C. STRENGTHEN EUROPEAN UNION SOLIDARITY POLICIES
In a complex world, which is increasingly seen as a threatening place, European citizens are looking to Europe for protection. This protection must be sought by means of greater social convergence and by modernising cohesion policy.
1. Moving towards social convergence
The promotion of European Union social convergence goes through a two-fold movement , firstly, convergence and the implementation of a pillar of social rights, and secondly, combating social tourism and social optimisation.
In 2016 the European Commission launched a consultation, as part of its work on the deepening of the Economic and Monetary Union, on the implementation of a European pillar of social rights 9 ( * ) . At the same time, it presented a first draft of the rights, divided into three chapters 10 ( * ) :
- equal opportunities and access to the labour market, attaching life-long learning to this theme;
- fair working conditions;
- social protection, intended to be adequate and viable, allowing access to high quality essential services.
It covers 34 rights , derived in part by the Charter of Fundamental Rights. It must form part of an action in favour of a fair and truly pan-European labour market. The pillar underlines the ambition of the European Union, which is to correlate economic development and strengthen social progress and social cohesion. Social policy, and in particular social protection systems, must facilitate a reduction in inequality, job creation and the development of human capital.
It is a case of going further than merely announcing the pillar, whose value is currently still subject to caution as it is ultimately just a new list of indicators designed to evaluate the situation of euro zone Member States as part of the procedure of macroeconomic imbalance. The pillar should be extended to the whole Union and assigned legal value . This could then facilitate a convergence of rules relating to labour markets and social systems, with due regard for subsidiarity. It must be accompanied by a wider reflection on common social challenges, including flexible and secure labour contracts, control of digital platforms and `uberisation', apprenticeships, professional training and support for those returning to work. We should also be aiming for a level of social harmonisation. It should also lead to an effective portability of unemployment and retirement rights to encourage mobility. Without leading to an alignment of amounts, consideration should also be given to the implementation of a common minimum wage principal , expressed as a percentage of the national median wage. Member States will have the freedom to increase the amount. For its part, the Commission has advocated the implementation of a transparent and predictable minimum wage creation mechanism, by preserving both the access to jobs and the motivation to find one.
The question of a minimum wage as a common principal is not unconnected with the necessary intensification of the fight against social competition within the European Union. As such, we should support the revision of the 1996 directive on the posting of workers 11 ( * ) , to guarantee a simple principal of equal work and equal pay in the same place of work and to challenge the phenomenon of `social dumping'. Beyond the text of the European Commission which constitutes definite progress, a proposal should be made for at least three months' work to have been completed prior to any posting, in order to retain the original intention of the temporary posting system. One core activity in the country of origin shall represents at least 25% of the turnover of the employer posting employees, with a 24 month posting limit defined during a reference period of 36 months, with the posting employer covering the essential expenses of the mission (accommodation, food, transport). This improvement to the text must go hand in hand with a tightening of controls using the VIES database which contains VAT registration numbers for trans-border transactions to check the actual existence of the company in the country of establishment, and the implementation of a collection system for social contributions relating to posted workers for host Member States which will then be paid to the Member State where the company is based.
Consideration must also be given in order to limit the phenomenon known as social tourism . There is a need to standardise the Dano and Alimanovic rulings by the European Court of Justice 12 ( * ) , under which the freedom of movement does not seem to imply automatic entitlement to benefits in the host country. Making particular use of the European Commission proposal of December 2016 13 ( * ) , consideration could be given to:
- a condition of employment within the host Member State before unemployment benefit can be claimed there;
- the implementation of a benefits coordination system for long-term care.
2. Modernising the cohesion policy
The European policy on territorial cohesion, implemented via five structural funds (ERDF-ESF, EAFRD, EMFF, Cohesion Fund), symbolise the ambition of solidarity, inseparable from the building of Europe. Aimed at reducing the development gaps between European regions, it is above all an investment policy achieved around a certain number of priorities jointly defined by the European Union and Member States. These include sustainable growth, research and technological development, competitiveness of SMEs; but also job creation, training, social inclusion and combating poverty. This policy should be confirmed in the next EU Multiannual Financial Framework (MFF) for the 2021-2028 period, for the benefit of all the regions of the Member States.
The policy is subject to shared management by the European Union - mainly the Commission - and Member States. Over a seven-year period, the Commission-Member States partnership members led to national operational programmes. These programmes must be coherent with the EU's growth strategy (Europe 2020) and integrate structural reforms, identified annually, for each Member State, within the framework of the European semester.
The regional policy is emblematic of the need for simplification which must permeate all European Union policies. So much so that a high-level group focusing on this objective was implemented, and their conclusions should give the European cohesion policy a new lease of life for the 2021-2028 period.
The need for simplification, vital to encourage a sense of ownership among citizens, must include in particular the following commitments:
- drastically simplify regulation which is exponentially cumbersome and complex. European regulatory standards are both excessively formal (thousands of pages long), legally unstable - with new standards replacing those which are current, and above all are themselves sufficiently opaque to generate interpretative notes from the Commission, which add to existing rules. Finally, many Member States, for fear of mistakes or challenge procedures by the Commission or the European Court of Auditors, add standards to this ensemble which are stricter and more complex than those established at an EU level;
- promote proportionality, i.e. to adapt monitoring and audit procedures to the size of the project in question - according to the level of resources and risk involved: less rigorous monitoring and audits for small and medium sized projects and retention of current shared management arrangements for the others;
- encourage differentiation by adjusting European monitoring and audit procedures according to the administrative capabilities of each Member State in this area. In fact, all Member States have different capabilities and experience in the area of administrative control of public spending. The existing excessively demanding single European system is not adequate.
In addition to these necessary reforms, based on a pragmatic approach, new guidelines are expected:
- financial flexibility - The migrant crisis has highlighted the major challenge for the European Union of rapidly releasing adequate financial resources for a large-scale crisis. Should cohesion policy incorporate this budgetary flexibility and reactivity into its programmes, and if so, how? Should future operational programmes include unassigned credit allowances so that regions and territories contribute to the implementation of a European policy on crisis management, for crises such as the migrant one or natural disasters?
In order to retain the predictability and stability of the cohesion policy and to respect fine multi-annual programming, the legitimate flexibility of the EU budget must be sought in rapidly mobilisable appropriations placed in reserve to deal with exceptional circumstances, as well as transfers between European budget headings or changes required as part of modifications imposed during the process of regional programmes;
- harmonise the rules between the different European funds, directly or indirectly managed by the European Commission (EIM, COSME, Horizon 2020, Structural Funds). In particular in regard to state aid and public procurement, which require different procedures for structural funds than for other European funds, especially when they all come from the European Union budget;
- merge the different structural funds to form a single European territorial development fund. By removing the rivalries created by concurrent competences between Commission directorates or between national ministries, this would guarantee the necessary progress to clarify the rules and visibility of the European investment policy on territorial development.
The Union's investment policy, which is applied through the European Structural and Investment Funds or the European Fund for Strategic Investments, offers a growing role to financial instruments compared with traditional subsidies. With leverage these instruments (loans, guarantees, equity funding) are able to enlist private resources, and they are often presented as promoting efficiency , enabling the renewal of funds.
Caution must be taken and there should be a focus on the right balance between subsidies and financial instruments in the implementation of the cohesion policy. Financial logic is not necessarily adapted to certain public policies which can only be encouraged by subsidies. Concerning the impact of these financial tools in terms of administrative and regulatory simplification, it is so far unknown.
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Essential in supporting growth and employment, the current cohesion policy is fragile and its future remains uncertain for several reasons:
- the desire to reduce the level of spending it represents;
- the competition concurrence which the ESIF brings, it is already planned to double;
- the desire of certain Member States, even the Commission itself, to limit it to only the less developed regions.
This policy, however, represents undeniable «European added value« , and the positive impact it has on the local terrain is not in question. By contrast, achieving a radical simplification of its rules, differentiation of monitoring, harmonisation with other European funds, is essential for it to be understood by project owners and beneficiaries so that its full potential is released to European citizens.
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Recommendations for Union solidarity policies 1. Moving towards social convergence - Implement a genuine European Pillar of Social Rights in order to facilitate a convergence of rules relating to labour markets and social systems, with due regard for subsidiarity; - Launch a wider reflection on common social challenges, including flexible and secure labour contracts, control of digital platforms and `uberisation', apprenticeships, professional training and support for those returning to work; - Consider the implementation of a common minimum wage principal, expressed as a percentage of the national median wage; - Support of the revision of the directive on the posting of workers to guarantee the same pay in the same place of work and strengthen posting management; - Challenge «social tourism» through conditioning access to contributory benefits for workers from other Member States. 2. Strengthening territorial cohesion - Clarify and stabilise the rules of use for the European Structural and Investment Funds:
- Allow flexibility in the implementation of structural funds:
- Preserve the achievements of the cohesion policy :
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* 9 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Launching a consultation on a European Pillar of Social Rights COM (2016) 127 final.
* 10 First preliminary outline of a European Pillar of Social Rights COM (2016) 127 final Annex 1.
* 11 Proposed directive modifying the directive 96/71/CE of 16 December 1996 concerning the posting of workers in the framework of the provision of services (COM (2016) 128 final).
* 12 Judgement of the Court of 11 November 2014 Elisabeta Dano and Florin Dano v Jobcenter Leipzig and Judgement of the Court of 15 September 2015 Jobcenter Berlin Neukölln v Nazifa Alimanovic e.a.
* 13 Proposal for a Regulation amending Regulation (EE) n° 883/2004 on the coordination on social security systems and Regulation (EC) n° 987/2009 laying down the procedure for implementing Regulation (EC) n° 883/2004 (COM (2016) 815 final).