EU at 50

The Financial Times is reporting that progress toward regularized EU-Russian collaboration will be negatively impacted by the lack of progress on the Lisbon Treaty ratification. Russian officials want to see the ratification process move ahead, in part for the clarity it would bring with respect to foreign affairs: ““With the Lisbon treaty in force and a clearer picture of how the EU is organised it would have been easier to negotiate the pact . . . I hope it won’t delay the negotiating process,” says Moscow’s ambassador to Brussels, Vladi­mir Chizhov.

In light of looming energy resource issues and a desire for stable relations with the enlarging Union’s Eastern neighbor, European officials have been hard at work crafting a ‘high-level’ discourse on issues including trade and investments with Russian counterparts.

The Lisbon Reform Treaty forsees the creation of a European Foreign Minister and a term (though permanent) European President, arguably giving other nations - to quote Henry Kissinger - a “number to call when they want to talk to Europe.” 

Just as the demands for increased female leadership in the EU become more vociferous, a new study reveals that enormous income gaps in some of the Union’s largest countries are hurting women’s chances and having a harmful effect on the economy as a whole. Speaking to German daily, Die Welt, the EU Commissioner for Employment, Social Affairs and Equal Opportunities, Vladimir Spidla, revealed the findings of a recent EU study on wage discrimination, which highlights that women in the Union’s most populous economy, Germany, earn 22% less than their male counterparts in average hourly wage. This makes Germany one of the states with “the highest inequality in the payment of men and women,” Spidla said. Estonia, Cyprus and Slovakia offer a similar bleak picture, with averages the same or slightly higher than the German figure (the EU average is 15%).

Spidla points to the fact that too many German women still choose to work part-time, in jobs that are underpaid, because of the lack of opportunities for child and elderly care. Germany still largely operates as a male-driven society, where the man is the breadwinner and the woman - irrespective of her level of education or opportunities in the work force - stays home. Over the past two administrations, important changes have been made, with the introduction of increased flexibility in childcare, new forms of parental financial support, and greater emphasis on the role of employers, who are losing out on valuable labor. The prospects of demographic decline has hastened the government response to these pressing issues, but at the study proves, results are yet to be felt.

The Financial Times Deutschland (quoted in the English language version of Der Spiegel), also points out the detrimental consequences of a lack of women in the labor force in times when qualified workers are scarce and offers a European comparison:

“Regardless of the discrimination issue, it’s a problem for the economy, which is crying out for skilled employees, if women are thwarted in their careers. That’s what happens if they’re made to choose between having children and having a career. Belgium has excellent child-care provisions — and is among the countries with the lowest wage differentials between men and women in the European Union. Germany is at the other end of the scale. Silent reserves of qualified women could be used here.”

Naturally, a real solution to Germany’s skilled labor problem is a combination of utilizing existing labor resources (i.e. motivating women to return to work after childbirth by offering feasible solutions to combine both work and family) and creating a feasible, flexible labor migration system as proposed through the EU Blue Card. However, changing policies is one thing - changing mentalities is another!

You might think you are reading the synopsis of a comic book, for all the talk of ‘heroes’ and ‘villains’, but instead it’s just the newest edition of the Centre for European Reform’s (CER) Lisbon Scorecard. Published with smooth regularity ahead of the Union’s annual Spring Summit for the eighth consecutive year the report highlights the most effective actors in the Lisbon reform process and castigates the ‘villians,’ those falling short of desired progress. Though the authors praise Europe’s overall economic recovery, the team is critical of the complacency that seems to be sneaking in the back door and is already affecting the largest economies in the Union. Continued economic reforms are surely needed in light of what promises to be a year of overall slowing global economic growth, with a weakened dollar and the reverberations of the earlier sub-prime crisis which keeps markets lurching both forward and back.

 To the CER, however, this year’s heroes and villains are:

“Austria– which has done well in copying the Nordic model of ‘flexicurity’; Estonia – a small, nimble newcomer that has moved ahead quickly; and the Netherlands – the only EU country that combines high employment with high productivity. Our ‘villains’ are Greece and Italy, which continue to combine poorly functioning markets with mediocre social outcomes. Some of the new member- states also need to raise their game if they want to cope with competition from emerging Asia.”

Britain leads the ‘brat pack’ of large European economies, given its competitive product markets one of the Union’s most flexible labour markets. And while Germany moves up a spot in the ranking, the authors caution that large economies have to keep the reform pressure up, as they still bring in 75% of the Union’s GDP. They criticize Germany’s over-dependence on exports as much as they do France’s low employment rate.

The entire report, compared with earlier versions, gives a well-rounded perspective on whether (or NOT!) the Member States are making good on the lofty ideals once agreed to in Lisbon. Its concrete and factual discussion is surely more than we can expect from the EU Spring Summit next week.