Dr Ozgun Sarimehmet Duman, Associate Fellow, EU Centre in Singapore
22 May 2012
SR 607, Level 6, NTU@one-north campus, Executive Centre 11 Slim Barracks Rise (off North Buona Vista Road) Singapore 138664
3.30 – 5 pm
EUC Associate Fellow Dr Ozgun S. Duman considered the nature and degree to which social and employment policies have been Europeanised in the two countries to answer the question: Does Brussels have more leverage on accession states than member states?
Social and employment policies constitute the core of economic transformation in Europe. In the EU, labour market reforms have generally been undertaken to achieve greater labour flexibility and make labour costs more competitive (through deregulation). They are the major instruments of increasing competitiveness and growth in the EU, and productivity and efficiency in the labour market. The two main Union-wide programmes have shaped these policy areas, leading to the convergence of social protection goals and policies across the EU are the European Employment Strategy and the Lisbon Strategy.
In accession states, labour market reforms are placed at the centre of accession criteria, though not as comprehensive as in member states. Their commitment to membership serves as a ground for legitimacy for labour market reforms domestically – Turkey is subject to Maastricht convergence criteria.
As a consequence of the introduction of the Single Market Act, which saw the removal of physical, technical, and fiscal barriers to trade within the union, policy makers were left with only labour market policies and other supply-side strategies to increase competitiveness. As a result, this has facilitated labour market reforms in member states. Furthermore, euro zone countries that had to adhere to the Maastricht Criteria were left without the ability to make use of monetary policy mechanisms to increase competitiveness.
Economic transformation in Greece and Turkey took different paths. From Dr Duman’s findings, accession states have the potential to be more Europeanised than member states. Labour market reforms were more comprehensive in Turkey and comparatively limited in Greece. Turkey’s social and employment policies are also more closely aligned with the EU than Greece’s have been. In Greece, where economic transformation was initiated by a civilian government, and there were few deunionisation policies, there was limited scope and effect of reforms because of strong resistance and social unrest. Thus, deregulation and flexibilisation were immediate but partial. In Turkey, however, economic transformation was initiated by a military government, with very comprehensive deunionisation policies. There was little resistance as reforms were narrow in scope and effect much more gradual. In this case, Brussels has had more leverage over accession states than it does on its member states.
During the question and answer session that followed, those in attendance questioned why it was so hard for Greece to reform its labour markets, which fed into the current debate over the usefulness of austerity measures, and the possibilities of growth under conditions of austerity. A brief exchange was also conducted on the possible consequences of Greece leaving the Euro.