The European Trade Union Confederation (ETUC) and its research institute ETUI presented the annual report “Benchmarking Working Europe 2018” at an event hosted by AK EUROPA and the Brussels Office of the Austrian Trade Union Federation (ÖGB). The report shows that in spite of the slight recovery of European economic and working world, even in the tenth year after the economic and financial crisis it is still not standing on firm ground. Representatives of ETUC, ETUI, EU Parliament and European Commission discussed how social partnership and the “European Pillar of Social Rights” could contribute to further stabilisation.


Maria Jepsen, Director of the research department at the European Trade Union Institute thought that the presentation of ”Benchmarking Working Europe” would give little cause for optimism. Even though the European Economies (EU 28) - at 2.9 % in 2017 and probably 2.3 % in 2018 - recorded the highest growth rates since the crisis, the increase is mainly based on exports and is extremely unequally distributed among individual Member States. On average, the investment volume has still not exceeded the level of 2007; only the northern Member States are slightly better off. The economic convergence of the European Union is still in danger: since the crisis, the gap between Northern and Southern Europe has continued to grow. The only positive aspect is that the distance has not grown since 2015.


A similar conflicting picture emerges from the labour market. Admittedly, the figure of people in work in 2018 is again above pre-crisis level for the first time; however, the volume of hours actually worked is on the level of 2006. The apparently good unemployment rate is significantly distorted by increasingly atypical and precarious employment. The dynamics of wage development also remains below the standard reached prior to the crisis: real wages have even fallen in 10 Member States. In spite of significantly increased minimum wages, poorer countries have not been able to catch up; for example after last year's doubling, the Rumanian minimum wage is still only half of the German, or similar the Bulgarian minimum wage, after an increase by 10 %, still amounts to only about a sixth.


The panel discussion dealt with the question as to how the newly created “European Pillar of Social Rights” could contribute to improving the situation. Even though almost all panellists identified the Pillar as symbol policy “without teeth”, it was nevertheless welcomed as a step in the right direction. Regret was voiced that the Social Pillar does not have the option of suability. However, according to the European Trade Union Confederation (ETUC), it would be impossible to initiate a macro-economic positive trend without more public investments and a departure from the failed austerity policy and wage-policy interventionism.


Luca Visentini, ETUC General Secretary, drew attention to the multi-dimensional problems of social policy. For example, VW workers in Eastern Europe would earn circa a fifth of the Austrian wage in the same company. Hence, due to massive wage differences, the companies of rich Member States have earned a lot of money since the crisis, which so far has only been reinvested at a very unsatisfactory level. Thus, the competitiveness of Eastern Europe is increasingly based on wage and social dumping, which in the end is detrimental to everyone. Visentini therefore argued the case for a comprehensive approach: today, none of the divergences can be solved by the individual measure of one individual Member State.


Patrick Develtere, Principal Adviser for European Social Policy at the European Political Strategy Centre EPSC, rated the spreading dissatisfaction of the citizens with the EU as a rejection of the neoliberal policy of the Troika. Nowadays not only every second European was subjectively dissatisfied with her or his job; objectively, the job quality has also measurably deteriorated since the crisis. According to Develtere, the Pillar of Social Rights is therefore a “tectonic shift” in European politics: since then social issues have been given greater space in European politics; for example within the framework of the European Semester, the Commission has no longer only assessed the situation of respective public finance, but also issues country-specific recommendations on social policy.


In contrast, Gabriele Zimmer, Chair of the GUE/NGL faction in the European Parliament, recognises the Social Pillar as a purely political concession: she demands to embed the Social Pillar as soon as possible in the EU Treaties; whilst the majority in the European Parliament makes this still possible. However, the Commission would remain inactive and internally divided. For example, the REFIT Programme on deregulation would clearly contradict the plans of the Directorate General for Employment, Social Affairs and Inclusion (DG EMPL). Even though, according to Visentini, the current pre-negotiations on the Multiannual Financial Framework (MFF) of the EU beyond 2020 would indicate that resources for the European Social Fund (ESF) would not be cut in view of Brexit; however, an increase was nevertheless urgently required.


The Federal Chamber of Labour too demands a consequent investment policy and a general departure from austerity. After all, more public investment and the coordinated wage increase and “Wage policy without Borders” would be the most effective measures for higher national and European convergence and the best way for the stabilisation of economy and labour market. Finally, the “Benchmarking Working Europe 2018” report also determined a clear correlation between the degree of social partnership participation and social inequality in Member States, which once again clearly underlines the significance of Social partners in Europe in this context.


Further information:

Benchmarking Working Europe, Report 2018

AW-Blog: More public Investments are sensible and necessary

AW-Blog: Shall the state make cuts to education, healthcare and social affairs? Austerity policy since the financial crisis by comparison

AW-Blog: Do we have to forego Real wage increases?

Social Fairness Package der Commission

Pictures of the event