ECONOMY

Social protection held up

The informal meeting on employment and social protection that took place in Nafplion at the close of last week underscored the difficulty of getting European leaders to consider social protection as an issue with more than financial implications. The strong disagreement between Germany and the UK made it impossible to achieve the objective, set by Social Affairs Commissioner Anna Diamantopoulou and the Greek presidency, of getting a binding and unified agreement for a European social model. This model could start out with a uniform procedure incorporating the four different components of social protection: In other words, the national programs on social inclusion, coordinating pension policies, dealing with the exponential increase in health and welfare spending on the elderly and wage labor. With respect to wage labor, a term which expresses for the first time the real poverty level in the EU, the statistics forwarded to Brussels for discussion are highly indicative. They note that 6 percent of those employed in Europe live below the poverty line. At 17 percent, the proportion of the poor among the self-employed is even higher. The Commission has suggested cutting the burden on low-income employees, which currently comes to 37.8 percent in contributions and taxes for companies. As part of the goal of improving coordination between the different social security systems, the EU has suggested increasing working life by at least five years so that retirement would come into effect at the age of 65. Currently, the average retirement age is 59.9 years. Regarding immigrants, the data points to a sharp divergence between immigrants and locals. Unemployment among immigrants is 8.3 times higher than for locals – with the exception of Greece, where the percentage of immigrants in employment is higher, and jobless rates lower. Sources said the morning session of the council of ministers, which discussed employment, was heated as some expressed opposition to including the new indices during evaluation of policies. Nevertheless, the ministers reaffirmed their commitment to the targets of 67 percent of the economically active population being in work by 2005 and 70 percent by 2010. At the press conference held at the end of the informal meeting, Diamantopoulou expressed the Commission’s concerns over the impact a global recession would have on unemployment. «Due to the reforms in the labor market, employment in Europe has proved to be resilient. However, the crisis does not appear to be receding and there is need to take this into account. Naturally, this concerns not only just employment policies but also the increase in gross domestic product, and this is where things are not going well,» she said. Diamantopoulou did not rule out the need for new reforms to the social security system. She said that while Greece has made a serious attempt, the recent reforms are based on specific presuppositions about migrants, demographics and unregistered labor. «If one of these factors changes, then the reforms will have to be re-examined.»