The EP and the European model of society. There is something new in the debate on the European model of society, and the European Parliament should take account of it. The EP has a special role on this, and it has proved that it is aware of this in a few specific fields (for example, the obligation of companies to inform and consult workers). But I see it less present, less visible, on issues that have a more technical aspect, relating, for example, to the rules of competition or stock exchange legislation, and where consequently the "model of society" aspect is less obvious. I have already stated that, in my opinion, the European Parliament could make better use of its powers and its increased authority to have its voice heard over economic issues "which, apparently technical, have a direct link with the European model of society", and I cited three that are topical: take-over legislation, automobile distribution (where its role is only consultative) and public procurement (see this section of 16 February). I shall to try broaden this discourse.
Three prestigious authors. Fortunately, I have not to start from scratch: I would have neither the ability or the skill to raise a global debate on the European model. As journalist, my task is to point out that this debate (the point of departure for which is Jacques Delors' White Paper) is evolving, and to set out the dangers. This time, I'm resting my case on a book (Michel Albert, Jean Boissonnat and Michel Camdessus: "Notre foi dans ce siecle". Editions Arlea) that has the privilege to have three authors long time now implicated in the problem, with different but considerable responsibilities: Michel Camdessus, former Director General of the International Monetary Fund (IMF) and former Governor of the Banque de France, which is significant; Michel Albert, who, before taking on his current role in France, was a senior European Commission official; Jean Boissonnat, writer and journalist. In chapter IV of this work, the three authors evoke and invoke for Europe the inclusion of the adjective "social" in the definition of its economic model: no longer simply "market economy", but "social market economy". Of course, they do not claim to have discovered a new terminology: these are well-known German words and oft repeated in other languages, and Michel Albert had devoted an essay to them in 1991 (Michel Albert: "Capitalisme contre capitalisme", Seuil, 1991), when the two models were opposed to each other and that the former, having been imposed in the United States and Great Britain, gave the impression of prevailing everywhere.
Shareholders are not the only people in the world. What's new? The return in strength, according to the three authors, of the model with the adjective "social", not only in Europe but also in the United States. It is significant that the theoretical backing of this return should have been provided by three American studies, those of John Rawls, Robert Reich and Frederik Reichfeld. It's the "swing effect" that plays: in reaction to the excessive power that company managers acquired, denounced by John Kenneth Galbraith in the 70s, the "corporate governance" revolution handed power back to the shareholders. But this power-taking went too far and is now being disputed. According to Camdessus, Michel and Boissonnat, the imperative of short-term profitability and the preference given to shareholders' interests led to "consider the company no longer a durable and composite institution, bringing together different partners, but as a simple package of shares intended to produce stock market value (shareholder value). The only goal of that model is profit, as fast as possible. This means a purely financial vision of the working of a company. What of its contribution to local or regional development? The career and interests of the workforce? No importance (…) Sure, this model of capitalism has demonstrated its indisputable short-term effectiveness. It cannot, however, be denied that with its soulless cruelty it plays in favour of the less acceptable tendencies of capitalism (…) It deliberately plays in favour of two partners: the shareholder and the consumer, at the expense of all others; it demands the most from the workforce (…) and the lives of workers become uncertain, unpredictable". Here the authors cite Robert Reich: "companies are no longer responsible for their employees, not the community and the general public. They consider that their sole duty is to maximise shareholder value, which they obtain by furiously lowering costs and adding value".
A caricature of liberalism? This scheme represents, according to the three authors, a "caricature of liberalism. Not only does it eat away at the middle classes, but it, in the long term, it destroys the minimum pact on which the whole of society is founded and saps the original values that had rendered capitalism possible, i.e., honesty, State service, the transmission of know-how, the good work. Result: "the excesses of the Anglo-Saxon model to day threaten capitalism itself (…). The dogmatic contraction of capitalism is dangerous and probably without lasting future". Now, according to the three authors, "all sorts of new and more or less media currents are fighting for a return to the respect of non-financial values in company management, in the name of ecology, social rights, combating corruption and tax havens". "Ethical investment funds", born in the United States have now started taking hold in Europe. The new British law on pensions (inspired by the French law on wage saving) means that pensions funds must state if and how they take into consideration social, environmental and ethical criteria in selecting their investments. The three authors deduce from this that "the Anglo-Saxon world is rediscovering the importance of certain founding values", and observe "a convergence between the two types of capitalism, each gaining from the assets of the other". At the centre of the model of social market economy "there is the idea that free market economy and competition are not an end, but a means at the service of more humanisation of capitalism".
The immense deficit in world law. Certainly, account needs taking of opposite arguments and nor should we forget the well-known and at times abhorrent abuses of certain major managers to the detriment of their companies and staff. It is a debate that is starting again, in which Europe has to play a decisive role. But the concepts set out would be hardly viable if only applied in a single country or on a single continent. The final objective has to be to fill the gap stemming from the "total incoherence between a an increasingly more globalised market and an immense deficit of world law". To recognise this imbalance in no way means being converted to the pseudo-theories of the anti-globalisationists and even less so the violent demonstrators, for whom the interest of the poor of this world in fact represent their last concern. Umberto Eco recently declared: "I do not see myself in the anti-globalisationists who count among themselves as many far right-wing reactionaries as revolutionaries. It upsets my ideas, to mingle with people who want to destroy computers and others that want to offer them to Africans."
The preceding quotations must not stop you reading the essays from which they were drawn but may alert those who have to decide. I do not believe that the EP has to devote a doctrinaire debate to the problem, as a Parliament session is neither a seminar nor a conference. But by discussing draft European legislation on takeovers, on public procurement and on the revision of the rules of competition, parliamentarians could have in mind the aforementioned considerations and developments, without sheep-like following voting indications supplied to them by the political groups to which they belong. The debate has to be a real one.
Germany sticks to its stance over hostile take-over bids. Let's return to an issue this section has dealt with on several occasions; that of take-over bids, instrument that not only defines the ownership of a company but at times also its localisation and very existence of certain activities. The European commission has announced that it would present a new proposal in April (intended to replace the one rejected by the European Parliament), basing itself on the conclusions reached by high-level experts that it consulted (see this section of 21/22 January). But only last week, the daily Handelsblatt announced that German reservations remained, in the sense that a draft based on the radical primacy of shareholders over company managers of companies attacked would not be acceptable to Berlin. According to this newspaper close to industrial circles, Germany renounce the concerns and safeguards introduced by national legislation that has been in force since the beginning of the year. Far be it for me to pretend to make a choice between ideas on this: arguments in favour of one idea or another are all serious and valid. I've already said, there are too many examples of managers who take advantage of their situation to the detriment of the interest of their companies, their staff, to consider that they must have the possibility of opposing a hostile take-over bid. But, at the same time, there are too many social, historical, regional and at times even strategic reasons that warrant a degree of protection of traditional economic activities to consider that the interests of the shareholders must represent the only applicable criterion. I thus return to the point of departure: the debate in Parliament should go beyond the technical aspects of the projects submitted to it and involve discussion and the search for European solutions taking account of the interest, at times contradictory, that are at stake, with, before their eyes, the European model of society that says yes to competitiveness but without forgetting solidarity, progress and history.
(F.R.)