‘Neoliberal monster’: Germans urge EU to shake off its bad image

Street vendors protest against the so-called Bolkenstein Directive, in Rome, Italy, 28 September 2016. [EPA/MASSIMO PERCOSSI]

As many as 78% of Germans say economic inequality between EU member states damages Germany. And two-thirds consider a need for EU reform, with a greater focus on social issues, according to a new survey. EURACTIV Germany reports.

These were the main results of the latest study by the Friedrich Ebert Foundation, a German political foundation associated with the Social Democratic Party.

“The EU is often criticised for being a neoliberal monster,” said Manuel Gath of the Friedrich Ebert Foundation during a debate organised by EURACTIV in Berlin last Friday (5 April).

It is much easier to deregulate and remove borders than to counter with revised regulation, according to Gath. As a result, social security quickly deteriorates, he said.

And even though there are more than 90 pieces of EU legislation dealing with social issues, there is still work to be done when it comes to harmonising social protection standards, said Susanne Zels from the Young Union of Germany (Junge Union Deutschlands), a youth organisation affiliated with the two conservative German political parties, CDU and CSU.

At the same time, Zels said she favoured leaving core competences in social policy to the member states because discrepancies between social systems remain too large.

Social dumping

“Especially when economic consequences of the crisis years are starting to weaken, there comes a point when we can focus on what Europe should stand for: prosperity, good social security, high labour standards,” said Manuel Gath.

In addition to securing peace, the EU is also tasked with ensuring social cohesion, which is often quickly forgotten, he said.

One challenge in this context is the issue of wage dumping because of cross-border labour migration. Gath outlined the example of a truck driver earning relatively well at a small shipping company in East Germany, but being under great pressure from eastern European competition.

“He had a very negative impression of the European Union,” said Gath.

“This is a European topic because member states cannot find solutions by themselves,” said Suzanne Zels.

In 2018, the EU agreed to reform the Posting of Workers Directive, saying workers posted abroad should receive the same remuneration as their native counterparts across Europe as of 2020. Everyone at the debate agreed that similar initiatives were needed in other areas.

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However, only close to 3% of Europeans use their freedom of movement to work in other EU member states.

“One wonders why this is the case, especially in view of high youth unemployment in southern European countries,” said Zels, who called for better recognition of professional qualifications, similarly to what has been achieved with the recognition of university degrees. Language courses, including in origin countries, should also be better promoted, she argued.

But Gath wants to go a step further, calling for a minimum wage standard to be introduced across Europe. Currently, six EU member states do not provide minimum wages.

Gath also wanted to make progress in the field of unemployment insurance, which he said is often misunderstood. “It is always said that hard-working Germans are the ones financing others. But that is simply not the case,” he pointed out. The term unemployment insurance is itself misleading, Gath argued, because it is not a mere transfer of funds but a loan in times of crisis.

“The fact that we did not have something like this negatively impacted the social situation during the crisis,” said Gath. “We need more solidarity. After all, everyone is affected when Italy falls into a downward spiral.”

Zels did not see it the same way: Unemployment insurance does not create jobs, she argued. And proposals for a new instrument at EU level leave many questions unanswered while some steps towards communitisation are currently unrealistic, she pointed out.

Both agreed however that the European Parliament should have the right of initiative to ensure legislative proposals do not only come from the EU Commission.

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A bigger budget for the European Social Fund (ESF)

Gath also suggested that finance, labour and social councils from EU member states meet  on a regular basis to bring economic and social policies closer together.

And care should be taken to ensure that the 2021-2027 EU budget does not, under any circumstances, reduce the budget for the ESF, he argued.

Zels, for her part, called on media outlets to get more involved in the EU policymaking process by reporting on EU legislation at an earlier stage.

“At the moment, issues only reach citizens when it is too late,” Zels said. One example is that of the copyright directive’s controversial Article 13, which was only briefly discussed before the directive’s final adoption.

Current global economic challenges such as Chinese competition and the worsening relations with the US under President Trump are an opportunity for the EU to emancipate itself. “The best diamonds are created under pressure,” said Gath.

[Edited by Zoran Radosavljevic and Frédéric Simon]

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