The German Social Partners Discuss the Future of Social and Employment Policy in Europe
Interviews: Eric Bonse, Journalist
What role should the EU play in social and employment policy in the future, and what do the social partners expect from the German EU Council Presidency? Trade union representative Annelie Buntenbach and employers’ representative Steffen Kampeter talk about these issues in an interview.
Annelie Buntenbach: Germany must put social affairs at the very top of the agenda1
How do you see the European Union’s role in labour market and social policy – is it a topic for the EU at all?
Buntenbach: It has to be a topic for the EU, because for far too long the EU has been a more economic policy-focused community. Now it needs to show that it can also achieve something in terms of social justice and regulation of the labour market. But for that we need a change of course. To date, the single market and the freedom to provide services have always been at the top of the agenda in Brussels. The main focus was freedom for businesses. If we want to build trust in the EU, then it has to bring about progress in the fields of labour market and social policy as well.
What do you expect from the German EU Council Presidency, in this context?
Buntenbach: Germany needs to put these issues at the very top of the agenda. We need to address the crisis of trust affecting not only the EU, but also many national governments, as is shown by the rise of right-wing extremism and right-wing populism, also in Germany. It is important to make clear that there is a social perspective which we are developing together in the EU. It’s about fair minimum wages, minimum income benefit schemes, fair working conditions and social protection for platform work.
You have already mentioned the minimum wage, which also exists in Germany. Do you support the aim of an EU-wide framework for minimum wages?
Buntenbach: Yes. We support an EU-wide framework for minimum wages. This also means that national collective bargaining systems must be strengthened.
What would be important in the implementation process?
Buntenbach: A directive would be the appropriate legal form. The formula would be that national minimum wages must reach 60 per cent of the median for a full-time employee as quickly as possible. In addition, it is also important to establish that minimum wages cannot be reduced improperly. We have had many bad experiences, not just in the transport sector, but also in the catering and food industry where tips suddenly are being counted towards the wage. The framework also needs to be compatible with national legislation and national traditions. And in any case, we are demanding the involvement of the social partners.
However, resistance is growing, especially in northern Europe. Even the trade unions there are opposed to the idea of EU-wide regulation.
Buntenbach: In the Scandinavian countries, collective bargaining coverage is better than in Germany. If collective agreements are generally binding, then there’s no need for a minimum wage: that’s what trade unions are saying in Sweden, for example. But this is not the case anywhere else in Europe. That is why we have to balance the different interests.
Can Germany serve as a model for adequate minimum wages? The European Commission is warning of a risk of poverty…
Buntenbach: What is good in Germany is the involvement of the social partners in the adjustment mechanism for the minimum wage. I think it is right to draw on the expertise of the social partners. But that aside: we neither invented the minimum wage nor are we at the level I would like to see for Europe as a whole. That is why Germany is not really a model.
Presumably you would like to take up the EU Commission’s suggestion that the German minimum wage should be raised?
Buntenbach: Yes, and there is also a lively debate on this subject in Germany. If we want the minimum wage to be truly poverty-proof, and leap towards 12 Euros, that will require a political decision in Parliament. This cannot be achieved via the adjustment mechanism.
„We need to address the crisis of trust affecting not only the EU, but also many national governments.“
Let us turn to minimum income benefits. Do you support the aim of creating minimum income benefit schemes in all EU countries?
Buntenbach: Yes, I think that is urgently needed. We need adequate and effective systems of minimum income benefits. This means that minimum income schemes in all EU countries must be designed to avoid people being pushed into poverty. Here again, we need a European directive, but we will not create a single European minimum income benefit scheme. The national traditions and systems are simply too different for that.
Can Germany serve as a model in this area?
Buntenbach: That is difficult to say. What certainly helps is an individual legal entitlement like the one in Germany; that is needed for a minimum income benefits scheme. We also need non-discriminatory access and an adjustment based on the size of the household – these are important points, in our view. On the other hand, the German mechanism is certainly in need of a refurbishment. For example, we only rank in the middle of the table in comparison with other EU countries when it comes to the level of our minimum income benefits. And then there are other points which I do not like at all. Excluding EU foreigners from the entitlement in the first three months is completely unacceptable. That is really not a European approach.
You emphasise the good cooperation between the social partners in Germany. What about the employers, do they share your views on a social Europe?
Buntenbach: Of course, there are different interests and perspectives which clash. But there is also common ground. The involvement of the social partners is genuinely important to both sides; that is undoubtedly one aspect we have in common. Otherwise, we have very different views on the question of how much regulation we need for a social Europe and to ensure that dumping does not take place in the labour market. In our view, it is absolutely essential that the standards we have are also monitored and enforced – when it comes to the Posting of Workers Directive, the transport sector, but also A1 certificates and much more. I would be delighted if we could work together to support a European social security number. That would be a first step towards putting a stop to wage and social dumping. If there is opposition to the A1 certificate, we should at least say when it comes to the social security number: fantastic, that’s it!
Steffen Kampeter: The Member States must remain the key actors in social policy2
German employers are opposed to an active social policy at EU level. Why?
Kampeter: That suggestion is completely wrong. The fact is: there is hardly any area today which is not covered by a sensible European minimum standard, for example the whole field of occupational safety and health. Employers have played a constructive role in this and in some cases have also reached agreements with trade unions, for example on parental leave. For good reason, the Member States remain the key actors in social policy under the EU Treaty and the EU has been expressly excluded from certain areas, such as issues relating to pay. We show a stop sign to those who disregard these requirements.
Yet the new European Commission has sprung into action…
Kampeter: Yes, through a creeping assumption of competence. The European Pillar of Social Rights, which does not change any competences in the field of social policy, is being misused and overstretched in this context. The general rule is: anyone who disregards clear legal provisions or constructs crutches to push through what is politically desired does not build trust in the lawfulness of European decision-making processes.
What do you expect from the German EU Council Presidency, in this context?
Kampeter: We think of Europe in European terms. Of course, it is great that we have a German President of the European Commission and that Germany is taking over the Council Presidency. But the country holding the Presidency acts as more of a moderator. I expect the German Presidency to assume a professional and integrative role in bringing about results – but I do not expect any specific German priorities. The important thing is for the EU to speak with one voice.
The European Pillar of Social Rights should not be developed further, in other words?
Kampeter: We are not available for interventions in collective bargaining autonomy through EU legislation.
You are arguing primarily from a legal perspective. Isn’t the aim also to ensure socially acceptable conditions in Southern or Eastern Europe?
Kampeter: I’m not arguing from a legal perspective, but I am pointing out that EU law follows sensible regulatory principles, such as the right of way for the social partners. Much of what is now being considered appears to be social in nature, but is hindering the economic catch-up process in Southern or Eastern Europe, which is also the prerequisite for more effective social security systems.
Wages in Eastern Europe are nonetheless comparatively low, perhaps even too low?
Kampeter: Differences in wage costs have been and continue to be a major driver of convergence, throughout the EU’s history. Wage differentials have made Poland interesting for economic activities, which in turn has led to convergence, i.e. the alignment of wage levels. Eliminating wage competition may sound socially beneficial, but in essence it is directed against those countries which have used wage differences to promote convergence. Not every measure labelled as being socially beneficial actually is.
Can Germany serve as a model regarding the minimum wage?
Kampeter: Germany’s minimum wage is based on the development of collectively agreed wages. To me, the crucial issue is not the wage level in the various countries, but rather the wage-setting mechanism. In Germany, we do not rely on the state, but on the social partners. Politics and party tactics should be kept out of the wage-setting process. That is my advice to all EU Member States. In that respect, Germany can serve as a model.
What is your view of the aim of upward convergence?
Kampeter: The EU’s history is a history of successful upward convergence. Of course, there have also been setbacks. But if you look at developments in Spain and Portugal, for example, but also in Poland, Europe is an economic success story.
„The EU’s history is a history of successful upward convergence.“
Do you support the goal of creating minimum income benefit schemes in all EU Member States? Can Germany serve as an example in this context?
Kampeter: Germany has one of the most comprehensive and effective social safety nets. It is up to each country to decide whether it would like to implement a similar system, if it has a similar level of economic performance. I think it would be presumptuous to propose that all of Europe should adopt the German minimum income system.
You argue against European regulations in the social field. Are there any areas where German employers would like to see more action at European level?
Kampeter: Once again: the existing European social minimum standards are reasonable. I am by no means opposed to these regulations. But the Member States remain the key actors in social policy. Anyone who fails to respect that can expect resistance from us. There are two issues which are particularly important to me in terms of Europe’s development. First, we have to turn the Green Deal into a market-oriented undertaking. The emissions trading system is a positive development, but one swallow doesn’t make a summer. We will need to do much more in terms of climate protection. Second, the EU Commission should make competitiveness a bigger priority again. There are immense opportunities in this area, particularly in the context of the Digital Single Market.
Should the EU also do more to encourage investment, as the German trade unions, for example, are calling for?
Kampeter: Nine out of ten investments come from the private sector. The political discussion concentrates on the remaining tenth – I think it is better to improve the conditions for private investment.
Would you be willing to take up the issue of a European social security number together with the German trade unions?
Kampeter: I like the basic idea. It makes sense for us to be able to determine unbureaucratically whether someone is properly registered in a social security system. It remains to be clarified how this can best be achieved. But we share the basic idea.