Nicolas Schmit presented the review of the Luxembourg Presidency to the European Economic and Social Committee (EESC)

On 9 December 2015, Luxembourg's Minister for Labour, Employment and the Social and Solidarity Economy, Nicolas Schmit, appeared before the European Economic and Social Committee meeting in plenary session to present the review of the Luxembourg Presidency of the Council of the EU, which will end on 31 December 2015.

By way of introduction, Nicolas Schmit recalled the major challenges that the Luxembourg Presidency has faced, in particular 'unprecedented' migratory pressure and the fight against terrorism. Both are challenges which he believes require a united response from the EU, but which he regrets has not always been present. 'Over the past few months we have witnessed some progress, but there has also been a lot of dithering, reversals and, overall, the European project has been severely tested', he stated.

After thanking the EESC for support the Presidency, Nicolas Schmit took stock of the results obtained under the Luxembourg Presidency.

Deepening the European Union’s social dimension

Nicolas Schmit, Minister of Labour and Employment, at the European Economic and Social Committee, the 9 December 2015

Nicolas Schmit believes that European policy has overlooked the social aspect for too long, which means that 'Europe is no longer readable and understandable' to citizens. He stated that a priority of the Presidency has been to deepen the European Union's social dimension, pointing out that many fruitful discussions on the social dimension have taken place in the EPSCO Council. 'At the outset, we wanted to facilitate social dialogue, including with social partners', he said, before lamenting the fact that reform of the tripartite social summit is still ongoing. 'This process should be continued', he insisted, stressing the need for 'genuine social dialogue at EU level'. 'If we fail to involve social partners in European construction, support in Europe will waver', he said.

'We also attached great importance to governance', continued Nicolas Schmit. The Luxembourg Presidency focused on deepening the social dimension of economic governance within the Union and, in particular, the eurozone, stated the Minister, referring to the general debate on social governance within the EU held during the EPSCO Council of 5 October.

'We need genuine social governance. Social issues must be at the heart of governance', added the Minister, before stressing the need for fiscal and budgetary governance 'to ensure a strong Economic and Monetary Union'.

Nicolas Schmit then welcomed the adoption by the EPSCO Council of 7 December 2015 of employment and social aspects of the draft eurozone recommendation, one of the documents presented by the Commission within the context of the European Semester 2016. 'The Presidency has fought to ensure that the EPSCO Council can play a full role', he said, stressing the need for this Council to 'assume its responsibilities in the field of social affairs'. 'If we want genuine economic and social governance, we need to see genuine coordination between the ECOFIN and EPSCO Councils', he added. 'It is a difficult battle to wage, but we risk losing some of our fellow citizens with regard to the European project', stated Nicolas Schmit, who referred to the issues of poverty and social inequality which he believes are 'crucial' for Europe. Against this background, he regrets that the Commission has not yet presented its 'mid-term review' on the Europe 2020 Strategy.

In the field of employment, Nicolas Schmit referred to the Commission's proposal to include three employment indicators - employment rate, long-term unemployment rates and youth unemployment - in the Macroeconomic Imbalance Procedure. The Minister welcomed that proposal, observing that 'for the first time, we have recognised that high rates of unemployment lead to macroeconomic imbalances'. 'And if we are confronted with major macroeconomic imbalances, it will be necessary to adjust economic policies to redress that imbalance', he said.

Single market

With regard to the 'digital revolution', Nicolas Schmit underlined the importance of the digital single market. 'Digitalisation is going to revolutionise our companies, production methods and the workplace', he emphasised, before welcoming the fact that the EESC had initiated a reflection on this issue. 'Keep at it', he hammered home, reminding those present that Europe 'is lagging behind in this field'. 'EU Labour Ministers have never discussed the impact of digitalisation on employment, even though things are changing rapidly', he lamented. In his opinion, the digital revolution will 'shake up' employment, qualifications and labour law.

Regarding the single market, Nicolas Schmit believes that it contributes to 'building a Europe to be preserved'. 'We must protect the single market, because it is the basis on which European economies operate', he insisted. The Minister takes the view that it is necessary to 'build on the strength of the single market'.

Nevertheless, he spoke of the need to 'avoid placing unnecessary administrative and bureaucratic burdens on companies' and stressed the importance of 'balanced' European legislation in that field.

As for the proposal to establish national competition authorities, the Minister highlighted the 'mistrust' of social partners towards them. He believes that national competition authorities should not interfere with the autonomy of social partners. 'We must retain the autonomy of social partners in the field of tariff setting and, where it does not exist, it must be restored', he said, emphasising that it is 'a crucial element of the European social model'. He takes the view that competitiveness cannot be confined to labour costs, in so far as it also concerns innovation, research, entrepreneurship and the skills of employees.

Other issues

As for gender equality, Nicolas Schmit regretted that the Presidency had failed to reach an agreement on the Directive on using quotas to improve gender equality in boardrooms.

Referring to the Valletta Summit on Migration, Nicolas Schmit highlighted the importance of giving real economic prospects to young Africans.

He also welcomed the agreement reached on the Passenger Name Record (PNR).

After stressing the need for 'better organisation of the Schengen area', he stated that the freedom of movement of European citizens was 'a fundamental principle which cannot be called into question'.

'The work of the OECD on the BEPS project has made significant progress', added the Minister. He stated that the meeting of Finance Ministers and Central Bank Governors of the G20 held in October welcomed the results of the OECD's BEPS Initiative, and that the pioneering role of the EU, as well as the progress made on the exchange of information under the Luxembourg Presidency, were hailed as examples to be followed.

As far as COP 21 is concerned, Nicolas Schmit declared that 'Europe has a significant role to play' in reaching an ambitious agreement. 'Failure at the meeting in Paris would be a failure for the world as a whole - for humanity and for the planet', he warned.

Debate

During the debate that followed, the Minister was commended for his efforts with regard to the social economy, consolidated by a conference held in that regard and the conclusions adopted by the ESPCO Council of 7 December.

The Luxembourg Presidency was praised for convening an extraordinary meeting of the Competitiveness Council on 9 November to discuss the difficult situation facing the European steel industry which, according to the speaker, is 'having to compete with unfair imports from China'.

Likewise, action taken by the Luxembourg Presidency to raise awareness in the Council with regard to the impact of digital technology on labour markets, societies and social protection systems within the EU was highlighted.

For some, the Presidency charted 'new territory' such as with the meeting of Ministers of Employment and Social Affairs of the eurozone held on 5 October 2015 in Luxembourg. Attention was also drawn to the need for more democratic and social governance of the EMU.

Some speakers expressed concern about the way in which the work of the Luxembourg Presidency will be continued by its successors.

Responding to EESC members, Nicolas Schmit called for an international trading system subject to anti-dumping rules and high health standards, and stated that agreements currently being negotiated, such as the TTIP, would not have been made credible in the eyes of a reluctant public in the light of a surplus GDP growth rate of 0.5 %.

The Minister expressed his desire for the hand-over to provide for discussion on the governance of the euro and the social aspect of the EMU. He acknowledged that there is reluctance to discuss that issue among Member States of the eurozone, 'but if we fail to introduce a social dimension in the 19 Member States of the eurozone, it surely won't be possible in the 28 Member States of the EU'. And added: 'those who wish are welcome to join us'.

He called for a basic set of social rights and deemed that a protocol stipulating that basic social rights are equivalent to other civil liberties of EU citizens would be useful. He believes that 'competition from social devaluation constitutes unfair competition'.

To conclude, he reiterated one of his key messages: 'The greatest danger in Europe is that, shortly before the crisis, it achieved economic and social convergence up to a certain point, but the crisis stymied that progress and inequalities are widening between Member States and within Member States.'