Brussels, 29/11/2012 (Agence Europe) - On Wednesday 28 November, the European Commission brought out its latest Annual Growth Survey (AGS) - (see other article). This practical guide of measures that the member states are asked to implement in 2013 is aimed at tackling the consequences of the economic and financial crisis, and at boosting growth and employment. European Commissioner for Employment, Social Affairs and Inclusion Laszlo Andor presented the main ingredients of the AGS by focusing on a single objective - creating jobs for the 25 million or so Europeans who are today without work.
The reference that Andor made to Austria and its low rate of unemployment (4.4%) at the beginning of his speech was not by chance. Alongside Germany, the Austrian model is often presented as a suggestion - an outline which shows the main features of an economic and social model that works and that moreover is exportable and applicable to the rest of the EU. Certainly “some structural problems are well known (…) but most of Europe's unemployment problem is the result of low aggregate demand (…) a lack of growth-enhancing investment and a poor business environment”.
The measures promised by the Commission can therefore be divided into several categories, which nevertheless all share the same objective of marrying flexibility of the labour market with social protection. On one side, there are incentives for businesses - reducing the tax burden on labour, with particular attention to low paid jobs; making employment contracts flexible by reducing the differences in protection provided by the various types of contract (permanent contracts, fixed term contracts, part-time contracts); reforming salary indexation systems and adapting the minimum salary to productivity.
On the other side, the Commission would like to improve the employability of Europeans, particularly the under-25s for whom one in five do not manage to break into the labour market. There are various measures (lifelong learning, promoting traineeships and specific training) but they can be summarised in the resolve to make supply fit the current criteria of demand in terms of labour. The social protection section has not been forgotten either. This has to be adapted to the context of the crisis, setting up “active inclusion strategies”. The social assistance and labour incentives should be personalised, supporting “vulnerable groups” through “affordable and high-quality services”.
While the objective is clear - reducing unemployment - the means to achieve this are numerous. Governments can dip into this guide as they like, keeping in mind that this objective is written into a much bigger whole. This whole will materialise in the next six months in the national reform programmes (NRP) - the ultimate aim of which is to find the recipe (specific for each country) that will enable measures for budgetary cleaning-up to be combined with economic recovery plans. However, as Andor commented, all these measures can prove insufficient - indeed ineffective - because one of the reasons at the root of low aggregate demand is quite simply “the lack of investor and consumer confidence due to the eurozone crisis”. (JK/transl.fl)