Objavio: CEA | 12/04/2011

FLEXICURITY POLICIES AND EUROPE 2020

More competitive European Union represents the key challenge of Commission’s strategic efforts “Europe 2020”. Flexicurity labour market policies have been put among several important policies which would contribute to the most important strategic target – 75% employment rate among population aged 20-64.

Therefore, the Commission proposes the implementation of flexicurity principles, development of new skills and their adaptability to new market conditions, including potential career shifts. At the EU level, the Commission wants to identify ways of reducing unemployment and raising activity rates.

Moreover, being aware of different labour markets, the Commission proposes the implementation of national pathways for flexicurity policies, in order to reduce labour market segmentation and reach a balanced between work and family life.

Flexicurity model has mainly been the case of Nordic countries and the Netherlands, and less in Anglo-Saxon, Continental and Mediterranean countries. Growing unemployment in many countries has been a consequence of various structural weaknesses, including labour market rigidities. Therefore, further liberalisation of labour market in Member States will be needed, in combination with other important structural reforms, in order to increase labour competitiveness and activity rates.

Flexicurity model represents a compromise and includes the needs for labour market flexibility and security in a single system. Therefore, flexibility and security can be seen as complementary elements on the labour market. Although job security may have been a preferable choice for many workers, rigid labour legislation and collective agreements often have negative economic outcomes, resulting in higher unemployment than otherwise. However, security on the labour market could be maintained in cases of flexible labour market, although in a different form. Therefore, labour market policies should be directed towards increased employability and income security. High level of employability can be reached through a combination of flexible labour legislation, including collective agreements, and active labour market policies. While the market needs freedom how to allocate labour force efficiently, governments can implement active policies through training programmes for all unemployed. This would increase their opportunities for employability by developing competitive skills and qualifications that are needed on the flexible labour market.

In the meantime, unemployed people require adequate income security. However, it is not so easy to conclude that the unemployed people need more security, without considering their individual responsibility. If unemployment benefits are high enough to provide sufficient income for good living, this would mean no need for work at all. This welfare trap is a serious problem for many countries, which results in lower activity rate and higher unemployment. Therefore, it is important that governments find effective mechanisms of monitoring the usage of unemployment benefits, in order to prevent potential cheating practices. It is highly important that social policy needs to be well targeted and limited on providing adequate transitional income security only for those who are actively and responsibly seeking new employment. Therefore, social policy cannot be a purpose in itself. Social policy needs to be justified by individual work responsibility, well targeted and monitored.

The most important is that each Member States implements its national flexicurity policy agendas. The original Danish flexicurity model can only serve as the benchmark for others, but it cannot be simply copied elsewhere. Although the flexicurity system represents a policy innovation which is highly recommendable for many countries, in Danish case, it is a consequence of long historic tradition of compromises between social partners, concerning relations between flexibility and security on the labour market. Therefore, other Member States can implement flexicurity policies, taking into account their national pathways and long-term policy planning.

As a conclusion, we as liberals should focus on several points in the context of flexicurity:

1. urgent need for full labour market liberalisation,

2. active policies directed towards increased employability and competitive skills,

3. adequate unemployment benefits combined with effective monitoring mechanisms,

4. adopting these flexicurity policies into national labour markets.

REFERENCES

European Commission (2010); Europe 2020 – A European strategy for smart, sustainable and inclusive growth http://ec.europa.eu/eu2020/pdf/COMPLET%20EN%20BARROSO%20%20%20007%20-%20Europe%202020%20-%20EN%20version.pdf


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