The social dimension

Most of the discussion on growth and development often tends to focus primarily on the strictly economic aspects, especially those which can be quantified and captured in the official statistics.

This is also what generally happens at European Council meetings for Economic Affairs and Finance Ministers or, at least, this is what ends up being reported in the press. However, this is a misleading perspective since the social dimension is equally relevant and is of fundamental importance.

Last week, this message was very clearly reiterated by Jean-Claude Juncker, Prime Minister of Luxembourg, in a speech in Budapest at the opening of the European Regional Conference of the International Labour Organisation (ILO). As Mr Juncker very clearly stated: "Competitiveness is not a value in itself. The main purpose of competitiveness and growth is to spread social cohesion within Europe."

Economic and social development must go hand in hand, since the former would be meaningless without the latter and the latter is not possible without the former. Expressed like this, it almost seems like merely stating the obvious but, in practice, the link between economic and social objectives is not always so clear-cut and it is often 'lost' altogether in the debate. In fact, in many typical situations, economic priorities actually end up being perceived as running counter to social objectives.

For example, the discussion on how to improve competitiveness has generally been projected simply as a series of proposed measures that reduce the well-being of the community, a reduction in the number of annual holidays being one of them.

Similarly, the need for sound economic governance and hence the need to reduce public deficits is often projected exclusively in terms of the drive to cap certain social expenditure, such as unemployment benefits, and to reform others, particularly pension schemes. This situation is not something that is unique to Malta but, rather, it is practically universally the case.

It is therefore important to move away from this false debate (economic versus social objectives) and, instead, to focus our energies where they are most required: namely to identify, develop and implement those measures that will secure our longer term economic well-being as well as bring about greater social cohesion.

Embracing change

To achieve this, it is essential to take the time to explain to all the social partners, and to the public in general, the social dimension of what is being proposed so that they might be ultimately convinced that social objectives are and will be given due consideration as an integral aspect of the overall development strategy.

This is precisely what the European Commission is seeking to do and, on February 9, it published a 'Social Agenda' for the European Union. This is a very important document, indeed and, in the words of the Commission itself, this new Social Agenda must be seen as an essential pillar within the EU's growth and employment strategy as is being formulated under the revamped Lisbon Strategy (for growth and jobs).

The crucial consideration is that the appropriate Social Agenda must not be one that seeks to delay reforms but it must be one that embraces change, if and wherever this is required. Social goals need to be long-term if they are to be meaningful since they must also be sustainable. It can already be said that important adjustments will need to be made to secure them.

These adjustments will not always be palatable if viewed only from a strictly short term perspective. Conceptually, the situation is not very different from the choice that one makes in quitting smoking, undergoing a diet or otherwise making changes to the typical lifestyle that one has followed until now, so as to achieve better health in the long term.

Hence, while the new Social Agenda focuses on providing jobs and equal opportunities for all it seeks to do so by emphasising the need to modernise labour markets and social protection (welfare) systems. From this perspective, restructuring is not a dirty word but a precondition for future prosperity.

Globalisation, technological development and ageing populations are not an option which we could switch-off but a fact of life, and this reality needs to be properly understood and confronted.

Social Agenda

The EU's new Social Agenda has two key priorities: (a) generating employment and (b) fighting poverty and promoting equal opportunities. These key priorities reflect two of the three principal goals that have been highlighted by the Commission in the definition of its strategic objectives for the next five years. These are prosperity and solidarity, the third objective being security. Achieving these objectives will not be easy and requires a sustained and, especially, a common effort. Hence, the Social Agenda calls for an effective partnership between public authorities, employer and worker representatives and NGOs.

To many, the Social Agenda may sound like an abstract concept. In actual fact, however, it is a policy statement that seeks to tackle many issues that are of significant relevance to ordinary men and women. These include pensions, social security, health care, poverty, health and safety at work, finding a job in a different member state, striking a balance between work and home life and other similar issues of widespread concern.

This column does not purport to provide a review of the Social Agenda but it is only intended to present a very brief introduction by highlighting some of the most important facets that are addressed within this latest policy document by the European Commission. These include the following key considerations.

Encouraging and facilitating social dialogue to manage better the process of restructuring. Updating labour law to provide greater flexibility, especially in response to the needs created by new patterns of work (such as flexi-hours). Getting more people into better jobs, particularly through initiatives that target youth in Europe, measures to provide greater opportunities for additional training for those who have a job and retraining for those who are unemployed as well as measures in support of women in re-entering the labour market.

Finally the Agenda also seeks to establish the preconditions for a truly European labour market through the introduction of provisions that would enable workers to 'take' with them their pension and social security entitlements if and when they choose to work in a different member state.

Which brings me back to the point that I made at the beginning: a credible Social Agenda cannot be derived in a vacuum, based exclusively on pre-set considerations. Nor can it be formulated merely on the basis that it does not conceptually conflict with economic strategy. It needs to be more than that; it needs to be developed as an integral part of the same process that is to shape our future economic objectives and strategy. This is what is being proposed.

In a recent interview with the newspaper La Tribune, John Monks, secretary-general of the European Trade Union Council (ETUC), commented as follows on this initiative by the Commission: "The Social Agenda is the first indication that, for now at least, the social dimension has not been demoted to second place. We welcome the initiative of Commissioner Spidla and of the Commission. In my view, it is a solid programme for social policy. However for now it is still only an Agenda. It must be implemented."

This successful and timely implementation will not depend only on the Commission. In fact it will depend more on what is done within each member state, where most of the power still rests concerning many of the pertinent areas in the field of social policy. Let us hope that the social partners in the individual countries will adopt the same vigilant but objective stand that the ETUC has displayed.