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Chapter 4: Restoring Convergence between Member States in the EU and EMU
instance take the form of temporarily rais - of reforms. While discussions concern- Looking forward, the above analysis sug-
ing the duration (or coverage) of unem - ing such mechanisms are expected to gests that in order to foster long-term
68
ployment benefits ( 65 ). Nevertheless, due further progress in the near future ( ), growth, in particular in the regions most
regard needs to be paid to possible adverse it can be noted that possible associated affected by adverse long-lasting develop -
feedbacks such as the impact on workers’ provisions as regards labour market ments, funds could further reinforce the
behaviour with regard to job-search inten - institutions and social protection sys - focus on structural challenges, notably
sity and the readiness to accept job offers. tems could be supportive to long-term human capital formation. In this context
growth and convergence, though they several types of measures have been
... and complemented by other are not likely to strengthen short-term mentioned such as activation and training
instruments, such as short- economic stabilisation. programmes or strengthening the admin -
time work compensation istration of employment services, as well
arrangements Fostering investments in human as training services and social benefits
capital through European funds (see, for instance, Schmid 2014).
Well-designed short-time working arrange-
ments can alleviate some negative Proposals to increase the use of European Common benchmarks supportive
employment and social outcomes dur- funds to foster upwards convergence of inclusive growth
ing economic downturns. Such schemes, trends are rooted in early debates on the
which are often the result of negotiations design of the EMU (see section 2.1). It The literature on EU common bench-
66
between employers and trade unions ( ), remains however difficult to measure the marks or standards covers provisions
include temporary reductions in working contribution of structural and cohesion that can contribute to more mobility
time, while maintaining the existing con- funds on convergence patterns in Europe and adaptability in the labour markets
tractual employer–employee relationship. (see e.g. Marzinotto, 2012) ( ). (such as Public Employment Services and
69
This allows firms to avoid the costs of active labour market policies or employ-
67
recruiting and training new workers ( ) The new legislative framework of the ment protection legislation) as well as to
when demand recovers, and to distribute European Structural and Investment (ESI) reducing scarring effects and avoiding
the adjustment more equitably across Funds adopted in 2013 (including the social dumping (in fields such as wages,
workers. However, such schemes are not ESF) puts a greater emphasis on ensur- unemployment benefits and minimum
without risks including possible dead- ing that funding priorities better reflect incomes). Such EU-level common bench -
weight costs and delays in unavoidable the investment needs of human capital marks or standards are generally seen
restructuring that might prevent more development and employment, social and to be common rules or principles which
productive firms from expanding (see, public administration reform — notably complement the EU’s substantial experi -
for instance, Cahuc 2014). Furthermore, through the introduction of a minimum ence in sharing good practice examples
alternatives may exist, such as working ESF share (23.1 % of cohesion policy and encourage Member States to take
time accounts (see, for instance, Burda resources). New provisions also provide them up.
and Hunt (2011) and Möller (2010)). for more effective and results-oriented
use of the funds, such as making invest- Common benchmarks or standards have
3.3.2. Strengthening the ments conditional on the fulfilment of ex- been proposed in the past, such as in a
contribution of EU employment ante requirements. Furthermore, for the 1992 European Council recommenda-
and social policies to long-term 2014–20 period, the Common Agricultural tion ( ) on common criteria concerning
71
growth Policy provides for a policy framework, sufficient resources and social assis-
complementary to other EU policies, aim - tance in social protection systems ( ).
72
National efforts to support employ- ing at the maintenance of existing jobs, More recently, this approach has been
ment and productivity growth could the reduction of seasonality fluctuations taken in the Youth Guarantee, with guide -
be complemented by EU employment in employment and promotion of employ - lines given to reach the desired outcomes
and social policies, with three areas ment and growth in rural areas ( ). for young people within four months and
70
seen as particularly important: support a related standard (ensure that No one
for human capital formation, typically ( ) The December 2013 Council Conclusions stays ‘NEET’ for more than four months).
68
through structural funds; and the intro- http://www.consilium.europa.eu/uedocs/
duction of EU common labour market cms_data/docs/pressdata/en/ec/140245.pdf Looking forward, the above analysis
announced further work on the options for a
and social benchmarks. ‘solidarity mechanism’ or a CCI. suggests that common benchmarks
( ) While macroeconomic estimates generally can increase the effectiveness of
69
Furthermore, the Blueprint mentioned provide positive assessments as a result national employment and social pro-
of sizeable productivity improvements,
Convergence and Competitiveness Instru - econometric assessments tend to be tection systems in reducing the last-
somewhat inconclusive. Nevertheless, the
ments (or CCIs) as steps to be considered impact on GDP and employment appears ing impacts of economic downturns.
in an initial phase of strengthening the more pronounced for Member States which Several different types of proposals
are the main recipients of support, while the
EMU, which include contractual arrange- effect of funds continues to build up years have been developed. The Youth Guar-
ments or solidarity mechanisms and after the programmes have ended (see e.g. antee could be extended, as proposed
European Commission, 2014b).
financial support for the implementation ( ) Mutually reinforcing support measures, by the incoming Commission President
70
73
such as investments in local services and Juncker ( ), while others have proposed
( ) See, for instance, European Commission infrastructure to improve the quality of
65
(2013a), Chapter 3, and Andersen (2014). life and improve connectivity, training and
71
( ) See European Commission, Industrial knowledge transfer actions, research and ( ) 92/441/EEC.
66
innovation can effectively contribute to
Relations in Europe 2010, Chapter 3. tackling the structural challenges in rural ( ) See, for instance, Frazer and Marlier (2009).
72
( ) See for instance, Balleer et al. (2014). areas with long-term social benefits. ( ) See Juncker (2014).
73
67
229
instance take the form of temporarily rais - of reforms. While discussions concern- Looking forward, the above analysis sug-
ing the duration (or coverage) of unem - ing such mechanisms are expected to gests that in order to foster long-term
68
ployment benefits ( 65 ). Nevertheless, due further progress in the near future ( ), growth, in particular in the regions most
regard needs to be paid to possible adverse it can be noted that possible associated affected by adverse long-lasting develop -
feedbacks such as the impact on workers’ provisions as regards labour market ments, funds could further reinforce the
behaviour with regard to job-search inten - institutions and social protection sys - focus on structural challenges, notably
sity and the readiness to accept job offers. tems could be supportive to long-term human capital formation. In this context
growth and convergence, though they several types of measures have been
... and complemented by other are not likely to strengthen short-term mentioned such as activation and training
instruments, such as short- economic stabilisation. programmes or strengthening the admin -
time work compensation istration of employment services, as well
arrangements Fostering investments in human as training services and social benefits
capital through European funds (see, for instance, Schmid 2014).
Well-designed short-time working arrange-
ments can alleviate some negative Proposals to increase the use of European Common benchmarks supportive
employment and social outcomes dur- funds to foster upwards convergence of inclusive growth
ing economic downturns. Such schemes, trends are rooted in early debates on the
which are often the result of negotiations design of the EMU (see section 2.1). It The literature on EU common bench-
66
between employers and trade unions ( ), remains however difficult to measure the marks or standards covers provisions
include temporary reductions in working contribution of structural and cohesion that can contribute to more mobility
time, while maintaining the existing con- funds on convergence patterns in Europe and adaptability in the labour markets
tractual employer–employee relationship. (see e.g. Marzinotto, 2012) ( ). (such as Public Employment Services and
69
This allows firms to avoid the costs of active labour market policies or employ-
67
recruiting and training new workers ( ) The new legislative framework of the ment protection legislation) as well as to
when demand recovers, and to distribute European Structural and Investment (ESI) reducing scarring effects and avoiding
the adjustment more equitably across Funds adopted in 2013 (including the social dumping (in fields such as wages,
workers. However, such schemes are not ESF) puts a greater emphasis on ensur- unemployment benefits and minimum
without risks including possible dead- ing that funding priorities better reflect incomes). Such EU-level common bench -
weight costs and delays in unavoidable the investment needs of human capital marks or standards are generally seen
restructuring that might prevent more development and employment, social and to be common rules or principles which
productive firms from expanding (see, public administration reform — notably complement the EU’s substantial experi -
for instance, Cahuc 2014). Furthermore, through the introduction of a minimum ence in sharing good practice examples
alternatives may exist, such as working ESF share (23.1 % of cohesion policy and encourage Member States to take
time accounts (see, for instance, Burda resources). New provisions also provide them up.
and Hunt (2011) and Möller (2010)). for more effective and results-oriented
use of the funds, such as making invest- Common benchmarks or standards have
3.3.2. Strengthening the ments conditional on the fulfilment of ex- been proposed in the past, such as in a
contribution of EU employment ante requirements. Furthermore, for the 1992 European Council recommenda-
and social policies to long-term 2014–20 period, the Common Agricultural tion ( ) on common criteria concerning
71
growth Policy provides for a policy framework, sufficient resources and social assis-
complementary to other EU policies, aim - tance in social protection systems ( ).
72
National efforts to support employ- ing at the maintenance of existing jobs, More recently, this approach has been
ment and productivity growth could the reduction of seasonality fluctuations taken in the Youth Guarantee, with guide -
be complemented by EU employment in employment and promotion of employ - lines given to reach the desired outcomes
and social policies, with three areas ment and growth in rural areas ( ). for young people within four months and
70
seen as particularly important: support a related standard (ensure that No one
for human capital formation, typically ( ) The December 2013 Council Conclusions stays ‘NEET’ for more than four months).
68
through structural funds; and the intro- http://www.consilium.europa.eu/uedocs/
duction of EU common labour market cms_data/docs/pressdata/en/ec/140245.pdf Looking forward, the above analysis
announced further work on the options for a
and social benchmarks. ‘solidarity mechanism’ or a CCI. suggests that common benchmarks
( ) While macroeconomic estimates generally can increase the effectiveness of
69
Furthermore, the Blueprint mentioned provide positive assessments as a result national employment and social pro-
of sizeable productivity improvements,
Convergence and Competitiveness Instru - econometric assessments tend to be tection systems in reducing the last-
somewhat inconclusive. Nevertheless, the
ments (or CCIs) as steps to be considered impact on GDP and employment appears ing impacts of economic downturns.
in an initial phase of strengthening the more pronounced for Member States which Several different types of proposals
are the main recipients of support, while the
EMU, which include contractual arrange- effect of funds continues to build up years have been developed. The Youth Guar-
ments or solidarity mechanisms and after the programmes have ended (see e.g. antee could be extended, as proposed
European Commission, 2014b).
financial support for the implementation ( ) Mutually reinforcing support measures, by the incoming Commission President
70
73
such as investments in local services and Juncker ( ), while others have proposed
( ) See, for instance, European Commission infrastructure to improve the quality of
65
(2013a), Chapter 3, and Andersen (2014). life and improve connectivity, training and
71
( ) See European Commission, Industrial knowledge transfer actions, research and ( ) 92/441/EEC.
66
innovation can effectively contribute to
Relations in Europe 2010, Chapter 3. tackling the structural challenges in rural ( ) See, for instance, Frazer and Marlier (2009).
72
( ) See for instance, Balleer et al. (2014). areas with long-term social benefits. ( ) See Juncker (2014).
73
67
229
