On 1 July 2020, Germany assumed the Presidency of the Council of the European Union. Expectations are high – after all, the “honest broker” Germany has to swiftly succeed in reaching an agreement on the recovery plan. The social security of Europeans is also to be improved.
After the Croatian Presidency had managed the Coronavirus-related state of emergency during the first six months, the responsibility of Europe’s coordinated, fair and green recovery now falls to the German Presidency, which began on 1 July. With having to find a compromise for the recovery plan and completing the negotiations on the Multiannual Financial Framework, the Germany Presidency is faced with mammoth tasks and high expectations. Under the motto „Together for Europe’s recovery” the plan is also to make progress towards a social Europe.
Agreement on recovery plan and MFF
The first showdown will already take place on 17 and 18 July when the heads of state and government – for the first time physically present after the Coronavirus break – will debate the Commission proposal on the recovery plan in the European Council. Bridging the gap between economic recovery and promoting the Green Deal and the digital transformation, which shall lead to inclusive and sustainable growth, is uncontroversial. A success in the negotiations, which also manages to get the “frugal four”, hence Austria, Denmark, The Netherlands and Sweden, onboard, could help to crack a tough nut in the early stages. In any case, delaying an agreement until after the summer break is no option for the German Ambassador Michael Clauß. According to the Presidency Programme, the Recovery instrument “Next Generation EU” shall be temporary measure and politically embedded in the European Semester – an approach, which the AK is critical of, due to the current course of the European Semester and the missing integration of the European Parliament. The negotiations on the Multiannual Financial Framework 2021-2027 also need to be completed urgently, as the architecture of the recovery is closely linked to the MFF. In respect of the EU budget, Germany counts on strong structural funds capable of acting, which shall cushion the social and economic consequences of the pandemic in the regions. According to the Commission proposal, the European Social Fund shall benefit from resources of the Recovery Fund to enable it to finance Corona-related measures. However, the German Presidency should definitely avoid cuts of ESF+ funds, which are urgently needed to counteract long-term social consequences.
Right direction: Social Europe and responsible supply chains
Alongside the European single market, social security too shall be more resilient and crisis-proof, namely by higher minimum standards with the strong involvement of the social partners. In accordance with the further implementation of the European Pillar of Social Rights, the German Presidency also commits to creating a common framework for a minimum wage, which the Commission is currently pursuing within the scope of the second-stage consultation of social partners. A framework for national minimum income protections systems in the Member States shall also be developed. The proposal regarding a European unemployment reinsurance scheme, which is also part of the Commission’s work programme, shall be reviewed. Within the scope of Council conclusions based on Commission guidelines, the inhumane situation of seasonal workers, which is currently also on the political agenda in Germany, shall be tackled at European level. As regards gender equality, the German Presidency will focus on equality in the labour market, including pay transparency and the overdue ratification of the Istanbul Convention preventing and combating violence against women and domestic violence. Apart from that, Germany announces its commitment to the Youth Guarantee and to a strong European skills policy. On 1 July, the Commission made a relevant proposal by presenting an updated Skills Agenda. Encouragingly, the Presidency Programme also puts a special emphasis on fair value chains and promises an EU Action Plan to strengthen corporate responsibility in global supply chains. Less encouraging are the trade policy plans, for example the intended finalisation of the controversial MERCOSUR Agreement or the efforts to create a Multilateral Investment Court. Furthermore, the resilience and competitiveness of crisis-torn SMEs shall be supported by strategic European value chains.
Curtailing business interests!
If the recovery shall indeed benefit everyone, one cannot just listen to the voices of the few. Hence, at the start of the German Presidency the AK is supporting an appeal of the lobby-critical Brussels NGO Corporate Europe Observatory (CEO) and the German NGO LobbyControl for more transparency and the curtailing of business interests. In cooperation with numerous civil society organisations, as well as 92 MEPs, the AK demands that Germany supports a reform of EU legislative procedures, in particular with regard to more transparency concerning Council work. In its capacity as an economic heavyweight, Germany is particularly obligated to let its Presidency not to be influenced by business interests. A current study by LobbyControl and CEO shows that Germany both at national and European level regularly bows to pressure of the car, gas or chemical industry, thereby preventing committed climate policy, which would go beyond greenwashing. Germany’s blockades concerning European tax policy are not forgotten, e.g. the “abstention” on the vote on public country-by-country reporting in November 2019 that catered for the interest of the business lobby.
The German Presidency has a chance of doing a lot of things right during the coming six months and drive forward the development of a social Europe. However, caution is advised because of the German proximity to business interests, which once more could undermine a clear commitment to a fair and urgently needed European tax policy. In addition, the Programme contains some red flags, for example when the “effective implementation” of the “One it, One out” rule is suggested or when the “viability of public finances” in the context of the Stability and Growth Pact is being promoted. From the AK’s point of view, the introduction of a Golden Investment Rule, which would enable the successful and fair implementation of the Green Deal by appropriate budgetary flexibility, is urgently required.