EU employment policy coordination before and after the crisis

This section seeks to establish a system of Semester background knowledge. A decent understanding of Semester procedures and developments is essential for building a critically informed structure of the analytical framework. It also provides a grounded understanding of empirical findings discussed in country chapters.

From Luxembourg to Europe 2020: Applying the OMC

The choice for OMC in employment policy in the early 1990s came as a reaction to the growing perception that the EU needed coordinated action to overcome the employment crisis of the 1990s (Goetschly, 1999) and to successfully counter common technological and socio-demographic challenges (Borrás and Jacobsson, 2004). The reflections on a new social dimension of the EU took place in the context of public discontent with the negative consequences of more economic integration within the EMU which pulled monetary and fiscal lever out of the hands of eurozone Member States (Peña-Casas, 2013). Harmonization of policy responses through EU legislation in the area was at the same time considered out of question as Member States fiercely opposed further supranationalization. The EU reflected a large variety of welfare state traditions/institutions, industrial relations and employment and social protection systems which would have been tremendously difficult to reconcile with uniform application of rules (Scharpf, 2002; Crespy and Menz, 2015a). Instead, a broad alliance of social-democratic actors in the Commission, European Council and the European Parliament has opted for the creation of an EES (Goetschly, 1999; de la Porte, 2011: 486) roughly tailored after the soft coordination approach used in economic policy since Maastricht, called the Broad Economic Policy Guidelines (BEPGs).

The first indication of a new coordination method in employment was given in the White Paper for Growth, Competitiveness and Employment in which Jacques Delors, then Commission president, proposed to develop a strategy for boosting growth and employment which ought to be implemented by Member States’ coordination of employment policies (de la Porte, 2011:492). The White Paper and the subsequent 1994 Essen European Council summit promoted goals which later became core doctrinal elements of EU’s Employment Guidelines: Activation measures to support employment, vocational training and skills development, flexible working arrangements and adaptable workforce, measures for vulnerable groups and competitive wage policies (ibid.; Goetschy, 1999). Eventually, the EES was agreed at the Luxembourg European Council summit in 1997 and institutionalized as a separate title (Employment Chapter) in the Amsterdam Treaty which also included a horizontal principle for all other policy areas to be “aiming at full employment and social progress” (Article 3, Paragraph 3, TEU). Between 1997 and 2004, the EES fully developed into a standalone coordination process with distinct procedural

Employment policy in the European Semester 13 elements. The cycle starts with the Joint Employment Report, adopted by the European Council. The Report assessed Member States progress and formed the basis for the yearly proposal of Employment Guidelines. Member States reported on policy reforms and intentions in NAPs which were assessed in the advisory EMCO. The Commission proposed specific recommendations to the Council for individual Member States. The coordination process therefore rested on soft instruments, collectively defined objectives, guidelines, targets and indicators, the use of peer reviews within EMCO to monitor reform progress and benchmarks to compare convergence towards common objectives.

In 2000, the European Council launched the Lisbon strategy to make the EU “the most dynamic and competitive knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion” by 2010 (European Council, 2000). Most importantly, the EES was integrated into the Lisbon strategy, together with economic, social and environmental policies, which promoted the OMC “as the means of spreading best practice and achieving greater convergence towards the main EU goals” in those policy areas (ibid.). The 2004 2005 midterm review of the Lisbon strategy further noted that the OMC and its main instruments, benchmarking and peer reviews, have not been as effective in catalysing domestic policy reforms as expected. Already after the rather positive first evaluation of the EES (1997-2002), the Commission considered it necessary to simplify its procedures and synchronize them with BEPGs (Watt, 2004). The Commission decided to put a greater emphasis on growth and jobs in the relaunched Lisbon strategy which was renamed into a Growth and Employment Strategy (GES). The liberal tone of the GES9 reflected an ideological rebalancing to the right especially within the Commission led by José Manuel Barroso (2004-2014), but also in the Council and the European Parliament (Borrâs, 2009; Tholoniat, 2010). More weight was given to bilateral dialogue between the Commission and Member States on domestic reform processes to promote a more partnership-oriented approach and national ownership (Zeitlin, 2007; Armstrong et al., 2008; Borrâs, 2009). This signalled that the EES had become more intergovernmental and suited to Member States’ needs, which have expressed their discontent with some of the naming-and-shaming practices in the multilateral dimension of the EES (Borrâs, 2009; de la Porte, 2011: 499).

The EES process lost its standalone status and saw its procedures integrate with economic policy coordination—the BEPGs in the revised Lisbon strategy. Employment Guidelines were streamlined with BEPGs into a set of 24 integrated guidelines—ten microeconomic policy, eight employment and six macroeconomic guidelines. The once purely employment-related NAPs were transformed into broader N RPs, and the centrality of Joint Employment Reports (JERs) in the reporting on Member States’ progress was lost along the way. The 2005 changes were criticized for compromising the “visibility, monitoring capacity and participatory impetus” of the EES (Armstrong et al., 2008: 444).

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