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The Social Dimension of the Internal Market

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The Social Dimension of the Internal Market

European Economic and Social Committee

    SOC/360

    The Social Dimension of

    the Internal Market

    Brussels, 14 July 2010

    OPINION

    of the

    European Economic and Social Committee

    on

    The Social Dimension of the Internal Market

    (Own-initiative opinion)

    _____________

    Rapporteur: Mr Janson

    _____________

    SOC/360 - CESE 970/2010 EN/o

    Rue Belliard/Belliardstraat 99 1040 Bruxelles/Brussel BELGIQUE/BELGIË

    Tel. +32 25469011 Fax +32 25134893 Internet: http://www.eesc.europa.eu

    EN

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    On 16 July 2009 the European Economic and Social Committee, under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

    The Social Dimension of the Internal Market.

    The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 5 May 2010.

    At its 464th plenary session, held on 14 and 15 July 2010 (meeting of 14 July 2010), the European Economic and Social Committee adopted the following opinion by 143 votes to 15 with 19 abstentions.

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1. Summary

    1.1 The social dimension is a core component of the internal market. It has a number of aspects.

    This opinion deals among others with the economic and legal aspects. Recent developments

    have raised questions about the social dimension's ability to protect workers. The internal

    market cannot function properly without a strong social dimension and the support of the

    citizens.

    1.2 The EESC strongly believes that the EU has an important role to play in the social field

    because social problems cannot be solved by Member States alone. In order to create political

    acceptance, solidarity and coherence, the EU should place greater emphasis on the social

    aspects in its policies.

    1.3 A number of adverse developments have, among other factors, put the social dimension in

    jeopardy. The European economy is facing its most serious challenge in decades. Financial

    bubbles have been allowed to grow and control mechanisms and traditional risk assessments

    have been sidestepped. As a result unemployment has risen and labour markets and the social

    situation will continue to deteriorate. Therefore employment must remain at the top of the

    EU's agenda. Europe needs sustainable growth and a high employment rate combined with a

    high quality labour market in order to finance welfare systems.

    1.4 Over the last decade, welfare systems have been the target of reforms aimed at promoting

    more effective work incentives in social protection systems, in order to strengthen the value

    of work and to re-integrate people in the labour market. One result has, however, been a SOC/360 - CESE 970/2010 EN/o .../...

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    growth in inequality, thus aggravating social problems. Employment and welfare systems are crucial to alleviating poverty and without social benefits the rise of inequality and the social impact of the crisis would be much more rapid and severe. The deterioration of national finances in many Member States, leading to an actual or potential sovereign debt crisis, is putting social welfare systems under considerable pressure. Increased, sustainable economic activity, regulation of financial markets and investments in research and education are some possible solutions to this problem.

    1.5 The internal market is an arena in which both the social dimension and other dimensions find their expression. To flourish, sustainable economic growth and jobs must be created which in turn generate tax revenues which are the basis for social entitlements. The levels of unemployment and the fiscal imbalances show that much can be done to remedy the current situation.

    1.6 The legal aspects of the social dimension have been brought into question because ECJ rulings in four cases (Viking, Laval, Rüffert and Luxemburg) have led to lively debates particularly in political and academic circles about potential fears of increasing risks of social dumping. The European Parliament, the academic world and employee representative

    1organisations have expressed their concern about the decisions. Others are convinced that the ECJ judgements in these cases will contribute to improved functioning of the internal market.

    1.7 The EESC therefore demands:

    In the short term the EESC calls for the posting of workers directive to be implemented more effectively. The EESC proposes that the idea of the creation of a "European Social Interpol" be explored, supporting the activities of the Labour Inspectorates of the various Member States.

    The EESC urges the Commission to assess the situation in the EU in light of the ECHR's recent judgements.

    The EESC also supports measures by the Commission that seek to strengthen social dialogue, including:

    ; the promotion of a higher quality social dialogue and a European mechanism for dispute

    resolution and conciliation;

    ; further development of the macroeconomic dialogue with a view to preventing another

    financial crisis;

    ; promotion of the European social model in international relations.

    1 The European Trade Union Confederation represents 80 million workers.

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    In the medium term the EESC supports a Commission initiative which clarifies the legal

    obligations for national authorities, business and workers when implementing the Posting of

    Workers Directive and which ensures that these rules are universally applicable. The EESC

    finds the proposal in the Monti report, where the right to strike is exempted from the internal

    market, interesting and believes that it might resolve some of the problems. This should,

    however, not exclude a partial revision of the Posting of Workers Directive in order to apply

    the place of work principle consistently, making it possible to establish by law that the same

    working and remuneration conditions must always apply for the same work at the same

    location.

    In the longer term the European Union should strive to strengthen the social dimension and

    realise the full potential of the internal market. The Lisbon Treaty and the annexed Charter of

    Fundamental Rights have not yet had their full impact on the balance between fundamental

    rights and economic rights. Strengthening the social dimension requires that the fundamental

    social rights be strengthened and that any limitation of fundamental rights which includes

    social rights be very restrictive. A Treaty change could be pursued to achieve this objective.

2. The internal market and the social dimension

    22.1 In 1987, the EESC adopted an opinion on the social aspects of the internal market. The

    EESC proposed that the European Community secure a number of basic social rights

    connected to the labour market. It wanted to ensure that the recently launched internal market

    did not lead to market distortions and to underline that the Community also had social goals.

    The social dimension includes legislation and agreements made at European level in order to

    guarantee that employees enjoy certain fundamental rights at the workplace. However, this

    also requires cooperation with a view to boosting employment in the EU.

    2.2 Following that opinion, the European Commission published a number of documents which

    were the starting point for the development of a broader and deeper interpretation of the social

    3dimension of the internal market. As the Commission wrote "The social dimension of the

    internal market is a fundamental component of this project, for it is not only a matter of

    strengthening economic growth and stepping up the external competitiveness of European

    undertakings, but also of using more efficiently all the resources available and of achieving a

    4fair shareout of the advantages deriving from the single market".

    2.3 In 1989, the EESC was instrumental in outlining the content of the Social charter vesting

    workers with fundamental social rights not to be jeopardised because of the pressure of

2 See ESC opinion of 19.11.1987 on Social Aspects of the Internal Market, rapporteur: Mr Beretta (OJ C 356 of 31.12.1987, pp. 31-33).

    3 For example the Social Dimension of the Internal Market. Commission Working Paper. SEC(88) 1148 final, 14.9.1988 and the

    Communication from the Commission concerning its Action Programme relating to the Implementation of the Community Charter of Basic Social Rights for Workers. COM(89) 568 final, 29.11.1989.

    4 Social Dimension of the Internal Market. Commission Working Paper. SEC (88) 1148 final, 14.9.1988.

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    competition or the pursuit of increased competitiveness. In the view of the EESC, the exercise

    of such fundamental rights presupposes that there is no unjustifiable restriction placed on

    them.

    2.4 This opinion tries to capture some of the most recent important developments affecting the

    possibilities for the social dimension to function. In recent years, the EESC has adopted other

    5opinions dealing with the social dimension which this opinion partly builds on. What is clear

    from the outset is that in a social market economy the internal market cannot function

    properly without a strong social dimension or the acceptance of the European citizens. The

    advantages of a properly functioning single market are numerous and important for

    companies, workers, citizens and the economy in general. It appears, however, from the

    preamble to the treaties that the single market was conceived as a tool to serve the welfare of

    the people, and not as an end in itself.

    2.5