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Leaked Green Paper on Labour Law.

by Colman Wed Oct 4th, 2006 at 05:50:51 AM EST

EurActiv.com has a copy of a leaked draft of an upcoming Green Paper on "Working in Europe - jobs, competitiveness and social justice in the European labour market".

In order to start a discussion about possible common approaches to the challenges, DG Employment, Social Affairs and Equal Opportunities is preparing a communicaiton entitled "Working in Europe - jobs, competitiveness and social justice in the European labour market". The Commission also plans to launch a public consultation later this year. A copy of the draft Green Paper for the consultation has been leaked to EurActiv.

Apparently the European Employers' Organisation UNICE isn't happy about the draft:

"We feel that the present draft gives a negative picture of flexible forms of work and of self-employment which is not justified. It suggests an implicit agenda of harmonisation of labour law which would undermine growth and employment and is in contradiction with the flexicurity approach."


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Looks like this might be worth reading and following up: EurActiv are interested in comments.
by Colman (colman at eurotrib.com) on Wed Oct 4th, 2006 at 05:51:18 AM EST
The other day I serendipitously stumbled on this document.

European Commission: Social cohesion in the Czech Republic: a blessing or a trap? (by Marek Mora, DG for Economic and Financial Affairs, September 2006)

When using indicators of inequality of income distribution and the at-risk-of-poverty rate, the Czech Republic has one of the highest levels of social cohesion in the EU, comparable to that of the Nordic countries. Though social transfers play a significant role in reducing the Czech poverty rate, it is the country's relatively equal distribution of primary income that contributes most to the level of social cohesion overall. This can be explained by several factors, in particular by the quality of education, the homogeneity of society, regulation of rental housing, the gradual nature of the transition process and other historical reasons. Economic theory and empirical evidence are not clear-cut on what the impact of social cohesion is on economic efficiency and growth. Though social cohesion can have a positive economic impact on growth, the tax-transfer system, if badly designed, may have harmful consequences for labour supply and for the sustainability of public finances as seems to be the Czech case.
This paper should be revealing of the mindset in the DG.

Apparently social cohesion is a bad, bad thing. A shorter Marek Mora: CZ's numbers on income inequality etc are impressive: we can't have that.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Carrie (migeru at eurotrib dot com) on Wed Oct 4th, 2006 at 06:00:15 AM EST
Via an opinion page in the FT which I'll use as a front pager story a bit later:
http://www.ft.com/cms/s/9aa1055e-5344-11db-99c5-0000779e2340.html


Unfortunately, membership of Emu has, if anything, reduced pressure on governments to undertake reforms.

Italy and Germany illustrate this paradox most starkly. Freed from the risk of currency crisis and higher debt service costs, Italy has done little to strengthen its public finances, ùmake its labour market more flexible* or boost competition. The result has been a steep decline in productivity growth, higher than average inflation and a loss of competitiveness.

Italy is not solely to blame for its predicament.

German real wages grew by an average of just 0.3 per cent a year from 1999 to 2005, massively boosting the country's competitiveness and exports but depressing domestic consumption. The result has been a dramatic rise in Germany's trade and current account surpluses and a steady increase in the proportion of these surpluses accounted for by trade with other eurozone economies. Within Emu, Germany has been able to rely on exports for economic stimulus, reducing pressure on the German authorities to address the poor performance of its domestic economy.

Germany's dependence on wage restraint and exports leaves other eurozone members in an invidious position. If they try to regain competitiveness by depressing wage growth, Germany's economy will weaken, prompting tighter wage restraint in the country. This would further depress German domestic demand and, with it, demand for imports from other eurozone economies. While investment in Germany has strengthened this year, a lasting recovery in domestic demand is not possible without stronger wage growth.

If one eurozone economy reforms and is competitive, that works at the expense of others. If others do the same, no one will be competitive.

My take is: labor market reform = beggar-thy-neighbor policy, i.e. it works only at the expense of those that do not do it, and it's detrimental to all if they all do it.

Their take, of course is:


Eurozone governments must convince voters that the reforms needed to ensure the success of the euro are also those that will boost economic growth and safeguard public services and welfare states. It is not too late to ensure the long-term success of the euro.


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Oct 4th, 2006 at 06:25:00 AM EST
[ Parent ]
Unfortunately, membership of Emu has, if anything, reduced pressure on governments to undertake reforms.

...

It is not too late to ensure the long-term success of the euro.

The successof the Euro makes reform unnecessary, which is dangerous for the success of the Euro?

<head explodes>

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Carrie (migeru at eurotrib dot com) on Wed Oct 4th, 2006 at 06:38:42 AM EST
[ Parent ]
Exactly. The euro, by protecting us from the sanction of market forces for structural reasons, makes "reform" less necessary and thus paves the way for our downfall.

Structural improvements are not good. Only "reform" (i.e. a race to the bottom) will do.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Oct 4th, 2006 at 06:50:30 AM EST
[ Parent ]
Economic theory and empirical evidence are not clear-cut on what the impact of social cohesion is on economic efficiency and growth.

I don't suppose it ever occurred to them to consider social cohesion as a desirable objective of public policy in its own right.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Wed Oct 4th, 2006 at 07:00:48 AM EST
[ Parent ]
These people are dangerous fools.

Those whom the Gods wish to destroy They first make mad. -- Euripides
by Carrie (migeru at eurotrib dot com) on Wed Oct 4th, 2006 at 07:06:05 AM EST
[ Parent ]


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