MONDAY 23 JULY 2007

Mr Marco Cilento

  Chairman: Good afternoon, Mr Cilento. Shall we introduce ourselves. I have already had a chance to explain where we are in the timetable, but after we have introduced ourselves perhaps you would do the same.

Lord Powell of Bayswater: Charles Powell, independent member of the House of Lords.

  Baroness Eccles of Moulton: Diana Eccles, Conservative member of the House of Lords.

  Lord Whitty: Larry Whitty, Labour member of the House of Lords.

  Q295  Chairman: Over to your good self, Mr Cilento.

  Mr Cilento: My name is Marco Cilento. I am Italian. I work as an Adviser in the European Trade Union Confederation. I started my career in Italy with the Italian union and I have been working for the European Trade Union for six years. I work for the European Trade Union Confederation and you should be aware that ETUC is an association of cross-industry organisation federation unions in Europe. We are also associated with the European Industry Federations, the sector unions at European level. We reproduce at European level the trade union model which has a common background amongst most of the European unions in Europe. We represent about 60 million people, 60 million workers in Europe. ETUC is one of the fundamental partners of the European institutions which are recognised in the European Community Treaty. I was informed that the person sitting here before me was someone from BusinessEurope which is our social partner. Under the umbrella of the EU regulations we are engaged in social dialogue, what we call inter-professional social dialogue, in which we try to help the European Commission to produce policies and implement regulations in the social field. This means that as a Trade Union Confederation we try to make this European integration sustainable in terms of social content adding to the economic and financial integration and the social dimension. Our core business is taking care of the social dimension of the European integration. This means that we deal with many issues, all the aspects of European activities from the internal market issues, as we are going to talk about today, but also other aspects of relationships with multinational companies, promoting corporate social responsibility and migration policies, et cetera. We try to deal with all of the social relevance dossier.

  Chairman: That is very helpful.

  Q296  Lord Whitty: It is claimed on behalf of the internal market that it has benefited consumers in Europe where arguably two or three per cent have real income and that it has created a large number of jobs for European workers. Would you agree with that assessment so far? If not, tell me why not. If you do feel it could go further could you identify what area of the Single Market rules need to be improved or better enforced in terms of your perspective?

  Mr Cilento: We have always stated that we are in favour of a well-integrated Single Market which is an environment where companies can grow and improve their competitiveness, looking also at changes of globalisation and being competitive not only in the internal market but also outside. We consider that Europe should be a single economic entity in order to compete with the rest of the world. We see the results of that because many companies have found the European Single Market the right environment in which to develop and the results in terms of employment recognise the improvements from the efforts that have been made. From this point of view we recognise that the engagement of all Member States to build an economic area where companies can develop successfully is important. Also, we are keen to see equality of employment and this means we want more jobs but also quality jobs. What we have seen in the last few years with this injection of flexibility in the labour market is that it has widened the gap between different workers and too often this has brought about a decrease in the level of purchasing power of some workers. That is because salaries are under pressure, working conditions are more difficult and the pressure is coming from higher competition in the market. The good side of the internal market is increasing employment but we have also recorded poor working conditions and poor incomes, salaries, et cetera. We think that together with increasing flexibility we should have more protection for workers and more guarantees for workers in Europe. One of the reforms that we should have at the European level is to enforce or to foster in the labour market the increased mobility of workers but under certain conditions of protection and opportunities for workers. One of the steps that should be taken now is to improve performance and the opportunities coming from the labour market at the European level.

  Q297  Lord Whitty: Are you saying that part of the reason why this has not been achieved is because there is not a fully Single Market of labour, in other words there are differential problems across the labour market, or are you saying that there has not been enough European labour protection legislation or other elements of social policy?

  Mr Cilento: If you ask me in terms of enforcement of the internal market, we consider that the social aspects of the internal market in the last year have not been considered sufficiently. We want the mobility that all the different players in the market have today in Europe that companies and financial actors can benefit from which should go along with higher mobility of labour with certain rules that allow people to move and be protected in these new mobility capacities. That means we want a labour market which is European and is part of the internal market to ensure that there is a full and comprehensive internal market. This European labour market must be built on a clear regulation framework in which employees can be protected, but also in which they can find new opportunities for themselves. If we look at the Lisbon Strategy, for instance, this is considered to be the point to refer to which means we should invest more in terms of training opportunities, creating a skilled workforce, helping people to be mobile and helping families to move with workers to establish themselves in different countries, harmonising protection systems and social security systems. A lot can be done in these fields otherwise the internal market will only be an area of exchange which companies can benefit from but the citizens and workers cannot really benefit from.

  Q298  Lord Whitty: Leaving aside the question of investment and training, which is obviously an important issue but not quite an internal market issue, there is already a whole range of worker protections on the European statute book. Are you saying that they have gaps or that they are differentially enforced?

  Mr Cilento: For employee protection?

  Q299  Lord Whitty: For the protection of workers.

  Mr Cilento: Yes. ETUC says the problem of the internal market today is the differences in Member States are too different and they bring about social dumping and competition among Member States to attract capital and business only on the basis of social dumping or saving money on their working conditions. We want competition to be enforced on many, many aspects but it cannot be the reason why the working conditions decrease or get worse. In the beginning the project of the Single Market in the European Community and then the big projects of the political integration were supported by citizens who could see a kind of trust in a good future, but if they lose this trust in the European institutions the internal market will fail and will slowly die. If we only take care of the economic and financial aspects of the market and do not take care of the social aspects of the market then all the projects will fail. We feel that every day. One of the big problems is the national legislation in the social field is not as close as we would like and that creates a temptation to compete on working conditions and creates other effects, like no investment in human resources, we are not creating the best human resources we can in Europe, we are not exploring mobility of workers in Europe and our companies, our businesses, lose out.