Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-03-10-Speech-4-007-000"
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"en.20110310.3.4-007-000"2
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"Mr President, I would like to thank honourable Members for this opportunity to dispel some widely held misunderstandings regarding the Irish programme.
The S&D Group’s question that gave rise to this statement raises honourable Members’ concern that certain economic policy conditions set out in the Memorandum of Understanding of the Economic Adjustment Programme for Ireland are in legal conflict with Article 153(5) of the Treaty. That paragraph excludes the adoption of provisions in the field of pay under Article 153, that is, in the field of social policy. However, the Economic Adjustment Programme for Ireland is not a social policy programme and is not adopted under Article 153. It is a financial assistance programme set up, together with the Irish Government, to restore domestic and external confidence and remove the harmful feedback loops between the fiscal and financial crisis. Therefore, it is grounded in Article 122(2) of the Treaty, which allows for Union financial assistance if a Member State is seriously threatened with severe difficulties caused by exceptional occurrences beyond its control.
The role of the MOU is to specify the economic policy conditions that serve as a benchmark for assessing the Irish policy performance during the financial assistance programme. The Member State has full ownership of these economic policy conditions and their implementation. These conditions are commitments of the Member State that are undertaken by the state itself. It is not EU action in the respective fields. Indeed, many of the conditions, such as the minimum wage reduction, were already included in the Irish Government’s national recovery plan that was published on 24 November 2010, before the start of the programme.
The aim of the conditions relating to labour market policy is to create jobs and to avoid long-term unemployment in Ireland amongst the most vulnerable groups. The minimum wage reduction is part of this wider package of measures and needs to be seen together with activation policies and efforts to modernise the benefit system. When evaluating the reduction in one of the highest minimum wages in the European Union – it is, for instance, the second highest in the eurozone – and although there was significant wage adjustment in the economy, with the minimum wage, in common with wages in general in Ireland, falling by 3% in real terms in 2008, followed by a rise of 0.3% in 2009, it should be noted that most of the labour market adjustments took the form of job losses. In fact, the minimum wage cut only restored the status quo prevailing before 1 January 2007, i.e. before the crisis.
The other condition mentioned in the question is an independent review of sectoral collective bargaining. The motivation of the review is to discuss the fairness and efficiency of employment conditions for both employees and employers across sectors. I would like to highlight the fact that Ireland has a long-standing tradition of tripartite consultation on economic and social policy and that the successive pacts between the government and the social partners since the 1980s have been widely recognised as major factors in the success of the Irish economy.
The review is an opportunity for the social partners to voice opinions and shape policy, and its announcement was welcomed as such. I am fully confident that the review will be carried out by the Irish Government in a way that recognises the importance of social dialogue, includes all the social partners, and complies with Community law.
Finally, the conditions in the Memorandum of Understanding with regard to structural reform are not only about the labour market. They also contain important measures to open up product markets such as overly regulated sectors and professions. These reforms could have a major effect on customer prices and productivity, which support the purchasing power of households."@en1
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