverty, while maintaining the foundations of sustainable development.

9.2

The European Union’s external policy can promote agricultural development in developing countries. Support to encourage small agricultural producers to turn to fair trade could be made a criterion for the disbursement of subsidies, contributing to sustainable development in these countries.

10.1

Fair trade is undeniably part of the commercial, social, educational and political dynamic of local and international stakeholders.

10.2

Fair trade is a social and economic innovation, supported by civil society to change international trade practices in order to take greater account of the human aspect. It should:

11.1

All fair trade agricultural products originate in developing countries. However, some products such as sugar, wine and bananas are also produced by European countries with significantly higher social standards, meaning that they can be more expensive than a certified fair trade product.

11.2

In order to avoid this tricky situation, an international organisation of producers from these sectors should be set up to identify universally beneficial compromises.

12.1

Many human rights organisations denounce the effects of international trade (WTO).

12.2

At global level, there is a wide range of fair trade players and stakeholders of varying quality. It is this very ability to cover the range of fair trade areas which gives meaning to this approach and opens up the possibility that it will have a significant impact.

23.12.2009   

EN

Official Journal of the European Union

C 318/35

1.1

The underlying aims of the common agricultural policy, including security of food supply, remain just as pertinent now as they were in the past, inasmuch as farming traditions need to be preserved throughout the European Union, including in the northern regions.

1.2

The present opinion focuses on the natural, climatic and geographical particularities and problems of the EU's northern regions, in which farming is hampered by the cold climate, obliging farmers to bear higher costs than their colleagues in more favourable agro-climatic zones.

1.3

Farming is more cost-intensive and productivity considerably lower in the northern areas than in more favourably located regions. Ever shrinking profitability combined with dwindling motivation among farmers puts the future use of farmland in these regions in doubt. This danger can be avoided by the use of appropriate agricultural policy instruments.

1.4

Land must continue to be farmed in regions with natural handicaps in order to preserve the traditional rural landscape and conserve nature-rich areas. This can be achieved through compensation payments for less-favoured areas, but only with the proviso that support is directed more rigorously than hitherto to those regions where the danger of land ceasing to be farmed is greatest.

1.5

In addition to setting new criteria for the way regions with natural handicaps are defined, the principles behind the funding of this initiative also need to be re-examined if tangible benefits are to be achieved. One possibility that should be considered is to integrate compensation payments for less-favoured areas into the first pillar of the CAP. The system in force to date, in which the level of direct payments is based on historical yields, works to the advantage of farmers in more favourably located areas. The compensation payments do not adequately offset the unfavourable production conditions in areas with natural handicaps.

1.6

When future support payments for less-favoured areas come to be calculated, the total outlay needed to overcome natural handicaps and unfavourable production conditions should be taken into consideration for each individual region: the worse the natural conditions, the higher the support payments should be, albeit with upper and lower ceilings.

1.7

In determining natural handicaps, consideration should be given not only to each region's accumulated positive temperatures in the vegetation period but also to the accumulated negative temperatures in winter.

1.8

The northern regions are remote from Europe's large markets, the rural regions there are extremely sparsely populated, and the arable land is scattered. This drives up production costs. Compensation payments from funding set aside for less-favoured regions are needed to prevent these areas being depopulated and to keep farming alive. Consequently, the EESC recommends that low population density should also be taken on board when the criteria defining less-favoured regions are set and additional criteria drawn up to support farming in heavily forested areas.

1.9

The EESC recommends that the natural, climatic and socio-economic characteristics of the northern regions mentioned in this opinion be taken into account when the criteria for a new definition of less-favoured regions (areas with natural handicaps) are worked out and established. One possibility would be to define the areas concerned as special areas in a similar way to uplands.

2.1

The European Economic and Social Committee has already addressed the issue of less-favoured areas in earlier own-initiative opinions (1).

2.2

On 21 April 2009, the European Commission published its Communication COM(2009) 161 final, which proposes altering the principles for defining less-favoured areas and establishing corresponding criteria. Among other things, the Commission proposes that these areas be renamed and known in future as ‘areas with natural handicaps’. The EESC welcomes this new approach.

2.3

Since the EU single market guarantees the free movement of goods and services, farming in the EU's northern regions, where unit costs are higher, cannot be sustained in the long term without special support. This in turn adversely affects both the social and environmental sustainability of these areas and their biodiversity.

2.4

The rules for less-favoured regions in the various Member States – and the impact they have – are impossible to compare. Since a whole range of criteria are used, the current subsidy rules for less-favoured regions fail to give due consideration to the specific growing conditions arising from an area's natural and climatic characteristics. As a result, these conditions are not adequately or proportionally reflected in any compensation.

2.5

The long-term security of food supply in Europe and the world requires the farming tradition to be kept alive in the European Union's northern regions, where the climate for farming is forecast to improve in the next fifty to a hundred years due to global warming. As a result, the southern regions are set to dry up and farming in Europe is likely to shift northwards.

3.1

Farming in the northern regions of the European Union differs from that in the centre and south of the continent in having a far shorter vegetation period, a markedly smaller range of temperatures necessary for crop growth, and excessive moisture for most of the year. Rain falls unevenly throughout the year: in spring and summer, when plants germinate, sprout and grow, it is insufficient, while the heavy rainfall in the autumn makes it difficult to bring in the harvest in time and impairs its quality.

3.2

The long winters and concomitant ground frost also have a major impact on farming in northern regions. Temperatures can drop to below -40 oC. Soil frost penetration is contingent on the accumulated negative temperature and the depth of the snow cover, which in Latvia and Estonia can be up to a metre, and up to two metres in the north of Finland and Sweden. It takes time for the snow to melt and the soil to thaw. This in turn sets back the spring sowing and the onset of vegetation. Depending on latitude and distance from the sea, the spring sowing in the northern regions can be any time from late April to mid-June. Thus, in any new criteria for the way less-favoured regions are defined, consideration must also be given to accumulated negative temperatures.

3.3

Building is considerably more costly due to the need to lay frost-free foundations, install water pipes and sewage systems below the frost line and insulate the external walls. Winter heating and snow-clearing costs are also considerable.

3.4

The soil layer in the northern areas was formed over a short period after the Ice Age and is thinner as a result. These areas also have a diverse soil quality and texture: land in the northern regions is usually wet, stony in parts, and excessively loamy, sandy or peaty. Improving the soil requires heavy investment, especially in installing and maintaining drainage systems, but also in liming.

3.5

Characteristic of the northern regions are hilly and fragmented glacial landforms dominated by barren forests, wetlands and other natural areas. As a result, fields suitable for farming are small and scattered. In some areas, average field size is less than a hectare, and the fields themselves are scattered in forest areas quite far from the farmhouse. This makes it impossible to use large, more efficient machinery and at the same time drives up the farm's production and (intra-farm) transport costs. Natural handicaps of this kind cannot be offset by reverting to alternative crops or rationalising farm production in some other way. Thus, additional criteria need to be brought into play to take account of the natural handicaps of heavily forested areas. One such criterion might be the share of farmland per hectare. To further assist less-favoured areas, arrangements should also be made to provide compensation for the extra transport costs faced by farms there.

3.6

Rural areas in the northern regions are very sparsely populated. With the exception of the big towns, population density stands at less than ten inhabitants per square kilometre, falling to below three in remote areas. This drives up transport costs both for farming and in terms of providing access to public and private facilities. In the twentieth century, mechanisation led to a sharp rise in labour productivity in the northern Europe, with jobs being lost in rural areas. The low density of population and services in turn became a reason for people to leave rural areas – many abandoned farming as there was no younger generation to take over farms. Yet, alongside forestry and tourism, farming remains the economic backbone of rural life in the northern regions. Rural communities are considerably smaller so that per-capita spending on public services such as schools and non-formal education are significantly higher than elsewhere. Life is more expensive in sparsely populated areas since the few people that do live there form only a small customer base for goods and services. The remote areas of the northern regions are too far away from the main centres for people to be able to commute there daily to work or take advantage of the services on offer. To assist less-favoured areas, compensation should be provided to offset the additional transport and shipment costs from the main centres (the market) to the remote farms.

3.7

The fewer people that live on the rural areas in northern Europe, the more expensive life becomes for them, since great distances have to be covered to get access to goods, services, healthcare, education and so on. This is why retaining and creating jobs in farming and other sectors in sparsely populated areas is especially important. Efforts should be made to this end in both the common agricultural policy and regional policy. The successful implementation of these policies will determine whether it will be possible to balance rural-urban migration, halt the rural exodus to the towns and put an end to the economic and social desertification of peripheral areas. From the point of view of security policy too, it is the interests of the European Union as a whole to avoid the depopulation of these EU border areas.

3.8

Together with extensive farming and semi-natural ecosystems, the forests and wetlands of the northern regions are the foundation of natural variety and biodiversity. Besides, the north is a breeding ground for millions of migratory birds that forage for food on the fields and natural meadows.

3.9

Because of the natural limitations and the transport costs entailed by the fragmented nature of the farmland and the low population density, farms in the northern areas are less profitable and farming incomes are lower. This in turn explains the low direct payments to date under the first pillar of the CAP. In northern regions with natural handicaps, farming of agricultural land, the sustainable production of food and care for the countryside can only be achieved if farmers are guaranteed an income comparable with that of their counterparts in more favourably located areas. Failing this, people will leave their villages and stop cultivating the land, which will then fall fallow and cease to be productive The EESC would recommend that the European Commission look in greater depth at the specific features of the northern regions and, where appropriate, define them as special areas in a similar way to mountainous areas.

3.10

The type and extent of natural handicaps to be faced can vary greatly from region to region. When future support payments for less-favoured areas come to be calculated, the total outlay needed to overcome natural handicaps and unfavourable production conditions should be taken into consideration for each individual region: the worse the natural conditions, the higher the support payments should be, albeit with upper and lower ceilings.

4.1

The cold winters, short vegetation period, low effective accumulated temperature and, finally, the wetness in the northern regions – requiring heavy investment in drainage systems – all take their toll on arable farming. Depending on the materials used, drainage systems have a lifespan of between thirty and fifty years before they need to be replaced. Moreover, extra costs are incurred every year for their care and maintenance. Wet soil cannot be cultivated unless drainage systems are installed and maintained.

4.2

Soil in the northern areas is often acidic due to crystalline parent rock or sandstone. To be cultivated, fields must be regularly limed (every six to eight years), thereby incurring extra costs that do not have to be borne in areas with pH neutral soil. This is not about improving soil fertility: liming is simply indispensable for cultivating on acidic soil and for offsetting permanent natural handicaps. In the EESC's view, the problem of acidic soil merits greater attention than hitherto in the definition of less-favoured areas and the establishment of new criteria.

4.3

In northern regions, the entire grain harvest must be dried in special dryers, since its moisture content at harvest may be as high as 30 %. However, a moisture content of between 12 % and 14 % is needed for storage. Building grain dryers requires large investment and the energy needed for drying again entails considerable extra outlay. Dryers and drying facilities can cost as much as EUR 300 000 to build and have lifespan of between ten and fifteen years depending on how heavily they are used. According to data from farms, the average cost of drying grain is between EUR 20 and 25 per tonne, although the energy needed for drying varies from year to year. At an average yield of three to four tonnes per hectare in the northern regions, this drives up production costs by EUR 60 to 100 per hectare.

4.4

The crop varieties cultivated must be more resistant to cold and withstand the night frosts, which often continue into June. This also explains the smaller harvests. The short growth period makes it impossible to cultivate varieties, such as maize feed, that require longer timeframes and thrive better in higher average day- and night-time temperatures. The cultivation of such crops would do much to cut the cost of rearing livestock, which instead have to be fed predominantly on grass silage, which has a higher unit cost than maize feed.

4.5

Night frost is a particular danger for fruit trees, berries and for vegetables. At least once in ten years, night frosts during blossom periods are so severe they wipe out the entire harvest. Although there are various ways to avoid such damage – including sprinkler irrigation, smokescreens and frost blankets – all these methods involve additional outlay and labour.

4.6

The short vegetation period means that all field work has to be completed in a very short period of time. This requires relatively high levels of machinery, thereby increasing average investment per hectare.

5.1

In the north, the livestock grazing period is shorter (from mid-May to late September), so more fodder has to be stored for the winter, which in turn drives up production costs. This also requires special stores to be built. Weather conditions often prevent the grass being harvested at the most favourable time, thus diminishing the nutritional value. Frequent bouts of rain during the hay or grass silage harvest can damage feed quality

5.2

The costs of buildings and livestock facilities are higher than in more clement areas, given the need to lay frost-free foundations and install water pipes and sewage systems below the frost line (in Estonia, over 1.2. metres deep, for instance).

5.3

Additional costs are also incurred in cleaning farmyards and roads from snow and ice. Road surfaces have to be renewed every five to ten years due to frost damage. The low population density means that northern countries have a large number of dirt and gravel roads. Maintaining and improving these requires additional financial resources, especially to repair damage in spring and reduce dust in summer.

5.4

The per-kilogramme cost of milk is higher in sparsely populated areas than in densely populated ones with intensive farming, since long distances have to be covered to collect it. Milk production has, for instance, stopped on many sea and inland islands because transport costs made it unprofitable. It also costs more to deliver other operating materials to farms.

—

ensure that the populations of these regions have a supply of locally sources food, and safeguard the food security of the EU in the event of global warming,

—

save jobs and avert the depopulation of rural areas,

—

preserve – and in some cases even increase – biodiversity,

—

keep the countryside accessible and make it attractive for the tourism and leisure industry, and

—

guarantees the security of the EU border areas.

23.12.2009   

EN

Official Journal of the European Union

C 318/39

1.1

Over the past term the EESC has been working on the various issues covered by European energy efficiency policies and the different aspects thereof (external dimension, short- and long-term energy challenges, supply and security policies) with a view to achieving an economically-viable, sustainable energy policy. It would stress the importance of promoting and building on the results of the EESC's energy efficiency days, in cooperation with all stakeholders, end users and Member States. In view of this, it calls on the Commission and the new Parliament to act firmly on the recommendations already made in previous opinions (1).

1.2

In addition, the EESC feels that implementation of an energy policy promoting efficiency and new ‘clean’ technologies could be a solution not just to the environmental issue but also as regards reducing dependence on energy supply and coping with the high costs of raw materials and the effects thereof on end users.

The European Economic and Social Committee recommends stepping up endeavours focusing on systematically involving end users (in particular consumers and small businesses) with regard to the new constraints established by the March 2007 European Council and efforts to mitigate the current economic crisis.

1.3

The EESC believes that the European and national social partnership will encourage greater involvement of energy end users, particularly small businesses and their representative bodies, forms of public and private partnership at local level, and cooperatives, contributing more effectively to the achievement of European energy-efficiency targets and the green economy. This commitment, if addressed in the most appropriate context – for example within the European social dialogue agenda (including at sectoral level) – could make a practical contribution to increasing jobs and creating new skilled occupations related to the energy sector and the distribution of new services.

1.4

The EESC thinks that the decision to strengthen the European dimension of energy policies should also encourage reinforcement in the Internal Market and the domestic markets of a sustainable development strategy as well as greater cooperation in science and technology capable of reviving public and private investment, which could take the form of enhanced cooperation between EU Member States.

1.5

The EESC is disappointed and concerned at the shortage of homogenous, detailed information and data on end-use energy efficiency. This makes it difficult to define statistically-sound, harmonised indicators, not least because of the scarcity of historical data at European level accessible to end users.

The EESC reiterates its concern at Member States’ failure to draw up the National Energy Efficiency Action Plans (NEEAP), provided for by the Directive in question, in time.

1.6

The EESC therefore feels it is necessary and urgent, in order to encourage full, uniform and more rigorous implementation at national level of European energy-efficiency policies, to adopt – in cooperation with the Commission and the Member States and after systematically consulting the bodies representing end users – a widely-accepted European monitoring system that is both fair and makes energy bills easier to understand and compare.

1.7

In addition, the EESC believes that the sectoral dimension of European energy-efficiency policies needs to be reinforced if they are to be better implemented, and to allow for more substantial monitoring and impact analysis in respect of these policies. The impact of energy policy differs according to the kind of economic activity, both as regards businesses which use energy (whose issues vary according to consumption levels, the kind of processes etc.), and as regards businesses which operate in the various sectors of the energy chain (e.g. plant producers and installers, energy providers, construction companies etc.), where there is huge untapped potential for saving energy.

1.8

Moreover, the EESC firmly believes that European programmes such as the Competitiveness and Innovation Framework Programme (CIP), Intelligent Energy Europe (IEE) and others urgently need to be simplified, and this cannot be put off; end users should be more involved in these programmes whose measures should be more coherent and integrated (as is the case, for example, with the ECAP programme). A new integrated programme is therefore proposed, capable of better coordinating these activities for the benefit of end users.

The EESC calls on the EU, the Member States and businesses to invest sufficient resources in applied energy research and its transfer to the end user; in generating savings from using the new information and communication technologies (ICT) in the technical and high-tech professions; and in energy development and innovation; and recommends more inclusive global cooperation in this area.

1.9

The EESC feels that the EU should urgently adopt tax and credit-access instruments and policies more geared to supporting energy saving, thereby facilitating all end users, particularly SMEs and public-private partnerships, which (individually or collectively) use more efficient, sustainable production models.

Aware of the key role played by education and training in disseminating a European energy-efficiency culture, the European Economic and Social Committee proposes to launch an extraordinary consultation with the social partners and all stakeholders at European and national level in order to redirect existing EU funds, reinforcing professional skills and profiles associated with energy efficiency, and to encourage provision of information to the general public and awareness-raising.

2.1

The objective of European Directive 2006/32/EC was:

To this end, the Directive lays down a number of general objectives, including:

—

some measures were too ineffective and easy to get round when transposing the Directive into national legislation;

—

National Action Plans and national transposal measures which were less coherent and effective than provided for in the Directive;

—

flanking programmes and measures that were piecemeal and insufficiently coordinated;

—

the lack of homogeneous data and information, essential to monitor and assess the impact of the Directive on end users, meant that the initiative was utterly inadequate and incapable of facilitating coherent, sustainable development of energy efficiency in the EU.

—

developing a European expert task force and a network of independent energy-efficiency bodies for end users, particularly businesses (especially SMEs and the craft sector);

—

producing periodic reports on EU policies and their impact on end users (especially SMEs);

—

an information platform in several languages which is easy to use and easily accessible; and consolidating and enhancing relations between European and national representative organisations and main stakeholders.

4.1.1

The process of transposing the Directive into national legislation is still beset by significant problems and shortcomings as regards end users, in respect of:

Greater surveillance, monitoring and penalty measures are therefore needed from the relevant national and EU bodies, along with more effective, rigorous monitoring of energy operators (see Articles 11 and 13 of the Directive).

4.1.2

The efficiency of the means of access to ‘financial instruments for energy savings’ and the functioning of the relevant ‘mechanisms’ should be reinforced and further developed technically and politically, for the benefit of end users, with particular regard to energy taxation. These instruments and their results should be specifically monitored in close cooperation with European and national end-user bodies and with particular regard to ways of mitigating the rebound effect. The rebound effect, as emerged at the EESC hearing on ‘Enhancing energy efficiency policies and programmes by end users’, held at the Italian National Council for Economy and Labour (CNEL) on 9 July 2009, refers to the fact that measures taken to improve energy efficiency can sometimes increase rather than decrease energy consumption.

4.1.3

The energy audits and white certificates (Article 12) are also particularly important for the development of energy services and should therefore be further reinforced by the Member States.

European social dialogue, including at sectoral level, should also make a useful contribution here to the implementation of energy efficiency policies, thus fostering employment and increasing the competitiveness of the productive system.

4.1.4

Calculation methods are laid down for measuring energy savings. These methods have yet to be properly developed and harmonised. Thus, better definition is needed of calculation methods to be shared with end users and harmonised among the Member States.

Lastly, the Commission has launched numerous infringement procedures for failure to transpose all or part of the Directive: the costs and red tape arising from this will be passed on to end users.

23.12.2009   

EN

Official Journal of the European Union

C 318/43

—

measures to increase cooperation between companies and workers,

—

common and better coordinated policies,

—

more time-efficient decision-making processes, and

—

simpler and more transparent legislation.

1.5.1

The EESC is aware that some countries belonging to the original group who set out to create the European Community are, especially in this period of crisis, displaying considerable impatience with the rules of the internal market in areas such as competition and state aid. This is a mistake (1).

1.5.2

In present circumstances, the Council – backed by the European Parliament and the Commission – should devise a ‘strategic pact’, including:

—

a resilience and survival strategy making it possible to operate in mature markets through better specialisation in the same market, with cost cutting, or strong diversification into contiguous sectors, or new formulas;

—

a product and service process innovation strategy including market and technology change, with new materials leading to new products;

—

new initiatives involving the development of new types of businesses, sectors or initiatives. Foresight evaluations are required to envisage new expanding products (such as lead markets), towards which new investment should be channelled;

—

local marketing that emphasises excellence through agreements with research centres in order to increase technological cross-pollination;

—

financial support through development funds, including through loan guarantees under the EIF (4);

—

capitalisation of the risk capital of credit unions through agreements between administrations and the banking system to allow payment deferrals for micro and small businesses, primarily in order to safeguard employment levels;

—

short-term debt consolidation to enable micro and small businesses to focus on production, marketing and after-sales services;

—

support for an innovative services sector (green economy) by taking advantage of innovative training opportunities under the European Social Fund;

—

development of high-standard personal services in part by enhancing and strengthening the social and health care system (5);

—

implementation of infrastructure policies contributing to increased innovative choices for a low-carbon economy and creation of conditions making it advantageous to live in the region;

—

stepping up energy efficiency and environmental criteria in public procurement procedures;

—

encouraging new, more efficient products to substitute old ones, by means of funding;

—

enhanced access to information;

—

easier use of raw materials.

—

such aid does not have the effect of strengthening protectionism or hampering free competition;

—

businesses in receipt of funds should, above all, undertake to sustain employment levels;

—

collective agreements should be respected and the workers’ purchasing power maintained;

—

workers can use periods of reduced production to train for new qualifications and should be supported in this;

—

public financial support does not become a source of income for shareholders through dividends or other forms of share buy-backs;

—

as far as possible, support promotes the development of new environment-friendly products and services;

—

aid must not interfere with competition and must be temporary and degressive;

—

suitable monitoring mechanisms are in place to protect tax-payers.

2.1

The manufacturing and services sectors are the backbone of Europe's economy. The establishment of the Single Market has led to their strong development based on common standards and rules.

2.2

The manufacturing and services sectors are faced with exceptional challenges:

2.3

The current global recession may require these sectors to make even greater efforts to:

2.4

The ongoing crises do not only challenge the survival of businesses, they also offer major development and innovation opportunities. Businesses should not however be left to cope on their own. Entrepreneurship and job creation should be encouraged by implementing reforms as soon as possible in order to improve the business environment by reducing unnecessary administrative burdens, preserving and improving the internal market, encouraging risk capital, stimulating innovation and flexicurity measures, legislating less and better, and investing in the links between academia and science and the world of business, and in educating and training human resources, especially in the technical and scientific disciplines and in the development of lead markets.

2.5

The EESC underlines the importance of focusing on the current situation and possible future prospects for the key manufacturing and services sectors, and tourism in particular, bearing in mind a number of fundamental and interrelated aspects:

3.1

In the USA, GDP contracted by 1 % during the fourth quarter of 2008, following a drop of 0.1 % in the previous quarter. In Japan, GDP went down by 3.3 %, following a drop of 0.6 % in the previous quarter. GDP in the euro area fell by 1.5 %, following a drop of 0.2 % in the previous quarter (15).

3.2

The unemployment rate is rising rapidly and looks set to approach 12 % by the end of 2010 according to the OECD. At the same time, salaries are rising more slowly or not all.

3.3

As the Commission points out (16): ‘As long as lending remains scarce, efforts to boost demand and consumer confidence will be held back. (….) This is a global crisis, and recovery will not be complete until the major players of the world economy are once again growing and trading together’.

3.4

The European Trade Union Confederation (ETUC) shares this view, stating that ‘the outlook for growth in 2009 and beyond is alarming, given that the situation will get worse before it may get better, and it will only get better if there is a fundamental shift in thinking: away from the comforting yet unrealistic notion of a return to “business as usual” towards a new economic reality investing in people, innovation and sustainable development, as well as a revalorisation of the role of government:

3.5

In the run-up to the G20 summit in London of 18 March 2009, the Confederation of European Business (BUSINESSEUROPE) stressed that ‘the financial crisis is having a devastating impact on companies as the major drivers of growth have been hit by limits on access to finance. (….) Economic stimulus is needed to prevent a global economic meltdown’ (18).

4.1

Broader consensus is developing and there is a growing convergence of forces to take extraordinary measures and identify emergency policy responses for the preservation, at all costs, of businesses, manufacturing sectors, production and service activities, jobs, incomes and household consumption, going beyond existing rules.

4.2

Policies aimed at limiting the economic, employment and social impacts of the crisis by offloading internally accumulated tensions onto neighbouring countries are not only a false solution to the problem, they risk pushing economies into nationalistic and protectionist behaviour that would destroy international cooperation and regional integration frameworks painstakingly built up over recent years in Europe and around the world.

4.3

The EESC considers the following points to be fundamental, indispensable components of any action taken to tackle the ongoing crisis:

4.4

The EESC is convinced that the ongoing crisis should result in an institutional leap towards greater economic integration, geared to the development of a quality economy, and to more and better jobs.

4.5

The EESC nevertheless believes that a qualitative leap towards greater EU political integration is even more necessary. It considers this to be the only way to achieve a trade-off between giving up national egoism and priorities in pursuance of a common future.

4.6

The EESC is convinced that only if the European project is renewed, in the spirit of Jean Monnet at the launch of the Treaty of Paris, which brought the ECSC into existence, will it be possible to rebuild the foundations and launch a European economic recovery.

4.7

We must lose no time in completing the ratification of the Lisbon Treaty in order to ensure an EU architecture that can respond via better coordinated policies.

5.1

In recent months, corporate restructuring has increased dramatically. Many companies have launched redundancy schemes, with significant social consequences, also for the futures of young people (20). Others have declared bankruptcy.

5.2

The EESC firmly believes that human resources are the key to a return to EU competitiveness in terms of both workforce skills and qualifications, and a new managerial governance model.

5.3

The EESCC believes that investing in the workforce and protecting jobs are vital for the promotion of European industrial competitiveness in terms of both qualifications, new skills for the workforce and a new model for corporate social responsibility (21).

5.4

Given the magnitude of the crisis, vocational training/employment schemes orientated towards growth sectors, such as renewable energies, should be set up without delay for workers who fall victim to the recession.

5.5

Measures to support household consumption should be considered, also in order to stimulate demand (22).

6.1

Deindustrialisation: In recent years, especially at the turn of the century, the Commission and many Member States may have given scant importance to industrial and manufacturing policy in order to prioritise wealth derived from developing complex financial systems, supported mainly by North American models.

6.2

In 2005 the EU adopted an outline integrated European industrial policy based on a mix of sectoral and horizontal measures, followed by a mid-term review in 2007, making a contribution to the EU's growth and jobs strategy (23). Subsequently, in 2008 the EU launched a sustainable industrial policy action plan (24), on which the EESC has already commented (25).

6.3

The central importance of socially responsible and competitive businesses, social economy enterprises and a better qualified and participatory workforce must constitute the reference base for recovery policies for the manufacturing and services sectors.

6.4

The Lisbon Strategy must retain its credibility. The Member States and the EU institutions must demonstrate their ability to adapt policies to the new context by identifying clear priorities and new methods for the post-Lisbon strategy to be defined in the coming months. Reforms should be accelerated by identifying clear specific priorities, with feasible and verifiable roadmaps.

6.5

In the EESC's view, the manufacturing and services sectors in Europe should be developed by upgrading processes and products. The EESC calls on the EU to take firm action in this regard.

6.6

The EESC believes that such an industrial strategy should include:

6.7

The specific situation facing SMEs has to be addressed, especially with respect to lack of access to credit and loans. At present, funds dedicated to SMEs are not fulfilling their purpose.

6.8

The Small Business Act, on which the Committee issued an opinion (29), ‘falls short of what is required, particularly in these difficult economic and financial times’, as it is not adequately funded. It is however important to ensure full, timely and systematic application of the Act in the Member States.

6.9

As the Committee has frequently emphasised that, in addition to providing access to credit, it is particularly important under present circumstances to:

6.10

With regard to specific sectors, following a wide-reaching public consultation, the Commission had earlier identified a series of manufacturing sectors where stimulus and revitalisation action should be concentrated. Six markets were identified for the initial stage of the lead market initiative (31):

6.11

The method used by the Commission should be applied to other sectors. This means identifying the areas where concerted action through key policy instruments and framework conditions, as well as reinforced cooperation between key stakeholders, could speed up market development without interfering with competitive forces (32). The same could be said for the development of the European defence industry, which should be covered by a more coordinated European policy following the establishment of the European Defence Agency and the progress made in terms of joint security (33).

6.12

In order to make European industrial policy effective, we need to take into account the specific context of individual sectors, including the automotive sector (cars, trucks and motorcycles (34), the chemicals sector, shipbuilding, coal and steel, construction, glass and ceramics, cements, textiles and clothing, the agrifood sector, mechanical engineering, the electromechanical sector, aerospace, IT, telecommunications, energy, and health services.

6.13

The EESC also considers that in order to support the introduction of innovations, it is essential to further develop newly created industrial policy instruments such as the Joint Technology Initiatives, innovative public procurement, and the action plan for sustainable production and consumption.

6.14

The EESC also believes that the liberalisation of the services sector should be stepped up, especially with regard to the services of the liberal professions and persistent tariff and numerus clausus restrictions.

6.15

The EESC strongly advocates a Community initiative to support the business services sector, developing innovative services and content of benefit to citizens, consumers, workers and companies, speeding up the shift to digital services and the widespread introduction of broadband, and removing barriers to e-government and systems interoperability.

6.16

The EESC believes that the common foreign policy should be strengthened and made more stringent vis-à-vis relations with the rest of the world.

7.1

The EESC has supported (35) and continues to support initiatives to develop sustainable extraction, production and consumption policies, fully integrated with other EU policies, in order to turn potential challenges into competitive opportunities.

7.2

The EESC is convinced that EU action should continue to set ambitious targets, supported, however, by legislative and financial instruments that do not undermine Europe's competitiveness by placing greater burdens on businesses and citizens but support positive practices and processes for innovation and technological improvement.

7.3

The EESC reiterates the importance of launching appropriate initiatives to assume international leadership in energy efficiency, extending renewable energy production capacity and developing CO2 capture technologies.

23.12.2009   

EN

Official Journal of the European Union

C 318/52

1.1

A core objective of the European project should be quality jobs for all.

1.2

The working poor should be a regular topic on the agenda of the European social dialogue.

1.3

Research tools should be finalised as soon as possible in order to refine our understanding of these situations, showing European divergences, but also convergences.

1.4

New ways of combining social protection and jobs should be explored and introduced in order to secure decent incomes for all workers and thus create the conditions to enable them to meet their basic needs (housing, healthcare and education for themselves and their children, etc).

1.5

Effective initial and lifelong vocational training for quality jobs should be ensured; measures should be taken at various levels (national, regional) to create an environment that discourages young people from dropping out.

1.6

Efforts and discussions concerning flexicurity should be pursued in order to find a new balance between flexibility (essential for businesses) and the real means to provide greater security (protection for workers) and stem the rise in in-work poverty with a view to its eradication.

1.7

The year 2010, declared ‘European Year for Combating Poverty and Social Exclusion’ by the Commission, should be an opportunity to foster awareness and action on these issues at EU and Member State level.

2.1

A body of learned research, proposals and innovations developed at EU level and aimed at the ‘working poor’ illustrates how work is not necessarily a safeguard against poverty, especially in the current socio-economic framework.

2.2

In its Proposal for the Joint Report on Social Protection and Social Inclusion 2009 (1), based on the new National Strategic Reports, the Commission stressed the importance of the working poor and quality jobs. The topic and the concrete issues it sets out are well in line with EU-level action on ‘active inclusion’. We have the double concern of fighting pauperisation and supporting the development of quality jobs for all.

2.3

The issue becomes twice as important in a crisis due to the substantial resurgence of unemployment and growing tensions over public finances. Nevertheless, we need to step back from the immediate situation and view this issue as one that needs to be tackled in the light of current exceptional circumstances, naturally, but also as a structural issue at the heart of positive and desirable medium and long term developments in social protection and employment policy.

2.4

The Commission, which is working on a document on work and poverty, has declared 2010 the European Year for Combating Poverty and Social Exclusion. Indeed, 80 million people in the EU, i.e. 16 % of its population, are directly affected by poverty. They include a substantial number of ‘in-work poor’; 8 % of people in work are living below the poverty line (2).

2.5

In its opinion on the European Year for Combating Poverty and Social Exclusion (2010)  (3), the Committee pointed out that alongside the usual indicator of relative income poverty, other measures of poverty, showing its persistence and the actual deprivation suffered, are necessary to fully appreciate the extent of the problem. Beyond these technical details, comparisons, which are now possible thanks to an agreed definition at the European level, provide a clear picture of the trends.

3.1

When using the term ‘in-work poor’, we need to define both terms, i.e. ‘in-work’ and ‘poor’. A worker's ‘poverty’ depends partly on individual earnings over the period of the employment contract (remuneration for work) and partly on the family's overall material resources. Work constitutes an individual's professional activity. Poverty constitutes the inadequacy of resources to cover the entire household's needs. Sometimes people who are not poor and/or not apparently poor may be unexpectedly precipitated into poverty.

3.2

Poverty is defined at the household level, whereas work is defined at the level of the individual. We are therefore mixing two levels of analysis. In-work poverty first depends on the employment situation of individuals and the characteristics of their employment and then on their household's standard of living. This double evaluation leads to difficulties. Individuals may be badly paid but not considered as poor (because the other family resources are more substantial). On the other hand, individuals may be qualified as poor even though their remuneration is close to the average national income and considered adequate by the society of which they are part. Some may be out of work (unemployed) but in receipt of benefits well above the poverty line. Others may, on the other hand, be very actively employed, but poorly remunerated and with many dependents, and therefore find themselves living below the poverty line.

3.3

It therefore follows that addressing in-work poverty at the political level simultaneously involves employment, welfare and social insurance, and family policies.

3.4

Under the European Employment Strategy, itself part of the Lisbon Strategy, reducing the number of people in working poverty has become an EU priority. It was therefore necessary to set an indicator in 2003 for purposes of evaluation and comparison. In July 2003, in the context of its work on the Social Inclusion Process, the Social Protection Committee of the European Union adopted a common indicator to assess the proportion of working poor in the EU as well as some of their key socio-demographic characteristics.

3.5

According to the Social Protection Committee's definition, the working poor are those individuals who have mainly been employed during the reference year (either in wage and salary employment or as self-employed) and whose household equivalised disposable income is below 60 % of national median equivalised income. Individuals need to have been in work for more than half the year. The ‘at risk of working poverty’ indicator in fact identifies anyone who has been in work for at least seven out of twelve months during the reference period as being in work (4).

4.1

At the end of 2008, the Commission published its annual report on social trends in the Member States in the context of the common goals of the EU social protection and inclusion strategy (see appendix) (5). It reveals that at the end of 2006, 16 % of Europeans were at risk of poverty. 8 % of workers in the EU were living below the poverty line. These figures range from 4 % or less (Czech Republic, Belgium, Denmark, the Netherlands, and Finland) to 13 % or 14 % (in Poland and Greece respectively) (6). In-work poverty is linked to low pay (defined as 60 % below the average), low qualifications, low job security, low pay for some self-employed workers, and (often involuntary) part-time employment. This type of poverty is also linked to the economic status of other household members. The Commission notes that in the case of households with children, a single income is no longer enough to ward off the risk of poverty.

4.2

The monetary poverty indicator is often criticised because it does not accurately reflect the many different forms of pauperisation. Income poverty is clearly only one aspect of poverty. Other indicators are being developed in the European Union and present a different and complementary picture of the realities of poverty.

4.3

In addition to the monetary measurement of poverty, other measurements of poverty relating to ‘living conditions’ are being developed. At EU level, material deprivation (see appendix) is therefore measured. The indicator takes account of the proportion of people living in households lacking at least three of the following nine elements: 1) the ability to meet unexpected expenses 2) one week's annual holiday 3) ability to pay off loans 4) a meal including red meat, chicken or fish at least every other day 5) adequately heated accommodation 6) a washing machine 7) a colour television 8) a telephone 9) a private vehicle. All these material conditions are naturally questionable as indicators. It is their aggregation that presents an interesting picture. Deprivation rates show wide divergences ranging from 3 % in Luxembourg to 50 % in Latvia. These divergences are far more substantial than those for monetary poverty (ranging from 10 % to 21 %).

4.4

The material deprivation approach radically transforms the poverty classification of Member States. Nevertheless, it refers to poverty in general and not to in-work poverty. We will soon have to be able to show the situation of the working poor in terms of material deprivation for each country. In essence, in-work poverty is not just about low incomes, it is about quality of life (i.e. working, family and social life).

5.1

One of the key factors leading to in-work poverty is worker insecurity. Several actors including the European Trade Union Confederation and European trade unions are concerned about job insecurity, which continues to escalate. With over 19.1 million on fixed-term contracts (7) and about 29 million in ‘false’ self-employment (mostly in construction and public works), about 48.1 million workers are living with some degree of instability. Needless to say, these people form a very heterogeneous group within single countries, and even more between countries. However, the magnitude of the problem has to be measured in tens of millions of people in employment facing some form of insecurity that puts them at risk of in-work poverty.

5.2

Employers stress the complexity of in-work poverty, first of all by pointing out the link between poverty risk and poor education. Education and training systems must be more effective and fairer. Moreover, it is essential to make work pay (8), i.e. to find a way to ensure an effective balance between tax and benefit systems.

5.3

Working poverty is based on low pay (often not commensurate with the work involved) and changes in family models. Changing family trends, affecting different Member States to different degrees, are characterised by growing instability, more separations, more single parent families, and therefore single income households at greater risk of poverty. In the Joint Report on Social Protection and Social Inclusion (2007) (9) the Commission had already pointed out that a ‘job is the best safeguard against poverty and social exclusion, but a job does not guarantee a life free from poverty’. As a result, we need to adopt or strengthen vital solidarity-based support measures for families, women, young people, students, people with disabilities, the elderly, migrants - the most vulnerable social categories. Moreover, the extent to which working poverty determines child poverty needs to be stressed.

5.4

The rise in the cost of transport, housing, healthcare, etc. also undermines the security of workers. Those earning close to the minimum wage and the lower middle classes are specially affected by these increases since they are usually on the fringes of employment zones.

5.5

In-work poverty can result from low skills or low education levels and from being under-qualified for adequately remunerated jobs, or from substandard working conditions. The most vulnerable groups are often older workers, the young, women, large families, those with a disability, early school leavers and migrants. Thus it is vital to provide all people with a disability with appropriate workplace conditions and to give every child a good start in life through early years education, but also by tackling the school dropout rate, which, at the current level of 15 % in Europe, is still too high.

5.6

At a deeper level, in-work poverty is very often an outcome of underemployment. For employees as well as some self-employed workers, in-work poverty is a complex issue involving many inter-related criteria. A holistic approach is required to identify effective mechanisms to overcome the challenges. Without comprehensive growth policies aimed at adapting to globalisation, and now at economic recovery, there can be no effective programmes for combating in-work poverty.

6.1

We first need to think in macroeconomic terms in order to fight in-work poverty. Ad hoc measures will not adequately serve to check the dynamics, especially in a period of crisis. Employment and self-employment, and more specifically quality employment for all, should be the priority of all EU institutions.

6.2

Reliable indicators: the process of developing common and reliable indicators for the working poor must continue. Major advances have been made thanks to European investment and the open method of coordination. We now need to go further and build our knowledge on the basis of more complete data, taking account simultaneously of the number of working poor, the intensity of this poverty and the unequal distribution of income among the poor (within the same country and from country to country).

6.3

Technically speaking, with respect to these statistical issues, we need national data, based on national thresholds, as well as wholly European data, based on a European threshold. This would facilitate other classifications and other perspectives in addition to those provided today by the only indicator established.

6.4

Fair and decent pay, backed by strengthened social dialogue: Fighting in-work poverty must also involve an ambitious wage policy. We should increase and support all initiatives aimed at reverting to the formula: inflation + appropriate share of productivity gains. In this context, wage negotiations, the cornerstone of social dialogue, should play a preponderant role in fighting in-work poverty. At sectoral, national, and European levels, there is no real financial impact on businesses when negotiations go smoothly and therefore there is no ‘premium’ to be paid for genuine social dialogue. Progress towards decent work is achieved through social dialogue, the investment of the social partners, corporate responsibility and public authority incentive and corrective measures, and now through the role of banks vis-à-vis SMEs. Fighting undeclared employment is also a decisive factor in combating in-work poverty, partly because it affects the most vulnerable members of society (migrants, people in unstable situations) but also because it can lead to quasi-slavery, in violation of the Charter of Fundamental Rights.

6.5

Entrepreneurship and self-employment mechanisms: many entrepreneurs and the self-employed suffer from in-work poverty, especially in the early days of establishing businesses. Support mechanisms need to be provided as many of these SMEs go on to be job creators. Although 80 % of the growth in the economy comes from the SME sector, many entrepreneurs take little or no pay whilst establishing their businesses, putting their families at risk of poverty.

6.6

Adjusted vocational training systems: Lifelong training, especially for less qualified workers, is a prerequisite for improving these workers’ skills and their access to fairly and decently paid jobs.

6.7

Adapted social protection: Beating in-work poverty entails rationalising the measures in operation. Social services should be able to interact more effectively with new childcare and mobility support services (mobility, as well as work, must pay), which enable the working poor to get back into better paid jobs.

6.8

With regard to housing, since it appears that in some countries a not inconsiderable number of homeless people are in work, it is important to use social housing resources to give priority to those who have jobs but risk losing them and the stability they provide because they have poor housing, or no housing at all.

6.9

Taking working conditions and the job into account: In concrete terms, since in-work poverty is largely linked to working conditions, it is vital to impact on levers linked to the working environment: support for voluntary job mobility, subsidised meals for workers, housing conditions, childcare facilities. Furthermore, employers should be in a position to assess what measures they could take to offer greater job security in their employment contracts and how their employees could further and improve their qualifications.

6.10

Fostering awareness and action: Finally, we need to mobilise public opinion and the media during the European Year for Combating Poverty and Social Exclusion. Analysing in-work poverty, speaking out about the degrading situations it creates for human beings and mobilising public opinion in the EU could put an end to the distress suffered by some workers and so help to restore their compromised dignity. Rather than talking in terms of compassion, we should be talking in terms of action to ensure quality jobs for all in order to promote an ethically superior European social model.

23.12.2009   

EN

Official Journal of the European Union

C 318/57

1.3.1

The de Larosière Group recommends introducing higher capital requirements for banks in ‘good times’ and lower requirements in ‘bad times’. In view of the difficulty of forecasting fluctuations in the economic cycle, this might be a risky proposal. At the same time, the example of Spain shows that a system based on variable capital requirements can work. Therefore the EESC believes that such a measure needs to be studied with regard to timing before it can be implemented.

1.3.2

The EESC thinks that higher capital requirements and greater transparency for off-balance sheet operations are absolutely essential. The Spanish authorities had the most stringent rules governing off-balance sheet items and the Spanish banks were the least affected by the crisis.

1.3.3

‘Off-balance sheet items’ and ‘Special purpose vehicles’ have sometimes been abused. Risky assets have been removed from banks’ balance sheets in order to avoid capital requirements and sometimes in order to avoid taxation. Against this background, the EESC thinks that stricter rules are required.

1.3.4

The EESC believes that making the riskiness of bank assets more transparent ought to be one of the main demands in the follow-up to the report. The EESC, like the Group, thinks that banks and financial institutions should always retain a part of the underlying risk on their books when risky assets are sold on. The risks inherent in financial products must be clearly evident. Transparency of financial products is necessary in order to restore confidence in the financial markets. Here the EESC would again refer to the case of Spain. New instruments should not be used in the financial markets before they have been vetted by a monetary authority. The introduction of such checks should be discussed. It has to be decided whether they should be national checks or whether a common EU-wide system is required. The degree to which financial activities are cross-border in nature argues in favour of a common system.

1.3.5

The ‘parallel banking system’ consists of various forms of unregulated lending. These new forms of financial activity have been able to develop outside the scope of regulation, not even being subject to reserve requirements. The EESC agrees that they should also be brought within the ambit of regulation. The report also calls for common rules for investment funds, definitions of the various products used and stricter supervisory control. It is easy to concur with these recommendations.

1.3.6

Stricter requirements concerning bank management and auditing are essential. The EESC does not believe that the solutions put forward by the de Larosière Group pay enough attention to the role of auditors. With effective auditing it would have been possible to reduce the spread of risky instruments. Management of financial firms must be able to rely on auditing in the valuation of assets. The role of auditors and accounting methods should be included in the revision of Basel II.

1.3.7

The report makes good recommendations on bonus schemes. They should be set in a multi-year framework and reflect actual performance rather than just being guaranteed in advance. The EESC believes that there is need for a transition from a short-term to a long-term horizon, with bonuses not linked to speculative activities. In this spirit, the EESC supports the idea of a tax on financial transactions, the proceeds from which could be allocated to development aid. Moreover, an additional requirement is that bonuses should not be based on general developments but on whether the bank manages to turn in a performance which is better than the overall trend. It would also be good to establish a ceiling for bonuses in order to avoid excesses and ill-considered risk-taking. An ‘exit strategy’ for the financial crisis should provide for repayment of the vast sums disbursed to financial institutions from government budgets rather than reverting to high profits and bonuses.

1.4.1

The de Larosière Group notes that there is a need for a European body to carry out macro-prudential supervision of the financial system and issue macro-prudential risk warnings. It recommends that the ECB/ESCB be given this responsibility and that a special council be entrusted with this task. Whilst linking the council administratively link to the ECB makes sense per se, it is the ESCB which must be formally responsible for conducting supervision. Supervision must definitely cover financial systems in all of the Member States and the ESCH must also appoint the senior management of the new council/board.

1.4.2

The report recommends that the new system of micro-prudential supervision be created in two phases, with different authorities for the supervision of banks, investment funds and securities markets. The second phase would consist of establishing common ground rules for supervision and eliminating differences in national application. During this phase, sanction regimes would also be harmonised. The EESC sees no reason to delay this process and therefore welcomes the fact that in its communication the Commission now recommends that immediate steps be taken to prepare the whole system for micro-level supervision.

1.4.3

The EESC believes that colleges made up of supervisors from the relevant national supervisory authorities could be difficult to manage unless accompanied by the necessary harmonisation. Otherwise differences in the rules governing national supervisory authorities would make it necessary in practice for the three new authorities to assume responsibility for part of the supervision of cross-border financial firms.

1.4.4

The boards of the three new authorities should not be composed of only bankers. Trade union organisations, consumers of bank services as well as the EESC, as the representative of civil society, should also be given places on the boards.

1.5.1

In discussions on financial markets use is now made of the term ‘stress test’ – an examination of how a country's banking system would cope in the event of a financial market crisis. Viewed against the background of the current financial crisis, it is easy to understand how important such tests could be. At the same time this raises the crucial question as to whether the results should be made public. If the IMF were to publish the results of such a test showing that the banking system in a particular country would not be able to survive a crisis, the crisis could then become a reality.

2.1

The extent of the current financial and economic crisis is unprecedented in peacetime. The Depression of the 1930s took place at a time when the world's economies were not as integrated as they are now. It was mainly the US and Europe which were hit. What we are experiencing today is, to a large degree, a global crisis.

2.2

What started as a financial crisis has turned into an economic crisis accompanied by recession in large parts of the world. It is likely to be followed by a social crisis with high unemployment. How extensive it becomes will be determined by what kind of policy is adopted to address the crisis. It has been accompanied by a political crisis which has led to the fall of governments.

2.3

However, the present opinion focuses exclusively on the financial crisis and what can be done to prevent it recurring in the future. Seen against the background of the overall crisis, the subject matter is limited: it does not deal with the economic crisis or with measures for countering the current financial crisis, such as providing the financial sector with public funds. Rather, it is simply about the future and in particular the supervision of the financial sector.

2.4

This was the brief entrusted to the de Larosière Group, whose report is the subject of the present EESC opinion. The de Larosière Group saw fit to widen its brief. This was necessary in order to provide a comprehensive picture enabling more constructive proposals to be put forward.

2.5

The current crisis started in the financial sector. Before the de Larosière Group had published its report, the crisis had assumed such serious proportions that the European Commission had already put forward proposals for changes to EU legislation. The most important of these is probably the proposal on credit rating agencies. A proposal has been put forward for a directive on particular forms of financial activity. A communication presented on 27 May discusses the section of the de Larosière report dealing with supervision of the financial sector. According to Annex 1 of the Commission staff working document accompanying the Commission communication, there are five differences between the de Larosière report and the communication. These differences are commented on briefly in points 6.2.4, 6.3.1 and 6.3.5. The EESC will deliver a separate opinion on the forthcoming practical legislative proposals. Although the Commission does not touch upon the other parts of the de Larosière report in the communication, the EESC believes that they are also of the utmost importance for the future of the financial sector.

2.6

The de Larosière report was written by bankers for bankers and those who will have to take the proposals on board are primarily banking experts in the Commission and finance ministers in the Member States. The EESC supports the Group's 31 recommendations but the focus must be widened. Those who, in practice, brought about the financial crisis cannot solely be responsible for solving the current problems. Consumers of financial services are private individuals and firms who deposit their savings and borrow to finance their investments. The task of the financial markets is to serve these groups, i.e. civil society, in the best possible way. So, whilst generally endorsing the report, we would like to make some comments on it and put forward some additional proposals.

3.1

Excess liquidity in the financial sector did not prompt any measures by central banks. The focus was exclusively on the level of prices, and this did not justify raising interest rates. The availability of cheap liquidity led to a rise in security prices. Just as there can be no doubt that the level of liquidity was too high when the crisis started, so a consequence of the crisis is that it has now fallen to a level which is too low. On the other hand, it is difficult to say what is an adequate level of liquidity and money supply under normal circumstances. The EESC would also highlight the dilemma of simultaneously using inflation and some measure of money supply as monetary policy indicators. An excessive money supply should lead central banks to raise interest rates. If, at the same time, inflation is low, this should, on the contrary, lead to a fall in interest rates. The EESC therefore believes that if, even in such complex situations, the money supply is used as an indicator, the potential effects on the real economy must be taken into consideration.