22. 12. 86 Official Journal of the European Communities No C 328/15
Opinion on social developments in the Community in 1985
(86/C 328/08)
On 23 June 1986 the Commission decided to consult the Economic and Social Committee
on social developments in the Community in 1985.
The Economic and Social Committee decided to appoint Mr De Bruyn as rapporteur-general
with the task of preparing its work on the subject.
At its 239th plenary session (meeting of 17 September 1986), the Economic and Social
Committee adopted the following opinion by a majority vote in favour and two votes against,
with 15 abstentions:
1. General background
1.1. The Committee notes that in 1985 the Com-
munity's economic indicators were positive: the growth
rate was 1 % up on the previous year's figure; Gross
Domestic Product (GDP) was 2,2% higher than in 1984;
the average rate of inflation was 5,2 %, one percentage
point less than in 1984. Productivity and profit margins
improved somewhat. The Committee also notes that
investments were 2,2 % up in the two-year period 1983
to 1985, thus recouping the drop registered in the pre-
vious two years and bringing them virtually up to the
level of 1980, i.e. 15 % below that of 1974(*).
1.2. On the social front, in the Community as a
whole, wages rose less than average inflation. But
unemployment continued to rise. In 1985 more than 13
million people (i.e. 11,1% of the working population)
were unemployed in the Community of Ten. Following
enlargement this figure rose to 16 million (12%). The
progress represented by 200 000 new jobs created, con-
tributing to an increase of 0,4% in the overall figure
for people in work, is clearly inadequate.
1.3. As regards social expenditure, the Committee
would refer back to its comments in the 1983 opinion;
the updated figures published by the Commission for
1986 corroborate the fact that social-spending rates are
not keeping pace with the growth of GDP. Moreover,
according to the Commission's forecasts, it is conceiv-
able that social spending will actually be cut in real
terms. There is an unfortunate tendency for most Mem-
ber States to reduce social welfare measures or increase
employers' and workers' contributions in order to ease
the financial strain on their social security systems.
1.3.1. Under these circumstances, divergent trends
and social policies in the individual Member States are
(J) Source: EEC Commission and OECD; see also opinion ESC
on the economic situation in the European Community.
exacerbating inequalities in income. Poverty and social
conflict are on the increase. Destructive flare-ups and
attempts to destabilize society by means of violence and
delinquency are making a reappearance, along with
racism and xenophobia.
2. The impact of unemployment
2.1. The uneven distribution of unemployment
2.1.1. Wherever it occurs, the costs of unemployment
are high, in personal as well as social and economic
terms (2). The Committee notes, however, that global
figures on the level of unemployment can all too easily
mask its disproportionate and aberrant impact on par-
ticular areas and particular groups such as migrant
workers (3). The Committee believes that policies to
tackle unemployment must take proper account of the
varying needs of different regions and groups.
2.2. Regional distribution of unemployement
2.2.1. The uneven geographical spread of unemploy-
ment is well documented and need not be repeated
here. But is should not be forgotten that the level of
unemployment can vary greatly within regions. The
problem of unemployment is particularly acute in some
large cities where the decay of the industrial and social
fabric has led to a process of social decline and the
creation of economically moribund zones living increas-
ingly on the margin of society. This has brought in its
wake a rise in civil disorder, often with alarming racial
overtones. Nor must the high rate of unemployment in
some of the rural areas of the Community be forgotten.
(2) OJ No C 286, 24. 10. 1983, see ESC opinion on social
developments in the Community in 1982.
(3) OJ No C 343, 25. 12 1984, see ESC opinion on migrant
workers.
No C 328/16 Official Journal of the European Communities 22. 12. 86
2.3. Youth unemployment
2.3.1. The official rate of unemployment (established
on the basis of figures supplied by the Member States
according to different criteria) for the under-25s in
the Community as a whole is still worrying (37,1 %
compared with 38,3% in 1984). This situation must
spur all the Member States and the Community as a
whole into promoting further measures to tackle the
problem (2), given that 4,8 million young people in the
pre-1986 Community were without a job. The challenge
is all the greater with the accession of Spain and Portu-
gal which adds more than 1,5 million to this figure.
2.3.2. The Committee notes with concern that in
addition to the young people with qualifications and
training who are finding it hard to get a job, there
are a great many youngsters who possess neither the
qualifications nor the vocational training required to
compete on the labour market.
2.3.3. The Committee welcomes the Decision of the
Council of Ministers of 17 October 1983 whereby, with
effect from 1984, 75% of available European Social
Fund resources are to be allocated to promoting
employment opportunities for those aged under 25. One
of the effects of this is that in a number of Member
States additional measures are being taken to provide
young people with opportunities for gaining work
experience, thereby enhancing their future employment
prospects. The Committee therefore welcomes the
review of such measures undertaken by the Com-
mission; this will help build up a valuable data base
and encourage the exchange of information and experi-
ence and the adoption throughout the Community of
those schemes which are considered to be effective. It
urges the Commission to follow up this review with a
resolution adapting the 1984 resolution (2) with a view
to concerted action.
2.3.4. In this context the Committee notes that a
number of Community initiatives in the social sector
might produce more substantial results if they were
based on an up-to-date analysis of trends in the individ-
ual Member States, drawn up in conjunction with the
social partners. Accordingly the Committee feels that a
system of collecting such information could usefully be
established.
2.4. Women and unemployment
2.4.1. The Committee notes that the unemployment
rate among women had risen to 12,1 % in December
1985, compared with 11,7% in December 1984. This is
due in particular to the increasing number of women
registering for work in many of the Member States.
Women, however, account for only 37% of the total
number of people employed throughout the EEC, com-
(J) OJ No C 211, 8. 8. 1983, see ESC opinion on youth employ-
ment.
(2) OJ No G 29, 4. 2. 1984, Council resolution of 23 January
1984 on the promotion of employment for young people.
pared with 43 % in the USA for instance. As the Com-
mittee recently stated:
'This is why positive action for women is needed at
Community level. Such positive action, in the con-
text of worsening female unemployment, needs to
be activated in an integral rather than unilateral
way. An overall data-based assessment of women's
position on the labour market, linked to a carefully
indiscriminate jobs creation policy which would
objectively incite better female activity rates, ought
to be seriously attempted' (3).
2.5. Unemployment and the disabled
2.5.1. The handicapped constitute approximately
10 % of the population of the Community and therefore
represent a potentially significant pool of productive
talent. In some Member States the disabled have experi-
enced the effects of the world recession more severely
than other disadvantaged groups. Further measures
aimed at the social and economic integration of the
physically and mentally handicapped need to be
taken (4).
2.6. Unemployment and older people
2.6.1. The Committee notes the difficulties experi-
enced by older workers in re-entering the labour market
after they have lost their jobs and the impact this has
not only on the overall level of unemployment, but also
on their family and social life. The Committee believes
that consideration should be given to the ways in which
the skills and knowledge of such workers can be used
more effectively and geared to current needs, thus
enhancing their employment prospects.
2.7. Social security
2.7.1. The Committee notes that proposals for tailor-
ing social security to changed economic, sociological
and demographic needs are under active consideration
in a number of Member States, taking into account the
current budgetary constraints resulting largely from
unemployment.
2.7.2. In this connection the Committee would point
out that the underlying basis of social security is soli-
darity. This is reflected in the system of contributions
and may also be reflected in the tax system. Accord-
ingly, some Member States have a system whereby
(3) OJ No C 189,28. 7. 1986, ESC opinion on equal opportunities
for women — Medium-Term Community Programme —
1986 to 1990.
(4) OJ No C 189, 28. 7. 1986, ESC opinion on the employment
of disabled people.
22. 12. 86 Official Journal of the
social security contributions are earnings-related, while
benefits are calculated on the basis of an earnings
ceiling. Persons wishing to secure additional benefits
may do so, either by joining a mutual benefit society
or an insurance scheme. Nevertheless, the Committee
believes that it is essential to maintain collective
responsibility for the more vulnerable groups in our
society as this is a fundamental aspect of solidarity.
2.7.3. At all events, as the Committee has already
noted, social protection should not automatically be
considered solely as a burden on the economy. It may
also be a precondition for maintaining a high level of
skills, efficiency and motivation in the economic life of
Europe. Furthermore, the amounts levied do not drop
out of the economic circuit; they are reintroduced in
the form of benefits which play an important role in
maintaining economic activity and thus preventing an
even greater decline (1).
3. Unemployment: the most urgent problem
3.1. Faced with the need for the Community to
accord genuine priority to unemployment, the necessary
guidelines and conditions must be established for the
drawing up and implementation of an overall strategy
based on the interdependence of economic and social
policy.
3.1.1. With over 13 million people out of work in
the Community in 1985, the problem of unemployment
clearly has priority. The solution resides inter alia in
creating opportunities for economic growth and
improving firms' competitiveness. It is patent, however,
that market forces alone cannot generate enough
growth to significantly influence the job situation.
3.2. The task in hand is to get the right quality
of growth, making the necessary policy decisions and
regulating the pace of economic growth to ensure that
the labour market will benefit to the maximum.
3.2.1. It is, after all, political decisions which deter-
mine the balance struck between monetary policy and
investment credit policy; between public spending
(including spending on social security) and public
investment on the one hand and tax policy on the other;
between taxation and the need to safeguard firms'
competitiveness and workers' purchasing power;
between the quality of supply and demand on the labour
t1) OJ No C 343, 23. 12. 1984, p. 29, ESC opinion on current
social security problems in the countries of the EEC.
European Communities No C 328/17
market; between productivity and the reorganization
of working hours; between the different types of
R & D and the impact on production and services.
3.2.2. Looking ahead to the completion of the
internal market, which will cover both supply and
demand, the Committee would reiterate that, if we
are to ensure a fair distribution between income from
capital and income from labour, we must adopt policies
which give due weight to social considerations and have
a Community dimension.
4. Social policy and a Community strategy to combat
unemployment
4.1. The role of EEC social policy
AAA. With reference to its three opinions of recent
years (2), the Committee would once more stress the
interdependence of economic and social policy, and in
particular the need to preserve social cohesion and
solidarity as essential elements in the kind of substained
economic growth which can create jobs and construc-
tively reduce the inequalities in living conditions.
4.1.2. Technological change, improving firms' com-
petitiveness and performance, completing the internal
market, budgetary problems, tax and wage questions,
the use of profits for job-creating investments, the adapt-
ability of the labour market, the reorganization of
work, training and retaining — all these questions are
involved in a strategy for employment and all must be
set in a social framework and ethic so as to ensure a
flexible approach, based on a consensus, and hence
effective. In line with this overall approach, two years
ago the Council expressed itself in favour of 'gradually
promoting a European social area' and stated that:
'The Community will not be able to strengthen
its economic cohesion in the face of international
competition if it does not strengthen its social
cohesion at the same time. Social policy must there-
fore be developed at Community level on the same
basis as economic, monetary and industrial policy
(...). The Community must help to strengthen the
links between economic and social policies so as to
boost its competitiveness and its solidarity vis-a-vis
the outside world. The success of a proper economic
policy is an essential requirement for the implemen-
tation of an adequate social policy. An effective
(2) OJ No C 286, 24. 10. 1983, OJ No 307, 9. 11. 1984 and OJ
No C 218, 29. 8. 1985, the opinions on social developments
in the Community in 1982, 1983 and 1984.
No C 328/18 Official Journal of the European Communities 22. 12. 86
social policy is a necessary support for economic
policy. The changes necessitated by technological
change should be backed up by a policy of education
and vocational training, a labour-market policy and
a social policy, with a view to allowing and encour-
aging rapid and successful adjustment'^).
The Committee fully endorses this statement and urges
that it be rapidly reflected in Community policy.
4.2. Community isntruments
The principal means whereby the Community can pro-
mote such a social policy are:
— legislation and action programmes,
— the structural funds,
— social dialogue.
4.2.1. Community legislation in the social field made
no significant advances in 1985: the proposed directive
on the consultation of employees is still blocked at the
Council, as are other Directives on part-time work,
parental leave, etc. So too is the 'recommendation' on
the reorganization and reduction of working hours
which, through collective bargaining procedures at vari-
ous levels, can stimulate employment without neces-
sarily increasing unit costs.
4.2.1.1. Similarly, the important ideas expressed at
the meeting of the Standing Committee for Employment
in May 1985 have not been implemented, while the
Commission's 1986 Programme shows no sign of an
overall strategy based on such guidelines.
4.2.1.2. Although the Commission Programme pos-
tulates that the creation of a European economic and
social area goes hand in glove with the harmonization
of living and working conditions, with health and safety
standards at work and with vocational training oppor-
tunities, it fails to suggest ways of aligning social secur-
ity measures and instruments which, in the individual
Member States, are an integral part of the economic
system in general.
4.2.1.3. The Committee would also point out that
in its Programme, after restating the basic principles,
the Commission proceeds to formulate its employment
proposals along traditional lines. The proposed
measures to rationalize use of the structural funds are
(!) OJ No C 175, 4. 7. 1984, p. 1, conclusions of the Council of
22 June 1984 concerning a medium-term Community social
action programme.
totally vague, whereas, if only because of the Com-
1 munity's enlargement, urgent re-adjustments and
i increased resources are called for.
4.2.1.4. The Committee is fully aware of the practi-
cal difficulties facing the Commission — whilst there
is often a broad consensus amongst the Member States
as to general principles, they are at odds when it comes
to their specific application.
4.2.2. The Committee has issued opinions on the
revision of the main structural Funds, stressing that
Community aid cannot be made more effective simply
by reallocating present, inadequate resources (2).
4.2.2.1. The Social Fund can be seen to be a key
element of the strategy to secure institutional change
whereby the educational and training systems can
respond more positively to the needs of business for a
more highly skilled and flexible workforce capable of
adapting to technological change. The Committee notes
the improvement in training opportunities for young
people, in many cases leading to more secure employ-
ment, as a result of Social Fund policy. It approves the
new guidelines for the Fund to give priority to training
programmes linked with the introduction of new tech-
nology. In this connection it has also approved Com-
munity programmes such as COMETT, which is aimed
at promoting cooperation between universities and
industry on advanced training in the new technologies.
The Committee would reiterate its request for a more
substantial allocation to be made to the European Social
Fund from the Community budget.
4.2.2.2. The Committee thinks that, in addition to
restructuring existing Community Funds, and without
reducing the resources of these Funds, consideration
should be given to setting up a new Community
Employment Fund for cooperation in the field of
growth and employment. Its brief would be to help
control and humanize the implications of the modern-
ization of firms and to promote major infrastructure
projects.
4.2.2.3. The Committee calls on the Commission,
together with the European Investment Bank, to con-
sider the feasibility of setting up such an EEC-wide
Employment Fund, based on new facilities for job-
creating investment credit, for SMEs in particular.
4.2.3. As far as the dialogue between the two sides of
industry in the Community is concerned, the Committee
(2) OJ No C 124, 9. 5. 1983, ESC opinions on social develop-
ments, op. cit.; and on the revision of the European Social
Fund.
22. 12. 86 Official Journal of the European Communities No C 328/19
notes that the Council considers that carrying out a
Community social policy and Community industrial
strategies implies the continuation and development
of the dialogue between the two sides of industry at
Community level (x).
4.2.3.1. The Committee attaches great importance
to the dialogue between the two sides of industry, but
feels that satisfactory progress cannot be made without
the appropriate commitment and legal instruments.
4.2.3.2. The Community initiatives in the social sec-
tor as described in the Commission Programme (exten-
sion of the second programme on poverty, action pro-
gramme to promote the social integration of the dis-
abled, local employment initiatives, health and safety,
policy on migrant workers) could be better developed
and produce more substantial results if they were based
on a up-to-date analysis of trends in the individual
Member States, produced in conjunction with the social
partners.
i1) OJ No C 175, 4. 7. 1984, op. cit., p. 3.
Done at Brussels, 17 September 1986.
4.2.3.3. Therefore, the Committee feels that there is
an urgent need to set up a system for collecting infor-
mation for the 'communications' (provided for in the
Commission Programme) on living and working con-
ditions, labour-market surveys and medium-term cost-
benefit forecasts in the social sector. The Committee
would also reiterate its call for the harmonization of
social statistics particularly those on unemployment.
5. Conclusions
5.1. Community measures in the social field and the
dialogue between the social partners are unlikely to
have any real impact unless they form part of an overall,
phased strategy for achieving the Community's main
objectives.
5.2. The Community was established to bring the
people of Europe together so that they could join forces
in working for a common future. This basic aim was
confirmed and given new vigour in the recent Single
European Act. This revitalization must be encouraged
so that a genuine European political, social and econ-
omic union can be created with a better chance of
resolving the major international problems currently
disrupting the social and economic life of the whole
Community.
The Chairman
of the Economic and Social Committee
Gerd MUHR
Full & Egal Universal Law Academy