Autumn brings challenges for NFU
It will be led by Jean-Claude Juncker, the Christian-Democratic former prime minister of Luxembourg. As part of his candidature for Commission President, Juncker gave us some clues to what he wants. In his “Agenda for Jobs, Growth, Fairness and Democratic Change” paper from this summer, he describes the challenges ahead for the EU.
Two of the heaviest points on Juncker’s list is to stimulate growth through smarter investments and less regulation.
The smart investments, to start, include promoting more effective financial instruments including “loans with greater risk capacity”. And Juncker wants to make it easier for SMEs to access finance. Banks should get back to lending to the real economy, he writes. And capital markets in the EU should be further “developed and integrated” to improve the financing of the European economy.
But what is actually being done in practice is that the European Commission is exploring ways of improving funding to the economy from other actors than banks, such as pension funds, venture capital, private equity and crowd-funding. At the same time, the banks that used to provide this lending have been subject to a vast amount of increased legislation for the purpose of financial stability and consumer protection.
This legislation affects the capacity of banks to do their job – i.e. assessing risk and lending money.
It is of course important to have diverse sources of funding for the economy. But Juncker should take care not to create different rules for different financial services providers. We need a level playing field where all providers of financial services are regulated in the same fair and transparent manner – for the sake of fair competition and to avoid new systemic risks building up.
The second thrust of Juncker’s programme is the point of less regulation.
Juncker wants to stimulate growth by reducing the administrative burden for companies. This work is already underway in the European Commission. The REFIT approach aims to make EU law simpler and reduce regulatory costs. The Commission has already refused to make the Social Dialogue agreement on health and safety for hairdressers into binding EU law, as it is required to do under the Treaty. This decision is a direct challenge of the EU’s social dimension and a concern for the whole European trade union movement.
There is also a clear risk that other EU rules on employees’ rights will be questioned and removed following the REFIT approach.
Reducing administrative burden is indeed a good idea in many respects (not least for the financial sector considering last years’ wave of new rules). But rules protecting employees and promoting the role of social partners must not be undermined in the process. Juncker should swiftly transpose the hairdressers’ agreement into binding EU law. And the idea of social impact assessments that he outlines for the Eurozone support measures should be extended to all legislative activities in the European Commission, including financial regulation.
So as the summer draws to a close, the NFU secretariat leaves the lazy days of summer behind. We are in gear and ready to take on the challenges that autumn brings.
Arvid Ahrin, General Secretary