Plamen Dimitrov
For the trade unions in Bulgaria, the largest organisations in civil society seeking the protection of the workers’ rights and interests, the values of Social Europe have been mobilising milestones, defining activities since the beginning of the transition. Building a competitive economy, reducing poverty, promoting social cohesion, the development of education and health care, investment in human capital and the observance of human rights, based on the unity of economic, employment and social policy in line with European values have been key priorities of CITUB also in times of crisis.
With the adoption of the social acquis communautaire as part of European legislation on social policy, Bulgaria joined the framework of common rules aiming to ensure that economic growth and competitiveness as the goal of a United Europe will not be achieved by reducing the social standards, undermining workers’ rights or the deterioration of working and living conditions.
Today, Europe is different. The European Union is changing and while the social dimension is among its main pillars, it is challenged because of the crisis and the asymmetries of a strong economic and fiscal integration leaving the social integration behind. Global competition and the global financial crisis forced the EU and many of the member states to change some of their policies and even to step back from some of the established social policies and practices. The European Social Model has been undermined and weakened.
At the same time, the social and labour issues are still national, rather than European, although there is a single market and many steps for economic integration, including the EMU, have been made. In this sense, the challenges facing Bulgaria bring some national characteristics to the fore, but overcoming these challenges requires both internal efforts and joint actions with the European Community. That is why we support the position of the ETUC on a strong social dimension and the demand of a radical change of course.
Among the peculiarities of the ‘social’ Europe we see today are the following:
- There is a clear social divide between centre and periphery;
- Unfair competition, based on the low wages and social dumping is on the rise;
- Double standards in the freedom of movement. On the one hand, the workers from low-income countries are used in higher income countries to contravene labour law and social standards, on the other undue restrictions on the free movement of workers are still in place. The conditions of work of the immigrants from the EU-member states and of immigrants from third countries are often much worse than those of the domestic workers, and racism and radical nationalism are on the rise.
- During the last few years the concept of ‘flexicurity’ was dominant in labour market policies. However, the flexibility has often been implemented without any security;
- There are many and various national/regional patterns of industrial relations, although in most of the West European countries they still are based on the post-war consensus. However, in many of the new EU member states most of these main principles (with the exception of the national consultations between the social partners) are hardly accepted even after more than 20 years of democracy. Sometimes even the freedom of association of the employees is challenged by the employers.
- Both in the new and in the old member states the deregulation (hyphen deleted) of industrial relations and the de-centralization of (deleted the) collective bargaining were observed even before the start of the crisis. These trends are on the rise.
- The transnational dimension of labour and of industrial relations continues to develop, however, not always with appropriate social protection. Capital/employers’ interests are instead dominant.
Sunk in the maelstrom of the crisis, we are likely to ignore the long-term issues of development. Both the near and the more distant future of the economy and society depends on the policies and decisions we should take at the present time. From this perspective, I would like to discuss some of the challenges facing our country relating to the social dimension for a changing European Union.
There are clear indications that overcoming the negative effects of the crisis on economic growth, the labour market, income and social security systems requires a change in macroeconomic policy, which is currently focused on fiscal restrictions. A change is needed that should ensure both the stability of the fiscal system and also create conditions for growth and employment. Austerity policy does not encourage enough investment and instead leads to more job losses.
The unity of ‘smart, sustainable and inclusive growth’ means that in parallel with the implementation of structural and macroeconomic policies, the necessary synergy with social policy objectives of increasing the social integration of vulnerable groups through employment and poverty reduction needs to be achieved. Crucial in this regard is the support and solidarity of the European Community for the implementation of a ‘catch-up policy’ in the newest members states through the distribution mechanism of the EU funds.
From this background the social dimension development faces a range of internal challenges.
- The economics of supply has exhausted all its possibilities in Bulgaria (tax rates are at the lowest level in Europe; consistent reduction of social security contributions led to the collapse of the pension fund). However, employment has continued to decline. Exports cannot permanently maintain GDP growth. Efforts should be directed to attract foreign direct investment and to encourage internal investment activity through appropriate credit and interest rate policies and encouraging household consumption through adequate income policy.
- The implemented tax policy not only does not lead to sustainable employment, but is exacerbating poverty and social inequality. The policy of low direct and high indirect taxes leads to an unusual structure of tax revenues that imposes a relatively higher burden on the low- and middle- income population groups. This ‘inverted tax structure’ actually exacerbates poverty and income differentiation, rather than serving the purpose of a more equitable taxation and enhanced solidarity in the promotion of social inclusion.
- A serious challenge is the implementation of the ‘flexicurity’ approach. In our view, an optimal balance between flexibility and security in the labour market (‘flexicurity’) is only possible through the provision of security by the law and the implementation of flexibility through collective bargaining. We support the labour market flexibility, but insist it should not be at the expense of the employees: undermining core labour standards, implementing precarious working conditions and marginalising large groups of workers in the name of uncontrolled and misguided competitiveness.
- Economic growth should be linked to the creation of a better regulated and functioning labour market. The priority in the improvement of the labour market is high-quality jobs, which in itself implies decent incomes and working conditions and the prevention of poverty and social exclusion.
- Bulgaria needs clear and balanced economic and social policies, adopted and implemented with the participation of social partners and civil society. Social partnership, social dialogue and the full participation of workers are not only key elements of the European social model, but are also important production factors that can affect and accelerate the innovation and reforms in line with the objectives set by the country.
Social Europe is both an achievement and a goal which many generations have sought and continue to struggle for. It is not solely a creation of the post-war boom that gave rise to the ‘miracle’ which today seems of the distant past. We must fight against austerity to regain the social dimension of the European Union. The social dimension must be an integral part of economic and fiscal governance and must be grounded in the respect for fundamental social rights and the improvement of living and working conditions. It must promote the European Social Model comprising strong social protection and inclusion, quality public services and social dialogue.
In conclusion, we support the demand of the European trade union movement for a social dimension and believe that the Economic Union, the Monetary Union and the Banking Union must be complemented by a strong Social Union.
This article is part of the EU Social Dimension expert sourcing project jointly organised by SEJ, the ETUC, IG Metall, the Hans Böckler Stiftung, the Friedrich-Ebert-Stiftung and Lasaire.