15.1.2016   

EN

Official Journal of the European Union

C 13/1

15.1.2016   

EN

Official Journal of the European Union

C 13/2

Rapporteur:

M. Ullrich SCHRÖDER

—

a special annual Competitiveness Council for SMEs and the SBA be organised at EU level, as the EESC advised in its 2011 opinion (1);

—

the Council’s High Level Group for Competitiveness and Growth should review progress on national actions for implementing SBA priorities and reflect on additional measures at EU level. Results should be forwarded to the annual Competitiveness Council for SMEs and the SBA;

—

the European SME Envoy Network be upgraded by raising the level of participants to the directors-general of the Ministries of the Economy. This would ensure stronger and better coordination between the EU and the Member States.

1.4.1.

An EU’s yearly report on SBA implementation must be introduced and also include a data-based report on the Commission’s management of it and of the functioning of individual programmes.

1.4.2.

The European Court of Auditors should be encouraged to publish regular reports on the functioning of relevant SME programmes and measures, as the external Governmental Accountability Office does in the USA concerning the US SBA. An independent office within the Commission should deal with internal governance, along the lines of the ‘Office of the Inspector General’ within the USA’s Small Business Administration.

1.4.3.

The SBA will not succeed unless a multi-stakeholder governance partnership is established (with social partners and public and private stakeholders). Therefore, the SBA Advisory Group (see 4.3.4) planned to be set up in 2011, but never established, needs to be made operational and to be consulted in the pre-decision stage.

1.4.4.

The system of national and local SBA implementation plans (see 4.3.3) has to be improved and complemented by systematic use of scoreboards.

2.1.

Objective: to compare the broad approaches and actions for SMEs regarding the two SBAs: Small Business Administration in the USA and the EU’s Small Business Act.

2.2.

The conclusions of this opinion (see chapter 1) therefore do not compare the specific programmes of the two SBAs but focus on possible improvements concerning the legal and political position, governance and use of targets of the EU’s SBA.

3.1.

The Small Business Administration in the USA is an independent government agency that provides federal support to small businesses. It was created by President Eisenhower in 1953, after the adoption of the Small Business Act. Its mission is to counsel, assist and protect the interests of small business. Its budget in 2013 was around USD 1 billion (excluding budget for non-enterprise activities). Some measures are legally binding. The SBA has offices in every US state and 1 000 local centres. President Obama has elevated the Director-General of the SBA into his Cabinet.

3.2.

The SBA has a complex definition of a small business as one that is basically independently owned, operated and organised for profit. Depending on the industry, product or service, the size standard is based on the number of employees or on sales volume. When considering the number of employees, the maximum number ranges from roughly 100 to 1 500.

3.3.

Overview of US SBA activities and programmes (3)

3.3.1.

Finance: loans and venture capital

3.3.1.1.

The SBA provides guarantees for small businesses that cannot obtain credit elsewhere. In general these loans are made by SBA partners (banks and other financial institutions) and guaranteed by the SBA.

3.3.1.2.

The Small Business Investment Company (SBIC) enhances small business access to venture capital.

3.3.2.

Small Business Contracting Programmes

3.3.2.1.

Several contracting programmes allow small businesses (owned by disadvantaged people or in underutilised areas) to compete only with similar firms for important government contracts.

3.3.3.

R & D programmes: strategy to increase SME participation by raising targets

3.3.3.1.

The Small Business Innovation Research (SBIR) programme increases the participation of small high-tech firms in federal R & D in federal departments with an R & D budget of at least USD 100 million. A percentage of its R & D budget must be used to involve small businesses: this started at 0,2 % in 1983 and was steadily raised to 2,7 % by 2013 (new target of 3,2 % in 2017).

3.3.3.2.

The Small Business Technology Transfer (STTR) programme provides funding for federal research shared between a small firm and a non-profit research organisation: 0,35 % in 2013, rising to 0,45 % in 2016.

3.3.4.

Entrepreneurial Development Programmes

3.3.5.

Office of International Trade

3.3.6.

Special Offices

4.2.1.

The Commission studied the SBA approach in the USA, and published its Communication ‘Think Small First, a Small Business Act for Europe’ in 2008 (5), with a broader target group (SMEs with fewer than 250 employees).

4.2.2.

Ten principles for designing and implementing SME policies at EU and national level were introduced relating to: business environment, entrepreneurship, ‘Think Small First’, public procurement, shorter payment periods, a better Single Market, skills and innovation.

4.2.3.

In 2008 the EESC (6) proposed a more ambitious SBA. It refers to the American SBA.

4.2.4.

Key Committee recommendations included:

4.3.1.

In 2011 the Commission published its communication ‘Review of the SBA for Europe’ (7). The Commission concludes that there is progress, but more needs to be done.

4.3.2.

Regarding developments in the Member States, the Commission is less positive on:

4.3.3.

The SBA Review proposed actions responding to the economic crisis in the following areas: regulations, financing, market access, entrepreneurship, job creation and inclusive growth (including female entrepreneurship and a Social Business Initiative).

4.3.4.

Strategic improvements involve strengthening governance:

4.3.5.

In 2011 the EESC (8) recognised that greater attention has been given to SMEs.

—

The Committee believes that the SBA should take a more binding form.

—

The SBA will not succeed unless a multi-stakeholder governance partnership is established (with social partners and public and private stakeholders).

—

The essential role of intermediary organisations from the public and private sector by providing tailored services is neglected.

—

The EESC calls on the Council to establish a special annual Competiveness Council for SMEs, microenterprises and the SBA.

4.4.1.

In September 2014 the Commission opened a consultation how the SBA should be revised, called ‘A strong policy to support SMEs and entrepreneurs 2015-2020’.

4.4.2.

The Commission concludes that the SBA has not been fully implemented in many Member States.

—

reducing the administrative burden;

—

access to finance and markets;

—

entrepreneurial and innovation potential;

—

reinforcing skills development (new).

4.4.3.

In April 2015 the Commission published a report on the results. A proposal for a revised SBA was originally planned for the first half of 2015, but has now been postponed until 2016. European business organisations have indicated their disappointment about this postponement and called for action to be taken in 2015.

15.1.2016   

EN

Official Journal of the European Union

C 13/8

Rapporteur:

Jan KLIMEK

1.1.

Family businesses form the backbone of many economies around the world and are growing at an impressive rate. They are a source of economic growth and jobs and pay considerable attention to regional and local factors. There are different reasons for setting up a family business, but common to all of them are a naturally occurring system of values, a willingness to demonstrate dedication and sacrifice and a sense of responsibility towards those who set up the business and those who take it over. Family businesses are better able to withstand difficult periods of recession and stagnation, and one of the main reasons for their longevity is the sense of personal responsibility for the image of the business.

1.2.

Acknowledging the unique value of family businesses, and in line with the Small Business Act which stipulates that ‘the EU and Member States should create an environment within which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded’ (1), the European Economic and Social Committee (EESC) calls on the European Commission to implement an active strategy promoting best practices on family businesses among Member States.

1.3.

A further step could be to undertake work on legal frameworks/regulations on family businesses. This kind of regulation should include a definition of family businesses and specify the areas in which the Commission will be involved, together with the legal, economic and political institutions responsible for these measures.

1.4.

In terms of specific measures, the EESC calls for:

2.1.

Family businesses make up more than 60 % of all European companies, both small and large enterprises, and employ between 40 % and 50 % of all employees (2). In the vast majority of economies, most businesses are micro, small and medium-sized enterprises, hence the majority of family businesses also belong to this sector.

2.2.

The main assets of family businesses are their long-term horizon, the specific values that form their unique organisational culture and their involvement in local communities. Their unique culture is based on the values promoted by family stakeholders, such as a high level of trust in the business and the high quality of services or products offered.

2.3.

The long-term perspective of family businesses means that they create long-lasting ties with company stakeholders (employees, customers, suppliers and local communities).

2.4.

Family businesses are characterised by the desire to pass them on to the next generation and by care and responsibility for employees. This aspect also promotes the accountability of family businesses, where relationships are built on trust.

2.5.

In order to meet objectives, family businesses devote as much of their profits as possible to building a stable, independent and innovative company, using own capital, which primarily seeks to minimise risk so that the business can be passed on from generation to generation. Family businesses develop in a more balanced way in order to achieve their long-term (multi-generational) objectives.

3.1.

It is generally accepted that family businesses can be characterised within three circles: families, businesses and ownership structure (3). The impact of the family on the other two circles determines the family nature of the company. This impact means that family businesses are more complex than their non-family counterparts and therefore require appropriate treatment.

3.2.

Several Member States have adopted specific laws on family businesses:

3.3.

The Committee believes that it would be useful to carry out a legislative procedure aimed at introducing a family business category into economic activity registers in all the Member States.

3.4.

The report of the Commission’s group of experts on family businesses recommends the adoption of the following definition of family businesses:

3.5.

However, the above definition is too broad. It should be narrowed in such a way as to emphasise the family nature of the business, especially the multi-generational purpose of its work.

3.6.

The adoption of this definition among European countries would allow quantitative data to be collected, which would enable statistics to be compiled on these entities once it had been aggregated. This data in particular would help to analyse family businesses in the new Member States, where these businesses play a key role. This task could be undertaken by the European Union’s statistical office, Eurostat.

3.7.

At national level, attempts are being made to quantify family businesses. This is the case in Ireland, for example, where the Central Statistics Office produced a publication entitled Family Business in Ireland — Services Sector 2005. The European Family Businesses federation, in cooperation with the consultancy firm KPMG, publishes the European Family Business Barometer. In Poland, a comprehensive qualitative and quantitative study was conducted in 2008 by the Polish Agency for Enterprise Development.

3.8.

The participation of Eurostat would enable two important goals to be achieved: to standardise the definition of family businesses and, on basis of this, to collect statistical data about these entities.

4.1.

The challenges facing family businesses can be divided into two categories: those applicable to all firms and those specific to family businesses. The first category includes all factors affecting a country’s economy, such as domestic demand, demography and the socioeconomic situation. This opinion focusses on the second category, i.e. the specific challenges for family businesses which would enable them to develop and grow.

4.2.

In a family business ownership does not consist of liquid assets but rather what the family builds and develops over generations, and which encompasses values, traditions and know-how (4). Therefore, transferring ownership of a business to the next generation is the most serious challenge that any such business can face.

4.2.1.

One important step to be taken by family businesses would appear to be comprehensive succession planning, as the intention of owners of these companies is to pass the business on to the next generation in good condition.

4.2.2.

Each year approximately 450 000 firms, employing about 2 million people, face this challenge. Some 150 000 businesses close each year because of an unsuccessful succession, leading to the loss of 600 000 jobs (5).

4.2.3.

The main causes of failure in succession planning should be examined, and measures to facilitate business transfers should be supported, e.g. inheritance law or tax incentives which support transfers.

4.2.4.

The scope and scale of the various approaches in Europe to inheritance and wealth taxes illustrate that there is still much to improve regarding regulation in this area (6).

4.2.5.

One example of a potential solution in the field of business transfers is the Netherlands, where the Ministry of the Economy introduced the ‘succession package’ (Overdrachtspakket). Entrepreneurs reaching the age of 55 receive a succession package reminding them of the importance of planning the business transfer and providing a set of tools to assist in this process. The Belgian institute of family businesses (Instituut voor het Familiebedrijf) has introduced a succession charter available in three languages: Dutch (Scorecard Opvolging), French (Scorecard Transmission) and English (Succession Scorecard). Another example is Slovenia, whose Chamber of Crafts and Small Enterprises (Obrtno-podjetniška zbornica Slovenije) organises seminars and training covering all succession-related issues, and Finland has a succession programme (ViestinVaihto-ohjelma). In Austria, there is a law on the continuation of a business’ activities (Fortbetrieb) by a family member in the event of the death of the manager (Gesamte Rechtsvorschrift für Gewerbeordnung, 1994). There is a similar arrangement in France (successions et des libéralités) and Luxembourg. The Polish Agency for Enterprise Development, in cooperation with the family business institute, has prepared a succession package for family businesses. As part of this package, family businesses receive a guide to succession, free tools to support this process and free implementation workshops.

4.3.

Family businesses try to create long-term jobs, which contributes to the creation of a family-based organisational climate. For this reason, family businesses can provide desirable jobs for mothers bringing up children, for example. Support should be provided for the family-based organisational climate, which might give these businesses a competitive edge.

4.4.

The spouses or partners of company owners often play an important role in family businesses, although, for different reasons, they do not have a formal status. This can lead to legal and financial difficulties, for example, in the event of a relationship breakdown. Giving these people a more formal status, as well as other family members informally involved in the activities of company, would help avoid difficulties in the event of family-related problems.

4.5.

As regards innovation in family businesses, these companies should focus not only on traditional markets and products, but also on new innovative solutions.

4.5.1.

Innovation in family businesses can be supported by means of an innovative public procurement system in which price should not be the sole criterion for selecting a bidder. Family businesses are characterised by the fact that they compete on the basis of high quality and customer service, guaranteed, inter alia, by the family brand (often the name of the owner or the owner-family). Therefore, family businesses generally do not bid for public contracts that have price as their sole criterion. It is suggested that the values of the most economically advantageous tender (MEAT) (7) be promoted as the assessment criterion, and this information disseminated among family businesses.

4.6.

Globalisation is forcing companies to open up to new markets, technologies and skills. Family businesses should take these aspects into account in their development strategies. This could mean that they need to take on new employees, also in management positions.

4.7.

At national level, the role played by family businesses in national economies should be acknowledged and then favourable conditions put in place for these businesses in the fields of taxation, legislation on economic activity (including a law on family businesses) and support for education for family businesses. This type of education should take into account the specific characteristics of family businesses such as succession, family supervision, etc.

4.8.

Examples of education specifically for the representatives of family businesses include countries such as Cyprus (family business school run by the Cyprus International Institute of Management), France (Master 2 professionnel: Gouvernance des entreprises familiales et patrimoniales — M2 GEFP, organised by the University of Bordeaux) and Finland (Omistajuus ja hallitustyöskentely — valmennusohjelma jatkajille — ownership structure and company management — training programme for successors) (8). Family business support organisations also hold courses for family entrepreneurs, such as the FBN Academy, run by the Swedish branch of FBN and training programmes run by the Spanish Instituto de la Empresa Familiar, for example.

4.9.

Recognising the role played by family businesses in the economies of the Member States and giving them support could contribute to restoring the family tradition of crafts. A significant proportion of small family businesses are concentrated in craft guilds, which seek to ensure the continuation of crafts; hence it is legitimate to support this type of entity.

4.10.

Smaller family businesses are exposed to risks that may lead to their disappearance from the market. Appropriate legal and tax-related support should therefore be provided for these businesses with a view to supporting their further development. In turn, large international family businesses could benefit from institutional support and measures aimed at supporting local suppliers and economies.

4.11.

One specific type of family business is the family farm. In addition to the typical challenges characteristic of family businesses, these businesses must also deal with problems specific to rural areas.

4.11.1.

Of particular concern here is the problem of land grabbing, which leads to an irreversible disruption of the economic structure in rural areas and to the socially undesirable industrialisation of agriculture. In its January 2015 opinion (9), the Committee called for appropriate steps to be taken to preserve throughout the EU an agricultural model based on family farms.

4.11.2.

Family farms often form cooperatives in order to achieve economies of scale and raise market competitiveness (10). Cooperative-based entrepreneurship exhibits similar characteristics to family-based entrepreneurship, i.e. it focusses on long-term activities rather than short-term profit. However, in recent times, cooperatives have lost momentum and some have even collapsed, hence the need to take steps to revive this form of activity.

4.12.

The term ‘patient capital’ is used to refer to the long-term accumulation of capital to develop a family business (11). When carrying out a transfer, the family business hands over the capital together with its social and cultural dimension and the purchaser invests in or purchases the business together with its multi-generational knowledge, (family-related) culture and commitment to the (local) community.

4.12.1.

When defining the patient capital, it is worth considering the use of tax deductions on reinvested profits. Consideration should be given to deductions for family businesses (and not only such businesses) that reinvest profits and prefer to inject their own capital rather than using debt.

4.12.2.

The ability to offset debt interest against taxable profits is an additional incentive for companies to use debt finance, as this effectively reduces the cost of debt, such deductions not applying to equity.

4.12.3.

It goes without saying that taxation issues fall within the competence of the individual Member States, but the European Union should promote good practices for family businesses.

4.13.

Setting up national public investment funds to inject capital into family businesses might be worth considering. The special feature of these funds would be that they would provide capital to family businesses without granting voting rights to the providers of the capital, along the lines of Aksjeloven in Norway or the Ley de Sociedades de Responsabilidad Limitada in Spain.

4.14.

Family entrepreneurship activities may also be supported by national or local organisations acting on behalf of these entities (e.g. government bodies (ministries), employers’ organisations, chambers of crafts, etc.) and supranational organisations, the most important of which include European Family Businesses, FBN International and Les Hénokiens.

4.14.1.

These organisations play an important organisational role in promoting the family business sector. They provide a platform for the exchange of knowledge and experience between family entrepreneurs, and publish reports on family businesses with a view to disseminating knowledge about them. In addition, organisations supporting family businesses may lobby for specific solutions.

15.1.2016   

EN

Official Journal of the European Union

C 13/14

Rapporteur:

Renate HEINISCH

1.1.

The European Economic and Social Committee (EESC) endorses the European Commission’s efforts to make eHealth a high priority within the Digital Agenda.

1.2.

The Committee notes that people seeking information, patients and healthcare professionals have repeatedly stressed the need for full, accurate and up-to-date information on medicinal products and for a single digital market.

1.3.

This officially approved information must, in the EESC’s view, be available without discrimination or obstacle so as to afford access for the deaf and the visually or otherwise physically impaired. It must be capable of being tailored to the needs of individual citizens, patients and healthcare professionals so that it is pitched at the right level for the safest and most effective use of medicinal products.

1.4.

The EESC believes electronic distribution of product information approved by drug licensing authorities will further improve access. An electronic database of patient information leaflets (PILs) and technical information approved by health authorities (Summary of Product Characteristics — SPCs) can ensure the availability of up-to-date and targeted information on medicinal products.

1.5.

The EESC proposes that information for the visually impaired be made available in the way most appropriate, for example in larger print or as audio data. Videos, possibly with sign language, could be produced to demonstrate the proper use of medical appliances (such as asthma sprays) to the deaf. ‘Simplified language’ versions offer further possibilities to reduce barriers to communication. These allow people with learning disabilities to access information targeting them and compensate for educational shortcomings.

1.6.

The EESC also points out that having all this on a single portal means there is a trustworthy and in many ways easily accessible source of officially authorised information that meets disability-access criteria. This means that patients and healthcare professionals can compare any information available elsewhere with the basic authorised information.

1.7.

To ensure overall suitability for use, development should be supported by both users and web-designers with expertise in accessibility for the disabled. Open format solutions should be created so that users can access the information with any device (PC, tablet, smartphone, etc.) they want or have available to them.

1.8.

The EESC thinks that the website/portal for officially approved information should be developed in close collaboration with all major stakeholders — the pharmaceutical industry, which should operate and finance it, as well as patient associations, organisations representing people with disabilities and healthcare professionals — in order to best meet requirements.

1.9.

The EESC thinks it important to find user-centred solutions to make sure people with lower levels of education and infrequent internet users can also have access to information.

1.10.

Even though electronic access to information is considered to be important, it should be stressed that doctors (particularly GPs) and other healthcare professionals, such as pharmacists and nurses, are the first point of contact for patients, providing them with recommendations regarding their ailments and treatment options.

1.11.

The EESC asks the European Commission to support the proposal for the IMI2 project on electronic product information. Member States are invited to join the effort to coordinate existing databases.

2.1.

In 2012, the European Commission published an action plan that set out the obstacles to the full use of digital solutions in Europe’s healthcare systems. This plan is now being implemented under the title ‘eHealth Action Plan 2012-2020 — Innovative healthcare for the 21st century’ (1).

2.2.

The aim, the Commission states, is to improve health care for the benefit of patients, to give them more control over their treatment and to cut costs. While patients, the public and healthcare professionals are using telemedicine applications with great enthusiasm and millions of Europeans have downloaded smartphone apps to monitor their health and wellbeing, eHealth has yet to fulfil its great potential to improve healthcare systems and make savings through efficiency. In this connection, the EESC would point out the need to take account of data protection issues.

2.3.

eHealth, which includes telemedicine and mHealth, is defined as follows by the WHO: eHealth is the transfer of health resources and health care by electronic means. It encompasses three main areas:

2.4.

The European Commission has produced a Green Paper on mobile Health (‘mHealth’) (2) . mHealth is a sub-segment of eHealth and covers medical and public health practice supported by mobile devices. In particular, it includes the use of mobile communication devices for health and well-being services and information purposes, as well as mobile health applications.

2.5.

An increasing number of people of all ages use the steadily growing amount of electronic health information and applications.

2.6.

However, the quality of these sources of information varies greatly and search engines usually do not distinguish between reliable, officially approved sources and less reliable ones.

2.7.

There is a range of certified information systems for healthcare professionals. These professionals, particularly GPs and pharmacists, play a key role in healthcare systems and high-quality information is essential if we want to have well-informed medical professionals who can meet the healthcare needs of the EU population.

2.8.

The EESC believes that all patients need equally easy access to reliable information so they can better manage and participate in their own health care — something that is also mirrored in greater patient adherence. The details on training needs and inclusion of all groups (including the elderly and people with disabilities) have been set out in previous opinions (3).

2.9.

The increased workload of healthcare personnel and the various opportunities for people to get involved as patients or members of the public in healthcare organisations — such as national licensing authorities and committees of the European Medicines Agency (EMA) — and ethics committees requires knowledge to be widely shared.

2.10.

The European Patients’ Academy on Therapeutic Innovation (EUPATI) offers patients the opportunity to educate themselves on health issues. This consortium is financed by the Innovative Medicines Initiative, a public-private partnership between the European Commission and the European Federation of Pharmaceutical Industries and Associations (EFPIA).

2.11.

EUPATI is a consortium of 29 organisations led by the European Patients’ Forum (EPF). It is a unique amalgam of pan-European patient associations and academic and voluntary organisations that lead the field as experts in patient-focused and social engagement, and EFPIA member companies. EUPATI informs patients, as laypeople in the healthcare system, and difficult-to-reach patient groups by fostering public awareness of the development of new therapies. With the help of EUPATI, training courses — or corresponding educational programmes — can also be organised for better understanding of information on medicinal products.

2.12.

Some EU Member States already have information on medicinal products available electronically. The most highly developed database, FASS (4), is run by the Swedish Pharma Association LIF, but there are others in, for example, Germany, the UK, Finland and Denmark. These databases are either not normally accessible to the visually impaired or do not contain the full range of medicines.

2.13.

Some, moreover, are not regularly updated.

2.14.

In addition, drug licensing authorities have allowed the inclusion in package leaflets of codes (QR codes) that link to package leaflets on the company website. Here, again, there is often no access for the disabled.

2.15.

These initiatives show that a harmonised approach is still needed to provide access for all social groups to information through these new technologies.

3.1.1.

The EESC holds the pharmaceutical industry responsible for accurate and up-to-date information on its products. Any technological solution should come about in close collaboration with the industry in order to make use of existing technical solutions and ensure supervision by drug licensing authorities.

3.1.2.

The EESC stresses that how officially approved information is presented and can be accessed must be agreed with the relevant stakeholders (licensing authorities, patient associations, health professionals).

3.1.3.

A consortium responsible for coordinating development of the database/portal could be established and financed under the IMI initiative.

3.1.4.

The creation of the proposed portal will take account of existing databases (such as the EMA).

—

The designs of national databases are available. An additional prototype has also been developed to demonstrate a user-friendly and widely accessible database that also includes options for audio and video data. A technical solution that is freely available should be developed that makes the most effective use of existing sources.

—

This solution should also take into account the fact that citizens/patients do not want to use too many scanning applications on their smartphones. The database/portal should therefore be accessible using conventional scanner technologies, for example.

—

Open format solutions should be sought to increase take-up. It must be possible to request and view information using any kind of device (PC, tablet, smartphone, etc.).

—

Comparisons of technical solutions should be made and include matters related to parts of the healthcare system (such as Member State initiatives to reach people via television connections or ATMs and initiatives proposed by the European Commission (5)).

—

In Italy, pharmacies are required by law to print out updated package leaflets that the pharmaceutical industry has put on a database. Such printing — either by the pharmacist or by patients (using ATM-like terminals) — is a further complementary option and could cater for those who do not use the internet.

—

Research must include structural questions about the testing of technical solutions in order to increase acceptance.

—

How do licensing authorities check content?

—

Content must be presented in a way that enables adaptation to the individual needs of patients/citizens and must comprise all the information required by the relevant licensing documents or by law.

—

To enable rapid feedback for all those involved, a possibility for users to evaluate the information (above all in terms of understandabiity) could be incorporated. Social media elements for presentation, dissemination and exchange could be used for this.

—

How can active learning be encouraged so that existing sources of information can be used to disseminate information (including that in digital form) on health?

—

Learning to learn (life-long learning) is one of the eight key competences listed in the Recommendation of the European Parliament and of the Council of 18 December 2006 (6), which calls on the Member States to implement national measures. The ‘European agenda for adult learning’ proposes measures Member States can take to encourage active adult learning. ‘Digital health literacy’ could become a criterion to assess adult learning under the PIAAC.

—

What role can the various educational institutions (universities, adult education centres, etc.) and health care facilities play in strengthening the many skills involved — e.g., working with new technologies, getting involved and managing one’s health in a socially beneficial way, and imparting social and technical expertise?

—

Health professionals should receive the relevant training as part of their academic studies. Adult education centres could offer attractive courses tailored to the users of the system. In order to reach the target group, adult education centres could cooperate with professionals (especially doctors), local pharmacies and local health and social welfare facilities. This is especially important in rural areas, where people are more isolated. Inter-generational learning, in particular, could help to share knowledge on content and technical skills.

15.1.2016   

EN

Official Journal of the European Union

C 13/19

Rapporteur:

Mr Edgardo Maria IOZIA

1.1.

The European Economic and Social Committee (EESC) considers State aid impact evaluations to be key tools for checking the consistency between results and proposed targets, thus enabling resources to be allocated more effectively and efficiently, improving the transparency and the endorsement of management processes.

1.2.

Many Member States have already developed complex, structured evaluation systems. These systems develop in parallel with growing interest from the academic world, which has enabled improvements to be made to evaluation techniques and to the accuracy of measuring instruments available to granting authorities.

1.3.

The European Commission, along with the Member States, has set up a high level forum for State aid which also deals with evaluation.

1.4.

Last December, in her speech at the high-level Forum, the European Commissioner for Competition Margrethe Vestager stated that: ‘There are two key elements in the State Aid Modernisation programme (SAM) which are of particular importance: transparency, which lets citizens know where their money has gone, and evaluation, which tells them whether it has been well spent.’ The EESC strongly agrees with this message.

1.5.

The EESC welcomes the debate on impact evaluation in relation to business aid policy and urges the Commission to press ahead with the approach that it has been taking for some years now.

1.6.

It should be noted however that many aid schemes today are not subject to an impact evaluation, with the exception of evaluations laid down by European Regulations. In many cases, regulations merely require confirmation that individual operations formally adhere to legal requirements — they do not therefore enable a comprehensive, long-term evaluation of the effectiveness and efficiency of all investments made in support of firms. The EESC would like to see a generalisation of impact evaluations and possibly a lowering of the EUR 150 million average annual budget threshold currently set by the General Block Exemption Regulation as a limit, in excess of which aid schemes are required to submit an ex-ante evaluation plan — as otherwise this requirement would not apply to many Member States, particularly when the aid in question is considerable in relation to the size of the state.

1.7.

The EESC highlights how the overall legislative framework on State aid is gradually transforming the Commission’s role, moving it away from a predominantly administrative culture which once dominated, towards a new form of cooperation with Member States which seeks to optimise the results achieved by State aid, by focusing on its effectiveness and efficiency. The adoption of ‘modernisation’ was an important step forward.

1.8.

Member States must establish appropriate mechanisms for evaluation, carried out by independent bodies. The EESC considers it necessary for the social partners to take part in the process of defining the evaluation model without sacrificing the considerable expertise acquired by public authority staff. Such staff should have a role in developing evaluation processes and participate in the drafting of the final report, thus spreading a culture of evaluation within their own organisations and gradually improving the investigative process. The European Commission must contribute towards harmonising evaluation criteria in the Member States. Establishing comparable evaluation criteria will enable an overall assessment of the effectiveness and efficiency of State aid to be carried out.

1.9.

Particular attention should be paid to specific circumstances in the regions involved in the State aid system. The Commission’s commendable decision to exempt over 80 % of total State aid from prior notification (1) allows funding to be granted immediately but also significantly increases responsibilities and costs for local authorities, thus increasing public spending. Member States will therefore be required to concentrate on providing the necessary resources to launch targeted training courses and to initiate the sharing of best practices between local authorities. A culture of ‘partnerships’ must be developed at all levels.

1.10.

The EESC believes that the new system which grants Member States responsibility for ex-ante evaluation will increase overall costs to public administrations and to firms. Careful planning is therefore required to eliminate unnecessary burdens and simplify procedures. It also notes that the six month duration of the authorisation procedures for evaluation plans of very complex schemes could be too tight and that establishing a counterfactual model could present major difficulties for small states.

1.11.

The EESC recommends the rapid adoption of the communication on the concept of State aid, particularly in order to help local authorities. The mass exemption from prior notification has transferred a double burden of defining State aid and implementing it in a manner that is compatible with the market onto these authorities. For instance, in the case of public funding for culture and heritage conservation, the continuing legal uncertainty as to which of these constitutes State aid causes authorities to consider all interventions as subject to regulation on State aid and therefore to all the administrative and procedural burdens that this entails. This same uncertainty also characterises public financing for all infrastructure, in particular since the court ruling on the Leipzig airport case. A clear and concise distinction must be made between public support to firms which does not constitute State aid and support that can be considered as State aid pursuant to the definition set out under Article 107(1) of the Treaty of the Functioning on the European Union (TFEU).

1.12.

While welcoming the efforts made, the EESC considers it essential that this evaluation culture is extended to all levels of government, both regional and national. It must not therefore be limited to the cases mentioned above. To this end, the Committee calls for a renewed commitment from the Commission and Member States.

1.13.

The analysis carried out indicates that public authorities lack data on management costs incurred through overseeing State aid to firms. It is not possible to carry out a thorough evaluation of the efficiency of these funds without considering how much is spent by public authorities, in addition to measuring the aid itself, in relation to the results obtained. The transparency of this system relies on the publication of these data. From the data available, overall administrative costs would amount to around 5 %. Compliance costs — estimated at another 5 % — should be added to this figure, plus further evaluation costs, that the Commission estimates suggest would be just under 1 %. Objectively, this amount of resources — which is probably an underestimate — seems excessive.

1.14.

The EESC calls on the Commission not to create additional and unexpected burdens for firms and to guarantee that whole evaluation system is rendered more efficient and effective.

1.15.

It is very important that assessments consider the efficiency of administrative costs and costs arising from evaluation models.

1.16.

Comparability of different models and flexibility in relation to size, type and indicators should be ensured by simplifying ex-ante evaluation and harmonising ex-post criteria.

1.17.

The EESC calls for an integrated view of Commission activity in different areas of economic policy — structural funds, State aid, trade partnership agreements — in order to ensure a unified European economic policy that is based on growth and development.

1.18.

The EESC recommends using criteria similar to those set out in Commission Delegated Regulation (EU) No 240/2014 (2) of 7 January 2014 on the European code of conduct on partnership in the framework of the European Structural and Investment Funds — which establish an obligation to consult all potential stakeholders — in order to a formulate a regulation on evaluating the effectiveness and efficiency of State aid.

1.19.

Transparency of the evaluation carried out should be guaranteed and given as much publicity as possible — this is already the case in some Member States with regard to firms and the amount of aid granted.

1.20.

The EESC recommends that evaluation plans include:

1.21.

The EESC asks to be involved in the processes of evaluating the overall effectiveness and efficiency of the State aid system at the end of the period 2014-2020.

2.1.

Aid to firms may distort competition and fragment the internal market, contradicting the nature and spirit of the treaties, if it is not set within a clear regulatory framework, directed towards productive activities and firms which invest in particular in innovation research and development (and produce economic and social benefits), and it if it is not limited and monitored.

2.2.

On the other hand, the negative economic predicament which has persisted for several years — entailing serious national crises which inevitably affect businesses, workers and citizens — requires a relatively flexible approach, as implemented by the EU’s major competitors on the international markets (which are not subject to a single set of rules on State aid). The competitiveness of European firms should be an important benchmark. Unemployment in Europe is a real emergency. Investments have fallen by 15 % since their peak in 2007 and 25 million Europeans are still unemployed. 5 million of these are young people. The majority are women (3).

2.3.

An interesting study by the European Parliament (4) highlighted considerable differences between current schemes in place in the EU and the USA. ‘EU competition policy has strict rules on State aid, whereas US legislation has no provisions in this area.’ An EU proposal for rules on State aid has been included — at the request of the then Commissioner Joaquín Almunia — in the current negotiations between the EU and the USA on the Transatlantic Trade and Investment Partnership (TTIP) (5).

2.4.

The proposal seems weak and essentially inconsequential (6). Europe will continue to have the most restrictive legislation in the world. While on one hand this helps to complete the single market, it also penalises our firms. A European firm which manufactures in the USA is eligible to receive State aid that is inadmissible in the EU. This will be made easier by the adoption of the agreement. The EESC issues a serious warning to the Commission not to give preference to US firms in the free trade agreement.

2.5.

Experience to date has shown that there is a need for a thorough review of the European State aid programme.

2.6.

The economic and financial crisis of recent years has forced a radical review of the spending criteria used to determine public investment policy and business support policy at all levels of government. Specifically, the need to find a better way of rationalising support (granting aid only when there is sufficient added value), which would improve the quality of aid and — simultaneously — enable proper monitoring of the effectiveness and efficiency of this aid, has become a priority, in light of the scarcity and limited resources available.

2.7.

In the EESC’s view, it seems appropriate to find out what effect the business aid policies adopted have had, whether instruments for support identified are suitable and whether administrative and management costs are proportionate to the results obtained. We must be mindful throughout that what cannot be measured cannot be identified or improved. The measures adopted so far have set this approach in motion.

2.8.

‘Evaluation may seem a technical topic of interest to only a small academic research community, while exercised by a larger, practitioners’ community of consultancies specialising in financial auditing or in project and program evaluations. However, as evaluation has risen centre-stage on the European Commission’s Smart Regulation agenda, it has become a key topic of regulatory policy, raising important governance and institutional questions beyond the field of expenditure programs’ (7).

2.9.

Since 2008 the Directorate-General (DG) for Regional and Urban Policy has developed counterfactual evaluation programmes to support existing evaluations (ex-ante and ex-post) which are conducted during the programming of the structural funds.

2.10.

In May 2012, as part of its State Aid Modernisation (SAM) reform programme, DG Competition introduced the use of an impact evaluation which employs counterfactual analysis techniques for some aid schemes (8). In particular, the new General Block Exemption Regulation makes the evaluation of large aid schemes (with an annual budget of over EUR 150 million) mandatory in specific sectors such as: regional development policy, aid to small and medium-sized enterprises (SMEs), research, development and innovation support, environmental and energy aid and support for broadband infrastructure. Some national plans have already been submitted (four), and others in the field of research, development and innovation and broadband are under consideration (around ten).

2.11.

The European Court of Auditors recently intervened in the case of the results evaluation systems used by EuropeAid, judging them to be inadequate (9). The evaluation systems used in all of the Commission’s activities are currently under review.

2.12.

Greater coherence between the evaluation methodologies used to evaluate State aid and the results of using structural funds is essential, as is a thorough review of all the Union’s expenditure policies.

2.13.

The purpose of a counterfactual approach to evaluating the effects of public policies is to verify the policy’s ability to effect a desired change in the behaviour or the conditions of a given target population or beneficiary. It essentially defines the extent to which the support — rather than other factors — has contributed towards the achievement of a certain result. This is sometimes referred to as the incentive effect.

2.14.

The aim of the evaluation process is to identify the causal impact of the policy adopted, including only the direct effect of that policy. In other words it eliminates any possible distortions due to general macroeconomic conditions or the diverse nature of firms.

2.15.

The causal impact is the difference between the observable outcome variables after policy implementation (the factual situation) and what would have happened if this particular policy had not been adopted (counterfactual situation).

2.16.

This type of analysis comes in response to requests seeking to establish evidence of the net effect of support, and the extent of this effect. For example it addresses whether aid produces positive or negative effects and to what extent, whether the changes observed are genuinely attributable to the policy implemented, whether results vary between different beneficiaries (large or small firms), between regions or over time, and whether management and administrative costs are proportional and sustainable.

2.17.

Although this subject has been addressed extensively in economic literature, particularly in recent decades, there are only a few cases of public authorities in European Member States continuing and generalising the use of impact evaluations to monitor and improve their business aid policies.

2.18.

The most interesting cases to note include efforts made by the United Kingdom, which since 2001 has regularly assessed regional aid programmes using quasi-experimental evaluation techniques, and the Netherlands, which in 2012 established an Impact Evaluation Expert Working Group. Similarly, Finland set up the Finnish Innovation Agency (TEKES) and Slovenia approved the Monitoring of State Aid Act in 2001.

2.19.

With this opinion, the EESC wishes to contribute to discussions conducted by the European Commission and Member States on the effectiveness and efficiency of aid measures for firms and on the need to extend the use of impact evaluations.

3.1.

On the basis of empirical evidence from counterfactual analyses, this opinion aims to demonstrate the importance of evaluation. Evaluation should no longer be considered as an academic exercise, but as an essential, institutionalised practice included within the policy cycle: implement, monitor, evaluate, reshape.

3.2.

For this reason it will examine a number of studies carried out in different European Member States and highlight the fundamental lessons learned, namely the policy implications in terms of the impact on investment growth, productivity, employment, innovation and the cost of the scheme. These indicators provide an understanding of the effects on growth and they emphasise the need for targeted, high-quality aid.

3.3.

Although the literature tends to emphasise the existence of a positive correlation between public support for firms and the growth of output (investment, employment, new products), it must be noted that the incentivising effect of aid cannot be taken for granted. There are several other factors which influence the success of a policy, such as the general economic trend, the functioning of the market and the overall taxation system.

3.4.

In a study analysing the impact of Law 488 in Italy, Martini and Bondonio (2012) show that on average firms that received direct aid reduced private investments. In this case direct state support to firms seems to have resulted in a decrease in private investment expenditure, thus reducing the need for private resources. State aid must be additional to and not a replacement for investment.

3.5.

The literature also highlights some important concerns in relation to the impact of aid on productivity. In an evaluation study on British firms which received support as part of the Regional Selective Assistance Programme (RSA), Criscuolo (2012) explains how growth in productivity was not statistically significant (10).

3.6.

These findings seem to be in line with other empirical evidence which shows how direct aid often has a positive effect on production volumes, without however having any effect on productivity. In other words, the firms which receive aid grow without becoming any more efficient. This would increase the risk of keeping non-competitive companies on the market.

3.7.

Statistical-econometric models which identify the impact of support using a counterfactual approach also make it possible to show the net effects of specific aid measures on employment. This allows the cost per labour unit ‘created’ to be measured.

3.8.

Often, there is a discrepancy between the number of new labour units that are attributable directly to the aid and the statistics recorded in ex-post monitoring. In a study focusing on measures to assist SMEs in Poland, Trzciński (2011) shows that out of the 25 000 new jobs ‘created’ by the support, only 10 550 are those are actually attributable to the policy implemented (11). Bondonio and Martini (2012) reached the same conclusion. Out of 89 000 new jobs recorded in the ex-post monitoring of Law 488, only 12 500 were effectively created, at a cost of EUR 232 000 per labour unit (12). The impact that State aid has in terms of existing jobs, and therefore safeguarding the local, regional or national economy, should be taken into consideration.

3.9.

Aid to firms produces different effects depending on the amount of support granted, the size of the firm, the geographical area where it is located and the type of aid pledged. Empirical evidence from such analyses should be at the disposal of public decision makers, to guide their choices and to help them understand what type of support is most appropriate and in what context. As has been clearly demonstrated thus far, it is necessary to formulate targeted aid measures, in order to increase the efficiency and effectiveness of policies.

4.1.

The European Commission should continue its work on raising awareness of the most common principles and methods employed in the area of impact evaluation. In particular, the EESC believes that workshops on evaluation techniques and available methodologies should be held in various Member States, in collaboration with universities, the social partners, research institutes and other stakeholders. This experience will help the Commission to gain a readier understanding of the obstacles encountered when applying regulation, and allow it to intervene promptly in this regard.

4.2.

Although the Commission’s efforts must be applauded, it is important that more aid schemes be subject to evaluation, particularly when large amounts of aid are involved. It is also essential to promote a debate on methodology which aims to complement counterfactual evaluation techniques with new evaluation instruments that can also cover the effects of other forms of support to firms (financial support, indirect aid, industrial policy considered per se).

4.3.

The EESC insists on the need to develop an appropriate pluralist methodology as regards evaluation criteria and indicators. The Commission asserts (13) that ‘this shall ensure that public support stimulates innovation, green technologies, human capital development, avoids environmental harm and ultimately promotes growth, employment and EU competitiveness.’ Each of these elements contributes to the evaluation of the impact of State aid, over and above a mere evaluation of cost. The European Parliament is calling to be involved in defining evaluation methodologies, as well as European law on State aid, as this has a strong influence on the economic policy decisions of Member States. The EESC also emphasises that it would be beneficial for research purposes to have free access to evaluation data, in order to improve the methodology used.

4.4.

It would be beneficial for the Commission, along with national and European statistical organisations, to discuss the possibility of creating a reliable database on State aid to firms as part of a single methodological framework. This would guarantee the transparency of decision-making processes, and would also encourage research and evaluation activities both by public authorities and researchers involved.

4.5.

Universities and research centres could play a decisive role in shifting awareness towards a culture of evaluation and in circulating new and more advanced instruments for evaluating public policies. Moreover the European Commission could use independent research institutes to conduct case studies with the aim of evaluating the effectiveness of aid in certain sectors such as research, development and innovation aid, support for SMEs, aid to the energy sector and infrastructure aid.

4.6.

Given that the evaluations required under the new Community regulations do not give due consideration to the effects that business aid policy has on the European economy as a whole, it is advisable that the Commission launch a pilot study on this topic at the end of the current programming period (2014-2020). The study should investigate the main factors which determine how aid is spent, define the relationship between aid to firms and the granting authority’s economic potential and seek to understand the existing link between cohesion policy and competition policy.

4.7.

This opinion is the first step in the EESC’s work on measuring the impact of state to firms. It also responds to and supports the Commission’s activity in this area. However the EESC considers it essential to enhance and extend debate. It will continue to follow the Commission’s work in this area closely and to promote a culture of effective and efficient evaluation wherever possible.

15.1.2016   

EN

Official Journal of the European Union

C 13/26

Rapporteur:

Carlos TRIAS PINTÓ

Co-rapporteur:

Stefano PALMIERI

1.1.

The EESC considers that the Economy for the Common Good (ECG) (1) model is conceived to be included both in the European and the domestic legal framework in order to advance towards the Single European Market through a more ethical economy based on European values and achievements of social responsibility policies, moreover establishing synergies that reinforce them.

1.2.

The Economy for the Common Good is an holistic approach whose concepts are close to the fundamental values of the Social Economy, Circular Economy, Sharing Economy, Functionality Economy, Resourced-Based Economy and Blue Economy.

1.3.

The Economy for the Common Good is supported by civil society organisations, businesses and universities and it is considered to be a feasible model which strengthens European values, social cohesion and promotes a responsible economic system. In fact, the ECG has been supported by more than 100 local groups, close to 2 000 companies (2) and social organisations.

1.4.

Aligned with the Europe 2020 framework, it proposes the transition towards a ‘European Ethical Market’ which will foster social innovation, will boost the employment rate and will benefit the environment. The ‘European Ethical Market’ can be built through the implementation of several strategies:

1.4.1.

Measuring indicators of wellbeing and social development beyond GDP (3) such as the Common Good Product and the Common Good Balance Sheet.

1.4.2.

Policymaking aimed at recognising companies with higher contributions to the common good, such as ethical public procurement and the promotion of ethical internal trade.

1.4.3.

Promoting ethical external trade as the ‘Brand Europe’. In this way, Europe will pave the way to be recognised as an ethical market and European companies will lead the global ethical market and will contribute to the enhancement of human rights, labour standards and the protection of the environment throughout the world.

1.4.4.

Encouraging all kind of entrepreneurs who start up organisations aimed at contributing to the common good.

1.4.5.

Fostering ethical consumption and awareness among European consumers.

1.4.6.

Increasing the diversity of the financial ecosystem by promoting networks of ethical banks and stock markets throughout the EU.

1.5.

The EESC demands that the European Commission, as part of the renewed CSR strategy, make a qualitative step in order to reward (in terms of public procurement, access to external markets, tax advantages, etc.) those enterprises that can demonstrate higher ethical performance.

2.1.

The economy and, consequently, economic policy play a crucial role in today’s society, on which hinges the success or failure of other basic policies for the well-being of citizens — education, health, social services, culture, the environment, technology and innovation. These all largely depend on the economic situation affecting the different local and regional levels.

2.2.

The crisis, which continues have a negative impact on Member States’ economies and the quality of life of the European people, has revealed the poor resilience of the EU’s social and economic system.

2.3.

On the other hand, according to the International Trade Union Confederation (ITUC) Global Poll 2014 (4), there is not a single country in which most people believe that the economic system is fair. Four out of five people (78 %) believe the economic system favours the wealthy. Similarly, 88 % of Germans and 90 % of Austrians want a ‘new economic order’ (Bertelsmann Foundation survey (5)) and the same undoubtedly applies to the countries that have suffered most from the economic crisis such as Greece, Portugal, Ireland, Spain and Italy.

2.4.

Taking into account the progress made by the commission concerning social innovation and EESC opinion SC/39 on Taking stock of the Europe 2020 Strategy, the report on The Mid-term Review of the Europe 2020 Strategy, and the Europe 2020 Steering Committee initiative ‘Let’s talk happiness — beyond GDP’, it is evident that if we want to effectively support economic competitiveness and social cohesion, this requires a paradigm shift to make the economic, environmental and social targets truly interdependent and achieve greater equilibrium between qualitative and quantitative aspects of development thanks to a holistic approach.

2.5.

The ECG model offers a proper complement that is supported by European society. Its aims and values go beyond what conventional corporate responsibility has to offer, and its holistic vision gives it the capacity to bring together the most diverse actors of society.

2.6.

In just 4 years, the ECG has turned into a social movement supported by more than 100 local groups, close to 2 000 companies and social organisations and an increasing number of universities in countries including Austria, Germany, Switzerland, Italy and Spain. In addition, the South Tyrol region in Italy and several local governments across several European countries have adopted the ECG model for their own territories.

3.1.

The objective of a society must be the well-being of each and every one of its members, in keeping with constitutional provisions.

3.2.

In line with those guidelines set out in Article 3(1) (2) and (3) of the Treaty on European Union (6) the main proposal of the ECG model is that the economy must serve people ; in other words, the common good. The starting point for achieving this goal must be that money and capital are important instruments — of exchange and investment — but never ends in themselves.

3.3.

The economic model of seeking the common good would be based on values that all recognise as universal: human dignity, solidarity, ecological sustainability, social justice, transparency and democratic participation.

3.4.

Recognition of the common good as the central objective of the economy demands a specific method for measuring economic success in accordance with the end and not only the means: the Common Good Product with the Common Good Balance Sheet and the Common Good Creditworthiness Assessment that, respectively, complement GDP, the balance sheet and the financial CA.

3.5.

The ECG is a holistic model that seeks to integrate the economy into the social, cultural and ecological setting of European society. As can be seen in the attached table, the ECG model reflects the fundamental values of various economic proposals:

Source: I original.

3.6.

The ECG is an economic model that can successfully contribute to the Europe 2020 strategy, in particular by:

3.6.1.

ECG is a process of ‘social innovation’ and positive entrepreneurship useful to promote and support new ideas that simultaneously solve social needs, create new social relationships and strengthen economic value creation. In this context, ‘Innovation’ refers to the ability to create and implement ideas that demonstrate the ability to produce value; ‘Social’ refers to issues such as quality of life, solidarity, happiness and well-being.

3.7.

The ECG is a tool to build a resilient social and economic system that can give European civil society ‘protection and development’, that contributes to finding solutions and, where possible, preventing crises and that in addition contributes to economic and social change. The ECG is the way to place resilience at the centre of the processes for supporting the transition from crisis to recovery and development.

3.7.1.

Resilience is a factor that affects civil society’s ability to react to major upheavals and address unexpected tensions and crises. Means of preparing civil society to avert and cope with crises do exist, but they require more effective management and closer cooperation at all levels representing institutional, economic and social interests.

3.8.

Increasing the economic and social partners’ ability to absorb, manage and prevent the effects of crises and structural changes is a key element for civil society when it comes to supporting the achievement of standards of living that are appropriate to peoples’ needs. This also supports the EU’s economic competitiveness with a view to social cohesion and sustainability, with the aim of not limiting opportunities for future generations.

3.9.

To put these ideas into practice, the ECG model is based on the direct participation of people in both the business and political spheres. Tools such as the common good report/balance sheet and, in particular, the Municipal Common Good Index, are based on the active participation of all stakeholder groups.

4.1.

As a result of the harmful effects felt during the recent economic and financial crisis, people in Europe are less tolerant of issues such as loss of income, cuts in social provision and services, environmental damage, economic and employment uncertainty and the diminishing importance of their social rights together with their rights as consumers and users.

4.2.

At the same time, voluntary and insufficient corporate social responsibility policies, that are not presenting enough relevant information, need fresh impetus as pay gaps are widening in many big companies, women are in the minority in decision-making processes and the commitment to the career development of young workers is weakening.

4.3.

Entrepreneurs and SMEs are, for their part, threatened by unfair competition and unethical practices, putting the survival of many such enterprises at risk. People in general are calling for an economy based on the values which are, in theory, enshrined in national constitutions.

4.4.

The climate of social disengagement is reflected in a loss of public confidence in institutions and those who represent them. If it is to win back this necessary confidence and strengthen social and territorial cohesion, the European Union will have to redesign its policies and draw up a new strategy in keeping with people’s demands and values.

4.5.

In this sense, the EESC opinion on the Annual Growth Survey 2014 calls for the scoreboard of social indicators to be proactively included in the European Semester on an equal footing with macroeconomic and budgetary indicators. Furthermore, the European Semester’s objectives, methods and instruments should continue to include the greening of existing industrial processes in each sector and of the economy as a whole, in order to ensure economic recovery based on a more sustainable model of development.

4.6.

This is why the ECG model proposes a shift to a ‘European Ethical Market’ in which economic and trade policies are aligned with the culture and values that people identify as universal. By means of this strategy, the European economy and companies would restore their international ‘brand image’ as exemplary organisations in terms of protection and promotion of human rights, the quality and meaning of work, and environmental protection.

4.7.

Recognition would therefore be given to organisations that market products and services in accordance with ethical criteria and which contribute to the common good. More specifically, products and services that do not guarantee an ethical minimum through the value chain would be removed from the profitability zone.

4.8.

To summarise, the ECG model matches the proposals of conventional corporate social responsibility (CSR) with regard to values, but goes further in terms of objectives and methods. CSR in Europe mainly has been based on the principle of ‘giving back to society part of the profit obtained from it’ before focusing on the aim of ‘maximising the creation of shared value for their owners/shareholders and for their other stakeholders and society at large’ (7). This is why, unfortunately, a significant number of companies have reduced CSR to no more than philanthropic actions or public relations gestures.

5.1.

Several strategies are proposed for building a European Ethical Market. The roadmap will start with the measurement of companies’ contributions to the common good and the convergence towards a European non-financial reporting. Next, European civil society will be informed of companies’ performance through the development of ethical labelling. Policymaking will recognise those companies with a higher contribution to the common good through ethical public procurement and policies aimed at building an ethical internal and international market. Finally, entrepreneurship, consumption and banking policies will also be aligned with the common good principles. All this will take place by avoiding excessive administrative burdens and using market mechanisms.

5.2.

Measurement of companies’ contribution to the common good by completion of a Common Good Balance Sheet. The Common Good Balance Sheet measures the non-financial part of a company’s success: its ethical success and contribution to the common good. The current version of the CGBS measures the most important constitutional values: dignity, solidarity, sustainability, justice and democratic participation: ‘ethical performance’ vis-à-vis all the contact groups.

5.3.

To move beyond conventional CSR, the ECG movement proposes that the balance sheet should meet eight ‘metacriteria’: it should be 1. universal, 2. measurable in neutral points, 3. comparable between companies, 4. comprehensible for stakeholders, 5. public, 6. externally audited, 7. mandatory, 8. legally binding: the better the result, the lower taxes, customs tariffs, interests etc. would be in keeping with the slogan ‘with ethics to success’.

5.4.

As part of the ECG movement, more than 200 SMEs have carried out a CGBS through to the final stage: peer evaluation or external audit. The transition to a mandatory balance sheet could be gradual. The EU has recently taken the first step with its directive on non-financial reporting. The second step could be for the directive only to include standards that comply with all the above-mentioned metacriteria and entail legal advantages according to result. The remaining standards could subsequently be combined into one, which would be the non-financial part of the mandatory company balance sheet. The ‘universal’ (financial and non-financial) balance sheet would become a passport to entry into the future Common Ethical Market.

5.5.

Ethical labelling. The ECG argues that information on ethical behaviour should be provided on all products sold on the European common market by means of a common ethical labelling setting out the company’s contribution to the common good. The labelling could visually rank the result of the Common Good Balance Sheet, for example, in five different colours. Via the QR code, consumers could see the balance sheet in detail.

5.6.

Ethical public procurement. Priority in public procurement could be given to organisations that can demonstrate the greatest contribution to the common good in their Common Good Balance Sheet. Public procurement in Europe can serve as a driver for implementing the ‘European Ethical Market’ by adopting criteria linked to the contribution to the common good and the quality of the social and ecological footprint set out in Directive 2014/24/EU of the European Parliament and of the Council (8) and the implementation of the corresponding social clause.

5.7.

Ethical Internal Trade. Free internal trade would be encouraged in those organisations that can demonstrate the greatest contribution to the common good in their Common Good Balance Sheet. Firstly, the free marketing and movement of products and services for European companies would be facilitated for those that can demonstrate compliance with minimum ethical standards under the ‘European Ethical Market’. Secondly, the import of products, investment and provision of services from companies in non-EU countries that can also show they comply with minimum ethical standards under the ‘European Ethical Market’ would be facilitated. In this way, import tariff and tax policies relating to internal trade and imports would be framed in accordance with the ethical behaviour shown by companies.

5.8.

Ethical International Trade. Ethical behaviour and contribution to the common good must be the European economy’s calling card — in other words, ‘Brand Europe’. European companies, as ambassadors for European society, culture and values, must make sure they behave ethically and prove it by means of the balance sheet. The European Union’s policies to promote external trade (aid programmes for external trade, ethical standards for trade rules, etc.) should therefore in the first place support those companies that demonstrate the greatest contribution to the common good.

5.9.

Entrepreneurs for the common good. Fostering entrepreneurship is key to ensuring the European Union’s economic sustainability. By the same token, social innovation must by definition be geared to supplying products and services that contribute to the common good of society. For this reason, policies to promote entrepreneurship in the ‘European Ethical Market’ would foster business start-ups and training for entrepreneurs on the basis of the values of human dignity, solidarity, ecological sustainability, social justice and democratic participation. Common good hubs could be set up in all (Common Good) cities, creating businesses that either practice the balance sheet from the outset or are initially set up as ‘common good enterprises’.

5.10.

Consumers and fostering ethical consumption. The success of the ‘European Ethical Market’ will depend on the demand on the part of European consumers for products and services that contribute to the common good. Strategies and programmes to boost ethical consumption will need to be devised and promoted. These programmes would provide information on the nature of the ‘European Ethical Market’ by means of education, awareness-raising and publicity campaigns. The ‘double act’ of the common good balance sheet and labelling would provide ideal tools for achieving this objective.

5.11.

Ethical Banks and extension of the Basel Accords, including ethical quality criteria in banking regulation. Since the 2008 financial crisis and the adverse banking and financial events, the European public has progressively lost trust not only in its banking system, but also in national and European regulators. This state of affairs poses a major risk to the economic stability of the euro area.

5.11.1.

It is consequently necessary to improve the ethical standards in the financial industry and, at the same time, to increase the diversity of the financial ecosystem, reinforcing the networks of ethical banks throughout the EU (cooperatives, savings banks, new ethical banks) that contribute to the common good. This may help the promotion of banking in Europe that: (a) only carries out basic services (savings, payments, loans), (b) does not pay dividends or they are limited, (c) carries out a common good audit for each loan request. An ethical creditworthiness assessment of this kind would represent an extension of the Basel Accords to ethical criteria. It would measure the ethical added value that an investment would bring.

5.11.2.

An initial prototype of such a common good check is currently being developed by the ‘common good bank’ project in Austria. Loan conditions could be geared to the result of the assessment. In this way, the financial market would become a tool for sustainable social and ecological development.

5.12.

‘(Regional) Common Good Stock Market’. All the ethical banks working for the common good could jointly create a regional common good stock market, which would receive loan applications that pass the ethical test but not a financial solvency one. These stock markets, unlike their conventional counterparts, would not be a forum for negotiating company shares or obtaining financial returns — this would not represent the reason for investing in a company. The benefit for financial investors would lie elsewhere, for instance in meaning, utility and ethics (the ‘triple skyline’). In this way, European people and companies would have an opportunity to make ethical investments reflecting the values of the Member States’ constitutions and the EU’s own Treaties.

15.1.2016   

EN

Official Journal of the European Union

C 13/33

Rapporteur:

Ms Gabriele BISCHOFF

1.1.

A genuine stabilisation of the economic and monetary union (EMU) can only succeed if faults in the EMU’s construction are rectified and major reforms are undertaken to accomplish this. This requires a change to the treaties as part of a convention. Since this is unrealistic before 2018, in the meantime other measures must be taken to enhance the democratic and social dimension of the EMU within the framework of the existing treaties and to ensure that the self-imposed rules are followed.

1.2.

The longer the current savings-oriented policy — primarily focused on making spending cuts — continues without an effective investment plan to generate revenue through growth, social cohesion and solidarity, it will become increasingly clear that Europe’s economic integration and prosperity is at risk from growing social inequalities.

1.3.

Continuing on the current course is therefore not an option. Instead, social, political and economic cohesion must be strengthened to avert a break-up of the euro area. The EESC agrees that divergences in the EMU economies must be given greater consideration and that balanced structural reforms in these countries must be introduced to reflect the requirements of a monetary union and in accordance with national requirements, in order to ensure the necessary convergence. In addition, the EESC believes that short-term demand management is essential.

1.4.

The EESC calls for greater ‘parliamentarisation’ of the euro area, with a grand EP committee comprising all members of parliament from the euro area and from those countries wishing to join (26 Member States), combined with stronger coordination of members of parliament from the euro area on EMU issues (COSAC +). This could get under way in a relatively short time.

1.5.

The EESC points out that some of the economic policy goals of economic governance of recent years must be brought more into line with the EU’s social policy objectives under Article 4(2) TFEU and possible conflicts between economic and social objectives should be resolved. All measures under the European Semester — in accordance with the horizontal social clause — must be subject to a social impact assessment. These results should be made public and discussed at national and European level. The EESC can support this within the framework of its competences.

1.6.

The removal of divergences in the functioning of labour markets, wage-setting systems and welfare systems also plays an important role in a democratic and social EMU.

1.7.

The EESC is convinced that macroeconomic dialogue in the euro area (MED-EURO) can make a key contribution to the democratic and social development of the EMU, the outcomes and conclusions of which should be taken into account both when drawing up the Annual Growth Survey and in the scoreboard and country-specific recommendations.

2.1.

The EESC has issued several opinions with specific suggestions on how the EMU could be better designed. Whereas some of these opinions set out future scenarios, this opinion provides proposals for how the democratic and social design of the EMU can be developed as quickly as possible within the framework of the Community method in such a way that it bolsters democratic resilience and meets the social obligations arising from the treaties. Serious moves towards more comprehensive treaty change are unlikely before 2018. At the same time, there is still concern that the intergovernmental instruments, in particular the Fiscal Compact, are undermining the Community method and provoking division in Europe (2). The longer the savings-oriented policy — primarily focused on making spending cuts — continues without the addition of at least an investment plan and measures to generate growth and social cohesion and solidarity, it will become increasingly clear that Europe’s economic integration and prosperity is at risk from growing social inequalities.

2.2.

The crisis in the euro area has laid bare the design errors of monetary union. As there was a failure to coordinate the various national economic policies from the outset, in many respects members of the monetary union grew apart (3).

2.3.

In the context of the crisis the intergovernmental method appeared to be the only way to adopt important EMU instruments — like the Fiscal Compact — quickly, as individual Member States would not have agreed to a Treaty change. On the one hand, some instruments have been improved during the crisis. At the same time, there is consensus that parliamentary design and monitoring of the EMU has hitherto been insufficient. This must now be rectified as part of a more consistent integration policy. The group of foreign ministers (4) therefore recommended as early as 2012 that ‘full democratic legitimacy and accountability’ be guaranteed in all measures, calling for stronger cooperation between the EP and national parliaments (5). The European Commission’s Blueprint for a deep EMU suggested building on the institutional and legal framework of the treaties. The Eurogroup could then lead the way with specific measures, provided such measures were open to all Member States.

2.4.

Within the framework of European policy, more and more intergovernmental solutions, such as the Fiscal Compact, are being implemented, heightening the risk that a parallel system governed by international law is being created. Published in December 2012, the Van Rompuy report pointed out that a common understanding was important in order to carry out more far-reaching reforms. Moreover, a high degree of social cohesion was needed, as were a strong role for the EP and national parliaments and renewed dialogue with social partners. The accountability (ownership) of the Member States also had to be improved. In so doing, the then president of the European Council (6) brought the social dimension and the specific role of the social partners into the debate, which previously had been geared primarily to economic and budgetary policy issues and the lack of democratic legitimacy.

2.5.

Following the 2014 EP elections, and with the position of Commission president thus enhanced by democratic elections, there have been new discussion proposals:

2.6.

The EESC takes note of these proposals and will assess them in terms of how much the ideas for the further development of ‘economic governance’ contribute to a social, democratic, solidarity-based and political union which guarantees appropriate participation of EU citizens and the social partners.

2.7.

The EESC takes the view that the EMU requires a genuine strengthening of intra-Community cooperation, as hinted at in the Commission’s ‘blueprint’. By extending demand instead of stifling it, this would ensure that the economic capacities of the various countries are more closely aligned within the framework of a growing and prosperous economy. This includes an upwards harmonisation of social standards and labour rights.

2.8.

The co-existence of the Community method, intergovernmental initiatives (such as the Fiscal Compact) and other new ‘intermediate forms’ linked to the Commission’s and the European Court of Justice’s supervisory function in the application of international agreements have given rise to renewed confusion regarding operators and their legitimacy and accountability. Transparency and thorough democratic scrutiny cannot be guaranteed given this state of affairs and this has aroused a lot of criticism. In the midst of the crisis, quick solutions had to be favoured, albeit with the declared intention that individual international-law agreements should later be transferred to the Community method. The five presidents intend this state of affairs to continue until 2018. Their timetable would further postpone the full democratisation of the EMU, and their report does not pay the question of political union enough attention. In the meantime, the European Semester dialogue between the EP, Council and Eurogroup, as well as between national parliaments and the Commission and between national parliamentarians and MEPs (COSAC), is intended to enhance trust and spur joint action. In this regard, the EESC points out that increased dialogue cannot replace integration policy. The Community method must now be strengthened once again and form the basis of a functioning EMU, instead of different, parallel systems based on international law.

3.1.

Better involvement of the social partners can contribute to improved EMU governance, and structured dialogue with civil society helps to improve democratic resilience. The EESC is willing to play a special role here and to make its experience and resources available, as is already the case with the 2020 strategy, for example (9).

3.2.

The question of ‘ownership’ especially by the social partners, as introduced by Council president Herman Van Rompuy, promises to be much more difficult, especially as the social partners — unlike governments — have so far been involved in a very limited way in designing the objectives/instruments of economic governance. How can we then encourage them to get involved in a policy, the details of which they have little influence over? As social partners and economic operators, they have a substantial influence on pricing levels and stability, for which the EMU provides the overarching framework for their respective systems for setting wages and organising labour market and social policy.

3.3.

In 2013, the Commission published its communication on the social dimension of the EMU (10) responding to the discontent of civil society stakeholders. ‘Problematic’ economic developments should be identified and dealt with at an early stage since persistent social inequalities could jeopardise the financial and economic stability of the EMU. In the discussions that followed, it became clear that there were two schools of thought. The first one is based on the assumption that the social dimension of the EMU is an additional, optional and voluntary pillar, in contrast to the mandatory budgetary and economic policy procedures. Others, like the EESC, would point out that some of the economic policy goals are at odds with the EU’s social policy objectives under Article 4(2) TFEU and call for these conflicting aims to be made public and resolved.

3.4.

The Commission wants to involve the social partners more closely and to engage in a discussion on wage development and collective bargaining. It has already taken several steps in this regard. On the other hand, it would like to discuss the European Semester with the social partners and calls for them to be involved more effectively in the Member States. The EESC itself has put forward very concrete proposals to ensure that the social partners play a more effective role in economic governance (SOC/507) (11). At least the new allocation of Commission portfolios, especially the broadened remit of vice-president Dombrovskis, can be seen as a sign that greater attention will be devoted to the participation of the social partners.

4.1.1.

The EESC expects the report on Completing Europe’s Economic and Monetary Union  (12), presented by the five presidents (13) on 22 June 2015, to serve as a guide for future development of structures for economic policy governance in Europe. The EESC is of the opinion that ongoing imbalances as well as the creation of trust require more effective and democratic economic governance, notably in the euro area (14). On the other hand, the analysis is based on some false premises, which leads — despite some good points — to problematic conclusions: without a change of course, the savings-oriented policy would continue, leading to more wage and welfare cuts. While it is recognised that the minimum conditions for the long-term viability of the EMU have not yet been achieved, the recommended stepping up and long-term institutionalisation of the current anti-crisis policy is nonetheless to continue. The EESC sees a contradiction here.

4.1.2.

The current (not least in comparison with the USA and Japan) disastrous economic situation in the euro area is not attributed to the ongoing anti-crisis policy, but to the uncompetitiveness of some Member States because of divergent wage trends and government deficits. The EESC finds it regrettable that the short-term challenges for macroeconomic policy, such as inflation and deflation, and the failure (from 2010 onwards) of counter-cyclical policies, as well as excessively weak demand, are being overlooked and a largely asymmetric adjustment policy is to continue. Regrettably, the five presidents completely disregard the fundamental problem, which has become evident during the crisis: unlike the US, Japan and the UK, the euro area as a whole lacks a ‘lender of last resort’.

4.1.3.

The report completely overlooks the approaches taken by other central banks, which enabled the USA and the United Kingdom to recover relatively quickly, while the situation in Europe only worsened. Instead of a counter-cyclical stabilisation policy, existing instruments of economic governance are to be strengthened, including by means of national competition councils that focus on reducing debt levels (‘deleveraging’) and on production-oriented wage development. The EESC regrets that the opportunity to assess the long-term sustainability of the foundations of the existing policy framework and to complement them with an enhanced pan-European perspective was not taken.

4.1.4.

The EESC finds it regrettable that the presidents attribute the much worse than expected economic trend purely to the fact that the new mechanisms of economic governance, as well as the adjustment programmes of the countries in crisis, were not thoroughly applied and were inadequately organised. The over-emphasis on structural reforms and price competitiveness of the Member States to complete the economic union (Chapter 1) overlooks the fact that structural reforms and wage-setting are subject to constant negotiations and problem-solving at local level — processes that follow democratic principles. The five presidents, however, position themselves as external operators who wish to steer Member States closer to arbitrarily defined benchmarks, without enhancing their democratic legitimacy to do so or creating ownership.

4.1.5.

The EESC is therefore concerned that the report’s lack of perspective of a fully-fledged fiscal union will further de-legitimise the euro area in the Member States, particularly because their approach of ‘more of the same medicine’ will not improve the economic well-being of all their citizens and the national perspective will continue to dominate. The EESC considers the proposed measures for integrating labour markets and welfare systems to be completely inadequate, not least because — in contrast to the presidents’ rhetoric of wanting to achieve a ‘social AAA rating’ for the euro area — these measures have only secondary importance. The EESC considers the development of a social union to be an integral part of a democratic and social EMU, not an afterthought.

4.2.1.

The European think tank Bruegel notes that from the outset the EMU was characterised by significant differences in economic, social and political conditions, which are responsible for the policy errors in Member States and inadequate European economic governance. It proposes a reform of economic governance in the fields of banking union and macro-prudential supervision of the financial sector, the prevention of strong divergences in unit labour costs and fiscal policy governance, which can ensure that the budgets of individual members are sustainable and that resources are available in the event of a banking and sovereign debt crisis. The EESC has very recently put forward very similar proposals in its opinions (16).

4.2.2.

Capital flows from surplus countries have been partially responsible for overheating in deficit countries, with nominal wages increasing as a result. The financial imbalances have so far been given too little attention. This is at odds with the intention of having deeper financial market integration.

4.2.3.

The pro-cyclical fiscal policy between 2011 and 2013 and the absence of a counter-cyclical fiscal policy in 2014 have further exacerbated social hardships unnecessarily (17). In addition to the necessary structural reforms, policies should therefore offer people opportunities, for instance through favourable conditions for private investment in order to rebuild long-term employment. Moreover, policy should include measures to enhance competitiveness in order to generate income and prosperity to guarantee social stability to all. The EESC therefore strongly endorses the conclusion that, in the short term, aggregate demand and inflation must be increased as a matter of urgency. Furthermore, the ECB must be relieved of the tasks of fiscal policy and adjustment of unit labour costs, which fall outside its mandate but which it carries out for all intents and purposes owing to the political inaction of the other institutions.

4.2.4.

In the EESC’s view, further action is required in order to address the basic issues of democratic legitimacy. The EESC strongly supports the full ‘parliamentarisation’ of the euro area (grand EP committee including all members of parliament from the EMU and those wishing to join the euro area). Even coordination among members of parliament from the euro area on EMU issues should be improved within the framework of COSAC (18).

4.2.5.

In 2014 COSAC itself pointed out that many parliaments are not yet sufficiently involved, and expressed concern that the link between the public and the EU has therefore been disrupted. They call on the Commission and the Council to work together with members of parliament to address the situation with practical proposals (19). Although the forms of participation provided for in Article 13 of the Fiscal Compact are a step in the right direction, they fall short of genuine ‘parliamentarisation’.

4.3.1.

Removing the divergences in the functioning of labour markets, wage-setting systems and welfare systems also plays an important role in a democratic and social EMU. A federal system with a single European labour market together with uniform institutions and welfare systems, as in the USA, does not seem feasible in the short term. In addition, the Macroeconomic Imbalances Procedure (MIP) should be strengthened in a symmetrical way with the social partners becoming involved.

4.3.2.

The EESC points out that some of the economic policy goals of economic governance of recent years must be brought more into line with the EU’s social policy objectives under Article 4(2) TFEU and possible conflicts between economic and social objectives should be resolved. All measures under the European Semester — in accordance with the horizontal social clause — must be subject to a social impact assessment. These results should be made public and discussed at national and European level. The EESC can support this within the framework of its competences.

4.3.3.

The five presidents’ report speaks of a financial, fiscal and political union, while there is no mention of the social union. It urges strengthening the unique European model, while no longer saying anything about the unique European social model. It is true that the image of the ‘social triple A’ is raised, which is intended to be achieved as part of a deepened EMU, but it remains extremely vague. Social issues are dealt with at best as supplementary matters, or in the context of increased mobility of the labour markets in the Member States. Key elements — mentioned without further explanation — are a minimum level of social protection, effective welfare systems in the Member States as well as new employment ‘flexicurity’ initiatives.

4.3.4.

The governments of the Member States have an important responsibility for the further development of a democratic and social EMU. The same applies to the social partners, both nationally and at European level, for whom the EMU provides the overarching framework for their respective systems for setting wages and organising labour market and social policy. As economic and social players, they play a key role as regards compliance with the EMU’s common stability target.

4.3.5.

The EESC reiterates that a monetary union with different price and wage trends in the Member States inevitably gives rise to imbalances between the regions of the same currency area, whereby external shocks can develop into social and political crises and may further exacerbate divergences (20). Therefore the EESC believes that a serious debate on a well-founded architecture of the EMU, implying a consensus concerning economic and social objectives as well as agreed governance, is unavoidable (21). The EESC concludes therefore that EU macroeconomic dialogue (MED) needs to be strengthened and deepened within the euro area.

4.3.6.

Macroeconomic dialogue was launched by the European Council in Cologne in June 1999 in order to achieve a long-term growth and stability-oriented macroeconomic policy mix, i.e. smooth interaction between wage development, monetary and fiscal policy. Its goals are now more pertinent than ever: more growth and jobs while preserving price stability, using up production capacity and increasing potential growth (22). The EESC finds it regrettable that this tool has been watered down over the years and, since the onset of the crisis, has not been used to democratise the instruments of economic governance and to enhance awareness of ownership in the EMU common currency area.

4.3.7.

The EESC is convinced that MED in the euro area (MED-EURO) can make a decisive contribution to the democratic and social development of the EMU provided that the group of participants in the dialogue meets its requirements. Maintaining the capacity for dialogue within the MED-EURO requires a limit on the number of participants. In addition to the representatives of the social partners, the European Central Bank, the Eurogroup and the Commission (while fully preserving their autonomy and independence), the chair of the Committee on Economic and Monetary Affairs of the European Parliament should participate on an equal footing.

4.3.8.

The EESC believes that MED-EURO should meet at least twice a year and become an integral part of the economic governance of the EMU. Its findings and conclusions should therefore be taken into account both when drawing up the Annual Growth Survey and in the scoreboard and country-specific recommendations. Within the overall context of monetary, budgetary and wage policy in the EMU, trust can be fostered and closer convergence can be achieved without jeopardising free collective bargaining. This could — by analogy with the ‘Stability and Growth Pact’ — lead to a higher degree of transparent commitment by all economic operators and act as a ‘stability and jobs pact’. In this context, the EESC stresses the importance of smooth interaction between monetary and budgetary policy and wage development in order to ensure more growth and jobs, boosting confidence in monetary union.

4.3.9.

This is a different approach from the five presidents’ suggestion — similar to the Bruegel proposal — to establish national competition institutions in order to accompany wage-setting processes at national level. According to the five presidents’ proposal, these national competition institutions should also be coordinated at European level. An early consultation of the social partners before putting together the report would have been wise, because the presidents’ proposal has little chance of success in its current form.

4.3.10.

Outlook: without undertaking fundamental institutional and political reforms, the EMU will always remain fragile. The Committee is extremely concerned about the stability of the EU, since the necessary reforms — with or without treaty change — always occur only at the last minute and under intense pressure. What is needed is to strengthen social, political and economic cohesion in the EU once again and to continue a coherent economic and monetary integration as a basis for a properly functioning EMU. Without bold members of parliament, politicians and social partners, who lead the discussion with civil society both nationally and at European level and who fight for the best solutions, a well-functioning EMU cannot succeed.

15.1.2016   

EN

Official Journal of the European Union

C 13/40

Rapporteur:

Mr Bernd SCHLÜTER

1.1.

The EESC advocates clearer EU strategic priorities in social policy. This means learning from the crisis, the policies adopted to address it and the loss of trust among the general population.

1.2.

The European Commission is urged to frame general social policy principles as part of a solid work programme. The EESC presents proposals for these principles in point 4 below. This effort could be based on a flagship initiative, governance rules or a White Paper. The starting point should be improved comparative data collection at EU level and in the Member States. Pure input indicators (how much money a given Member State spends on a given welfare service or benefit) are not sufficient to indicate the quality of a welfare provision system.

1.3.

The responsibilities of the Member States and the political and cultural differences between welfare systems must be heeded and a consensus pursued between Member States as far as possible when framing social policy principles with the aim of bringing about upward convergence of welfare standards.

1.4.

These social policy principles should form a substantive basis, for instance, for future recommendations to the Member States as part of a more effective European Semester (1). However, the principles should also be applied through the Structural Funds, the open method of coordination and the social impact assessment as set out in Article 9 TFEU. A binding social protection floor should be aspired to as part of these measures. The existing legal bases should be used to achieve this.

1.5.

Social policy principles should form a basis for the action of the EU institutions, especially in economic governance, fiscal control and crisis management.

1.6.

The social partners are key players in social insurance systems financed and managed jointly by employers and employees and other systems that have developed by negotiation between the social partners. They should be involved in the framing of social policy principles. Civil society actors and associations of welfare providers, social businesses, local authorities, welfare authorities, social insurance bodies, users and consumers should also be involved within their areas of responsibility.

1.7.

In this opinion the EESC will set out specific proposals for social policy principles in relation to welfare provision systems. The goal is to improve the effectiveness and reliability of the services and benefits of social protection systems, as well as social security and health systems, irrespective of the nature of the service provider and the type of service or benefit provided. The EESC is concerned above all with guaranteeing the provision of modern public interest-orientated social services in all EU countries from a legal and financial standpoint.

1.8.

The EESC recognises the diversity of systems and considers among other things the goals, form and substance of welfare provision, the balance between solidarity and personal responsibility, legal guarantees, funding and quality. It also looks at the position of users and welfare providers. The Committee sees a need to safeguard basic welfare provision by having common rules at EU level.

2.1.

The foundation of European social policy includes human rights, the lessons of the two world wars (2), the principle — enshrined in the Treaties — of the social market economy, the goals of the Europe 2020 strategy, the needs of productive national economies, the duty to combat poverty, the social, employment and health policy chapters of the Treaties, the objective of social cohesion and the common competition rules in Article 3 TEU. Article 151 TFEU stipulates that the objective of social policy is to promote employment, improve living conditions, ensure proper social protection and combat exclusion. The European social model is the expression of a unique community of values and culture (3) that melds democracy and the rule of law with social responsibility and solidarity. The EESC would like to strengthen this model and ensure its future viability.

2.2.

The EESC firmly believes that social policy should be a pillar of EU policy, both in its own right and as a means of promoting long-term growth and employment  (4). The Committee commends the progress already made in employment policy, on many aspects of coordination and in industrial safety. It affirms the investment function (5) of effective welfare provision systems and points to the moral, social and material cost of neglecting social policy. The EESC believes that efficient, innovative national economies and reliable, efficient and effective welfare provision are interdependent. Modern welfare systems can make national economies more resilient in crises; they promote employment and indeed create high employment potential, including for disadvantaged regions (6). In today’s technology-driven information society, and in the light of demographic trends (7) and migration, there is no long-term competitive edge to be gained by limiting spending in areas such as active inclusion, empowerment of job-seekers and opportunities for children and young people. Developing existing systems based on common principles could help to promote equal opportunities and fair competition within the EU.

2.3.

One of the purposes of welfare and healthcare systems and equivalent systems is to achieve necessary social equity, combat poverty, and ensure subsistence support and social harmony. Almost every EU citizen is reliant on the support of welfare services at certain times of their life. Among other things, welfare systems ensure adequate pension provision and assistance from qualified professionals for people requiring care or support.

2.4.

Employers and employees have an interest in, for example, a good work-life balance, health promotion and empowerment. Professional welfare provision helps people to communicate and cope with everyday life, furthers their skills, and supports them with problems such as addiction and crises and with care and education in the family.

2.5.

The EESC observes that substantial differences exist in the effectiveness, reliability and efficiency of welfare systems  (8). Well-functioning systems exist in many Member States, but all countries would nevertheless benefit from a general debate about social policy. Minimum subsistence protection by means of welfare provision (minimum income), professional social services and effective integration into employment and society are not guaranteed everywhere. Healthcare in particular is often not universally accessible — for instance where someone is unable to afford official or unofficial extra charges. Professional services, including non-residential care, support for people with disabilities, and help with educational or developmental problems are not available in all regions and Member States. The EESC observes that collective financing and legal safeguards sometimes need improving.

2.6.

A recent study from the Bertelsmann Foundation (9) demonstrated wide disparities in the efficiency of welfare systems and alarming trends in wealth and poverty in the EU and the Member States, and called for the EU to step up its social policy efforts. The study also showed that effective welfare systems are feasible, even where GDP is relatively low, and that inadequate welfare systems may still be seen where GDP is relatively high. Increasing poverty is a threat to social harmony and economic development (10). Social policy proposals should also be put forward to address both the growing divergence between the Member States and worrying political developments.

2.7.

The substantive basis for recommendations to the Member States and for crisis policies should be improved. Instead of calls for humanitarian measures after the event, the EU should adhere to consistent social policy principles. The controversial use of taxpayers’ money to bail out banks engaging in high-risk activities should be reasonably proportionate to investment in the proper functioning of welfare systems. The internal market rules, e.g. in relation to state aids and public procurement, are already having a substantial impact on welfare systems and services without having being obviously evaluated on social policy criteria.

2.8.

Under the new Treaty objective of a social market economy  (11), internal market policy should be complemented by social policy elements (12). The EESC echoes current calls (13) on the Commission and the European Council to flesh out social policy promises and implement measures (14).

2.9.

A new phase of European social policy could build on the following earlier efforts: the Council’s call for a guaranteed minimum income, dating back to 1992 (15); its adoption of the Social Agenda in 2000; the requirement under Article 12 of the European Social Charter that the parties maintain a system of social security; the objectives of social cohesion and protection of services of general interest contained in the EU Treaties (16); the minimum standards for welfare systems published by the ILO (17); the still valid EU White Paper on Social Policy published in 1994; the right to a decent existence laid down at EU level (18); key benchmarks contained in the UN Convention on the Rights of Persons with Disabilities.

2.10.

In its opinion SOC/482, the EESC, like the European Parliament (19), the Committee of the Regions (20) and other relevant organisations, calls for an adequate minimum income (21). The Committee has actively promoted discussion about welfare provision, social businesses, social investment, employment, Article 9 TFEU, the youth initiative, economic governance and services of general interest. This opinion is directly related to numerous other EESC and EU documents which cannot be cited individually.

3.1.

This opinion focuses on one aspect of a necessary social policy agenda, namely improving the effectiveness and reliability of social protection, and of the social security and healthcare systems. It considers welfare provision that is wholly or partly financed through taxes or social insurance systems and that falls within the scope of public social policy under social legislation or joint (employer/employee) agreements in a way that can be monitored. The nature of the service provider is not the deciding factor here.‘Welfare provision’ as discussed in this opinion may be delivered by central and local administrations, social insurance bodies, independent social businesses and charities or undertakings with various legal forms. All these are covered by the term ‘welfare providers’ if they deliver social services themselves. The concept ‘welfare provision’ embraces all types of service and benefit here, including services and cash payments in the social and healthcare sector. ‘Social insurance’ denotes joint (employer/employee), contribution-based and/or statutory social insurance arrangements and/or mutual insurance arrangements, which play a role in social security systems regulated by social law or joint (employer/employee) agreements.

3.2.

Care needs to be taken in discussions and translations when it comes to social policy, owing to the multiplicity of welfare systems, services and benefits, terms and definitions. The systems of the Member States reflect their national social policies, culture and history. These should be further developed on the basis of the European social model. A reasonable balance must be achieved between the diversity of systems and the need for common principles (22).

3.3.

The EU should create a common forum for discussion about social policy, draw up modern standards and take initiatives itself. It should promote convergence between welfare systems as they continue to evolve. Social policy principles could provide a substantive basis for the Commission’s recommendations, especially in the context of the European Semester, the Europe 2020 strategy, the open method of coordination and application of the social impact assessment under Article 9 TFEU (23). Such principles should also provide the substantive basis for a binding social protection floor and for the action and governance (24) of the EU institutions themselves, especially in relation to crisis management, fiscal control and economic governance.

3.4.

The future sustainability of welfare provision systems needs to be assessed. Welfare providers should be bound by democratically legitimised social welfare goals while preserving their conceptual autonomy.

3.5.

Decisions about welfare provision are generally taken by welfare authorities, social insurance bodies or third party service providers such as doctors prescribing a specific treatment. It is important to separate the issue of delivering and financing welfare from decisions about entitlement to welfare: for instance, purely cash benefits may be paid to a person with or without the obligation to use certain professional services. Social services may be delivered directly by local authorities, other welfare authorities or social insurance bodies. However, if such services are delivered by independent welfare providers, the legal relationship and funding may be subject to very different rules. For instance, there are procurement systems, service level agreements between welfare providers and funding bodies, reimbursement arrangements, voucher systems and non-case-specific direct support from welfare providers, especially in the sphere of advice and prevention. With contract and voucher systems, the public funding body pays the welfare provider directly based on case numbers. All systems need to be examined to establish whether adequate legal protection and sufficient user choice and participation options exist.

3.6.

The social partners play a key role in social insurance systems in particular. They should therefore be key contributors in the framing of social policy principles. National and local welfare authorities, social insurance bodies and independent welfare providers are pivotal players in welfare provision, which means that their representatives must also be consistently involved in their areas of responsibility.

3.7.

Bearing in mind that a reasonable balance must be achieved between the competences of Member States, shared European values and fair competition within the EU, the following principles are intended to provide a factual basis to stimulate further EU action on social policy.

4.1.

Social protection floor: guarantee of basic welfare provision, including subsidiary subsistence protection/minimum income for people without an adequate income, e.g. from work, pension or other welfare provision. This includes developing common indicators for basic welfare provision (25). This financial subsistence protection should be at least sufficient to cover the real costs of food, accommodation, clothing, water, energy and basic healthcare.

4.2.

Need: development and provision of modern, professional social and healthcare services for different problem situations, including for families, people with disabilities, the sick, the unemployed, lone parents, children, family caregivers, refugees, young people with developmental problems (26), parents with parenting issues, care in the home and other services in private homes (27), and help with overindebtedness (28), addictive behaviour, homelessness and psychosocial problems. Effective social services include advice, supervision, guidance, support, care, empowerment and education, treatment and therapy (29). Because there are many reasons for unemployment and because it is important to prevent the downward spiral into poverty, it makes sense to deploy active labour market measures that are legally guaranteed to support prompt reintegration into the labour market, and until that reintegration is achieved to secure decent benefits for all jobseekers, particularly young workers seeking their first job and women wishing to return to work after a long career break.

4.3.

Precise definition of aims: development of clear social policy goals for welfare provision, e.g. equal opportunities and intergenerational equity, active inclusion, compensating for disadvantage, work-life balance, protection against life’s risks, prevention, crisis measures, participation in the labour market and in society, material provision for old age, empowerment, etc. This goes together with a clear definition in social law of the categories of services and benefits: monetary and/or service-based, non-residential, residential, etc. A balance should be achieved between users’ right to decide for themselves and the objective of ensuring the effectiveness of welfare provision.

4.4.

Accessibility: ensuring that welfare provision, and above all social services, is affordable and accessible on a non-discriminatory basis wherever and whenever they are needed. Accessibility is facilitated by collective and sustainable funding, transparency as regards the services and benefits available and a specific legal guarantee with appeal and complaints procedures. Where they exist, cash contribution requirements should be balanced and should not constitute a bar to access. Bureaucratic procedures to verify actual needs can be counterproductive in the case of certain services such as drug dependency programmes or help with psychosocial problems. In particular, counselling and prevention services should be actively offered to users.

4.5.

Proportionality: services and benefits should be necessary and appropriate in their form and extent. Discretionary decisions and social legislation should take this into account. The cost should be in reasonable proportion to the expected outcome of the welfare service or benefit provided. The proportionality principle should also be applied to a person’s legal obligation to use a service or adopt any other course of action, and to the relationship between rights and obligations.

4.6.

Solidarity: funding of welfare provision should essentially be supported by solidarity-based social insurance systems and fair, solidarity-based tax systems. Collective financing should as far as possible include all social groups and strata. This would enhance the reliability, acceptance and sustainability of financing. Undeclared work (30) and tax avoidance are harmful to welfare systems. Demographic and economic trends may make it appropriate to include all types of income, e.g. also income from capital. Better coordination between taxation and funding systems in the EU could provide a stronger financial basis. Private investment, donations, civic and religious action and grants from foundations are welcome supplements to conventional funding, but cannot constitute legal entitlements or be used to support infrastructure.

4.7.

Personal responsibility: job-seekers and those finding it difficult to enter the labour market etc. should be supported through social services and incentive systems with the aim of enabling them to subsist, fully or partially, through their own efforts. People should have access to supplementary cover managed on a not-for-profit basis under negotiated joint agreements that complement public systems. Professional support with developing vocational qualifications and personal skills — such as communication, social and general coping skills — is often required so that people are sufficiently capable of assuming responsibility for themselves and being good citizens. As regards individuals staying healthy, a healthy lifestyle could be promoted by social security systems through preventative measures, incentives and better consumer protection.

4.8.

Participation: all services and benefits — alone or in combination — should help people to play their part in society. Social participation embraces occupational, cultural and political participation, as well as sharing in social prosperity.

4.9.

Structure: rational configuration of the legal and financial relationship between users, welfare providers (public or independent, depending on the system), welfare authorities and social insurance bodies. Where independent welfare providers are involved in public welfare provision systems, e.g. under social legislation and through funding, the services and benefits they provide, in particular with regard to funding and accessibility, should be based on the principles outlined here. Such welfare providers should be collectively funded and their activities regulated under social legislation so that they are able to make high-quality services and benefits available to the whole population.

4.10.

User’s right to decide: users are not passive recipients, but partners in assistance and citizens with entitlements. Within an appropriate budget, they should be able to choose between different types of service or benefit, e.g. residential and non-residential services and other types of service such as sheltered housing. The right type of assistance depends on individual circumstances, on the specific need for professional help as determined by trained experts, on the wishes of the individual and on the local situation. Where independent welfare providers are involved in public welfare provision systems, e.g. under social legislation and through financing, users should be able to choose from a range of providers.

4.11.

Legal certainty: services and benefits should be legally guaranteed, for instance under social legislation or similar democratic legal instruments of the Member States. Social security law should cover: legal entitlements; decision-making rules; cooperation requirements for users; and a description of conditions for provision of services/benefits, complaints and appeals options, public oversight of private providers of public services, if applicable, quality rules and access guarantees, infrastructure requirement, type of funding, etc. Legal rights and entitlements of users should at least be guaranteed for basic welfare and healthcare services. Discretionary decisions may take more account of circumstances in some spheres of welfare provision. The well-being of vulnerable people should be subject to special legal protection (31). Independent welfare providers must enjoy a protected legal status and non-discriminatory access to service provision, assuming that systems are not based on a monopoly. In many Member States the position of social policy is underpinned by a constitutional welfare state principle guaranteeing basic welfare provision, including in times of crisis.

4.12.

Public interest focus: in particular, third-sector and participatory forms of undertaking and organisation  (32), such as non-profit organisations, social businesses, public services, associations, certain types of foundation and cooperative, user associations and other civil society players, should enjoy appropriate financial and legal conditions. There should be a thorough debate in the context of social policy about financing for-profit companies operating in this area through taxes or social security contributions, and there should be adequate oversight and at least a framework for profit distribution.

4.13.

Transparency: the use of public funds by welfare providers and public administrations should be transparent. The general public should be able to find out about the reasons for service and procurement decisions, legal bases, etc.

4.14.

Joined-up approach: People’s everyday situations, changing life paths, new family constellations, ageing and immigration call for integrated and joined-up services  (33). Segregation, exclusion and discrimination should be avoided.

4.15.

Level playing-field: users, welfare authorities and welfare providers should have legally enshrined and enforceable rights and duties. If penalties or compensation arrangements exist for breaches of rules, then they should apply to violations not only by users but also by welfare authorities.

4.16.

Quality: social services should be backed up by quality assurance measures. Needs assessment and planning and implementation of measures should be based on social research findings and expertise. Personalised services should be enhanced through training, professionalisation and appropriate remuneration and working conditions achieved through free collective bargaining. The Quality Framework for Services of General Interest in Europe (34) can serve as a model for EU recommendations on welfare providers. Where expedient, the mobilisation and guidance of volunteers should be encouraged.

4.17.

Coordination: management of cross-border issues relating to social security and social protection should be improved. The capacity of finance providers and taxpayers and contributors should be considered here, as well as the principles of social solidarity and proportionality. It is important to avoid placing a disproportionate burden on those national systems that are particularly efficient.

15.1.2016   

EN

Official Journal of the European Union

C 13/49

Rapporteur:

M Pavel TRANTINA

Co-rapporteur:

Ms Marie ZVOLSKÁ

1.1.

The EESC strongly believes that emphasis should be placed on identifying, recording, assessing and hence validating the outcomes of non-formal and informal learning and doing so in the most comparable way possible that is comprehensible to all parties involved, particularly employers and educational institutions.

1.2.

Member States should provide opportunities for people of different ages and qualification levels to get the outcomes of non-formal and informal learning validated. This may require further collaboration between providers of such education, public authorities and other interested parties, including on issues such as funding and recognition.

1.3.

The EESC calls for support for all stakeholders, particularly social partners and other civil society organisations, to make them aware of the benefits of validation and enable them to participate actively in setting national qualifications frameworks and determining professional qualifications.

1.4.

The public must be given relevant information on the benefits of having skills recognised and the options and mechanisms for doing so. The EESC recommends that Member States broaden the range of institutions providing this kind of guidance and counselling and, in particular, enlist employment services, youth information centres, educational institutions, employers, trade unions, career advice centres, youth organisations, women’s organisations, organisations providing support to migrants and people with disabilities, and public institutions.

1.5.

A good national legislative framework is a prerequisite for ensuring the equal value of certificates achieved through formal and non-formal or informal study. This places significant demands on the quality of validation processes, which should be financially supported by, for example, the European Social Fund.

1.6.

The EESC calls on educational institutions, particularly secondary schools, vocational training colleges and universities, to promote the recognition of skills and knowledge acquired through non-formal means. The EU has many examples of good practice in this field and these should be promoted.

1.7.

The EESC is convinced that collective bargaining and social dialogue between unions and employers could play a key role in the process of validating non-formal education and lifelong learning and it should be used as an instrument to work on validating non-formal learning as an important contribution to the debate on employability and instruments to support it.

1.8.

In the current climate of high youth unemployment, support should be given to opportunities for interaction between public and private employment agencies, volunteer organisations (particularly for young people) and employers. This can serve as a means of promoting the visibility — and raising awareness of the importance and value — of non-formal and informal education in voluntary organisations, as well as strengthening mutual trust.

1.9.

Support should therefore be provided for the development and use of self-evaluation tools that help people identify and describe their learning outcomes. The experience of civil society organisations should be harnessed here. The EESC has already supported the creation of a European skills passport and, subsequently, the Europass Experience. It is therefore disappointed that the European Commission has suspended the preparatory work on the Europass Experience and calls on it to see this initiative through to completion.

2.1.

Despite the unfavourable economic and social circumstances many EU countries are currently facing, in which even formal education does not guarantee finding a job, the EESC believes that the EU cannot fail to validate the hidden wealth that lies in the experience and skills that people have acquired through non-formal or informal means.

2.2.

This validation could provide opportunities in particular to certain disadvantaged groups (such as women, migrants, young people, older workers). However, it should not create false hopes that they would quickly find a place in the labour market. This requires economic and social policy aimed more at investment, creating quality jobs, and reducing poverty and the risk of social exclusion. These policies must also guide and support the strengthening of education, vocational training and retraining systems.

2.3.

The EESC is drawing on an important document, the Council Recommendation on the validation of non-formal and informal learning of 20 December 2012 (1). It highlights the fact that the validation of learning outcomes (knowledge, skills and competences) acquired through non-formal and informal learning can play an important role in enhancing employability and mobility, as well as increasing motivation for lifelong learning, particularly in the case of the socioeconomically disadvantaged or the low-qualified. The validation of relevant knowledge, skills and competences has a valuable contribution to make in improving the functioning of the labour market, in promoting mobility and in enhancing competitiveness and economic growth.

2.4.

The Council sees the following as key stakeholders with an important role to play in facilitating opportunities for non-formal and informal learning and any subsequent validation processes: employer organisations, individual employers, trade unions, chambers of industry, commerce and skilled crafts, national entities involved in the process of recognising professional qualifications and in assessing and certifying learning outcomes, employment services, youth organisations, youth workers, education and training providers, and civil society organisations.

2.5.

As set out in the Council Recommendation of 2012, by 2018 Member States must have in place, in accordance with national circumstances and specificities and as they deem appropriate, arrangements for the validation of non-formal and informal learning which enable individuals to:

2.6.

According to the Council Recommendation, arrangements for the validation of non-formal and informal learning should include the following elements, as appropriate, whilst allowing each individual to take advantage of any of these, either separately or in combination, in accordance with his/her needs:

2.7.

The EESC has on a number of occasions expressed its appreciation of the benefits of non-formal education and the importance of recognising them. However, this opinion is the first time we are making the case for it in a consolidated manner. It aims to summarise the views of representatives of employers, workers and other civil society organisations on the practical procedures for validation and to put forward workable proposals from their own perspective.

3.1.

The decline in specialised production based on skilled trades, technological changes and the rise of the service sector mean that 21st century employers now put greater emphasis on ‘personality’, or ‘transversal’ and ‘transferable’ skills. The importance of lifelong learning and validation of the knowledge and skills acquired outside of schools is on the increase.

3.2.

In 2012, the University of Bath and GHK Consulting drafted a study for the European Youth Forum looking at the impact of non-formal learning in youth organisations on young people’s employability (3). Youth organisations are important providers of such learning. This type of education in youth organisations is not primarily aimed at increasing employability, but research has shown that the skills acquired through it could help achieve this.

3.3.

This study confirms the general recognition that the skills required by employers clearly correspond to those nurtured by the non-formal learning sector. Five of the six most frequently required soft skills are among those further developed by youth organisations — the sole exception being numeracy. The soft skills most sought by employers include: communication, organisation and planning, decision-making, teamwork, reliability/independence and numeracy. These soft skills are seen as key competencies for working successfully. Certain character traits are also developed, such as personal motivation, initiative and creativity, which are personal traits related to reliability/independence and enterprise.

3.4.

Everyone is involved in the process of lifelong non-formal and informal learning. For instance, women (and men) often develop skills while performing domestic chores, which could be transferred to the workplace, especially in the social services field. If they have to change jobs because of redundancy or their family situation, they can use this knowledge in the transition to their new work, or female migrants could use it to get their first job. The EESC has already called on Member States (4) to ‘speed up the process of recognising qualifications and experience gained abroad to enable women to find jobs corresponding to their skills and aspirations’, to ‘consider work in some sectors (such as cleaning, caring for children and the elderly, hotels and catering and agriculture) as offering opportunities for less qualified migrant women, provided that steps are taken to ensure that these sectors are legalised, professionalised and upgraded and that women are given training in these areas and enabled to develop their careers’. Social partners were called on to ‘facilitate the recognition of women migrants’ qualifications in collective agreements’.

3.5.

A shift in emphasis towards the outcomes of such learning is important if validation of the non-formal and informal learning is to be successful. Indeed, since 2004 this has been expressly encouraged in the EU policy agenda for education, training and employment. The recent study by Cedefop (based on research conducted between 2013 and 2015) shows that the shift to learning outcomes is currently gaining ground across Europe — for example, in the creation of national qualifications frameworks, in defining and describing professional skills, in the use of learning outcomes in curricula and assessments and as reference points for validation. This is expected to increase the transparency, relevance and quality of education and its openness to non-formal and informal learning. At the practical level, it is important for students to have clear goals: this will provide motivation, enable flexible study plans and steer the focus towards assessing outcomes. At the same time, in order to achieve sound educational outcomes, methods and learning/teaching processes themselves must also be improved.

3.6.

It therefore follows that emphasis should be placed on evaluating and documenting the outcomes of non-formal learning in a manner that is comprehensible to all parties involved, particularly employers and educational institutions. Then, insofar as people are interested and the required conditions have been put in place for them, these could then be recognised as standard professional qualifications on an equal footing with formal education programmes.

4.1.1.

Member States should ensure, as part of the validation process, that individuals and organisations have access to information and guidance on the benefits of — and opportunities for — validation, as well as on the relevant procedures, and that validation of non-formal and informal learning is supported by appropriate guidance and counselling and is readily accessible.

4.1.2.

Arrangements for the validation of non-formal and informal learning must be appropriately laid out whilst taking into consideration national, regional and/or local, as well as sectoral, needs and conditions.

4.1.3.

Opportunities must be provided for people of different ages and qualification levels to take part. This may require further collaboration between the non-profit sector, public authorities and other interested parties, including on issues such as funding and validation.

4.1.4.

People should be informed about other benefits of continued participation in voluntary organisations. Even a short period of involvement can have a major influence on the development of skills and can improve employability.

4.1.5.

The public must be brought on board in a coordinated manner and given relevant information about the benefits of validating skills and the options and mechanisms for doing so. We recommend that Member States broaden the range of institutions providing this kind of guidance and counselling and, in particular, enlist employment services, youth information centres, educational institutions, employers, trade unions, career advice centres, voluntary associations, youth organisations and public institutions.

4.1.6.

Guidance in the validation process is essential and beneficial, particularly for young people, at all stages — from identification through to certification. It should:

4.2.1.

In the view of the Council, Member States should promote the coordination and involvement of all relevant stakeholders in the development and implementation of the elements and principles of validation. To foster participation in this process:

4.2.2.

The EESC therefore considers support for all stakeholders important, particularly for social partners and other civil society organisations, so that they can be made aware of the benefits of validation and actively participate in setting national qualifications frameworks and determining professional qualifications. Working towards ‘real’ changes in the attitudes of participating parties could be very difficult, particularly in Member States that do not consider this area a priority or where access to validation of non-formal or informal learning has no real support nationally. It would be useful to provide a platform/support and so on for those that have already made progress in this area (through pilot projects, for example) in their efforts at the national level.

4.3.1.

Member States should enable individuals to obtain a full qualification, or, where applicable, partial qualification, on the basis of validated non-formal and informal learning experiences. They should ensure that validation procedures are linked to national qualifications frameworks and are in line with the European Qualifications Framework and that synergies exist between validation arrangements and credit systems applicable in the formal education and training system, such as ECTS and ECVET.

4.3.2.

Social partners and other civil society organisations, in particular, should be involved as much as possible (and suitably encouraged) in designing national qualifications systems. The experience of some Member States shows that, to implement validation procedures at the sectoral level, committees and units for sectoral skills need to be set up and staffed with the right people. It would then be possible to draw up national standards for individual professions and professional qualifications in the identified areas.

4.4.1.

Member States should ensure that transparent quality assurance measures in line with existing quality assurance frameworks are put in place, since this type of measure supports reliable, valid and credible assessment methodologies and tools. This mainly means having appropriate legislation — a regulatory framework for validation and guarantees acquired through certification in accordance with national qualifications frameworks derived from the European Qualifications Framework.

4.4.2.

For the EESC, this means that equal standing must be ensured for certificates obtained through formal, informal or non-formal learning. This places significant demands on the quality of recognition processes, which should be financially supported by, for example, the European Social Fund.

4.5.1.

Educational institutions play a key role in the validation process. The Council recommends that education and training providers facilitate access to formal education and training on the basis of learning outcomes acquired in non-formal and informal settings and, if appropriate and possible, award exemptions and/or credits for relevant learning outcomes acquired in such settings.

4.5.2.

The EESC calls on universities to further promote the validation of skills and knowledge acquired through non-formal means. Ireland could serve as an example here. Its National Strategy for Higher Education to 2030 supports the civic vocation of higher education and its ‘engagement with wider society’ as one of the ‘three interconnected core roles of higher education’. It defines this engagement as: ‘engagement with business and industry, with the civic life of the community, with public policy and practice, with artistic, cultural and sporting life and with other educational providers in the community and region, and it includes an increasing emphasis on international engagement’ (5).

4.5.3.

However, it is not only universities that can recognise the results of non-formal and informal learning. In Malta, for example, the secondary school certificate and profile presented in September 2010 recognises all forms of learning during the five years of secondary school. For both formal and informal education, it provides credits that encourage students to pursue further and higher education.

4.6.1.

The Council Recommendation stresses the importance of implementing validation in the workplace and recommends that Member States promote the involvement of all relevant stakeholders, such as employers, trade unions, chambers of industry, commerce and skilled crafts, and national entities involved in the process of validating professional qualifications. Employers should also promote and facilitate the identification and documentation of learning outcomes acquired while working.

4.6.2.

Validation of non-formal and informal learning could be part of collective agreements (as is the case in the Netherlands). This is an excellent example of providing access to validation for employees and contributes to effective human resource management in businesses. Employers should be actively involved in the evaluation of knowledge, skills and competences, both in the workplace and when setting up education and training programmes, which will improve the value of validation and help to build confidence in it.

4.6.3.

Collective bargaining and social dialogue between unions and employers could play a key role in the process of validating non-formal education and lifelong learning. A specific example on the European scale is the European Metalworkers’ Federation (EMF), which is working on validation of non-formal learning as an important contribution to the debate on employability and instruments to support it.

4.6.4.

In some countries, a new role is taking shape for union activists who provide advice during working hours and negotiate with employers on free access to educational opportunities in the workplace. In Austria, Denmark, Finland, Norway, Sweden and the United Kingdom, trade union representatives act as ‘ambassadors’, supporting staff in further education, filling gaps in their skills and advising companies on their educational needs (6).

4.6.5.

Given that employers place great value on involvement in youth organisations when hiring young people with little or no work experience, this involvement should be supported as one of the ways of helping young people make the transition from school to work (7).

4.6.6.

Furthermore, everyone interested in seeking validation should be given better guidance and coaching so that at the job application stage they are better able to present the skills and competences they obtained by non-formal and informal means and better understand how these skills apply in the work environment and help them in specific work-related tasks. This is a process to which career guidance services, counsellors in schools and universities, the youth sector and employment agencies, as well as employers and international organisations, can contribute. They could also help young people on this front by giving them information and useful tips.

4.7.1.

In its Recommendation, the Council points out the importance of actively involving the voluntary sector in validation schemes. Youth and civil society organisations should promote and facilitate the identification and documentation of learning outcomes acquired at work or in voluntary activities, using relevant validation tools to ensure transparency such as those developed under the Europass framework and Youthpass.

4.7.2.

People should be more aware of the value employers place on skills and competences developed non-formally or informally, for example through volunteering. This is especially true for those with a lower level of education, who are often less aware of the value this type of activity has for employers and are less well trained in how to present these skills.

4.7.3.

In the current climate of high youth unemployment, support should be given to opportunities for interaction between public and private employment agencies, volunteer organisations (particularly for young people) and employers. This can serve as a means of promoting the visibility — and raising awareness of the importance and value — of non-formal and informal education in voluntary organisations, as well as strengthening mutual trust.

4.7.4.

Support needs to be given to developing the assessment and training plans of volunteer organisations, as their existence is linked to a higher declared level of skills development. In this respect it should also be noted that the activities of volunteer organisations vary significantly, and so the benchmarks they use to assess the skills developed through their activities also vary. In the light of this, greater consistency in terminology and evaluation methods in the voluntary field should be promoted. Alignment of benchmarks could result in, for example, more volunteers being aware of the skills they develop through their involvement in voluntary social services.

4.8.1.

The Council Recommendation emphasises common European validation tools to ensure transparency, such as the Europass framework and Youthpass. Member States should ensure that synergies exist between validation arrangements and credit systems applicable in the formal education and training system, such as ECTS and ECVET.

4.8.2.

The knowledge and skills developed through involvement in civil society organisations are also valuable on the labour market, but are often not documented or sufficiently visible. Support should therefore be provided for development and use of self-evaluation tools that help people identify the outcomes of learning through experience in civil society organisations. For instance, creating personal competence portfolios could offer people added value in their further education and career aspirations.

4.8.3.

Certificates and portfolios are an important element in the validation of competences and qualifications acquired though non-formal means. Providers of non-formal education should aim to issue certificates/documents describing in detail the nature and results of participation in their educational activities and should make people aware of the value these activities have. This is above all about the value these documents have in terms of education (improving people’s awareness of the skills and competences they acquired in civil society organisations and how they can use these skills when looking for work or in further education), rather than as proof of an achievement.

4.8.4.

The EESC has already supported the creation of a European skills passport and, subsequently, the Europass Experience. It is therefore disappointed that the European Commission has suspended the implementation of this initiative.

15.1.2016   

EN

Official Journal of the European Union

C 13/57

Rapporteur:

Dorthe ANDERSEN

1.1.

Young Europeans have been hit hard by the crisis in several Member States, at huge human, social and economic cost. However, higher youth unemployment is nothing new and points to some structural problems that make the transition from school to employment difficult.

1.2.

Well-functioning apprenticeships and other quality forms of work-based learning (WBL) systems can help young men and women to make a smoother transition from school to employment.

1.3.

The EESC underlines that there is no ‘single best model’ for dual training; the aim is to promote a high-quality dual training which works.

1.4.1.

The EESC believes that there is a need for a European quality assessment tool that documents progress as well as the effects of the reforms Member States are undertaking in order to improve performance of the VET and dual training systems.

1.4.2.

The EESC recommends that the Commission — with the relevant partners — develop tools to monitor and collect data, evaluate what works in the Member States and identify the key elements of well-functioning dual training systems. The aim is to measure and assess what works, to ensure quality in the training systems and to highlight the correlation between dual training and employment.

1.4.3.

High-quality and labour market-relevant vocational skills and qualifications will also in the future constitute a core segment of the labour markets and European competitiveness. The EESC therefore proposes setting an EU target for VET and dual training, which can serve as path for better youth employment opportunities. This could be part of a renewed EU 2020 strategy and the EESC therefore calls on the Commission to examine the options.

1.4.4.

The EESC believes that an EU VET-target and the compilation of data could help keep the Member States on track to improve educational levels and ensure that young people have a positive experience of the education system and leave with the skills needed on the labour market.

1.5.1.

The EESC recommends that Member States which do not have well-functioning dual training systems explore the costs involved in developing such systems, compared with the trade-off and benefits this would have for companies‘competiveness and young peoples’ job opportunities.

1.5.2.

The EESC emphasises the importance of partnerships between schools, training centres, trade unions and the business community. The social partners play a decisive role in all stages of well-functioning dual training systems (design, implementation, monitoring, evaluation, etc.). Strengthening and making better use of social dialogue at all levels can be an effective instrument to improve quality of dual training and to make it more attractive.

1.5.3.

The EESC calls on the Member States to introduce or review on a systematic basis the professional development of VET teachers, mentors and trainers — and in particular in-company trainers, as these are key to improving the performance of VET systems.

1.5.4.

The EESC emphasises the importance of employers and believes that employers — including SMEs — will get more involved in apprenticeship schemes when these genuinely meet their needs and when there are good links with schools. Putting in place dual training systems that allow for the cost-effective involvement of employers and giving them greater ownership should be the focus in the coming years.

1.5.5.

The EESC recommends that the European social partners continue their work in this area as part of their stand-alone work programme.

2.1.

The economic crisis in Europe has hit young people hard. 4,5 million young people under the age of 25 are out of work (1), although for certain EU countries, high youth unemployment is nothing new; it has simply been exacerbated by the crisis. The EU youth unemployment rate is more than twice the adult one — 20,9 % against 9,8 %. Around 7 million young Europeans are not in employment, education or training (NEETS) (2). With a rather weak short-term economic outlook, youth unemployment has reached extreme levels in some Member States at huge human, social and economic costs.

2.2.

Unemployment was higher among young people than adults before the crisis too. This suggests a structural problem in establishing closer links between education and training systems and labour markets. Another argument in this direction is that in many countries there is high youth unemployment, while at the same time employers have difficulties in finding employees with the right skills.

2.3.

The situation calls for a new approach improving the bases of employment and growth with a view to developing high-quality and labour market-relevant vocational skills and qualifications and well-functioning labour markets.

2.4.

There are considerable differences between EU Member States, however, with regard to their experiences in getting young people onto the labour market.

2.5.

In many countries, people with vocational training form the majority of employees in the private sector but also play a significant role in parts of the public sector. Today about half of upper secondary students across Europe follow a VET programme and about a quarter of them are in combined school- and work-based learning (3). But key challenges lie in making VET more attractive by improving its quality and relevance.

2.6.

In a number of its opinions (4), the EESC has highlighted the importance of creating the right conditions for young people, with the aim of easing the transition from education to work by boosting opportunities to undertake different forms of dual training as part of high-quality vocational education and training (VET).

2.7.

The EESC believes it is important to keep up the momentum and ensure that the individual Member States, in conjunction with the social partners, adapt their VET systems by incorporating dual learning components.

3.1.

This opinion focusses on the dual training systems in VET. Dual training is an umbrella term covering different national models. According to Cedefop, dual training concerns education or training combining periods in a school or training centre and in a workplace. The duality refers to the learning avenues (schools/VET providers and training companies sharing the responsibility to provide theoretical and practical training) and the duality of actors (public and private).

3.2.

All Member States have systems that incorporate the work-based aspect, but their quality, outcome and scale vary (5). For example, how much time is spent in a workplace? Is there a contract between the learner and the employer or is the learner paid and what is the role of the social partners?

3.3.

There is no single or ‘best’ model and developing a dual system depends on many economic and social contexts.

3.4.

There are three broad avenues of VET training today.

3.5.

The watchword is the close link between the workplace and the synergies to be developed between the student, the theoretical basis and practical learning and development in the workplace.

4.1.

The European Council of 27/28 June 2013 (6) agreed on a new strategy for combating youth unemployment, including the aim to promote ‘high quality apprenticeships and work-based learning’. 22 Member States have received country-specific recommendations to adapt their vocational education and training systems, by placing greater emphasis on the work-based components of training and high-quality apprenticeships for young people.

4.2.

At EU level, a range of measures have been taken. For example, a youth guarantee has been adopted, ESF funds have been allocated for the development of apprenticeships nationally, including the dual training system, and a European Alliance for Apprenticeships has been established.

4.3.

In their June 2013 Framework of Actions on Youth Employment (7), the European Social Partners also highlighted the value of work based learning models, such as the dual learning systems.

4.4.

The Latvian Presidency has endorsed five deliverables as part of the review of the Bruges Communique. The first of these deliverables will be to promote work-based learning with special attention to apprenticeship-type training (8).

5.1.

Studies by Cedefop and the European Commission, for example, suggest a positive link between VET-systems based on dual education and youth employment (9).

5.2.

Experience and the figures speak loud and clear. Countries with relevant and attractive vocational training systems based on dual training principles perform better when it comes to getting young people onto the labour market. Some countries like Austria also provide good examples of training possibilities for disadvantaged young people such as work assistance or a safety net for apprentices.

5.3.

A well-functioning dual training system provides young people with an initial work experience and consequently makes them more attractive to businesses and future employers. In Germany more than 2/3 of apprentices stay with the same employer after completing their apprenticeship (10). In Denmark, figures (11) show that VET graduates are among the fastest to find a new job if they are made redundant and that a high number start up their own companies.

5.4.

However, VET and apprenticeships are not considered to be as attractive as academic education by many young people and parents; or are perceived only as traditional blue-collar employment. What is forgotten is the ‘competitive knowledge’ that can be acquired through dual training — so that young people do not have only one career opportunity but also gain competitive knowledge that can be further developed.

5.5.

An EU target for the share of students in VET and dual training should be considered as part of the reviewed EU 2020 strategy. This could give more attention to the strong employability and inclusiveness component of dual training and apprenticeships.

5.6.

Such a target has to be set high, as evidence shows a positive link to employment, and it has to take into account the future labour-market demands for skilled workers with mid-range qualifications.

5.7.

To improve image and attractiveness, a combined effort is needed by schools, training centres and companies, the social partners and politicians. VET schools and training centres have to be more adaptable to the changing labour-market needs and economy. Skills competitions and role models could be encouraged to showcase skills or schools and to inspire young men and women. Opening up pathways into higher education to avoid apprenticeships being perceived as a dead-end by students and parents or enhancing EU intra-mobility programmes such as Erasmus+ could make such schemes more attractive.

5.8.

Good and early career guidance and counselling services are essential in order to improve the understanding and image of the dual training systems.

5.9.

Teachers also play a role making dual training systems more attractive and have a direct influence on young people’s perceptions of VET. Becoming a VET teacher must also be perceived as an attractive proposition. One way is to ensure that VET teachers ‘professional and teaching skills are continually updated, improving cooperation between schools and companies so that teachers are up to date with companies’ requirements, current working practices, new technologies, etc.

5.10.

In a dual system, the presence of a qualified and motivated staff member acting as a tutor or trainer in the company should be a basic quality assurance requirement. Greater focus has to be placed be on the responsibility of in-company trainers. Clearer and more detailed descriptions of the competences to be achieved can raise the quality of work-based learning.

6.1.

A number of studies have already been carried out, indicating that the German, Swiss and Austrian dual training systems, for example, work well, in that they provide young people with appropriate training and a good entry point into working life. But there is no ‘single best model’ — the aim is to identify successful structures and practices.

6.2.

More transparent information on cause-content-outcomes could help to identify the key elements that characterise well-functioning dual training systems. While most Member States and the Cedefop collect data on VET graduate employability, greater use could be made of such data to improve systems — including dual training.

6.3.

The share of ‘work-based learning’, for example, could be used as a variable in the EU-employability benchmark. A European benchmark for dual training could highlight the correlation between dual training systems and youth employment. Data for such a benchmark could be collected yearly through the Labour Force Survey.

6.4.

In cooperation with Cedefop, Eurostat (Eurobarometer) could carry out a more systematic study of young people who complete vocational education and training, and have the skills that are in demand and also of how dual training in firms has helped them gain these skills.

6.5.

It might be useful to compile comparable national data on which countries’ performances can be assessed when it comes to the implementation and outcomes of the different dual training systems in Europe. Cedefop, Eurostat and the Commission already collect data as part of the ET2020 and Copenhagen strategies, but the EU needs a coherent tool which captures the progress as well as the effects of the reforms now being undertaken in many Member States to improve the performance and quality of national VET systems.

The EESC proposes that such a quality-assessment tool should at least address the following policy questions.

6.6.

A time-based set of relatively straightforward parameters could be used as a springboard for more qualitative analyses, and could at the same time be used to monitor developments in each country with regard to its process of adapting VET systems to the principles and benefits of dual training. A data platform of this nature could also feed into the work of the European Alliance for Apprenticeships, and into work on the EQAVET reference framework.

7.1.

There are many challenges that are still not being taken seriously, for example in terms of quality of training and relevance to business.

7.2.

Apprenticeships play an important role in meeting companies’ skills needs, while helping young people into the labour market. Apprenticeships offer employers a number of advantages; these include better skills-matching resulting from in-house training, new knowledge and perspectives. Fully-fledged apprenticeships entail a number of rights and obligations for all involved.

7.3.

Companies must see this as an investment in future qualified human resources and take the responsibility to actually train a young person. But if companies — including SMEs — are to see apprenticeships as an investment there needs to be provision for them to have greater ownership of schemes, including curriculum design.

7.4.

Some employers fear that the cost of training an apprentice outweighs the benefit, but this mind-set has to be challenged. A cost-benefit analysis from Switzerland shows that the productive contribution of an apprentice exceeds the training costs (including the apprentices’ wages) by more than EUR 6 000 per apprenticeship (12) and BUSINESSEUROPE is currently conducting a cost-benefit study of apprenticeships.

7.5.

In some countries, burden-sharing funds have been established whereby companies pay a certain sum into the fund to compensate for hours spent in school or transport costs (in Denmark, Arbejdsgivernes uddannelsesbidrag). In Austria, companies receive a bonus for trained apprentices receiving a good assessment. There is a model of burden-sharing in Austria (Vorarlberg), under which companies pay 0,2 ‰ of apprentices’ salaries into a training fund. After 18 months, the training is assessed and businesses providing good apprenticeships receive compensation in the form of a bonus.

7.6.

However, cost-benefit outcomes might differ in different sectors and under different VET-systems. National training systems therefore need to be constantly assessed and, where appropriate, adapted to ensure they contribute to European companies’ competitiveness. More comparable and quality assessments tools can also help Member States in this.

7.7.

Good quality assurance and assessment of apprenticeships and dual training schemes, including working conditions, is equally important and here the social partners can also play a role. Above all, the social partners must be involved in designing national provisions for dual training and can also make use of appropriate collective bargaining traditions to help ensure quality apprenticeships and other work-based systems. Trade unions and union representatives can also play a greater part in the training and well-being of young people within a company.

—

Opinion of the EESC on ‘Making post-secondary VET more attractive’ (OJ C 68, 6.3.2012, p. 1).

—

Opinion of the EESC on ‘A Quality Framework for Traineeships’ (OJ C 214, 8.7.2014, p. 36).

—

Opinion of the EESC on ‘Employability of young people — matching training with industry needs in an age of austerity’ (OJ C 311, 12.9.2014, p. 7).

—

Opinion of the EESC on ‘Youth employment measures — Best practices’ (OJ C 424, 26.11.2014, p. 1).

15.1.2016   

EN

Official Journal of the European Union

C 13/63

Rapporteur:

Filip HAMRO-DROTZ

Co-rapporteur:

Pierre GENDRE

1.1

The EU should develop without delay a coherent and comprehensive 5-year anti-corruption strategy and accompanying action plan, endorsed by the presidents of the European Commission, European Parliament and European Council. EU Presidencies and the EU institutions should commit themselves to clear anti-corruption objectives in their programmes, as well as in interinstitutional cooperation. They should have a forward-leaning agenda and focus on cross-cutting anti-corruption issues within the EU and in the EU’s external relations, on increased support to the Member States and enhanced transnational cooperation, on improvement of the integrity of the institutions and on protecting the EU’s financial interests. Promoting transparency and preventing corruption should be core objectives in all EU policies. The strategy should take into account the recommendations in this opinion.

1.1.1

The first priority should be to support the Member States in their efforts to implement and enforce existing national, European and international instruments.

1.1.2

Progress on the strategy should be reviewed as part of the European Semester exercise, taking into account the Commission’s anti-corruption reports and regular surveys. The prevalence of corruption should also be taken into account in EU monitoring of how the rule of law is upheld in Member States, and specifically addressed as part of the conditionality of economic support programmes agreed with Member States and third countries.

1.2

Enhanced and inclusive transnational anti-corruption cooperation should be the key concept of the strategy.

1.2.1

The European Commission and EU Member States should strengthen transnational anti-corruption cooperation in the context of the renewed EU Internal Security Strategy 2015-2020 (COM(2015) 185), enhance coordination among the relevant bodies (OLAF, Eurojust, Europol, Ombudsman, Court of Auditors) and ensure effective management of the European Anti-Corruption Network (EACN).They should expand exchange of best practices and enhance coordination and cooperation between national public prosecutors in cross-border criminal cases, for example in the recovery and repatriation of criminal assets.

1.2.2

The European Council has a key leadership role and can spur fighting corruption by:

1.2.3

The Tripartite Social Summit should, based on Articles 152-155 TFEU, consider how the social dialogue at both horizontal and sectorial levels could contribute to the efforts to prevent and combat corruption.

1.2.4

Based on Article 11 TFEU, the consultation and participation of civil society and of the European Economic and Social Committee and the European Committee of the Regions concerning engagement in EU anti-corruption initiatives should be enhanced.

1.2.5

The EU institutions and the relevant bodies should, in cooperation with Member States, step up actions to raise public awareness of how citizens can become involved in the fight against corruption, highlighting the rights and redress available under EU law. An information campaign aimed at mass media outlets would be needed, for example to make clear the channels available to citizens to report suspicion of corruption and the misuse of EU funds. This should go hand-in-hand with greater transparency about how EU funds are spent.

1.3

The EU should, in addition to legislative measures, initiate and support alternative measures to promote the adoption and implementation of codes of conduct and standards on compliance and anti-corruption, particularly bribery, in individual companies, in line with international, sectorial and European instruments and guidelines. The concept of transparent and inclusive involvement of relevant stakeholders, including employees, should be part of the implementation of an ethical code (also including adequate provisions about whistle-blowing) by the individual company. Companies worldwide should be required to have an anti-corruption management system in place to be selected for projects which receive EU funds.

1.3.1

The EU should also use the renewal of the EU Corporate Responsibility Strategy to examine, with the assistance of business, social partners and commercial associations, how best practices in corporate governance and ethics can be widely disseminated.

1.3.2

The recent non-financial reporting directive which requires large EU companies to report on their compliance and ethical standards is welcome. It should encourage companies to ensure that anti-corruption standards including adequate alert mechanisms are upheld throughout their supply chain and that proportionate measures are also adopted by small and medium-sized enterprises.

1.3.2.1

This concerns particularly the supply of natural resources which is a frequent source of vulnerability for corruption. The EU can build on best practices in the forestry sector and regulatory approaches to conflict minerals in the US. The European Commission should, in this context, ensure a consistent approach in the review of its raw materials strategy. It should also work with European-level business representatives to develop a coherent and consistent approach to eradicating corruption in the supply chain.

1.4

The European Commission should again review public procurement directives, specifically to see how the transparency and soundness of the procedures can be improved. It should proactively monitor how existing provisions on preventing conflicts of interest and favouritism are implemented by Member States (also at regional and local levels) and provide more detailed guidance where necessary. Public procurement rules should cover all companies regardless of origin.