Social Charter

In the wake of the Single European Act (1986), the prospects for ambitious EU social policy initiatives were bleak. The Single European Act represented a strong reconfirmation of national as opposed to enhanced European responsibilities for employment and social policy. One important exception was made for minimum harmonization concerning health and safety of workers as a safety valve of the unanimity agreement, so as to prevent 'unfair' competition (Art. 118a). For the first time in European social policy, it allowed directives to be agreed on the basis of qualified majority voting in the Council. In the wake of the completion of the Single Market, there were proposals with respect to the unification of social protection in a single European system. Yet actual measures were very limited: the two 1992 texts on minimum protection and social protection were merely given the status of Council Recommendations, as such, they remained at the 'softest' end of the legal spectrum. The Council Recommendation 92/244/EEC of July 1992 on the convergence of objectives and policies in social protection aimed at promoting convergence between the social protection policies of the Member States in order to reduce differences in social protection levels that might inhibit the free movement of persons and to prevent any type of mutual undercutting between the systems of social protection of the Member States (Ferrera, 2005a: 119-31).

The overall reluctance of the Member States to take social policy measures at the EU level indeed reinforced the double-bind logic whereby the Member States, by asserting their sovereignty, were unwittingly losing their autonomy in social policy (Leibfried and Pierson, 2000). It was increasingly felt imperative to legitimize the integration process in terms of social policy considerations. However, it also became overwhelmingly clear that the accommodation of so many policy traditions, systems of finance and enforcement, and decisionmaking styles through harmonization was no longer feasible on a European basis. This stimulated a development of more innovative and flexible institutional solutions in the 1990s based on strong element of what Wolfgang Streeck has called 'neo-voluntarism' (Streeck, 1995). Ultimately, it was not the competition between the policies of the southern European and the Continental and Scandinavian welfare states, but the political confrontation between the European Commission and the United Kingdom (with other 'unwilling' countries in its wake) that enforced institutional flexibility on the EU. Moreover, German unification in 1990 produced a new mini-enlargement, with the absorption of the GDR into the German Federal Republic, with major consequences for the European political economy.

After some political tussle, the Social Charter was adopted in 1989 by eleven (then fourteen) countries, extending Community competences to working conditions, the information and consultations of workers, and the integration of persons excluded from the labour market. The Charter, despite not being a legally binding declaration, represented a considerable step in a new direction. The Treaty of the European Union (TEU) and especially its Protocol are the basic landmarks of this period. The Agreement on Social Policy based on the Protocol on Social Policy and concluded within the realm of the TEU at Maastricht, brought about further extension of EC competences in the social field, in so far as the Council was given the right to decide on minimum norms for social policy. During the negotiations for the Intergovernmental Conference (IGC) preceding the Treaty of Maastricht, attempts to include the objectives of this Charter as Article 117 in the text of the Treaty failed because of the British veto (Cullen and Campbell, 1998: 264). For pragmatic reasons, Delors chose to restrain his own wish for a stronger social Europe so as to let basic agreement on the internal market go through, believing that once the internal market was fully operative this would surely raise the political demands for corrective action at a later stage (Ross, 1995). The final result of the negotiations was a separate binding Protocol for each of the eleven Member States concerning social policy (the Protocol on Social Policy) relating to work environments, and a unanimous vote concerning the development of working conditions and social security (Brinkmann, 1998: 239; Hantrais, 2000: 27). With this compromise over the closer coordination of eleven countries, acceptable to all twelve Member States, it was possible for the group of eleven to impose guidelines concerning labour conditions, consultation of employees, and equal opportunities for men and women by a qualified majority. This constituted a remarkable extension of the competences of the EU into a wide range of social policy issues. Most market-correcting interventions, however, remained dependent on unanimity within the Council. In a sense, the British opt-out marked the first step towards greater differentiation in European social policy development.

A second institutional innovation that sprang from the Social Protocol pertains to the formalization of the European social dialogue between the social partners at the Community level. The idea of anchoring the Social Dialogue dates back to the 1985 'Val Duchesse' initiative of Jacques Delors to promote industrial relations at the European level, in which the Union of Industries of the European Communities (UNICE), the European Centre of Public Enterprises (CEEP), and the European Trade Union Confederation (ETUC) participate as representatives of the social partners. The Commission was the midwife of the European social dialogue (Falkner, 1998). The Social Protocol allows the European social partners to sign collective agreements. Through decisions of the Council, these agreements could attain the status of fundamental guidelines, with minimum standards that permit much freedom of policy at the national and sectoral levels (Brinkmann, 1998: 241-2). According to Article 4 of the Protocol, it is also possible to assign to the social partners, at their own request, the task of implementing specific guidelines. Ultimately the Social Dialogue was introduced into the body of the Treaty (new Arts. 138 and 139) at Amsterdam in 1997, stating that '[t]he Commission shall have the task of promoting consultation of management and labor at the Community level and shall take any relevant measure to facilitate their dialogue by ensuring balanced support for the parties.' This new status of the social partners is an example of 'horizontal flexibility'. Wage-setting and collective bargaining were, however, exempted from this regulatory competence.