THE POLITICAL ECONOMY OF A SOCIAL EUROPE

THE POLITICAL ECONOMY OF A SOCIAL EUROPE

The Political Economy of a Social Europe Understanding Labour Market Integration in the European Union Michael F. Kluth Associate Professor of lntemational Political Economy Roskilde University Denmark

First published in Great Britain 1998 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN 978-1-349-40769-9 DOI 10.1057/9780230378766 ISBN 978-0-230-37876-6 (ebook) First published in the United States of America 1998 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 ISBN 978-0-312-21557-6 Library of Congress Cataloging-in-Publication Data Kluth, Michael F. The political economy of a social Europe : understanding labour market integration in the European Union I Michael F. Kluth. p. em. Includes bibliographical references and index. ISBN 978-0-312-21557-6 (cloth) 1. Labor market-european Union countries. 2. Labor policy -European Union countries. 3. European Union countries-social policy. 4. Europe-Economic integration. I. Title. HD5764.A6K63 1998 331.1'094--dc21 98-17439 CIP Michael F. Kluth 1998 Softcover reprint of the hardcover 1st edition 1998 978-0-333-73395-0 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the te1ms of any licence pennitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Comt Road, London WlP 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 10 9 8 7 6 5 4 3 2 07 06 05 04 03 02 01 00 99

Contents Preface List of Abbreviations Chapter 1 Introduction: Regional Integration and Political Economy Vll ix 1 Chapter 2 The Institutional Frame: from National Welfare to the EU Social Dimension 38 Chapter 3 Chapter 4 Chapter 5 Notes References Index Social Protection: Health, Safety and Equal Rights 66 Social Dialogue: Creating European Institutions for Labour Market Governance 100 Conclusion: the Dynamics of European Labour Market Integration 134 158 171 177 v

Preface In 1993 a group of social scientists from the universities of Aalborg and Roskilde obtained a grant from the Danish Social Science Research Council. 1 Drawing on both economics, political science and cultural studies the group has spent three years exploring crossdisciplinary approaches to the issue of integration dynamics. This study is much indebted to these collective efforts. While the approach employed here does not reflect the theoretical preferences and positions of all group members, the joint research has been instrumental in identifying the key issues addressed in the conceptual framework which follows in the first chapter. This book emanates from previous research on European labour market integration. In an earlier study I posed the question: why is a social dimension developing at the EU level? The inquiry looked at the policy process surrounding the adoption and the substance of key EU labour market policies. 2 Emphasis was on deliberate political attempts to develop EU labour market policy. While the original basis for EU labour market policy has been broadened by a series of European Court of Justice (ECJ) rulings, the study focused on the extension of scope brought about by bargaining and negotiation between various segments of the executive and legislative branches of supranational and national government and the social partners of the Union. In this contribution I attempt to develop and present a theoretical understanding of the dynamics of regional integration and apply it to the EU's Social Dimension. The focus is on re-interpreting existing material rather than revealing new intriguing details about European level politicking. Ideally the presented framework is applicable to the full range of EU policy fields. Hence the purpose of this book is to present a theoretical construct for the analysis of the dynamics of regional integration, and illustrate its applicability to the case of the EU's social dimension. Many people have greatly contributed to the present work. First and foremost the six other group members: Jesper Jespersen, Birgitte Gregersen, Staffan Zetterholm, Henrik Plasckhe, Bjorn Johnson and Bent Greve. The latter has served in the dual capacity as academic mentor, particularly in relation to the collection of the empirical material, and as head of my department he has shown considerable vii

Vlll Preface resilience in generously allowing me relief from teaching responsibilities thus greatly facilitating the making of this study. Another Roskilde colleague, Professor Klaus Nielsen, has also been an important source of inspiration throughout the process as regards the momentous task of constructing theory. Professor John Zysman of Berkeley first spurred my interest for institutional political economy, for this I am extremely grateful. Outside the realm of academia my friends in national and international bureaucracy have assisted me in focusing on the real world without losing track of the grander perspectives of societal change. I am greatly indebted to Jorn Andersen both as an ever encouraging friend and as co-author of various conference papers. In addition Soren Jakobsen has provided personal encouragement and substantial input. Both of them have willingly spent many evenings in endless academic discussions, generously sharing their experiences from the real world of bureaucratic policy making. Last but not least I would like to express my deep gratitude to my wife Karen, who put up with me in the hectic months of writing. Although burdened by pregnancy leading to the delivery of a beautiful baby boy, she was always able to provide both moral support, inspiration and critical inputs. As an experienced economist having worked both as banker and investment consultant, she earnestly strived to rectify my overtly state-centred political science outlook. Still, the idiosyncrasies, tautologies and downright errors critical readers undoubtedly will find in this book, are solely my responsibility. The book is dedicated to my two children Marie and Frederik.

List of Abbreviations AND IN A SEAN CAP CECE CEEP CEFIC CEMA CEN CENELEC CEU CNPF COMITEXTIL COPA COREPER Council DG DGV EC ECJ ECSC EEC EIPA EMU EO-WCL EP EPC ERM ESC ETUC Andean Pact Association of South-East Asian Countries Common Agricultural Policy European Committee of Construction Equipment Producers European Association of Public Enterprises European Council of Chemical Manufacturers Federations European Manufacturers of Agricultural Machinery European Technical Standards Committee European Technical Standards Committee for Electrical Appliances Commission of the European Union (see also EC) Leading French Employer Association Committee of Textile Industries Committee of Professional Agricultural Organizations in the European Community Committee of Permanent Representatives The Council of Ministers Directorate General Directorate General Number 5. In charge of Social and Labour Market Policy European Commission European Court of Justice European Coal and Steel Community European Economic Community European Institute of Public Administration Economic and Monetary Union European Organisation of the World Confederation of Labour European Parliament European Political Cooperation Exchange Rate Mechanism Economic and Social Committee European Trade Union Confederation ix

X EU EUFTU EUROCOTTON EVCA FEM GATT IGC ILO LO MEP MER CO SUR NAFTA NIC NTB OECD SAP SCE SEA SEM SHCMOI SME SOP SOFAIS TUTB TUC UK UNICE WTO List of Abbreviations European Union European Confederation of Free Trade Unions Committee of Cotton Industries European Venture Capital Association European Transport Material Producer Association General Agreement on Trade and Tarifs (see also WTO) Intergovernmental Conference International Labour Organisation Scandinavian abbreviation for National Trade Union Center Members of the European Parliament Common Market of the Southern Cone North American Free Trade Agreement Newly Industrialized Countries Non-Tariff Barriers Organization for Economic Cooperation and Development Social Action Programme Standing Committee on Employment Single European Act Single European Market Safety and Health Commission for the Mining and Other Extractive Industries Small and Medium-sized Enterprises Standard Operating Procedure French State-sponsored Venture Capital Insurance Scheme European Trade Union Technical Bureau for Health and Safety Trade Union Congress United Kingdom Union of Industries in the European Community World Trade Organisation (see also GATT)