Andor: ‘We have to do more’ to fight poverty

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Looking beyond the 2010 European Year for combating poverty and social exclusion, Employment and Social Policy Commissioner László Andor says the EU and its member states must keep working to find new and more effective ways to improve the lives of the most disadvantaged groups. He spoke to EURACTIV in an exclusive interview.

László Andor is EU commissioner for employment, social policy and inclusion.

He was speaking to Ben Carlin.

To read a shortened version of this interview, please click here.

Employment

Polls show that employment is the top political concern of EU citizens, with 23 million people currently unemployed. The 'Europe 2020' strategy includes a target to increase the employment rate from 69% to 75% of women and men of working age. In concrete terms, how can the European Commission help the member states to create jobs?

In very concrete terms, we have just launched a new flagship initiative which is a summary of the employment policies. It provides a lot of ideas and initiatives, mainly focusing on the supply side of labour. This has been the key idea already in the Lisbon Strategy, but it has been reinforced and adapted to the new times by the Europe 2020 strategy.

There are two flagship initiatives: 'New Skills and Jobs' on the one hand and 'Youth on the Move' on the other. This is because we need to be focused on those groups with the greatest problems. In any future employment policy, we will have to be more and more age-conscious, as there are different conditions and needs for young workers, for older workers and for those in-between.

There are other challenges as well of course, such as breaking down barriers to the employment of women – particularly those with children, and concerning employment opportunities for minorities and, in some countries, for people with disabilities also.

So we have to be focused in terms of the traditional employment policies on the supply side by providing skills and enhancing life-long learning opportunities in order to allow people to take up the jobs that are available, because even in such awful times there are jobs available.

People either don't have the right skills or they are not well informed about the available opportunities, or don't want to move from one place to another to take up a job.

The Commission wants to help directly on all three accounts: information – enhancing the transparency of the labour market by various innovations; skills – which is a huge agenda, to develop skills; and mobility – to help not just students or researchers but entrepreneurs and young workers to go from one country to another by bringing down the barriers.

But having said that, it is also true that even with the most perfect employment policies you cannot fully address this situation. It takes a broader focus of other policies and that's why I believe that with the employment portfolio, I am a stakeholder in other areas such as financial regulation and industrial policy. This is because these policies will provide greater stability for the economy, so there will be greater confidence for investment, and jobs will become more sustainable.

Your 'Agenda for New Skills and Jobs' refers to the so-called 'segmentation' of labour markets in the EU member states – where you can find workers with permanent or indefinite contracts, some with temporary or fixed-term contracts, part-time workers and people hired via private employment agencies. Does the Commission consider this diversity to be a problem?

It is definitely a problem, especially as concerns younger workers, because this segmentation also means that in many member states younger workers face a situation in which they can, if they try very hard, find temporary jobs with a limited contract and no good conditions and no capacity to build up rights for the future.

That's why we believe that if this segmentation continues, it is going to be a major problem for the countries affected, because it's a waste of human resources. Then if we allow breaks between generations for too long, it's also an economic waste.

So the suggestion which has been made in this initiative is to introduce the open-ended contract (or 'open-ended contractual arrangements'). The essence is that you need a new type of contract to overcome this segmentation and allow employers to employ someone with this open-ended contract, which starts out similar to a fixed-term contract, but gradually allows (an employee) to build up rights if a certain person is performing well in the given job. And there is no need to terminate the contract, because if there is a satisfaction and both sides are happy, it can just continue and enter a different phase.

So if such arrangements can help to provide a greater security for young people to the benefit of employers as well, I believe that this will be to the benefit to the entire labour market without doing any harm.

The communication on 'new skills and jobs' mentions that open-ended employment contracts might be one way to reduce segmentation in the labour market. What is your response to those who accuse the Commission of being too prescriptive and trying to impose a 'one-size-fits-all' approach?

It is not the case in this strategy. We are fully aware of both subsidiarity and also the diversity of the member states. Just two weeks ago I presented the Employment Report (2010), and clearly highlighted how different the various member states and groups of countries are from one to another, and they can be characterised by different advantages or different problems they struggle with, so it would be foolish to propose a uniform solution. That's why whenever we suggest something, it means we suggest it only insofar as it applies to each country.

There are some countries where youth unemployment, despite the crisis, has not become a problem, because of the attention the government has paid to this, preventively, and the internal flexibility the business sector had to absorb the young workers – instead of dumping them on the streets.

So it's clear there are huge differences between countries. We put forward certain types of solutions for countries that should seek solutions and some of them obviously have to struggle to overcome the multitude of difficulties they face in the labour market.

Employers often make the argument that there is too much European legislation in the field of employment, and this administrative burden (so-called 'red tape') is a barrier or a brake on job creation. What do you say to those who are calling on the Commission to reduce the administrative burden on employers?

There has been a High-Level Working Group on reducing the administrative burden, but in reality, especially with regards to SMEs [small and medium-sized enterprises], social legislation [such as health and safety rules] only represents less than 5% of the total, and most of it is not connected with the Commission. The majority [of the administrative burden] concerns taxation or other issues imposed by the member states.

We do what we can and are not launching unnecessary legislative initiatives. We only initiate [legislation] where there is really hard evidence that the situation needs to be improved.

European Social Fund

You are in charge of the European Social Fund (ESF), which currently has a budget of around €11 billion per year. How do you make sure that all of this money is spent properly and is actually reaching the people you want to help?

There is indeed a very serious system of controls and on this the member states, together with the European institutions – here I mean the Court of Auditors and the Commission together – there is close cooperation to make sure that the funds are used according to the rules.

In recent years, the practice has been that when there is no sufficient assurance that the rules are met, the Commission can suspend or interrupt payments. That's now the case not only with the Social Fund (ESF) but with the Regional Development Fund (ERDF) as well. The error rate has come down and we have reported quite good results to the European Parliament.

But this is obviously not the end of the road, because there is a lot of work before us in order to make sure that these results are sustainable, and potentially even better than now. For that we have to act on both sides: on the one hand, if possible, to simplify the regulation, because the likelihood of error increases when the regulation is too complex, and when it doesn't meet the social and economic reality on the ground. On the other hand, we believe that this practice of suspensions and interruptions makes an impact not only in the short-term but also in the long run.

In other words, [we believe] that the member states' managing authorities learn from this. Even if, in some cases the delay is two or three months, or longer. It is definitely not about losing funds because we are also interested in implementing the budget.

Even in such cases when a short delay is happening, its already too bad for the users because for the regions, development agencies and all the stakeholders, to use the funds in a planned way and in a timely way as soon as possible is key for maintaining investment and reporting success in the domestic political environment.

And therefore, I think, if all concerned where it applies learn that the Commission is ready to interrupt and interfere if there is an issue, they will endeavour for a sustainable, good achievement and error-free application of the European funds.

We believe that the trends are developing on both sides. We continue our agenda for simplification. But we also expect and anticipate that the member states learn better how to use the European funds, and all this together will result in better figures.

Do you think there is a need to ensure better coordination and integration between the ESF and other EU financial instruments – such as the European Regional Development Fund (ERDF) and the European Investment Bank (EIB)? Can this be done without changing or diluting the particular characteristics and focus of the ESF?

Well, we have had various ways of cooperation in this last year, with the cohesion funds, between myself and [Regional Policy] Commissioner [Johannes] Hahn. We have been discussing all the issues over the days and months, and of course coordination of the funds has been on the agenda. We don't really see fundamental problems here. There might be examples where the coordination is not perfect, but I don't think there are fundamental problems.

We try to look for further opportunities to coordinate better, especially where third parties are involved, like the EIB or EIF (European Investment Fund) or other institutions or agencies. I think it is to the benefit of all instruments if we are all well-coordinated, because then the member states will see opportunities for efficient use, and the European institutions and all stakeholders that are committed to the cohesion policies will see that these policies are meaningful and they do produce results.

For the Social Fund, it is quite clear what the mission has been: it's the main employment and human resource development fund of the EU. I think now, with a very high level of unemployment in Europe, this mission cannot be questioned.

The only question is: what types of innovation are needed for the Social Fund to perhaps do more with limited resources? Especially since the adoption of the Europe 2020 strategy by the European Council [in June 2010], we have been very systematically looking for ways to bring innovative approaches into the ESF and prepare it for the next period.

Poverty and social exclusion

Your first year as commissioner for employment, social affairs and inclusion has coincided with the European Year for combating poverty and social exclusion. What have been the main achievements of the year, and what lessons have you learned?

We are going to summarise it [on 17 December]. What I can already say is that the message has been sent very forcefully to the general public in all member states [by] the NGO world, which has been active and has been made more proactive by this campaign, that this is a very serious social problem in Europe despite the fact that this one of the most advanced high-income regions of the world economy.

I think we also sent a clear message that this is a responsibility for everyone, every government and also every citizen, to help those who suffer from exclusion or various types of social disadvantages, and that we have to do more. 

I think that this campaign helped to create a momentum from the very first moment, from January [2010], when Mr [Vladimir] Špidla was still there. Together with the incoming Spanish Presidency, they launched this year – with the involvement of [Commission] President [José Manuel] Barroso, who will also be there for the closing next week.

The fact that this campaign was launched and maintained on such a high level contributed to the adoption of the Europe 2020 strategy, with the inclusive pillar and the poverty target and the poverty platform [European Platform against Poverty]. Realistically, you cannot expect more from a campaign.

The Europe 2020 strategy includes the headline target of reducing the number of people living in poverty from around 85 million to less than 65 million. How, in concrete terms, will the Commission help the member states to reach this ambitious target?

Well, first of all we help the member states to develop their own strategies. Each member state now has to submit – and many of them already have submitted – their own programmes, in which their own poverty target is explained, their level of ambition is expressed and also they tell how exactly they want to implement it.

There is a dialogue with each and every member state about the level of ambition, about the actual policies and to what extent it is focussing on income, social protection, social services, job creation and other factors – such as the inclusion of discriminated minorities.

Whichever factor is most important in a certain country should be prioritised, so in some countries it is structural employment, in other countries inclusion of the Roma minority, in some developing social services or in others simply to create jobs. Then, the implementation of these strategies will be monitored together, year by year. There is the possibility [for the Commission] to support this through the dissemination of best practices.

What the European Platform against Poverty will newly introduce is what we call 'social experimentation' – or in other words a science-based social innovation – to develop new pilot projects for a micro-region to improve social conditions in a sustainable way. After an initial period, this can be offered to others, for implementation together with the know-how.

I think there is a lot to do in this area and we can support all these measures with the European Social Fund (ESF). I would like to enhance the share of the ESF which is focusing on social inclusion, and make it clearer that the ESF in the future is primarily about delivering on the 2020 targets. It's not about reinventing the ESF but refocusing it and developing better project designs that help more.

This year there has been a lot of attention on the situation of Roma people. How can the European Union ensure that all its citizens – including members of ethnic minority groups – have access to equal rights and equal opportunities?

The Roma question received a lot of attention, which is a good thing and a bad thing at the same time. It's a good thing because it highlighted that indeed there is discrimination, there is no equal opportunity, and it is a must to address this situation. I must say it's a lucky coincidence that now we have the incoming Hungarian Presidency, which takes this issue very seriously and has certain ideas about how to overcome the situation.

It's also been a bit unlucky, because at least for a couple of weeks this discussion was media-driven, while we really have to focus on the social conditions of the Roma minority and see why these multiple social disadvantages are so cemented in these societies of Central Europe and the Balkans.

I think we identified the key challenges, which are education – especially early childhood education – and employment. Of course there are many other dimensions as well, like housing, health provision and social services, but the area where we really need to make a breakthrough is early childhood education and an integration agenda. I say that because we do not accept in principle the segregated approach – that would just continue with a bad pattern.

We also need to provide jobs, knowing that many of the jobs can only be designed for low-skilled or unskilled people because at this time – because of the previous decades – this is the situation.

Pensions

This year the Commission published a green paper and carried out a public consultation on the future of pension systems in Europe. But the member states are very reluctant to accept any interference from Brussels in their national pension systems. Being realistic, how much difference can the Commission make in this area?

I didn't see any reluctance concerning the consultation on the green paper. Some member states of course expressed their focus on subsidiarity, but it was never questioned. On the contrary, the Commission's work on the green paper was welcomed by the member states and all other stakeholders because it's practically a consultation on the key challenges – and these challenges are common.

Most of the participants of this process saw the benefits of looking for solutions together, if we are facing common challenges, especially because the European labour market is more and more integrated, and some of the consequences of this integration can only be tackled if the Commission takes an initiative. For example mobility raises the question of the portability of occupational pensions, on which I believe we will have to take a legislative initiative in due course.

Also, since the financial markets are so integrated, and the pension systems are connected with the financial markets, we will have to look at it from the side of financial regulation as well, but this is for my colleague Michel Barnier.

But even if it's not only about the mobility and the regulatory approach, to develop common principles, like for example on the raising of the retirement age which is practically about balancing the time spent at work and in retirement, I saw that the Commission's analysis was appreciated by the member states. On Monday [6 December], Minister Daerden and all other colleagues expressed their appreciation for this work [in the EPSCO Council meeting].

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