Giving a free hand to the market?

Tue, May 20, 2008, 01:00

LISBON EXPLAINED PART 7:Rejecting Lisbon, as urged by the TEEU, would leave workers relying on existing EU treaties and European Court of Justice case law, which unions say favours the rights of business over workers

THE DECISION by the Technical Engineering and Electrical Union to urge its 45,000 members to vote against Lisbon was a setback for the Yes campaign. The union blamed recent judgments issued by the European Court of Justice (ECJ) on labour rights, which it said had swung the pendulum in the EU against workers and in favour of business.

The far left has also declared war on Lisbon, with veteran socialist campaigner Joe Higgins claiming it would "give a further impetus to the right-wing, neo-liberal agenda which the EU has been driving".

It is true that Lisbon boosts the EU's powers in the area of services of general economic interest, such as electricity and telecoms, by providing a legal base to introduce new legislation.

But portraying Lisbon as some sort of Trojan horse which will usher in a new phase of liberalisation and the privatisation of public services is to ignore the safeguards inserted into the treaty to protect states' services sectors.

The European Trade Union Confederation (ETUC), which represents 86 unions across 36 countries, is also strongly backing the treaty because of several new initiatives that it believes should bolster workers' rights and the position of organised labour.

Lisbon provides three significant advances to the area of social rights: making the Charter of Fundamental Rights legally binding; inserting a social clause that requires EU institutions to consider the social impact of new proposals; and inserting a protocol to protect the special character of public services.

The charter, the impact of which has already been assessed in this series, elevates labour rights to the same status as political and civil rights. It states that every worker has the right to: conditions that respect health, safety and dignity; protection against unjustified dismissal; collective bargaining; and information and consultation.

Debate still rages between legal experts over what impact the charter would have on EU and domestic law. Lisbon states clearly that it applies to EU legislation and not domestic law, but some trade unionists believe judges at the ECJ could use the charter as a basis to bolster union rights in states like Ireland where companies are not obliged to engage in collective bargaining.

The ETUC is already invoking the charter in its dialogue with the European Commission to persuade it to legislate to overturn a series of recent ECJ judgments that have eroded workers' rights.

Any future EU legislation will also have to take into consideration a social clause in Lisbon which states: "In defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health."

There is no guarantee that these changes would persuade ECJ judges to overturn recent rulings such as the Laval case, which accepted that the right to strike is a fundamental right, but not as fundamental as the right of business to supply cross-border services. But the TEEU's call to reject Lisbon would leave workers relying on existing EU treaties and ECJ case law, which unions say favours the rights of business over workers.

Left-wing Lisbon critics have warned that provisions in the treaty which give the EU the power to create framework legislation in the areas of services of general economic interest such as telecoms and electricity could force further privatisation. They also fear that a clause ensuring "that competition is not distorted" in the internal market could be used to force privatisation of services such as electricity, post and telecoms.

Yet provisions to prevent the "distortion of competition" are already in the existing EU treaties. Lisbon also qualifies the role of the EU in the services area in Article 2.27, which states that "regulations shall define these principles and conditions, without prejudice to the competence of member-states to provide, commission and fund such services". It also introduces a specific protocol on services of general interest designed to recognise "the essential role and the wide discretion of national, regional and local authorities in providing, commissioning and organising services of general economic interest".

This protocol was inserted at the insistence of the Netherlands, which had been concerned that recent ECJ judgments were threatening to undermine its ability to fund public housing. It also extends its scope to non-economic services of general interest such as health and says the treaty should in no way affect the "competence of member-states to . . . commission and organise" these types of sensitive services.

The treaty makes changes to commercial policy by providing the EU with a specific legal base to agree trade deals that include social, education and health services and foreign direct investment on the basis of qualified majority voting.

But, once again, specific safeguards exist for public services, with the treaty stating that unanimous voting is required when agreements risk "seriously disturbing the national organisation of such services and prejudicing the responsibility of member-states to deliver them".

The principle of unanimity will also remain for any trade deal on foreign direct investment that includes provisions normally decided by unanimity, such as tax.

Claims by Libertas and Sinn Féin that Lisbon removes Ireland's ability to veto a World Trade Organisation (WTO) deal because of the possible move to qualified majority voting on social, education and health services are inaccurate.

WTO deals usually exclude these sensitive sectors from the start. The continued requirement for unanimous voting comes from other areas, such as transport services and intellectual property rights, which fall outside the exclusive competence of the EU. These areas are always included in big trade deals, such as the Doha round in the WTO, and will safeguard Ireland's veto.

The business lobby can point to clear advances in Lisbon. For example, it successfully lobbied to have "competitiveness" recognised as an overall objective of the Union. The EU will also gain competence over intellectual property, a move that could enable talks on an EU community patent to be approved after years of fruitless debate, and it can act to combat cross-border threats to health and tobacco and alcohol abuse.

However, contrary to the claims of the far left, Lisbon does not provide a new legal base for a further shift towards a more neo-liberal Union. If anything, the charter, a new social clause and the protocol on services of general interest could end up boosting social rights.

Sinn Féin argues that rejecting the treaty would force EU leaders to come back to the negotiating table to agree a new treaty with a stronger social input to better protect workers' rights. But given the pro-business sentiment that exists in Ireland, Britain and many new EU states, it is unlikely that any big changes could be achieved in the medium term.

It should be noted that devolving more power to the EU in the field of social affairs could actually enhance labour rights as Ireland remains one of the most pro-business states in the EU. One example of this is its recent decision to team up with Britain to veto a proposed directive which would have provided more rights to agency workers.

Lisbon: at a glance

Lisbon boosts EU influence in the area of services of general economic interest such as electricity and telecoms by providing a legal base to introduce framework legislation.

A protocol on services of general interest aims to clarify that national, regional and local authorities have wide discretion to provide, commission and organise public services.

The Charter of Fundamental Rights is made legally binding for all EU legislation, thereby elevating the status of workers' rights to the same level as political and civil rights.

New social clause will force the European Commission to consider the social impact of any new legislative proposals.

Decision-making at the council of ministers on international trade deals will continue to be decision by qualified majority voting.

However, any deals touching on transport or intellectual property rights, such as a WTO agreement, need the unanimous backing of states.

Any agreement in the field of social, education and health services will be decided by unanimity "where these agreements risk disturbing the national organisation of such services and prejudicing the responsibility of member-states to deliver them".