Assessing the impact of labour market flexibilization ...

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Hans Adriaansens in the 1990s, in light of the Dutch Flexibility and Security Act, concerning the Allocation of Workers via Intermediaries (Withagen and Tros, ...

UNIVERSITY OF BATH

Department of Politics, Languages and International Studies

___________________________________________________ Has Europe made its choice? : Assessing the impact of labour market flexibilization on the youth during the crisis. ___________________________________________________

Tsaireli Eleni Supervisor: Nathalie Morel (Sciences Po)

September 2016 Dissertation submitted in partial fulfillment of the requirements for the MA in Contemporary European Studies

To my parents, for never doubting my choices

To my sister, “You is kind You is smart You is important”

To K., for all the adventures

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Abstract This dissertation critically analyses the flexicurity labour market reforms that have taken place during the years of the crisis in Europe. The dissertation examines the impact of those reforms on the youth focusing on forms of “precariatization”. To answer these questions, the cases of Greece, Spain, and France are presented. The dissertation concludes that the reforms present an imbalance between flexibility and security and subsequently quantity versus quality of employment. It is finally argued that those reforms contribute to the reconfiguration of the whole European Social Model.

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Table of Contents Abstract ........................................................................................................................................ 2 1.

Literature Review ................................................................................................................ 7 1.1

The concept of flexicurity ........................................................................................... 7

1.2

Flexicurity in the European Union policy-making ................................................. 11

1.2.1 Youth Policies ............................................................................................................ 14 1.3 2.

Precariat ..................................................................................................................... 17

Hypotheses, Data, Methodology ....................................................................................... 20 2.1

Hypotheses ................................................................................................................. 20

2.2

Case Study Selection ................................................................................................. 21

2.2.1 Limitations ................................................................................................................. 21 2.3 3.

4.

Methodology .............................................................................................................. 22

Case Studies ....................................................................................................................... 23 3.1

Greece ..................................................................................................................... 24

3.2

Spain ....................................................................................................................... 29

3.3

France ..................................................................................................................... 32

Impact assessment on the youth ....................................................................................... 35 4.1

Unemployment........................................................................................................... 35

4.2

Precarious employment ............................................................................................ 42

4.3

Personal Life and Well-being ................................................................................... 45

5.

Conclusion .......................................................................................................................... 48

6.

Discussion ...............................................................................Error! Bookmark not defined.

7.

Bibliography ...................................................................................................................... 54

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Table of figures Figure 1-1 Employment protection legislation index for permanent and temporary work contracts 2008-2013 ............................................................................................................... 13 Figure 4-1Youth Unemployment for those between 15 and 24 in the EU-28................... 36 Figure 4-2 Unemployment rates: General population and youth ..................................... 37 Figure 4-3 Youth Unemployment change rate.................................................................... 37 Figure 4-4 Long-term unemployment 20-24 ....................................................................... 38 Figure 4-5 Long-term unemployment 25-30 ....................................................................... 38 Figure 4-6 Youth unemployment according to level of education .................................... 39 Figure 4-7 NEETs by country 2011 & 2014 ........................................................................ 39 Figure 4-8 Labour market insecurity 2007 and 2013 ......................................................... 41 Figure 4-9 Temporary contracts 20-29................................................................................ 42 Figure 4-10 Involuntary part-time job ................................................................................ 43 Figure 4-11 In-work at risk of poverty ................................................................................ 45 Figure 4-12 At-risk-of-poverty and social exclusion .......................................................... 46 Figure 4-13 Average age of young people when leaving the parental household by country and sex, 2013 ............................................................................................................ 47

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Introduction The notion of flexicurity has been widely used in the last decades to refer to the need for policy-making to reconcile the demands of a flexible labour market with those of a robust social security (Nardo and Rossetti, 2013). The origins of the term date back to developments and debates in Denmark and the Netherland in the 1980s and 1990s (Viebrock and Clasen, 2009). In the EUs policy-making process, flexicurity was introduced mainly in the 2000s and became a central goal in major European policy papers, such as the Lisbon Agenda, the EU2020 Strategy and the European Employment Strategy. It has been argued that the Lisbon strategy, which was intended to deal with the low productivity and stagnation of economic growth in the EU, has been reduced to “an employment strategy, and this employment strategy is itself only limited to making labour markets more flexible and increasing labour supply” (Raveaud, 2007). This occurrence probably fits in, what can be described as, the neoliberal orientation of EU social and employment policies (Streeck, 2014; Papadopoulos, 2013). Despite flexicurity embodying the balance between protection and flexibility, a series of Social Europe accounts have criticized the supply-side and individualized orientation of the concept (employability and activation) for depoliticizing unemployment and throwing the blame and responsibility onto people’s actions and motivations (Hyman, 2015). According to some observers, the only difference between the flexicurity and neoliberal policies in labour market reforms is that the former recognizes the dangers of social insecurity during unemployment and job-to-job transitions and proposes the introduction of social security support throughout young people’s transitions into the labour market (Burroni and Keune, 2011: 84, Papadopoulos, 2013). However, the latest reforms that have taken place in Europe appear to be moving more towards the neoliberal ideals of total flexibilization rather than those of flexicurity. In the latest years, with the labour market being vastly affected by the world economic and financial crisis, EU’s flexicurity policies, as introduced through legislation, countryspecific recommendations (CSR) and the aid packages delivered to countries mostly

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affected by the crisis, have brought into light a certain asymmetry between flexibility and security policies and subsequently quality against the quantity of employment. This dissertation will try to assess the labour market reforms that have taken place (or are currently underway in the French case) since the beginning of the fiscal and financial crisis of 2008, in light of the flexicurity model. The three case studies selected, namely, Greece, Spain, and France, will allow for an examination of the potential tradeoff between flexibility and security in the reforms introduced. The dissertation focuses on the impact the reforms can have on the youth, in order to determine whether those are in line with the demands of flexicurity or are rather putting the youth in a precarious position. The hypotheses this dissertation makes are the following: 1. The impact flexicurity policies can have, especially on the youth, are largely unassessed and can lead to the youth being “precariatised”. 2. The crisis has provided a window of opportunity to national and transnational elites for them to justify these labour market reforms to the civil society. 3. The labour market reforms are in fact an effort by the national and transnational elites to reconfigure the EU social model. All these hypotheses will be tested using the Critical Social Science (CSS) perspective (Neuman 2005). CCS looks at social situations and transformations with the aim to uncover truths and explain social order. CSS states that “facts of material condition exist independent of subjective perceptions … [but] require an interpretation” (Neuman 2005, p.94- 99). The goal is, firstly, to demonstrate the imbalance between flexibilization and securitization of the labour market during the years of the crisis. Using Guy Standing’s idea of “the precariat”, the dissertation secondly attempts an impact assessment of the implemented or proposed reforms to the youth to identify patterns of “precaratisation.” Finally, the aim is to demonstrate that the labour markets reforms that are taking place in Europe since the eruption of the economic and fiscal crisis are just another step in the EU’s agenda that aims at reconfiguring the whole EU social model. The first chapter is a literature review to contextualise the notions of flexicurity and “the precariat” and to give an overview of the European Union’s labour market reforms in the light of flexicurity. In the second chapter, the methodological and theoretical choices are explained. In Chapter Three, the three selected case studies are presented. Chapter Four presents an impact assessment of the reforms on the youth, while Chapter Five

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opens up presents the final conclusions. Finally, Chapter Six opens up further discussion on the subject.

1. Literature Review According to some, the concept of flexicurity was introduced by the Dutch sociologist Hans Adriaansens in the 1990s, in light of the Dutch Flexibility and Security Act, concerning the Allocation of Workers via Intermediaries (Withagen and Tros, 2004). In the European Union (EU) policy-making, flexicurity was promoted by the European Commission (EC) to a flagship policy in the mid-2000s (Nardo and Rossetti, 2013), it was included in the Lisbon Agenda and is one of the primary social policy goals of the EU2020 strategy (EC, 2010). Flexicurity is advocated by guideline 21 of the European Employment Strategy 2007 as able to promote flexibility combined with employment security (Viebrock and Clasen, 2009). In this Chapter, the first part is dedicated to an examination of the literature on flexicurity. In the second part, the concept of flexicurity is examined in the context of the European policy-making, with special attention to youth policies. Finally, the concept of “precariatisation”, as proposed by Guy Standing (2008, 2011) is scrutinized. 1.1 The concept of flexicurity One of the first issues when dealing with the issue of flexicurity is that, so far, despite many attempts by scholars and policy-makers, not one standard definition has been adopted and put into use. The term has been widely used in describing policy strategies or desirable outcomes and has been attributed each time a different notion. What remains undetermined is whether flexicurity is a policy, a political idea or merely a tool to achieve those. The most common distinction is that between a policy strategy, meaning that one should define the instruments and methods to achieve it, and a state of affairs, saying that one describes the desirable results. The absence, however, of a standard definition leads to the term being used at times to describe a type of public policy, whereas at other occasions, as a condition of the labour market (Viebrock and Clasen, 2009). What makes a definition so important in that particular case is that, when specific criteria are not put in place, any policy can be labelled as “flexicurity policy”, irrespectively of whether it fulfils the demands of both parameters of the term, meaning “flexibility” and “security.” [7]

As stated by Chung (2012, p. 154) by taking up a certain definition and framework, a researcher is consciously making a decision to put emphasis on a certain aspect of flexicurity. Flexicurity is not just a concept or a theoretical model; it also has practical implications for public or social partner-based support instruments or regulation of the labour market. However, a measure, or a combination of measures, is often not explicitly labelled as ‘flexicurity’. The lack of precise language leads to a lack of visibility of flexicurity measures. Combined with the intangibility and ambiguity of the concept, a situation arises in which little is known about whether or not flexicurity is applied in practice and what form its implementation takes or could take. Criticisms of this model have been proposed by Muffels and Withagen (2013) and Chung (2012). They suggest that, if flexicurity has to be intended both as a policy strategy and a state of affairs, one should measure the efforts made by institutions, companies, and individuals to enhance flexibility and security, and states intended as the outcome of flexicurity policies (EC, 2013). A first theoretical approach sees flexicurity as a tool, which if properly used can be the answer to many issues that have intensified during the years of the crisis, such as growth stagnation and high unemployment rates. Once implemented, those policy strategies are supposed to result in a flexible and secure labour market. Wilthagen and Tros (2004, p. 170) suggest a rather institutional definition that focuses mostly on the practical aspects of creating a flexible labour market. They define flexicurity as: Flexicurity is (1) a degree of job, employment, income and ‘combination’ security that facilitates the labour market careers and biographies of workers with a relatively weak position and allows for enduring and high quality labour market participation and social inclusion, while at the same time providing (2) a degree of numerical (both external and internal), functional and wage flexibility that allows for labour markets’ (and individual companies’) timely and adequate adjustment to changing conditions in order to maintain and enhance competitiveness and productivity (Wilthagen and Tros, 2004). Although this definition provides a general approach to the core demands of flexicurity, the interpretation of what is a desirable and acceptable degree of security and flexibility, is left to the interpretation of the one using it. The result is an asymmetry between the [8]

flexibility and security policies, more often in favour of flexibility. Another notion is the “analytical frame that can be used to analyse developments in flexibility and security and compare national labour-market systems” (Madsen 2007: 527)).That is to say, flexicurity as a tool used by research is “a general formulation to guide analysis of combinations of flexibility and security” (Mandl und Celikel-Esser, 2012:12) A second approach that views flexicurity as the desirable outcome of implemented public policies suggests that it may serve to reconcile employer and employee interests and concerns that are often assumed to be contradictory and incompatible (Viebrock and Clasen, 2009 and Larsen, 2010). Including both policy and labour market characteristics flexicurity came to describe the “fonctionnement d’ensemble du système d’emploi”, translated as the way the employment system works as a whole (Duclos, 2012). The result, according to Gautié (2006, in Lehweß-Litzmann, 2014) is that flexicurity has acquired a very comprehensive status: “initially designating a reform aiming at both flexibility and security […], the concept would soon be used to name not a reform or a particular policy but more generally a social model”. What raises concerns is that this new paradigm, especially in the EU policy-making, has ended up meaning more flexibility and less security. This tendency is of course in line with a neoliberal agenda, very much driven by corporate demands, which aims, as this dissertation intends to demonstrate, at the reconfiguration of the whole European Social Model. However, what does more flexibility mean for the working people as well as those trying to enter the workforce? The term “flexibility” adequately encompasses two different models: on the one hand ‘numerical flexibility’, which incorporates the idea of easier hiring and firing contracts. The other model is that of the ‘functional flexibility’ which is closely linked to the concept of ‘knowledge society’ or ‘lifelong learning’ (LLL), whereby the European workforce is being prepared for a changing working life, where only a multitude of skills (polyvalency) will ensure employment (Crouch, 1999). What can be noticed in the literature is that flexibility can have many dimensions. As Standing (2011) suggests each aspect of flexibilization was linked to a different outcome:

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“Wage flexibility meant speeding up adjustments to changes in demand, particularly downwards; employment flexibility meant easy and costless ability of firms to change employment levels, particularly downwards, implying a reduction in employment security and protection; job flexibility meant being able to move employees around inside the company and to change career structures with minimal opposition or cost; skill flexibility meant being able to adjust workers’ skills easily.” (Standing 2011: 6) In the European reality, when first mentioned by Commissioner Špidla in 2005, the idea of flexicurity was more related to the neo-liberal push towards deregulation of labour markets (Vesan, 2011). By contrast, the current approach of the Commission is to devote more attention to employment security, as stated by Commissioner Andor (2011) “even before the crisis, the number of temporary contracts and jobs arranged through private work agencies rose steeply, even in countries where employment protection has been reformed. The labour markets did not benefit from this, despite the short honeymoon when employment increased before falling sharply during the crisis. Moreover, job insecurity has increased” (László, 2016). Keune and Sorrano (2014) show how the implementation of the flexicurity paradigm has enhanced some of the negative trends that have been observed in Europe’s labour markets and welfare states in recent years. With the global financial and economic crisis and the attempts to find ways out of the recession, the debate on flexicurity once again gained momentum. In particular, the question arose whether flexicurity – having been developed in times of positive economic and labour market performance – would also work in ‘bad economic times’. If it is to be applied, the main challenge is how it could be implemented to keep as many workers as possible in employment while at the same time giving people outside of the labour market the chance to find new jobs as quickly as possible (Eurofound, 2012). Keune and Serrano (2014), focusing on the interpretation of flexicurity by what they consider being its dominant promoter, the European Commission, argue that the new concept of flexicurity can change the overall understanding of social phenomena and that of the role and objectives of the employment and social policy. A recent survey by the European Social Partners (ETUC, 2011) showed that, although an overwhelming

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majority of employers and a relative majority of trade unions believe in the potential of flexicurity in introducing win-win situations, most of the respondents believe that the measures introduced so far under the umbrella of flexicurity had failed to establish a balance between its two dimensions. Flexicurity was seen as an important element in adjusting the European labour markets to the globalised economy, in a way that would help them become more flexible without damaging the provision for social security and justice (Schmidt, 2002). However, even in flexicurity role model countries like the Netherlands and Denmark, trade unions have been concerned about this risk of imbalance between flexibility and security aspects. More specifically, the European Trade Union Confederation (ETUC) underlined the fact that a real balance should be based on quality of work, lifelong learning, work-life balance, promotion of internal flexibility, enhancement of upward mobility of workers, recognition of the diversity of solutions in Europe determined by the size and social dialogue heritage of the country, more investment in welfare systems, active labour market policies investing in people, social dialogue and coordination of tax policies in Europe (ETUC, 2007). The crisis has definitely made it more difficult for this balance to be achieved, mainly due to severe cuts in the welfare state and high deficits (Busch et al., 2013) 1.2 Flexicurity in the European Union policy-making In recent years, the European Union considers flexicurity to be a solution to the problems caused in the labour market by the economic crisis. There is however much debate over the extent to which flexibility and security can complement rather than contradict each other. The literature on the labour market has emphasized the existence of a potential trade-off between flexibility and security since flexible labour markets can be beneficial to job creation, but at the same time reduce levels of economic security. The difficulty in evaluating flexicurity policies arises from the fragmentation of existing definitions. The European Commission adopts a rather general and vague definition, describing flexicurity as an integrated strategy for enhancing, at the same time, flexibility and security in the labour market (European Commission, 2007, p. 5). Flexicurity attempts to reconcile employers' need for a flexible workforce with workers'

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need for security – confidence that they will not face extended periods of unemployment. It is evident that the European Commission’s definition of flexicurity is rather broad and general. It incorporates, however, four specific policy components (European Commission, 2007): •

Flexible and reliable contracts through modern labour laws, collective agreements and work organization (for both the employer and the employee, the insiders and the outsiders in the labour market);



Comprehensive lifelong learning to ensure the continuous adaptability and employability of workers, particularly the most vulnerable ones;



Effective active labour market policies to help people cope with rapid change;



Modern social security systems including broad social security provisions that help people combine work with private responsibilities.

Through the implementation of flexicurity policies, the European Commission suggests that the labour market will eventually be lead to high employment rates and low unemployment rates. Also, the social security dimension of the concept safeguards low poverty levels (European Commission, 2007). Since approximately the year 2000, large deregulation waves have progressively transformed the European landscape of employment protection, branded as too stringent (Schömann, 2014). This trend has been reinforced since the onset of the financial and economic crisis in 2008, in particular in Portugal, Italy, Spain and Greece, but also lately in France, Estonia, the Netherlands, Slovenia, Romania and the United Kingdom (Muller 2011). Employment protection law was particularly under attack before the outbreak of the economic and financial crisis and in some member states even more during the crisis (Koukiadaki et al. 2016). Employment protection legislation refers to the procedures of hiring and dismissals and as the ILO rightly points out: It is widely acknowledged that labour legislation is vital to the economy of any country and the achievement of balanced development regarding both economic efficiency and the well-being of the population as a whole. This is a delicate balance to achieve. In this

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context, labour legislation plays a critically important role in providing a framework for fair and efficient industrial and employment relations that eventually deliver productive and decent employment as well as social peace. (ILO 2011)

In a time of crisis, as mentioned in the latest European Commission report on Labour market developments in Europe 2012 (European Commission 2012a: 12) strict employment protection law is linked to reduced dynamism of the labour market and precarious jobs. De-regulation of the labour market or else its regulation by the free market is in the views of the EU the right response to growth stagnation and rising unemployment. The deregulation of labour law has been implemented by the European Commission since the early 2000s with the aim of loosening employment protection law in the member states so as to get rid of the so-called constraints linked to workers’ protection in terms of substantive requirements (authorization requirements) and procedural requirements for dismissals (notification, negotiation, trial periods) (Schömann, 2014). As can be seen in Figure 1:1, employment protection legislation has decreased or remained unstable for most countries. In the cases that this dissertation examines, all countries that have been severely affected by the crisis, a minor decline of the level of employment protection can be noticed in both Greece and Spain, while France up until 2013 remained stable.

Figure 1-1 Employment protection legislation index for permanent and temporary work contracts 2008-2013 (OECD, 2016)

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Schömann (2014) notes that this has also happened regarding procedural requirements for collective dismissals (including the obligations of the employer to consider other measures before termination of employment, criteria for selection of employees to be dismissed, the priority of rehiring, as well as severance pay), and regarding redress. The deregulation agenda, that the EU seems to have adopted and which was further strengthened with the introduction of the new European economic governance, aims to influence national labour law reforms towards worrying trends in which ‘social policy becomes the primary adjustment variable for managing the debt crisis, (…) a whole series of fundamental social issues are being ignored by the new governance (Degryse and Pochet 2011: 84 and 97). It is, yet, clear that progress towards more flexibility and security has been modest and uneven (European Commission, 2012).

1.2.1 Youth Policies When trying to define the specific population we refer to when discussing “youth policies,” there is a big challenge, posed by the various definitions different organizations or even various initiatives inside the EU adopt. As stated in Eurostat’s report (2009), finding a standard definition of youth is not an easy task. Age in itself can be a useful but insufficient indication to characterize the transition to adulthood. In some of its qualitative information, Eurostat reveals how different societies acknowledge the increasing maturity of young people (Eurostat, 2009); this gives an idea of the challenge it is to find a common European framework. In its statistical analysis, Eurostat defines the “youth” as people between the ages of 15 and 29 as does Eurofound, one of the European Union’s leading agencies in the analysis of workrelated policies. Other initiatives, however, that are specifically designed for young people, adopt different definitions, such as the Youth Guarantee program, which includes only people under 25 years old. Finally, the Economic and Social Committee of the EU, defines in its analysis young people like those in the ages between 15 and 24 (EESC, 2015), without taking into account any qualitative parameters. In the course of this dissertation, “youth” will refer to people that are in the ages between 15 and 29 and are still in education, employed, unemployed, financially

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dependent on their parents, not in education employment or training (NEETs) and/or in transition from education to work (ex. Interns). Along with the age limitation, it is sufficient for a person to have one of the above characteristics to be considered as “youth” in the course of this study. Although the data available do not unveil the full impact of the crisis on the different groups of young people, the crisis represented a departure from the pre-2008 situation in that it seemed to be affecting young people across a range of skill levels (House of Lords, 2014). It can be considered a paradox that the post-2008 period had been characterised by its impact on highly skilled young people and graduates, who had not been as affected by past recessions (House of Lords, 2014). This is paradoxical, considering the unemployment crisis has affected graduates and young people who are highly skilled, less qualified and those who struggle most to access the labour market (House of Lords, 2014). In order for policies to be responsive to youth unemployment in Europe, it should be examined whether unemployment results from a long-term structural problem or rather a short-term phenomenon rooted in the economic crisis. It seems that youth unemployment is both a long- and short-term problem. The EU Treaties define the extent of the European institutions’ competence to act in any given area. In the field of employment, they provide that: “The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies.”1 In 2010, the EU adopted its Europe 2020 strategy, which outlined its goals for Europe in five key areas. In the field of employment, the European Commission’s headline target was that 75 percent of 20–64-year-olds in the EU should be in employment by 2020. The current high rates of youth unemployment have led to a greater focus on policies aimed at young people (aged 15–24), with a view to achieving this target. The European projects directed to the youth are the following: 1. European Social Fund funding to address unemployment for the period 2014– 2020 will be worth approximately €72 billion over the seven-year period. 68 percent of

1

Article 5(2), Treaty on the Functioning of the European Union (European Commission, 2012a).

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the ESF funding for the period 2007–2013 went towards projects that benefitted young people in some way. 2. The European Regional Development Fund (ERDF) established in 1973 aims at strengthening the economic and social cohesion in the EU by correcting imbalances between regions. 3. The Youth Employment Initiative agreed in February 2013 by the European Council will comprise €3 billion from the ESF and €3 billion from a separate budget line dedicated to youth unemployment for the period 2014–2020. 4. The Youth Employment Package proposed by the European Commission in 2012 and adopted by the Council in the same year is made up of a number of legislative and non-legislative policy initiatives that the European Commission firmly believes should be adopted by the Member States. The package is not legally binding on the Member States and its most significant section of the Package is the Recommendation for a Youth Guarantee. 5. The Youth Guarantee seeks to address youth unemployment by ensuring that all young people under 25 receive a good-quality, the concrete offer of employment, continued education, apprenticeship, or training, within four months of them leaving formal education or becoming unemployed. 6. Erasmus+ is the EU’s programme for the mobility of EU citizens for education and training at all levels, including school education, higher education, international higher education, vocational education and training and adult learning. It also focuses on youth, particularly in the context of non-formal learning; and sport, in the particular grassroots sport. 7. Action Teams were set up in February 2012 for the eight Member States with the highest level of youth unemployment at the time to mobilise funding still available within the 2007–2013 ESF and ERDF. In a Report by the House of Lords (2014) it is suggested that EU proposals to address youth unemployment strike a balance between setting out an EU strategy to reduce unemployment and allowing individual Member States to tailor EU funding and proposals to specific national circumstances. As it will be demonstrated, under the [16]

pretext of the current crisis and the demands of austerity, governments, and social partners have had little or no say in the reform process. It isn’t, however, only the initiation of these reforms. The argument this dissertation makes is that, under the “excuse” of the economic crisis, EU policies have been solely focused on improving “the numbers”, meaning the sheer quantity of job offers, often neglecting the importance of quality and security. This choice can potentially lead to the youth being “precariatised”, a concept that is being analysed in the following section. 1.3 Precariat In this section, the distinctive characteristics of “the precariat” are examined. The discussion on forms of “precariousness” is heavily dominated by the work of Guy Standing (2008, 2011) on the precariat. As a concept, the term “precariat’” could be described as the combination of the adjective ‘precarious’ and the related noun ‘proletariat’. According to Guy Standing (2011), the precariat can be seen as a distinctive socio-economic group. To be “precaritised” is to be subject to the pressures and experiences of living in the present, without a secure identity or sense of development achieved through work and lifestyle (Standing, 2011: p.16). Standing refers to an ever more fragmented global class structure which has emerged primarily as a result of the flexibilization and increasing insecurity of the labour market throughout “[t] he globalization era (1975-2008)”, defined in broadly Polanyian terms as “a period when the economy was “dis-embedded” from society as financiers and neoliberal economists sought to create a global market economy based on competitiveness and individualism” (Standing, 2011: p.26). So how do we identify class characteristics in the precariat? According to Standing (2011), it consists of people who have minimal trust relationships with capital or the state, making it different from the working ‘salariat’. The precariat also lacks the social contract relationships of the proletariat, whereby labour securities are provided in exchange for subordination and contingent loyalty. Subsequently, if we consider the precariat to be what Standing suggests, a class on its own, then it should be situated in the margins of society, often excluded and unaccounted for. Accepting this could partially explain the latest trends in Euroscepticism (Torreblanca et al., 2013), especially when it comes to the youth, which seems to become politically more radical (Howe,

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2015). In countries where the crisis has been hard, especially on the youth, such as Italy, the precariato has been taken to mean more than just people doing casual labour and with low incomes, implying a precarious existence as a normal state of living (Grimm and Ronneberger, 2007). The result is that many have come to understand “precarity” as describing a “generalized condition”- albeit one still “searching for a radical transEuropean subject” (Foti, 2004: p.22). One can then notice a particular disparity between theory and practice. Despite different interpretations and categorizations of precarious living, there has been no legal definition of precarious work other than in Italy where the term is commonly used in judicial decisions, creating a case-law acceptance of the notion of precarious work. Therefore, while the term is developed throughout sociological studies, it is mostly absent from legal studies. This means that the concept of what it is, who is potentially affected by it and consequently what measures are needed to address it, is primarily subjective (McKay et al., 2012). Practically, according to Anderson and Rogaly (2005) one can identify many different forms of precarious work: undeclared work; short-term; temporary or casual contracts; working for an agency or third party rather than being a direct employee; providing a contracted-out service; and working for low wages that prevent the achievement of a decent standard of living. Reinert et al. (2007) in their paper on identifying occupational health and safety risks, also associate non-standard work with precariousness, but on the basis that some forms of employment offer low levels of control over work, low levels of income and little social protection. They proposed the following definition: “Atypical employments carry a high uncertainty potential and are often connected with an income which does not safeguard one’s living and are clearly poorer paid than identical or work of equal value. Also, many social rights and employees' rights do not apply or apply only in a limited form, e.g. protection against wrongful dismissal, social insurance protection, the right to maternity protection and co-determination rights. Setting-up of a family, building one’s home or planning phases for qualification are mostly unknown concepts for people in atypical employments.” (Reinert et al., 2007)

Besides labour insecurity and insecure social income, those in the precariat lack a workbased identity. When employed, they are in career-less jobs, without traditions of social

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memory, a feeling they belong to a professional community steeped in stable practices, codes of ethics and norms of behaviour, reciprocity, and fraternity (Standing, 2011: 23). The precariat not feeling part of a solidaristic labour community is left with a sense of alienation and instrumentality in what they have to do while their actions and attitudes can drift towards opportunism (Standing, 2011: 23). The precariat experiences what Bryceson (2010) has called “failed occupationality”, which can only have an adverse psychological effect. People in such circumstances are likely to experience social disapproval and a profound lack of purpose. Finally, Standing (2011) concludes that lack of occupation can ultimately lead to an overall ethical vacuum. The economic crisis seems to have intensified the feeling of marginalisation and social and economic exclusion for the youth. As can be seen in Figure 1.1, in a survey conducted by the European Parliament in 2016 among more than 10.000 people aged between 16 and 30, more than 50 percent feel that the economic crisis has affected their position with regard to economic and social inclusion. In the countries hardest hit by the crisis, such as Greece and Spain that will be further examined afterwards, the percentages reach 93 and 79 percent respectively (see Figure 1.1).

Figure 1:2 Feeling of marginalisation by the economic crisis by the youth, European Parliament (2014)

This feeling of exclusion is an indicator of the severity of the effect the economic crisis has had on the youth and can explain the increased Eurosceptic tendencies among young people towards the whole European project.

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To the opposite spectrum of “precariatisation” is the idea of decommodification. Esping-Andersen (1990:21) begins his discussion with the particular sentence that “social rights… granted by citizenship entail a decommodification of the status of individuals,

vis-à-vis

the

market”.

He

offers

two

different

definitions

of

decommodification, which imply different operationalisations. Initially, he states that, in de-commodifying welfare states, “citizens can freely, and without potential loss of income, or general welfare, opt out of work when they consider it necessary.” Later, Esping-Andersen (1990:37), arguing that decommodification was not absolute, but a matter of degree defines decommodification as “the degree to which individuals, or families, can uphold a socially acceptable standard of living “independent of market participation”. As it will be demonstrated in the course of this dissertation, current flexicurity reforms taking place in Europe are leaning towards flexibilization and not decommodification. This can lead to “precaritatization” especially of the vulnerable youth.

2. Hypotheses, Data, Methodology 2.1 Hypotheses The hypotheses this dissertation makes are the following: 1.

The impact flexicurity policies can have, especially on the youth, are largely

unassessed and can lead to the youth being “precariatised”. 2.

The crisis has provided a window of opportunity to national and transnational

elites to justify these reforms to the civil society. 3.

The labour market reforms are in fact an effort by the national and transnational

elites to reconfigure the EU social model. All these hypotheses will be tested using the Critical Social Science (CSS) perspective (Neuman 2005). CCS looks at social situations and transformations with the aim to uncover truths and explain social order. CSS states that “facts of material condition exist independent of subjective perceptions … [but] require an interpretation” (Neuman 2005, p.94- 99). Using Guy Standing’s idea of “the precariat”, the dissertation aims at identifying patterns of “precaratisation” in the reforms that are directly linked to the [20]

youth. Finally, the claim is that those policies are nothing but a continuum of the overall neoliberal social reform that the EU seeks and ultimately is targeted towards the reconfiguration of the whole EU social model. 2.2 Case Study Selection For the case study selection, this dissertation follows the typical case approach. The typical case exemplifies what is considered to be a typical set of values, given some general understanding of a phenomenon (Box-Steffensmeier, Brady and Collier, 2008). The reasons why the three countries have been selected are: • All are EU and EMU members Since all are EU member states and members of the European Monetary Union (EMU), the analysis will combine national and European aspects of the implemented labour market policies • The fact that they have all undergone reforms in employment during the years of the crisis. • In most statistical data, Greece and Spain represent countries with the highest rates of youth unemployment, NEETs, feeling of social and economic exclusion. France on the other hand, is most commonly to be found close to the EU average of the respective statistical data. The case studies, therefore, offer a balanced representation of cases when discussing the necessity and intensity of the reforms. • The different origins of the initiators of the reforms (Troika in Greece, the Rightwing government in Spain, Socialist government in France). 2.2.1 Limitations The limitations of the research are defined by the cases selected to analyse and by the viewpoint adopted, one that provides a critical assessment of the concept of flexicurity, as it has been used during the years of the crisis. Geographically the research is limited to three European member states, two of them belonging to the European South (Greece and Spain) and France that belongs to the European West. Also, the study is limited to examining reforms that have developed during the years of the crisis, from 2008 onwards. Most importantly, all cases represent countries that have been severely affected by the economic and financial crisis. It I evident that countries less affected by the crisis and with different labour market conditions have responded differently to the

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current pressures. Finally, as mentioned previously, the sample of the study is limited to examining those policies that affect the “youth,” as defined above. The findings of the survey can, therefore, indicate a pattern of the common rationale behind employment reforms only in countries affected by the economic and financial crisis, but the conclusions cannot be generalized to a European or international level. 2.3 Methodology To appropriately answer the rather complex research question, the study is going to rely on a mixed methods approach, e.g. using both quantitative and qualitative methods (Bergman, 2008). The aim of the research has been laid out before and is to investigate whether flexicurity policies are constructing the new youth precariat, normalizing forms of precarious employment. To answer this question, various information on actors, structures, policy cycles and policy evaluation are required. For the case study analysis, mixed methods of qualitative and quantitative data analysis will be used. The research consists of a review that focuses primarily on academic papers, articles and policy documents published in the period from 2008 to 2016. To begin with, the dissertation starts with a search of relevant academic journals looking for articles that referred to “EU”, “employment protection legislation”, ’the precariat’, “flexicurity” and “youth policies” in the title. For the case study, these terms are crossed with the name of each country and also linked with the terms « employment reforms » and « employment regulations ». In order to better analyse the labour market situation and role of the EU in the process of policy-making, many statistical data from Eurostat and OECDs Employment Outlook Survey have been used. This research was supplemented by desk-based research, examining relevant statistical data on precarious work as well as an extensive literature review of important books and publications. Finally, for the study, a primary mapping of law and practice in the three countries is conducted to provide usable comparative data on precarious work. From a theoretical point of view, the adoption of the Critical Social Science (CSS) theory as the central analytical lens leads us to the adoption of a critical policy analysis. This type of analysis specifies that the key task of analysis is the enlightenment of those suffering at the hands of power in the interests of action on their part to escape suffering (Howlett, 2003).

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Critique entails an examination of both action and motivation; that is, it includes both what is done and why it is done. In application, it is the use of dialectic, reason, and ethics as means to study the conditions under which people live (Budd, 2008). Methodologically, the understanding needed by the researcher can be achieved in part through observation. The observation is informed (shaped) by critical theory. That is, the theory identifies restricting factors as well as potentialities for emancipation. The Marxian aspect of the theory is of particular importance in shaping observation. Living conditions (including, but not limited to, housing) are economically determined, but they may also be affected by several other social and other components. Analysis grounded in critical theory includes an examination of ideological forces and statements that influence human action (Given, 2008: 178). In Marxian theory capitalism is a major ideology that has been and continues to be, the focus of much attention. The existing conditions of people are the focus of analysis, as is the possibility for emancipation from current conditions (Given, 2008: 178). The purpose of including ideology in the analysis is, as always, critique as the study of the communicative actions of individuals can unveil some of the ideological presumptions that underlie what people say and do (Given, 2008: 178).

3. Case Studies In this part, the aim is to conduct three case-study analysis to determine the nature of the employment reforms linked to flexicurity in the countries in question. Reforms since 2008 In the vast literature on the European crisis, its starting point is placed in the year 2008 and the collapse of Lehman Brothers. The framework this dissertation adopts is, therefore, the years after 2008 and up until today. As noted by the Conseil d’orientation pour l’emploi (2015), during the years of the crisis, more than 1000 measures relating to the labour market have been adopted in the 28 EU-member-states. Of those measures, almost 2/3 were directed towards market-activation policy measures, while the rest had to do with employment protection and unemployment benefits (COE, 2015: p. 3). It is interesting to observe that since most countries in central, west and northern Europe

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have had labour market reforms earlier in the 1990s, it is mostly countries in the South of Europe that has implemented such reforms. For the purpose of this dissertation, two countries representing the South of Europe, Greece, and Spain, have been chosen. The two countries have undergone important labour market reforms that initiated, were adopted and implemented during the years of the crisis and have had special provisions for the young population. The third case study is that of France, which is currently in the process of crucial labour market reforms and represents the west. What can be noted is that in some statistical data, France is rather close to the EU-28 average, making it an interesting example of the EU labour market situation. 3.1 Greece In one of the latest weekly report by the Hellenic Federation of Entreprises (SEV, 2016a), which bears the title “Rolling back seriously harms the economy’s health ( Η παλινδρόμηση βλάπτει σοβαρά την υγεία της οικονομίας), the authors discuss all the reasons why the reforms in the labour market introduced by the Memoranda of Understanding are a positive step for the economy. As the main, independent, employer’s organisation representing the collective vision of the industry and the wider business community in Greece, SEV targets its activities for continuous improvement of the economic and business environment as well as the development and growth of enterprises (SEV, 2016). It is interesting to examine the reasons why the most prominent employers’organisation in the country deems it so important that the labour relations do not relapse in a pre2008, and subsequently a pre-crisis, situation. The austerity policies that have been implemented in Greece since 2008 were to a large extent related to reforms in the labour market to make it more competitive and fight the high rates of unemployment. The capacity of these reforms to compensate for the other problems of the Greek economy, such as the extremely high public debt, have been more than contested. According to Matsaganis (2013), the austerity policies pursued since the beginning of the crisis in Greece were regressive and did not compensate but rather reinforced the adverse effects of the recession on the distribution of incomes. The main results, according to him, are firstly the sharp rise in unemployment among primary earners, which has raised the risk of poverty. The adverse effects of austerity policies have resulted in additional gaps in the social safety net, long- term unemployment may reach record-high in the [24]

foreseeable future, and a rise in adults and children in jobless households (Matsaganis, 2013). Inspections conducted jointly by the Labor Inspection Corps (SEPE) and the Special Monitoring Service (EYPEA) found that 35,674 people were working without any social/security benefits (Committee on Employment and Social Affairs., 2013). Of these, 5,411 or 42.8 percents are foreign nationals and 7,218 or 57.2 percent are Greeks. None of them were registered in the inspected companies' personnel catalogs or with the IKA (Social Security Foundation) (Committee on Employment and Social Affairs, 2013). Labour market deregulation was guided by the belief that lowering workers’ compensation and weakening labour market institutions was the key to restoring competitiveness (Matsaganis, 2013). However, policy responses to the social effects of the crisis have been misguided and inadequate as most cuts in welfare provision were indiscriminate, causing hardship and disrupting health and social services (Matsaganis, 2013). The first round of austerity measures was announced by the government in March 2010 and lead to a €110-billion loan from the European Commission, the European Central Bank, and the International Monetary Fund (called the Troika) in May 2010. In return for the loan, the government was forced to sign a Memorandum of Economic and Financial Policies, which committed the government to extensive spending cuts and steep tax increases, aiming to reduce the country’s public deficit below 3 percent of GDP by 2014 (Matsaganis, 2013). One of the most affected policy cycles was that of the labour market with extensive reforms aiming at the flexibilization of employment and severe cuts in the unemployment benefits, welfare provisions, and pensions. The economic crisis and passing of laws on the loan support to Greece (Memoranda) brought extensive changes to labour legislation, effectively decreasing the level of employment protection. Recent changes have also radically altered the system of collective bargaining (intact for 30 years). The right to determine the minimum wage through collective agreements is taken from the key social partners in Greece and handed to the government. In addition, new provisions have abolished regulations

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limiting commercial shop opening hours, reduced time limits on obligatory rest, and changed the distribution of annual leave. The most important legislative changes in this field were introduced with Law 3833/2010, Law 3845/2010, Law 3863/2010, Law 3899/2010, Law 3986/2011, Law 4046/12 and Law 4093/12. As a product of intensive legislation, new provisions came into force regarding minimum wages, severance pay, mass dismissals, commercial shop opening hours, temporary work, arbitration. The most significant reforms that the aforementioned legislation introduced were the following: 1. a firm-level wage agreement, allowing employers and employees to agree on wages that are less favourable than those stipulated in sectoral agreements, 2. a reduction in minimum wages in the private sector and a modification of a number of wage-setting procedures, including the rules on the expiration of collective agreements and the arbitration of wage disputes, 3. measures to boost part-time work and facilitate more flexible work time, 4. shorter periods of notice for terminating an employment contract, which cut the legal severance pay by 50 percent, 5. an increase in the thresholds for collective dismissals, 6. a reduction of the ‘non-wage’ costs for employers and 7. the introduction of non-subsidised sub-minimum wages for youths. As a result of these policy reforms, the Greek labour market, one of the most regulated and rigid markets in the EU, has been transformed within just three years, to one of the most flexible labour markets in the EU (Committee on Employment and Social Affairs., 2013). Regarding social partner reaction to the labour market measures instituted during 20102012, the Greek General Confederation of Labour (GSEE) and the Confederation of Public Servants (ADEDY) have described them as inefficient, harsh and unfair (Committee on Employment and Social Affairs., 2013). They have argued that the sacrifices would be pointless because they will not help the country emerge from its

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economic crisis, and are instead more likely to lead to a violent internal devaluation (Committee on Employment and Social Affairs., 2013). Similar were the reactions by the National Confederation of Greek Commerce (ESEE), representing small and medium enterprises, and the General Confederation of Greek Small Businesses and Trades (GSEVEE) both reacting to a continuous reduction in salaries and the abolition of collective agreements. Their view was that a deeper recession and further unemployment was being caused by the reduction of salaries, not by labour costs and called for the definition of the minimum wage to be the exclusive responsibility of social partners, and to be set by a collective agreement (Committee on Employment and Social Affairs., 2013). Law 4046/2012, introduced the law widely referred to as Memorandum 2, affected employment relationships, agreements, and salaries, and overturned long-standing laws, principles, and practices. It can be noted that youth employment was a distinctive policy target when reforms were being agreed upon. That being said, while the salary cut for employees generally was 22 percent, for those below the age of 25 the cut reached 32 percent. This means that, after deduction of social insurance contributions and taxes, net monthly salary will be 476.35 €, and, 426.64€ for those under 25. It should also be highlighted that this cut can now be imposed by employers without the employees’ consent. In an effort to counterbalance the severe effects of the reforms, new European support programs were introduced for the protection of the Youth and the combat against unemployment, in the frame of the Youth Initiative. Indicatively, two measures covering approximately 45,000 young unemployed people, gave the opportunity to enterprises to recruit, without any cost, unemployed people, 18-29 years old. The schemes, titled respectively ‘Cheque for the entrance of unemployed young people to the labour market’ and ‘Cheque for the entrance of unemployed young people to the labour market in tourism-related activities’, aimed at offering training to approximately 45,000 young unemployed persons (18-29 years of age), and then placing them as trainees in order to acquire work experience (Committee on Employment and Social Affairs, 2013). Following the completion of training and traineeship, enterprises interested in offering employment to the trainee could apply for regular employment

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subsidies. The results were less than satisfying since it was observed that in some companies there was a continuous recycling of trainees instead of the creation of a permanent job, low rates of hiring after the end of the traineeship, and oligopoly practices by the Vocational Training Center in the burden of the trainees. The rationale behind such interventions is rather questionable, since as noticed by the Economic and Social Committee (OKE) the Europen Support Programs haven’t been designed to cope with the structural crisis since the rationale behind their implementation focuses mainly on boosting employment offer. Consequently, only a part of the economy is affected in terms of demand (ΟΚΕ 2012: 18) . To conclude, from a critical theory point of view, the complexity of the issues and the transformation of the crisis of bank debts into a crisis of public debt as from 2009 supplied a new narrative that was exploited by well prepared strategic actors (ECB, economic and finance ministers, DG Ecfin) in order to put their ideas into practice. The result was that social policy became the adjustment variable within the monetary union (Degryse et al., 2013). In the rhetoric of “flexicurity”, the flexibilization has largely overrun any reforms directed towards the protection and security of the people. On the contrary, with the severe cuts that came along the MoUs, the welfare state has significantly diminished. The austerity policies and structural reforms that took place in Greece were programmed into the genes of a specific vision of the European monetary union. The tool used to realise this “vision” were through the MoUs, which contained detailed timetables for austerity measures and structural reforms, specifically targeting the labour market, to which Greece had to adhere in order to receive the relevant credit tranches. As Streeck (2014) mentions, debt states are being practically governed by their creditors. As established by the Legal Opinion, Commissioned by the Chamber of Labour in Vienna, the law has become an instrument of European governance – of political executives, global economic players, and strong interest groups, which, in the state of emergency, has created what is needed out of nothingness. It is evident that the labour market reforms in Greece became the adjusted variable in the equation on austerity reforms with severe consequences, especially to the youth, as it will be demonstrated in the following chapter (Chapter 4).

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3.2 Spain The deterioration of the competitiveness of the Spanish economy dates back to the beginning of the 2000s. However, the further decline during the early phases of the crisis and the upsurge of unemployment led to a reaction by the Spanish government with a series of structural reforms (OECD, 2014). The reason behind the suggested reforms was the need to combat high unemployment rates and the rise of temporary work. In order to reduce ‘rigidity’ of the Spanish labour market, the suggested reforms called for labour market flexibilization, claiming that more flexible employment was needed to create more jobs. The measures promoting flexible labour regulation included the promotion of atypical (fixed-term) employment contracts, the deregulation of dismissals, encouragement of part-time work, priority given to company-level collective agreements against sectoral agreements, and an increase of the employer’s power to modify labour conditions at the enterprise (Guamán and Lorente, 2016). Since 2008, the Spanish government has implemented several labour law reforms, following the European Commission’s Country Specific Recommendations, the Stability Program and the European Semester demands that called for extensive reforms in the labour market from 2008 onwards. In December 2009, the Socialist (PSOE) government approved the ‘Strategy for a Sustainable Economy’, with the goal of carrying out twenty major ‘modernising’ reforms in the labour, environmental, economic, and financial spheres (Guamán and Lorente, 2016). The main legislation that modified the Spanish labour market were Real Decreto Ley (RDL) 8/2010, RDL10/2010, RDL 10/2011, RDL 27/2011, RDL 3/2012, RDL 20/2012, RDL 4/2013, RDL 5/2013, RDL 11/2013, and RDL 23/2013. Among the measures promulgated by the government, in this chapter those relevant to forms of precariousness -as analysed in Chapter 12- are summarised. The main provisions of the reforms, as summarised by Guamán and Lorente (2016), were the following : 2

For an extensive description of the Spanish labour market reforms see among others: Guamán, A. and Lorente, R. (2016). Austerity Measures and Labour Law Reforms in Spain: A New Standard?. In: W. Baier, E. Canepa and E. Himmelstoss, ed., The Enigma of Europe, 1st ed. Merlin Press Ltd.

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Creation of the ‘contract supporting entrepreneurs’, that foresees a one-year trial period for the employer and tax and social security discounts for employees.



New temporary contracts for young people called the ‘first employment contract for young people’ and the part-time contract based on training.



The trainee and apprenticeship contracts have been reformed since 2012 and been turned into the path to job placement for low-wage young people, with the door open to temporary employment companies to formalise them.



Part-time work regulation that became flexible thanks to the new regulation of complementary hours resulting in a kind of ‘on demand’ contract.



Salary opt-out clauses and mechanisms to amend the provisions established by collective agreements in order to promote internal mobility of workers and change of working conditions, including working time and wages.



Modification of firing procedures, altering both cost and procedures. Today, compensation for unfair dismissal equals 33 days of salary per each year worked up to a limit of 24 months. Moreover, the cost of unfair dismissal can be determined without the need to enter into a dispute resolution process and independently of the time it takes to solve it.



reform of collective bargaining in order to “make collective bargaining an instrument rather than an obstacle to adapt employment conditions to the company’s specific circumstances”.



Reductions in pensions and raising the retirement age to 67, lengthening the reference period for calculating pension benefits and increasing the number of years of contribution required to receive the maximum allowance



Elimination of ‘co-responsibility’ labour policies for men and women and restriction of conciliation measures.

The 2012 reform was concentrated on the deregulation of protection of permanent contracts which can lead to labor market dualization (Dolado, 2012). Moreover, since it was not accompanied by any measures supporting marginalized workers or restricting the conditions of use of temporary contracts the reform constitutes strong labor market

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deregulation by itself, not matched by a corresponding recalibration of protections (Picot, 2014). As Dolado (2012) notices, all in all, reforms have advanced towards flexicurity only on the flexibility side but does very little regarding passive and active labour market policies and it actually makes the latter harder fund. It also lacks significant productivity-enhancing measures. Though the current reform may steer the Spanish economy towards a lower structural unemployment rate, once the financial crisis is overcome, it remains yet unclear how large this reduction will be and whether it will contribute to higher economic growth (Dolado, 2012). They have also drawn attention to the fact that the manner in which this legislation was passed shows contempt for democratic procedures since the government did not respect the right of information and previous consultation with the main unions, which are guaranteed under the Spanish and European social policy regulations. Furthermore, the legislation did not meet the urgent necessity criteria required to entitle the government to pass it by means of an emergency procedure (Sánchez, 2012). Finally, the trade union organisations have emphasised that these reforms ultimately encourage a business competition model based on the reduction of prices and labour costs, which is detrimental to innovation and added value. It is a model which will hinder the necessary progression towards a more sustainable economic model while leading to greater job instability, which will, in turn, have a particularly negative effect on young people. In the case of Spain EPL reforms were accompanied by a simultaneous decentralisation of collective bargaining and measures allowing employers to achieve greater internal flexibility so as to avoid redundancies (e.g. by adapting hours worked, wage and working conditions)(OECD, 2016: 137).

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3.3 France France has traditionally had one of the strictest employment protection legislations in Europe. As can be seen in OECD’s employment protection indicators, France has two of the highest rates in terms of protection of permanent and temporary employment in Europe (see Figure 1:1) It should also be noted that, although, for the majority of other EU countries levels of protection between 2008 and 2013 dropped, the respective rates in France remained unchanged. The socialist government, however, soon had to undertake major reforms in the labour market, firstly in 2013 with the Loi de sécurisation de l'emploi. The new legislation introduced among others the possibility for companies facing economic difficulties to conclude a safeguarding jobs company agreement with trade unions by which the employees agree to a reduction in wages or an increase in working, a faster and simpler procedure for informing and consulting with employee representative bodies and a faster collective redundancy procedures. Two of the largest trade unions in France, Confédération générale du travail (CGT) and Force Ouvrière (FO), refused to sign the proposed legislation trusting that employee rights have been drastically undercut in favor of employer interests (Cgt.fr, 2016a). This reform was largely directed by the European Commission, in an effort to harmonise and modernise national labour legislation. This particular aspect finds its sources in the 2012 guidelines inspired by the European Commission to the attention of France for its Stability Programme of France, 2012–2016 that says: ‘The review of employment protection legislation shows that the procedures for dismissals continues to entail uncertainties and potentially substantial costs for employers’ (European Council 2012:8) and recommend France to ‘take action within the period 2012–2013’ (…) and to ‘ Introduce further reforms to combat labour market segmentation by reviewing selected aspects of employment protection legislation, in consultation with the social partners in accordance with national practices, in particular related to dismissals’ (European Council 2012:14).

Emphasis is placed on the legal framework of the labour contract in France. Adding flexibility to this framework is seen as making it possible to better redistribute job

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opportunities and do away, at last, with the inequality among generations weighed down by labour market segmentation (Lefrence, 2012). This principle is at the very foundation of flexicurity, adopted by the European Commission. However, as Lefrence suggests, there is little or no empirical proof of its effectiveness (Lefrence, 2012). Even the OECD in its annual Employment Outlook in 2004 pointed out that no econometric study has been able to prove the existence of a correlation between the degree of severity of job-protective legislation and the level of job creation (OECD, 2004). The latest development in France’s labour law is the proposed Loi El Khomri, which has induced great opposition by Trade Unions and particularly by the youth (leparisien.fr, 2016). This positioning of the youth against the reforms comes as no surprise. In France, severe youth unemployment has become a quasi-structural phenomenon, with a high concentration of young people in insecure jobs increasing their sensitivity to the crisis (Lefrence, 2012). Labour market segmentation blocks youth integration and leads to a polarisation, with high turnover and less-skilled jobs (Lefrence, 2012). Some of the suggested reforms, that have recently been adopted, were presented in The Guardian (Henley and Inman, 2016): •

Companies that are large enough to have union representation can bypass sectoror industry-wide collective agreements and negotiate company-specific deals with employees on overtime and lower hourly pay.



Firms can negotiate with local trade unions on more or fewer hours from week to week, up to a maximum of 46 hours.



Employers are given more leeway to negotiate holidays and special leave, such as maternity or for getting married.



When the company and its staff cannot agree on a new deal, the staff will be allowed the final decisions provided it gains the consent of unions representing only 30 percent of the workforce.



Employers are allowed to use declining economic performance as a justifiable reason for dismissal. Companies with a workforce of 10 or fewer can lay off staff after a one-month fall in income, while those with up to 300 employees must demonstrate three successive quarters of falling revenues.

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A number of pro-business changes were out of the final version. One such measure, allowing companies too small to have union representatives to agree on working hours deals with their employees in the same way as larger companies were left out to many economists’ dismay arguing that it is growing small and medium-sized companies that need flexible working conditions and are most likely to create new jobs.

It isn’t, however, only the content of the legislation that has caused a reaction by the civil society and Trade Unions. The choice of the government to make use of Article 49.3, allowing the government to bypass parliament, has been severely criticised since it poses questions of the democratic deficit. On the other hand, Commission’s President Jean-Claude Juncker suggested that the El Khomri reforms are the minimum required by the Valls government when it comes to labour law (Delaume, 2016). Juncker also called for more austerity measures, following the greek example (Robert, 2016). This leaves open the question of the leeway national governments and national actors, such as Trade Unions, have in defining the policy reforms they deem efficient. As a left-wing party leader, Jean-Luc Mélenchon said, « La Loi El Khomri, c'est travailler plus pour gagner moins » (The El Khomri Law, is to work more in order to gain less). The reforms, however, and the new labour market reality can hardly contradict this estimation since working hours are increasing, wages are negotiated in company-level and working conditions are flexibilized.

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4. Impact assessment on the youth In this part, the potential effects of the previously analysed reforms on the youth are examined. As it will be demonstrated, examining this part of the population is of particular interest due to its high vulnerability under the pressures of the labour market. The first part is dedicated to identifying the position of the youth in the countries previously examined, among the general national population and among the European average in terms of unemployment, precarious employment, of precarious life and wellbeing, and involvement in society . The data used are extracted from Eurostat’s database and OECDs reports for the years 2008-2016. This gives an adequate overview of the situation of young people, employed, unemployed or NEETs in Europe in general and in the three case studies in particular. The goal is to determine whether the reforms that were previously analysed have indeed been designed respecting both the flexibilization and securitization requirements of the labour market. The hypothesis is that they all promote a fundamental transformation in the labour market standards, promoting its flexibilization and taking little account for the security and the protection of the “precariatisatised” youth. Ultimately, although the reforms may lead to the creation of jobs and the activation of a larger number of the young population, it risks, however, not maintaining any standard of quality of employment.

4.1 Unemployment Unemployment has been one of Europe’s greatest issues even before the economic and financial crisis. The crisis has undoubtedly intensified the problem, with the rates of unemployment doubling in some countries compared to their pre-crisis numbers. As it will be demonstrated in this section, the situation has been mostly alarming, in the selected case-studies, particularly for the youth. After locating the position of the youth in terms of unemployment amongst the general population, the aim is to identify whether the flexicurity reforms have had, or can in the future have any tangible results on improving labour market integration for the youth.

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In most European countries, youth unemployment rates are generally much higher, even double or more than double, than unemployment rates for all ages (Eurostat, 2016). During the crisis, the unemployment rate has taken an upward trend from the pre-crisis levels, peaking at 23.8 percent in the first quarter 2013, before receding to 21.4 percent at the end of 2014. Today we can notice the further drop, as the European average of youth unemployment has declined to 20.4 percent. There is, however, great disparity among countries, with countries like Spain and Greece having almost 50 percent of the young population unemployed, while countries like Germany and Denmark remain at very low rates,7.3 and 10.8 percent respectively (Figure 4:1). It is argued that Germany and Denmark have been able to maintain such low levels of unemployment due to the high flexibility of the labour market, that allows for easier hiring and dismissal. In those countries, however, flexibilization reforms took place long before the current crisis and went together with an increased welfare safety net, high unemployment benefits, promotion of vocational training and high levels of Unionism, even amongst young people (Pavlovaite et al., 2012).

Figure 4-1Youth Unemployment for those between 15 and 24 in the EU-28. (European Parliament, 2014)

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Compared to the general population, it is evident that, in the selected case studies, the youth is in a rather vulnerable position, with rates reaching 50 percent of the active youth population in Greece and Spain, compared to a little over 20 percent of the general active population. This is of particular interest since the reforms can potentially have the greatest effects on this part of the population that has been mostly affected by the crisis.

UNEMPLOYMENT RATES: GENERAL POPULATION AND YOUTH 70,00% 60,00% 50,00% 40,00% 30,00% 20,00% 10,00% 0,00% 2006

2007

2008

2009

2010

2011

2012

2013

2014

EU Overall

EU Youth

Greece Overall

Greece Youth

Spain Overall

Spain Youth

France Overall

France Youth

2015

Figure 4-2 Unemployment rates: General population and youth (Eurostat, 2016)

As can be seen in Figure 4:3, the unemployment change rate between 2011 and 2014, that is the core of the crisis, has dramatically increased for both the 15-19 and the 25-29

Figure 4-3 Youth Unemployment change rate (European Parliament, 2014)

age groups. It is also surprising that male unemployment change rate is higher than that of their female counterparts. It is evident, however, that although crisis has intensified

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the problem of unemployment, the situation was already difficult for the youth even before. Therefore, one of the greatest challenges for the policy-makers has been the high rates of long-term unemployment, especially in the European South. In Greece after the crisis, the long-term unemployment rate has increased from 19 percent to 32percent for those between 20 and 24 (Figure 4:4) and from 15 percent to 28 percent for those between 25 and 30 (Figure 4:5). This is very far from the European average that has been retained for both groups to an average of 5 percent.

Figure 4-4 Long-term unemployment 20-24 (European Parliament, 2014)

Figure 4-5 Long-term unemployment 25-30 (European Parliament, 2014)

One of the most concerning events, with regard to the youth, is that the unemployment rates are high even for those with a high level of education (Figure 4:6). From Eurostat’s data, it is evident that low-skilled young people are more vulnerable, reaching an EU average of 28 percent of unemployment, same as in the case of France. In Greece and Spain, the percentage for the same group reaches 40 percent of the total population. For those with upper secondary and post-secondary education (ISCED 3-4), although in the EU average they weigh in at a little more than 10 percent, which is a rather low percentage, in Greece they share the same fate with low-skilled workers, reaching almost 40 percent unemployment rate.

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Figure 4-6 Youth unemployment according to level of education (European Parliament, 2014)

Finally, high-skilled young workers, although less precarious than the other two groups, also face employability challenges, with the EU and French average being at 10 percent, while in Greece and Spain, it remains higher, 39 and 23 percent respectively. Apart from those among the youth with enough qualifications to find a job, another group of interest is that of young people who are not in employment, education or training (NEETs). Those people represent more than 10 percent of the EU-28 population, while in Greece and Spain they have reached over 15 percent of the youth population (Figure 4:7).

Figure 4-7 NEETs by country 2011 & 2014 (European Parliament, 2014)

Despite the overall improvement in labour market performance, vulnerable groups such as the risk being left behind. On average, 38 percent of all NEETs have not finished upper secondary schooling in the OECD area and are less likely to be actively searching for a job than more educated NEETs (33 percent versus 45 percent) (OECD, 2016: 17). Nearly a third of low-skilled NEETs live in a jobless household (i.e. a household that does not contain an employed adult), suggesting that many in this group experience both [39]

low current incomes and limited labour market opportunities (OECD, 2016: 17). Many members of this vulnerable group are likely to require targeted assistance to improve their long-term career prospects (OECD, 2016: 17). This particularly vulnerable part of the population is the most likely to be precariatised since they are alienated from all forms of social inclusion and deprived of any basic income or social benefit, leaving them completely reliant on their parents. According to Blanchflower and Bell (2011: 2), there are a number of reasons why youth unemployment rates tend to be higher than adult rates. Among those coming from the demand side, first is the issue that young people have less specific human capital so firms in distress tend to dismiss them first, particularly where statutory redundancy payments depend heavily on seniority. Secondly,

young people may also find

themselves in an experience-trap, whereby employers require experienced workers and as a result, young people are placed at the back of the queue and cannot increase their own experience (Blanchflower and Bell, 2011: 12). On the supply side, there is the much higher worker turnover among youths because their initial job matches may not fit well with their preferences and skills, and secondly the issue that youths often receive financial protection from their families, who may be willing to support them should they not find work (Blanchflower and Bell, 2011: 12). Whether the cause originates on the demand or the supply side, the outcome is that youths experience considerably higher rates of joblessness than adults. For example, a slow job creation environment is likely to increase the risk that vulnerable youth – such as early school leavers who are neither employed nor in education or training (NEETs) – will be permanently left behind in the labour market. Similarly, the economic costs and unfairness associated with the persistence of large gender gaps in employment and wages become even more unacceptable when incomes are stagnant and opportunities for career advancement rarer (OECD, 2016: 13). The question remains, whether the flexibilization reforms that have been implemented in Greece and Spain and are similar to those recently agreed in France, are adequate to answer to the problem of employability and youth unemployment, which has started to become a structural problem for Europe.

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With unemployment rates slowly starting to decline, it is evident that the flexibility introduced by labour reform has helped make contracting more dynamic through the introduction of incentives for employers and simplification of all types of contracts. However, the decrease of employment protection legislation can potentially worsen job security and social cohesion and reinforced labour market duality, putting at risk the already vulnerable youth. According to the OECD, reforms to employment protection rules, which can depress employment for some time following their introduction, tend not to have that effect if implemented during an economic expansion or combined with complementary measures to promote greater internal adaptability of firms and more effective unemployment benefits. Both the current weakness of productivity growth and the fact that most OECD countries are in the middle of an expansion indicate that now is a particularly good time to consider implementing additional structural reforms. (OECD, 2016) All in all, despite the fact that the reforms introduced in Greece and Spain, as well as those currently underway in France, can have marginal effects on tackling unemployment, the predominant concern is whether quality is assured in the jobs created and the threat those encompass for the vulnerable youth. As can be seen in Figure 4:8, labour market insecurity has largely increased in Greece and Spain, and marginally in France. In the following part, the forms and consequences of insecurity and precarious employment are examined.

Figure 4-8 Labour market insecurity 2007 and 2013 (OECD, 2016: 43)

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4.2 Precarious employment As analysed in the previous section, the reforms examined in the three case studies can have a marginal effect on the issue of youth unemployment. One aspect, however, often ignored in policy evaluation, is the quality of jobs that young people find themselves in. It is, therefore, important to examine the current labour market reforms in light of the current policy choices made by the EU and the member states, one that, as it has been shown, favours flexibilization over securitizations. In this section, the nature and consequences of the “precariatization” of the youth are analyzed. The aim is to demonstrate firstly that young people are much more likely to find themselves in precarious employment and secondly that this may result to a precarious living. As discussed in Section 1.3, Anderson and Rogaly (2005) have identified different forms of precarious work: undeclared work; short-term; temporary or casual contracts; working for an agency or third party rather than being a direct employee; providing a contracted-out service; and working for low wages that prevent the achievement of a decent standard of living. As youth unemployment is particularly sensitive to business cycles, young people are more likely than other age groups to be in short-term employment or other forms of flexible employment. As can be seen in Figure 4:9, on average 30 to 40 percent of young people in part-time jobs desire a permanent job instead. For countries like Greece and Spain, where temporary contracts have been rising (Figure 4:9), almost 80 percent of the young people aged between 25 and 29 would prefer a long-term position (Figure 4:10).

Figure 4-9 Temporary contracts 20-29 (European Parliament, 2014)

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Figure 4-10 Involuntary part-time job (European Parliament, 2014)

Considering young people, Scarpetta et al. (2010) conclude that the high diffusion of temporary contracts is a key explanation of the higher business-cycle sensitivity of young people in the labour market. For example, young employees with part-time contracts can reach up to 50 percent of the total contracts, as in the case of Spain (Figure 4:10). The result can be labour market dualization, making it harder for young employees to enter the labour market and to obtain a satisfactory contract (Dolado, 2012). Dualization is defined as the institutionalization of new, or deepening of existing, forms of institutional dualism, and the promotion of the interests of “insiders” over those of “outsiders”. The outsider population includes the unemployed as well as nonstandard workers (such as those in fixed-term, part-time, or temporary agency employment), given the association of nonstandard employment with higher employment insecurity as well as disadvantages in earnings, career prospects, and social protection. Being in flexible forms of employment is only one aspect of youth “precariatization”. Another important aspect is the overall quality of the offered jobs. The relevant indicators of the OECD allow for

job quality to be measured along three main

dimensions (OECD, 2016: 42):

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Earnings quality. Earnings quality refers to the extent to which the earnings received by workers in their jobs contribute to their well-being by taking into account both the average level as well as the way earnings are distributed across the workforce.



Labour market security. Labour market security measures the risk of unemployment (the risk of becoming unemployed and the expected duration of unemployment) and the degree of public unemployment insurance (coverage of the benefits and their generosity).



The quality of working environment. The quality of the working environment captures non-economic aspects of job quality and measures the incidence of job strain that is characterised by high demanding jobs that have few job resources to carry out these demands.

In all three criteria, the current reforms seem to be deteriorating the position of the youth in the labour market. Firstly the minimum wage is set to lower levels for those under 25 (see the case of Greece), generating dualisation in the total earning of the labour force. Also, as analysed before, young people often find themselves in unpaid internships, zero-hour contracts or involuntary short-term contracts, which results in a lower overall income. Temporary contracts are known to pay less, offer less on-the-job training, be less satisfying than standard contracts, and also result in incomplete contributions to pensions and unemployment benefits (Eurofound, 2014). They are often used as cheaper alternatives to offering permanent jobs (Guell & Petrolongo, 2007). Therefore, it can be concluded that the current reforms have a negative effect on the youth in terms of earnings quality. Secondly, examining labour market security, it has been demonstrated in Section 4.1 that young people are more vulnerable than the overall population in finding themselves unemployed, or becoming NEETs. Also with the pressing demands of austerity in all the three case studies, social benefits have been on the decline, further hindering the already vulnerable position of the youth, especially when they are not insured. All in all, the current reforms have had a marginal impact on labour market security, in that they target unemployment through the creation of new jobs. Connecting, however, this

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criterion to the last OECD criterion, that of the quality of working environment, proves the disparity between quality and quantity of the newly constructed labour market. Young people in the selected case studies are integrated into a challenging labour market, called upon to negotiate their salary directly with the company and are highly sceptical of adhering to Trade Unions. With the pressures of the economic crisis and the general pessimism over the future, precariatisation and low quality of working environment lead more rapidly to what Standing said the four As (anger, anomie, anxiety and alienation) (Standing, 2011).

4.3 Personal Life and Well-being The youth is obviously concerned about their positioning in the labour market due to, on the one hand, high unemployment rates and low-quality jobs on the other. The impact, however, of precariatisation doesn’t only affect their career path as it can also have a severe impact on young people’s everyday life and consequently their future. As seen in Figure 4:11, the rates of young people at risk of in-work poverty is up to 10 percent in the EU-28, while it has almost doubled in Greece during the years of the crisis. This can be partly attributed to pressure by the economic crisis. The current labour market reality, however, doesn’t seem to address the issue. On the contrary, the data show that younger employees are not adequately remunerated, usually having to settle for parttime, low-paying jobs or even unpaid internships in order for them to gain more experience and create social capital.

Figure 4-11 In-work at risk of poverty (European Parliament, 2014)

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As seen in Figure 4:12, people at risk of poverty are also in danger of being socially excluded, with people between the ages of 15 and 29 reaching 29 percent probability. It is also important to notice that, although prior to 2012 women were particularly more vulnerable to being at risk of poverty and social exclusion, trends are now equalising the situation between men and women, with an upwards trend, reaching almost 29 percent of probability.

Figure 4-12 At-risk-of-poverty and social exclusion (European Parliament, 2014)

Another impact on youth’s everyday life is the fact that nowadays young people leave their parental household at a rather older age than previously (Figure 4:13). Unemployment, low salaries but also the challenging property market, especially for the Spanish case, deter young people from becoming independent and responsible for their own household. All these pressures to the young turn us back to what Standing (2011: 19) has called the four As (anger, anomie, anxiety and alienation) and Bryceson (2010) has called “failed occupationality”, which can only have an adverse psychological effect. People in such circumstances are likely to experience social disapproval and a profound lack of purpose.

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Figure 4-13 Average age of young people when leaving the parental household by country and sex, 2013 (European Parliament, 2014)

Finally, for the youth precarious labour becomes the ‘normality’. The extension of employment precarity socialises young workers, and other social groups such as female or immigrant workers, in a context that treats employment precarity as ‘the rule’, through a collectively shared consciousness, as a necessary labour context, shattering their aspirations for decent work, which appears to them to lie beyond the realm of possibility (Guamán and Lorente, 2016).

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5. Conclusions In this Chapter, the hypotheses set in Chapter 2 will be tested. •

The impact flexicurity policies can have, especially on the youth, are largely unassessed and can lead to the youth being “precariatised”. From the analysis in Chapters Three and Four, it has been established that the reforms introduced in all three case studies have hindered the situation of youth in terms of access to labour market and the guarantee of a satisfying level of living standards. Following Standing's idea of “precariatisation”, as established in Section 1.3, we can identify patterns of precarious living in the way the labour market reforms shape the working conditions youth is called to accept. Belonging to the precariat means being in a status that offers no sense of career, no sense of secure occupational identity and few, if any, entitlements to the state and enterprise benefits that several generations of those who saw themselves as belonging to the industrial proletariat or the salariat had come to expect as their due (Standing, 2011). This is particularly true for young people who, despite being more educated and qualified than previous generations, have to settle for internships, low-paying and part-time jobs and ever dependent on their parents. Paul Mason (2012,p:71) describes this as a generation of “graduates with no future”, facing stiff competition for few jobs, little disposable income and high-interest rates and mortgages. Insult is added to injury when these future-less graduates are told they should be committed, happy and loyal in jobs that are beneath their qualifications and must repay debts incurred on a promise that their certificates would gain them high-income jobs (Standing, 2011, p:68). The globalisation era, and particularly the current crisis, was not one of deregulation but of re-regulation, in which more regulations were introduced than in any comparable period of history (Standing, 2011). The attack on collective institutions encompassed firms as social institutions, trades unions as representatives of employees, occupational communities as guilds of crafts and professions, education as a force for liberation from self-interest and commercialism, the family

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as an institution of reciprocity and social reproduction, and the civil service as guided by an ethics of public service (Standing, 2011). •

The crisis has provided a window of opportunity to national and transnational elites to justify these reforms to the civil society.

A distinctive feature of the austerity policy was that it was not based on any explicit social policy considerations, but was based on some rough estimations and strong ideological presumptions on how public spending and labour costs should and could be reduced (Bruun, 2015). With no impact evaluation or follow-up mechanism to assess and correct the possible mistakes or unexpected outcomes of the austerity measures, young people become vulnerable to external and internal market pressures.

The

dismantling of collective bargaining and the weakening of trade unions form part of a policy that follows the ideological pattern which was previously outlined by Ms. Margaret Thatcher in the UK in the 80s (Bruun,2015). Having examined the impact labour market reforms have had on the youth, two crucial questions emerge. Firstly if those reforms were necessary. In times of severe crisis, both policy-makers and the civil society ask for a change in order to face the immediate and long-term effects. Therefore, in an era of extreme unemployment rates and “austeritarianism,” it is only normal that reforms should be introduced in order for the labour market to be corrected (Lehndorff, 2016). Secondly, however, it is important to ask whether those particular reforms were necessary. This should be one of the focal point in determining the success, or not, of the process of reforms. From a Critical Theory point of view, the reforms were largely a product of neoliberal forces that acted upon in an effort to reconfigure the whole European

Social

Model.

Taking

into

consideration

the

Country-Specific

Recommendations by the European Commission, the role of the Troika in the Greek programs and the general direction of the European policies with regard to the youth, it is evident that rather than promoting a flexicurity system, the current reforms call for profound flexibilization, without any security counterbalance. While justified in official discourse by ‘the crisis’, the current reforms bore virtually no relationship to the economic cycle. They were rather aimed at reconfiguring whole areas

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of the European social model – such as labor law, collective bargaining, social dialogue, wage formation systems, relations between the two sides of industry, the foundations of social protection, and so forth – in spite of the fact that the best components of this model had proved efficacious in the crisis for avoiding a serious deterioration of the situation within the economy and on the labor market (Degryse et al., 2013) From an analytical perspective, the reform of European economic governance and the distributional effects of European crisis management are closely linked to changes in prevailing power relations. Until the outbreak of the global financial crisis, these power relations were characterized by an increasing influence of financial actors operating on global capital markets, often detrimental to workers, public servants and trade unions (Boyer, 2010; Peters, 2011). •

The labour market reforms are in fact an effort by the national and transnational elites to reconfigure the EU social model.

Ultimately, it can be concluded that the reforms that took place in the three case study countries that were previously examined, and the overall social policy promoted by the EU aims at reconfiguring the whole European social model. The Mediterranean system, including Spain, Italy, Portugal, Greece, Cyprus and Malta, features low flexibility, relatively low security, and no clear pattern of taxation. These countries have strict employment protection legislation for workers on open-ended contracts, while a growing number of people with part-time and/or fixed-term contracts (especially women, ethnic minorities and the young) enjoy very little, if any, employment security (European Commission, 2012a)3. The social protection expenditure of these countries tends to be concentrated on old-age pensions, with low coverage of unemployment benefits. Countries in this system reveal high levels of unemployment and a wider incidence of poverty and social exclusion. Although major structural reforms have been introduced in several domains, the governance of the social programme remains a challenge. The sharp rise in the unemployment rate, especially for young people, has not been adequately matched by activation policies. Various current

3

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfsa_etpga&lang=en

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analyses, however, stress that the crisis has opened a window of opportunity for Greece to engage in deep fiscal structural reforms and address its structural weaknesses. Based on an analysis of recent developments in social legislation in Europe, there is evidence to suggest that some common trends have developed. Changes in national systems of collective bargaining are proceeding alongside significant amendments in employment protection legislation, including collective redundancies, flexible forms of employment, contracts for young workers and dismissal compensation. These measures not only modify the individual employment relationship but also have the potential to shift the boundaries between state regulation, joint negotiation and unilateral decisionmaking by management. As the financial crisis turned into a crisis of public finances, most governments were forced to adopt a series of budgetary consolidation measures in the form of reforms, rather radical in nature, of their labour law provisions and social protection arrangements (Degryse et al., 2013). However, the general outline of these structural reforms of the labour market and social security systems had been advocated well before the outbreak of the crisis, during a period when public debts and deficits were under control (De Grauwe 2011). Francois Gaudu (2011: 26) confirms that the crisis has only highlighted previously predictable or already committed questions or developments’. As the OECD notes in its 2013 report, ‘a clearer tendency towards deregulation is observable since the onset of the financial crisis’ (OECD, 2013). Over recent decades, research has provided evidence that public authorities and national legislators of all 28 member states have undertaken, under the umbrella of the European Union’s deregulatory agenda, a massive deregulation of labour law, often under the auspices of ‘modernisation of labour law’ aiming at boosting enterprise flexibility and allowing for market ‘flexibilization’ (Schomann, 2014). This has been particularly palpable in countries that were put under an economic and fiscal Program, such as Greece, to the detriment of respect for fundamental social rights. In those cases, even the EU itself recognises that the deregulation agenda has been intensified since the outbreak of the financial and economic crisis (European Commission 2010).

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Interestingly, there is no evidence that the financial and economic crisis is the result of labour law constraints and inflexibility in the member states (Cazes et al. 2013). On the contrary, labour law has maintained the necessary balance between flexibility for employers and security for the workers during the years of the crisis, by providing them, for example, with recourse to short-time working schemes (Laulom et al., 2012). It is, therefore, unclear whether the current labour market reforms, as initiated and largely dictated by the EU is leaning towards the idea of flexicurity, or merely uses flexicurity as an isomorphism to neoliberal demands. There has been little doubt that the European Union has largely pursued the ideas of the liberal and neoliberal agenda. Although historically speaking, this was not the intent of the EU founding fathers, the EU’s “economic constitution” systematically biases EU policy making in a neo-liberal direction (Bugaric, 2013). The neo-liberal foundations of the single market and the EMU have imposed real and significant institutional constraints for progressive policymaking. In the recent years, the connection between the demands of neoliberalism and the way politics are conducted in the European sphere are continuously changing and have led to what Streeck (2014) has described as a crisis of democratic capitalism. As Colin Crouch (2011) argues, the only paradox in the present period of economic turbulence is the ideological stability, which is characterised by “the strange non-death of neoliberalism.” One explanation can be that neoliberalism hasn’t been a solely economic project, but has succeeded largely due to the respective political assistance. The political mechanism was used to defuse the emergent distribution conflict between labour and capital by introducing additional resources, even if these existed only as money and not yet, in reality, producing what Keynes (1965) called the “money illusion” (Streeck, 2014: p. 33). More precisely, the combination of ‘financialisation’ (Foster and Magdoff 2009), EU internal market policy and European Monetary Union, on the one hand, and the weakening of regulatory and welfare institutions within most EU countries, on the other, gave rise to serious imbalances within the EU and contributed to imbalances in the world economy (Krugman 2008; Coates 2011).

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6. Has Europe made it’s choice? A discussion. To conclude, it has been demonstrated that while justified in official discourse by “the crisis” flexicurity reforms have been mainly focused on flexibilization. They are aimed at reconfiguring whole areas of the European social model – labor law, collective bargaining, social dialogue, wage formation systems, relations between the two sides of industry, the foundations of social protection, and so forth – in spite of the fact that studies have shown that less employment protection legislation has little or no effect on improving working conditions. The youth has been particularly affected by the reforms, being forced into flexible forms of employment without security measures to counterbalance them. This puts them in a precarious position affecting their position in the labour market but also their social and personal life. The reforms as they have been designed and implemented show little interest in maintaining social security to a minimum standard. Instead, most of them favour employers and companies adjusting working hours and wages to the needs and demands of the market. This development is, from a critical theory point of view, clear evidence of the efforts of

elites to deregulate rather than reform the labour market and

subsequently the entire European Social Model. In the latest state of the Union, President of the Commission Jean-Claude Juncker made the following statement : “We need to invest in our young people. I cannot and will not accept that Europe is the continent of youth unemployment. I cannot and will not accept that the generation will be poorer than their parents. This is mainly a task of national governments, but the Commission can support” (Ec.europa.eu, 2016). The facts, however, show that for the EU this is only translated into numerical goals, completely ignoring the social aspect. One explanation of this choice Europe is consciously making could be offered by what Gabrielle Zimmer, leader of the United European Left, said in her speech during the State of the Union 2016 process. That “It’s lobbyists that are running the EU.” (Ec.europa.eu, 2016).

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