The Necessity for the European Integration Process to Have an EU Wide Social Policy

Introduction

At the onset of the European integration process, representatives of the six founding nations (West Germany, Italy, Benelux and France) teamed together to ratify the EEC Treaty. Their main objective was to establish a common market accessible to all member states, a marketdevoid of discrimination. However, members were hesitant to delegate their sovereignty to the Community citing differences in social welfare systems coupled with their negative perception that the integration process was just an improvement of the social standards rather than being a product of the economic integration process itself. Following this reason, a restricted social and economic commitment was effected for both social and economic cohesion in the Rome Treaty. In light of the above fact, therelationship between member states and institutions charged with generating the social policy was constrained to the levels of only improving and protecting the rights of workers, and their quality of life, as the integration process went on. Dealing with social issues became remarkably complicated and diverse, especially in the workplace and employment fields as opposed to addressing demand for social activity.

Currently EU social policy covers a wide range of social security provision that touches on free movement of migrant workers, employment legislations, equal treatment for women and men, health and safety at work, working conditions, public health programmes, poverty, disadvantaged groups and social inclusion, the elderly, employment for the disabled, social protection and young population, and vocational training for the unemployed. Even though there has been change ingovernance from ‘hierarchical to non-hierarchical mode of governance”, actors and stakeholders of the current regime must participate in problem solving and deliberation efforts which are anchored on formal and informal institutions established. They note that EU has a resilient social dimension in terms of its social laws and actions making it a reference when it comes to employment regulations.

In this paper, they answer whether a social policy is relevant, beyond its mere objective of a conceptual umbrella, by examining the basic social policy configuration aspects: normative foundations and substantives boundaries.

Development of EU Social Policy

The social dimension of the EU historical perspective dates back to the 1957 Treaty of Rome and progresses to the recent developments. This policy was to serve in coordinating the member states in achieving the envisioned economic integration.  Central to this developments was a deliberation as to whether the social policy should proceed beyond the establishment of the common market. In the 1980s, there was decreased fear for the social policy that was occasioned by the emerging market forces and the recurrent economic recession.  In 1985 the White Paper introduced the concept of free movement of people that then played a core role in determining and shaping the future of EU and its agenda. Due to the intense pressure that was still building for a more regulatory social policy, in the mid-1980s, a clear commitment relating to community social dimension in employment, labor management and intensified dialogue, and consultation and cooperation on social protection was proposed. However, the state parties were still concerned with competencies of the transfer policy in the social field because of the diversity of national welfare provision types that existed between the state members.

The harmonization of social policies together with the member states’ reluctance in delegating their influence to the multinational level was a difficult subject. Nonetheless, the ‘European social space’ idea was proposed to act as a complement to the achievement of a means of a fresh avenue for a stronger European social policy and an internal market. The idea of producing an upward standard of harmonization made the proposal receive massive political support across the state parties. The program highlighted the implication of social policy for the internal market and sought to invigorate the social dialogue among trade unions and employers.

An act highlighting a Single European was later ratified in the context of market integration, neo-liberalist movements, and economic internalization at the national level. This coincided with the coming on board new state parties namely; Portugal, Greece, and Spain which had a reasonably lower labor costs and lower per capita incomes compared to the other state members of the EU. This greatly improved the multiplicity of the Community social systems. The Commission further promoted SEA, with the main goal of improving the necessary provisions based on the political and economic reasons proposed above. This occasioned a new stimulus to the expansion of the social element with the deployment of remarkable changes to facilitate the social policy building process. Even though the idea was encouraging, the results were fairly still disappointing.

Fundamental to these statutory provisions were the member states. A proportion of the member states were not comfortable losing their competitiveness while others feared lowering their standards, hence becoming uncompetitive.  Even though SEA still appeared not acceptable for the improvement of EU social policy in relation to the statutory outcomes, under the aforementioned situations, the SEA was deemed a boost to the improvement of EU social policy as it not only instituted the concept widening process of social policy but also prolonged the content of social policy, considering the fresh initiatives to promote student interactions, language teaching, and improved vocational training and to institute safety and health norms.

Single Market and Free Movement

The 1957 Treaty of Rome removed all barriers that inhibited the free movement of people, goods and capital within the EU Common Market. This was the main goal of this treaty alongside the EU community cohesion. The process took ten years to be achieved with the first stage being the EU market construction and elimination of tariff barriers on industrial products. Nonetheless, national policies barrier negatively impacted on the success of the project resulting into its massive delay. As a counter measure, the EU later proposed a creation of a level playing field whereby companies from the state parties were not to be placed at a competitive disadvantage in any way. This enabled the EU companies to remain competitive.

In 1992, a single European market was created in the Single European Act of 1992. This act was based on the suggestionsproposed by the Cockfield Report of March 1985. It was important because the legal and political developments following the ratification of the Treaty of Rome did not immediately create a momentum to establish a fully Common Market free of barriers. In the late 1992, most state parties reneged on the law and therefore resolved to remain slow in implementing and modifying their national laws to conform to the EU laws. These laws later completely transformed the internal market operations and removed numerous barriers. Examples of some of the legislations removed included:

  1. a) All intro capital regulations
  2. b) All Products controls
  3. c) All retrogressive technical rules
  4. d) In the insurance and banking sector, all licensing restrictions were also been eliminated.

Incomplete “Single” Market

This process was achieved by naming and shaming member states who were slowing down the transposition rates within the EU markets. Other member statesalso failed to respect the European rules and regulations averaging to approximately 53 violations for every member state. The table below shows Italy and Spain leading with the amount of violations of EU single market law.

 

Efforts to Construct the Single EU Market

In 2004, the infamous Bolkestein Directive sought to remove barriers on the service provision by promoting what was termed as “country of origin principle”. The principle required service providers to be subjected to their home countries’ laws when providing cross-border services. This position did not sink well with the western European countries who feared their environmental, labor and other standards would be compromised. In 2006, a slimmed down service directive replaced the country of origin principle. This new directive contributed to the free service provision as they state parties were then bound by their state regulations

In 2005, adjustments on the Financial Service Action Plan was adopted.In 2007, the Market in Financial Instrument Directive (MiFID) followed by a Single European Payment Area in 2010 which then served to speed up payment clearances. It was however noted that freeing the financial service sector still remained a priority for the EU particularly with the main state parties.

EU Competition Policy

The creation of EU was a critical component in the development of the Single EU Market and more so in establishing a free and fair movement of goods, capital and services. This was based on the fact that barriers tofair competition distorted the market operations. For so manyyears now the competitive policy has radically remained in tandem with the reinforced national policies. Most of these policies derive their strength from the Treaty of Rome ratified in 1957 and which also established the objective of preventing single market distortion

The treaty also set up anti-competitive rules and circumstances under which immunities would be allowed. The provisions provided for flexibility in the execution of competitive policy. Often sanctioning the commission to negotiate with companies and national governments in giving room for integration principles to decide, thus statedscenarios in which market distortion was allowed. Other Council laws also gave the Commission powers to administer competition rules that include consultation procedures, notification process, and investigative and imposing fine powers. In 1960 and 1970s, many state parties hesitated at the deployment of EU competition rules that immensely contradicted the national industries policies.

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