IN SEARCH OF THE BEST SCENARIO FOR BULGARIA IN FUTURE EUROPE
Author: Petya Stoyanova, Investor.bg.
The issues of labour market imbalances, convergence and future cohesion in the EU were discussed at a forum organised by the Economic and Social Council.
The economic dimensions of the future of Europe and which of the five scenarios proposed by the President of the European Commission, Jean-Claude Juncker will be the best for Bulgaria, and what are the new challenges facing the labour market and the social systems – these questions were addressed by the participants in a discussion organized by the Economic and Social Council of Bulgaria (ESC) and the European Economic and Social Committee (EESC).
They united around the idea that the voice of civil society should be heard when talking about remuneration, employment, quality of life.
Arguments were advanced in support of the different scenarios – for the continuation of the EU project as it stands, for a more effective Europe, but with the important emphasis on continuing the cohesion policy. The fifth scenario, for full integration, received the strongest support from the participants in the debate. The idea also emerged for a new – sixth scenario in which the interests of civil society are more integrally considered.
However, it was clearly stated that the issue of the social dimension in the White Paper on the EU, according to the trade unions, is not reflected and developed adequately.
Before Bulgaria there are not five, but two scenarios. The first one is negative and is related to maintaining the status quo, while the second one is to harmonize Europe, why not even federalize it, the decision must be political. This opinion was expressed by Lubomir Datsov, a member of the Fiscal Council, during the discussion.
“In the political cycle in which Europe finds itself at the moment, things are happening more slowly and there is no will for reform. The word “cohesion” is outdated and should be replaced by something more modern. Changes in banking and capital unions have come under the pressure of circumstances, and many things are happening under technical convergence. Efforts to enter ERM II do not yield good results, and the answer is in Eurostat statistics,” the economist said.
According to him, “we are slowly growing through GDP, which used to measure convergence”.
“Bulgaria does not look up-to-date with 2-3% economic growth,” Datsov categorically stated and drew an example with Romania where there is a more significant change in people’s quality of life.
Datsov recommended a change in the systems, which can be done following a debate with employers and trade unions.
He is of the opinion that the challenge for the Bulgarian government and the European Commission is for reforms to take place at a higher rate.
Datsov believes that one of the problems of the economy is related to the imbalances of the labour market and he is categorical that this leads the way back to stagnation.
“During the first labour market crisis it was 72 percent of the working population, now there remained 66 percent of the active working population,” he said, explaining that it would be difficult to recover these 6-7 percent of the working Bulgarians. “Many European countries have preserved jobs by cutting salaries,” he said, drawing an example for the policy of convergence.
The position of Bulgaria
Bulgaria’s position on the future of Europe must sound strong and convincing. This was the general conclusion of those present at the Forum of the Economic and Social Council of Bulgaria.
“Europe is at a crossroads and the voice of its citizens must be heard, including the Bulgarians and even more during the upcoming Bulgarian presidency of the EU,” the participants in the discussions said.
Minister Liliana Pavlova said that one of the ideas for continuation of this debate is to organize a high-level forum in Sofia next year.
“At this forum, Bulgaria will come forward with a declaration on the priorities of the presidency and Bulgaria’s position on the future of Europe. The question is not whether the European project has a future, but how to continue beyond 2020, how to make it more effective, with simpler rules and procedures, more balance and control, with a clear cohesion policy,” she said.
“At the end of June 2018, at the height of the presidency, we need to debate what the cohesion will be, what financial instruments can reach the people. Bulgaria has to show its cultural and historical heritage through a cultural programme combining the three areas – competitiveness, cohesion and culture. These will be the priorities of the Presidency. “
Liliana Pavlova said that “we will be looking for partners among other countries, especially those who have joined the EU during the past 10 years.”
Petar Kanev, Chairman of the Economic Commission at the National Assembly, stressed that it was encouraging that economic growth was the first priority, but expressed his fears that at this rate in the next ten years Bulgaria will not reach Europe’s average income level. In his opinion, the question of the Eurozone remains open.
“The fact that Bulgaria is a member of the EU that has not created any financial or other problem for the union is an indicator for social justice. At the same time, Bulgarians have paid a very high price in terms of the emigration of almost 2 million people and this Europe must admit,” said Prof. Dr. Lalko Dulevski, President of the Economic and Social Council. “When young people stop leaving our villages, cities and our country, then there will really be European justice and solidarity.”
Introduction of the European Social Pillar
Social Policy Minister Bisser Petkov stressed the opportunity to apply the European Social Pillar, which will deepen the social integration of EU Member States.
“With the implementation of the European Social Pillar, new and more effective rights for citizens will be achieved. The principles and rights enshrined in the Pillar highlight the ways to create a highly competitive social market economy that will provide employment and social progress,” the Minister of Labour and Social Policy said.
He hopes that the document will be adopted as soon as possible in order to justify the increased expectations of the citizens of the European Union.
“The recently published White Paper on the Future of Europe presented an analysis of the opportunities for EU development in the coming years. I think that for Bulgaria in the longer term the first and fifth scenarios are the most favourable in terms of employment and social policy. They will preserve the existing EU decision-making process and will not lead to deviating from the essential priorities, tasks and activities in the social field and employment,” Petkov said.
Employers with specific messages concerning the White Paper
The President of the Association of Industrial Capital in Bulgaria (AICB) Vassil Velev pointed out the strengths and weaknesses of the five scenarios for the development of the European Union.
In his words, the first scenario, as set out by the European Commission in the March 2017 A White Paper on the Future of Europe “Reflections and scenarios for the EU-27 by 2025” – to maintain the status quo has already shown that the EU is not sufficiently prepared to respond to global crisis situations.
“The second scenario of “leaving only the single market” and reverting the powers back to the Member States on issues not related to the single market, will bring decision-making closer to the level of citizens. This will overcome the problem of excessive intervention of the community bodies in everyday life,” Velev said.
He believes, however, that barriers to businesses will emerge from the 27 different legislations in other areas by introducing specific national standards in the fields of ecology, social affairs, consumer protection.
“The scenario “those who want more, do more” by differentiating the integration process will allow a group of Member States to move forward faster in certain areas. Here, the issue of openness and inclusion of other willing parties, without introducing additional (especially bilateral) conditions, is essential in order to avoid fragmentation of the EU”, Vassil Velev pointed out.
In his view, the implementation of the scenario for “focusing on selected areas of common policy and withdrawal or a minimum level of pan-European cooperation in other areas”, which comes fourth, will allow for faster and more decisive action at the EU-27 level.
“Technological advances, globalization, the demographic crisis, migration processes are increasingly strengthening the understanding of the need for a collective response to the new challenges. In addition, minimizing the introduction of new standards and detailed harmonization will give the Bulgarian economy more flexibility to adapt to global competition, the Chairman of AICB believes.
He assessed the last scenario “we are doing more together in all policy areas” as “reaching a consensus on sharing more powers and resources at the pan-European level.”
“AICB shares the understanding that such a model of constitutional leap for further delegation of national powers to the supranational level is difficult to implement,” Velev sayd, and expressed his hope that the development path of the EU should be based on a combination of elements found in the different scenarios.
He reminded that the discussions in AICB and the information received from its European partners show that the EU should remain only a single market and nothing else was clearly rejected.
“Businesses exclude such a development. From there on, there are different nuances and preferences. In Bulgaria there is a certain affinity to “doing less but more efficiently”. In the other EU countries, the approach to individual scenarios is even more differentiated, and it is emphasized that different scenarios are possible even in different areas,” the representative of the employers stressed.
Velev highlighted the fact that the aim of cohesion policy is to precisely mitigate the existing differences between EU Member States and alleviate the problem of the EU at different speeds, which he believes exists at the moment.
“This is why a cohesion policy is being pursued. Therefore we pay close attention to the question of Bulgaria’s accession to the Eurozone. Participation or non-participation in the Eurozone is one of the main watersheds between individual “tracks” that exist objectively or someone is trying to outline. If we achieve Bulgaria’s integration into a strengthened Eurozone, we will give the best solution for Bulgaria’s behavior under the terms of “Europe of different speeds,” concluded Velev.
Measures in the labour market
Lyuben Tomev of the Confederation of Independent Trade Unions in Bulgaria reminded that globalization and the digitization of the economy change the regime of the labour force and have to respond to technological unemployment.
He hopes to provide access to education and the labour market for the realization of Industry 4.0 with the potential to encourage investment.
“Cohesion policy must respond to the integrated approach that coordinates individual funds. Bulgaria expects that after 2020 cohesion policy will be maintained for all regions that support labour market measures in the conditions of competition with the support of companies that are innovating,” Tomev stressed.
He explained that startups are largely backed by Western companies, but pointed out as a flaw their underdeveloped ties to the industrial sector.
“They still do not cooperate with the local industry to get into the world’s value added chains,” the trade unionist said.
Tomev is of the opinion that the Juncker Plan should include another more refined instrument that would deal with the geographical distribution of funds, because, as it is, it shows unevenness and dominates the distribution of private resources to the big economies of Germany and France, while it should focus on – the weak economies of the EU.