The President of the European Commission, Mr Jacques Santer, yesterday threw his reputation behind controversial Commission proposals for next week's jobs summit. He appealed to member-states to honour their commitments at Amsterdam to concrete EU-wide co-ordinated action on employment. "The summit must not once against limit itself to simply taking note of the proposals on the table," Mr Santer said of the special meeting in Luxembourg on November 21st.
"Now its a question of taking action. We cannot permit this summit to fail."
The Commission's guidelines on employment, formulated by the Social Affairs Commissioner, Mr Padraig Flynn, have irked a number of member-states, led by the Germans, because they provide specific, quantified policy proposals for labour market reform and a rigorous annual monitoring mechanism involving the Commission. Bonn says the Commission is overstepping its mandate and should leave job creation to the member-states.
Yesterday, Mr Santer strongly defended the approach taken, reminding member-states that they had committed themselves to precisely this in the Amsterdam Treaty.
Speaking to journalists after a Commission discussion of its second submission to the summit, Mr Santer said that "uncoordinated national approaches have not demonstrated their effectiveness". It was not enough to agree a broad macro-economic approach, he said. It was already clear that growth would not automatically produce jobs - radical structural reforms of the labour market were also required.
Responding to criticism that the call for "active" labour market measures to replace Union-wide spending of £150 billion a year on passive welfare support took no account of the cost of such changes, Mr Santer insisted that the Commission's package was "budget neutral".
It was possible, he insisted, to pay a young person to undertake training instead of wasting on the dole. In doing so, the person was being given hope and the ability to become a tax-paying citizen.
The Commission's guidelines are set out under four headlines - entrepreneurship, employment, adaptation and equal opportunities - against which member-states will be measured. In addition to action on the guidelines to help small and medium-sized enterprises (SMEs), the summit will also hear reports from the European Investment Bank on its attempts to make credit more available. The European Parliament has also freed some additional £300 million from unspent budget lines to help SMEs. The Commission also reiterated its intention to help create a Europe-wide SME capital market.
In addition it was suggested yesterday that an experimental reduction in VAT on certain labour intensive services provided locally would help to stimulate employment. It is proposing a voluntary three-year cut in VAT rates on such services as household repairs and decoration, the repair of clothes and goods in the home, cleaning and laundry services, and a range of personal services.
