Print

Mail

wiki links

EU efficiency report stalled by conflicts over labor issues

A row between employers and unions over business demands for longer working hours and delayed retirement has held up a report for European leaders on how to revitalize the so-called Lisbon strategy for making the EU the world's "most dynamic and competitive economy" by 2010.

A 13-strong group chaired by Wim Kok, the former Dutch premier, is due to present its findings to EU leaders at their Brussels summit early next month. It will warn them that, in the near-five years since the strategy was adopted, Europe has fallen further behind the US and Asia.

Amid union fears that the incoming European commission is firmly wedded to the Anglo-Saxon model of liberalization and flexibility, and is ready to abandon key elements of the continental social model, the Kok group is understood to have been riven by employer demands for a longer working life to kickstart the faltering EU economy.

The report, due to be completed late last week, says that the EU will fail to meet its target of raising the overall employment rate for men to 70 percent and of women to 60 percent by 2010 because it is growing at 2 percent at the very most, compared with the goal of 3 percent -- still far behind US and Asian growth rates.

A draft version says: "If Europe cannot adapt ... its aging working population will be unable to sustain the cost of maintaining pensions to Europe's growing army of pensioners, economic growth will stagnate and institutions will be faced with contraction and decline."

Employers on the group, including Niall FitzGerald, former Unilever chairman who now holds the same position at Reuters, are said by insiders to want greater flexibility built into working hours, with clear hints that the 35-hour week enjoyed in France and Germany should be abandoned. German companies, including Bosch, Mercedes, Siemens and Volkswagen, are enforcing longer hours in return for job guarantees.

But John Monks, leader of the European TUC, which has three members on the Kok group, said: "Our approach is not to look west [to the US] or east [Asia] but to look north, to the Nordic countries such as Finland, Sweden and Denmark which figured at the top of the league table in last week's Davos rankings on global competitiveness."

He said the Scandinavian economies were already meeting the Lisbon targets, with low unemployment combined with high union density and collective bargaining across a range of issues -- including retirement and pensions.
This story has been viewed 1369 times.