“We want to make the EU weatherproof for the future”, says Günther Öttinger. The European Monetary Union (EMU) should be set on a solid basis after the heavy economic repercussions caused by the financial crisis in 2008. Since then, the common currency has not provided protection against economic turmoil. On the contrary, it pushed several member states to the edge of economic collapse, forcing them to revert to bail-out. The ensuing austerity measures stand for an EU that deconstructs social, industrial, and trade unions´ fundamental rights. EU institutions committed themselves to a new social agenda via the European Pillar of Social Rights at their 2017 Gothenburg summit. A European Labour Minister could push this project forward.
Social dumping and deregulation of national legislation on social and labour protection are one of the main reasons for the disintegration of the EU. On the one hand, the completed single market provides the free movement of services, goods and capital as fundamental rights for companies. These are counterbalanced by a patchwork of labour and social laws as well as an incomplete Monetary Union that still lacks a common EU fiscal policy, meaning a real and sizeable Eurozone budget, credibly backstopping the financial system and entailing the ability to raise taxes, decide on expenditures and issue debt.
On this basis, the integration process comes to a standstill. The effect is a growing division within the EU, culminating for the time being in Brexit.
European Economic – and Finance Minister
Three proposals on recasting EMU lie on the table. Schäuble´s vision of “EU master-cutter” for the Union is contrasted by Macron´s idea of a Eurozone finance minister with fiscal policy competence, complemented by a separate “Euro”-Parliament. By contrast, EU-Commission President Juncker proposes an EU finance minister embedded within the structure of the EU constitution, more precisely an economic- and finance commissioner, Vice-president of the EU- Commission and at the same time chairperson of the Eurogroup. S/He would take a mid- position between the current autocratic government of the European Stability Mechanism and Macron´s EU- finance minister who would be accountable to the European Parliament.
What are the consequences for the EU? The result will be either way a continuation of the single market agenda, while the social agenda would remain a patchwork. An EU economy and finance minister would push forward the radicalization of the single market: The removal of national legislation on social and labour protection, privatization of public services and stabilization of the Euro by a debt brake. Even if Macron´s concept became reality, the purely economic and finance agenda would occupy centre stage, the social- and labour law agenda a mere addendum.
A face for workers’ rights in the EU
The socio-political agenda, which is codified in Art 3, Paragraph 3 TEU, has nothing to put in the way of such an EU economy and finance minister. A competitive social market economy aiming at the promotion of full employment and social development will remain simply an unrealised vision.
This is incompatible with the commitment of the EU institutions to establish a European Pillar on Social Rights as set out by the Gothenburg proclamation on 17 November 2017. The EU has missed the target of convergence of living conditions (Art 151 Treaty on the Functioning of the EU, TFEU) for decades. While relative income inequality has decreased since 2009 and is stagnating for the time being, absolute income inequality is rising dramatically. For this reason, it is high time to systematically breathe real life into the socio-political competences of the Union, which so far has yielded only a patchwork of hard laws.
The EU’s development demonstrates that a commissioner for employment, social affairs and inclusion does not have enough political weight to push through opposite standpoints to those of the Euro-group, let alone to an economy and finance minister.
Juncker in his State of the Union Speech 2017 proposed a European Labour Authority. This approach must be grasped and built upon. However, such an authority will not be sufficient by itself. A European Labour Minister is needed, giving new impetus for developing European social- and labour law, bringing the socio-political agenda forward according to the European Pillar on Social Rights and exploiting the existing competences set out within the TFEU as explained below.
Competences of a European labour minister
The Union disposes of extensive tools offered by Article 45 et seq. and Article 153 TFEU. A European labour minister stands for the promotion of employment, improvement of living and working conditions, adequate social protection and a permanent high level of employment (Art. 151 TFEU). Given a youth unemployment rate of up to 50% in the crisis-stricken countries, the youth guarantee should be his/her priority. It encompasses the commitment of the EU member states to offer young people aged up to 25 a job, apprenticeship, internship or training.
The Union´s competence to support and supplement national regulation or activities should start wherever the latter fall short. In doing so, the European labour minister should act according to the following three principles: Respect the rule of non-regression (no falling behind the existing acquis), the requirement of minimum harmonization (member states are permitted to go beyond the harmonized minimum protection) and upward convergence. He/she would be accountable for the achievement of these targets to the European Parliament.
To improve cross-border cooperation and further develop the social agenda, a European labour authority would support the European labour minister´s agenda. Such an authority would be assigned to protect cross-border employment, to combat social and wage dumping and to defend the principle “equal pay for equal work at the same place”. Cooperation between the European Labour Authority and national executive authorities could be organised along the lines of Europol.
Balance between Economic- and Social Agenda
EU citizens feel threatened by the single market freedoms, because the European Court of Justice often assesses national social and labour law as a restriction of these freedoms. This legislation has to withstand the so-called three-level test: National regulation must be adequate, proportionate and appropriate. This results in a limited interpretation of provisions in favour of employees and often in annulment of the provisions at stake. The EU Charter of Fundamental Rights rarely serves as a yardstick when it comes to the trade-off between the single market freedoms and workers´ protection. Consequently, Title IV (Solidarity) of that charter often remains an empty shell.
By way of contrast, an EU Labour Minister could claim the priority of social fundamental rights over the freedoms of the Single Market, and s/he could advocate amending the TFEU with this principle set out in a social development protocol/clause. A first step in this direction would be an institutionalised participation in proceedings before the European Courts, whenever the assessment of trade-offs between the freedoms of the single market and national labour- and social protection law are at stake.
With a view to the increasing practices of social and wage dumping between member states, it is high time for the EU and its institutions to embark on a progressive path to guarantee convergence of wages, labour markets and social standards.