Old but still in work

Inhaltsverzeichnis

1. Research design

2. Why influence the demographic aging the EU economy?

3. Why are supranational institutions attempting to enhance their influence on the policy-making in the realm of the EU-Employment and social policy?

4. Why are trying the member states to obstruct a communitarisation of the Employment and social policy?

5. Why was the open method of coordination implemented in the realm of the Employment and social policy?

6. Why influence the implications of the demographic aging for the EU-economy, the policy-making within the realm of the Employment and social policy? Page 16

7. Bibliography

1.The Research Design

The path to answering the basic research question leads through four part-questions. The answering of the first question shows the possible impact of the demographic aging upon the economy of the European Union. The other part-questions are answered through the testing of three hypothesis. Hypothesis # 1 is derived from the Marxist political theory. Its answering show why the economic effects of the demographic aging leads to an enhancing of influence by supranational actors. Hypothesis # 2 is derived from the

Intergouvernmantalism theory and show why member states trying to obstruct a shift of more sovereignty upon the supranational level in the realm of the Employment and social policy. Hypothesis # 3 is derived from the supranationalism theory. Its answering show why the integration process in another policy-field directly influence the policy-making in the Employment and social policy.

The hypothesis are tested through the method of secondary data analysis. The secondary data exists in this case as respective literature as well as official documents of EU Institutions.

Distinction

1. The focus in this paper is on the expected implications of the demographic aging on the EU economy and the effects for the policy-making in the EU-Employment and social policy.
2. The paper analyses how the issue of the demographic aging is managed between the pole of supranational actors (mainly the EU-Commission) and intergouvernemental actors (mainly the member states).
3. The aim of this paper is not to explain how demographic aging accrues.

Theories

Marxist political theory:

In a capitalist system the state can, considering the interest groups, intervene in the economy. For example to control economic processes.¹ For a macroeconomic growth it is important that the state provide the political conditions. This is necessary to ensure an enlargement of the productive forces. This is the logic way of the capital system to gain more profit. One possibility to reach this aim is to extend the working period.² „ Mit Arbeitszeiten oder einer Produktivität oberhalb des gesamtgesellschaftlichen Durchschnitts, an dem sich die Preisbildung orientiert, können dann einzelne Unternehmen einen gr öß eren Anteil am gesellschaftlich produzierten Mehrwert in Form eines zusätzlichen Profits realisieren. “ ³

For the economist Ernest Mandel it was the increasing interdependence of the european capital, which caused the political process of european integration.⁴ „ Die Schaffung eines gemeinsamen europäischen Marktes mit entsprechenden supranationalen Strukturen von Staatlichkeit wird funktionalistisch aus den vorangegangenen grenzüberschreitenden Unternehmenszusammenschlüssen abgeleitet. “ ⁵ This led, from an economic point of view, to the European Union as we know it, based on capital interests. At an advanced level of capitalist development, state intervention increases more and more to upheld the capitalist production and exploitation processes.⁶ In reaction to the view of the marxist political theory critics. A fundamental critic to the question in this paper, is that through the marxist political theory politics will be diminished to a result of economic coherences. The theory cannot provide either an understanding of the collaboration of ideas in political and economical processes nor the act of different stakeholders.⁷

For the research question in this paper, the marxist political theory build a fundament to understand the efforts of the supranational actors in playing an active role in the employment and social policy. As it will argued below, there are several factors of the demographic aging which have fundamental implications to the common market and further for the interests of the capital class.

Intergouvernmentalism:

Stanley Hoffmann developed a theory of european integration inspired by realism. The central statement of his theory: The nation-states remains the central unit of european integration and european politics is, first of all, shaped by the national governments.⁸ So the main point of the theory of intergouvernmentalism is the resistance of the nation states against a gradual transfer of sovereignty.⁹ National governments are willing to allow further integration if they are able to achieve economic benefits for example as effect of integration policy. But they hesitate or obstruct because of sensitive national interests. Still there is a common denominator to increase the competitiveness of the european economy against others in the world. This seems as a boost for integration, the so called „negative-integration“. According to this, it is rather easier for the national states to agree in a downsizing of trade barriers than building up an common Employment and social policy.¹⁰ The intergouvernmentalism allows to look through a national perspective at european issues and will help to understand the tension between a reseverd position in further integration in the EU employment and social policy on the one hand and the implementation of the open method of coordination in the other hand.

Supranationalism:

The theory of supranationalism follows the tradition of the neo-functionalism by Ernst B. Haas and the transactional theory by Karl W. Deutsch. It was mainly developed by Wayne Sandholtz and Alec Stone Sweet. The central distinction to the transactional theory lies in a requirement of an european identity - in the sense of the supranationalism it is not needed for supranational governance. There also exists a obvious similarity between Supranationalism and neo-functionalism. The main distinction between these two theories lies in the modification of the logic of the spill-over process, which, by the theory of supranationalism, not automatically leads to deeper supranationalisation.¹¹ Stone Sweet and Sandholtz define the supranational sphere as centralized competences in particular policy fields in which the supranational institutions are able to constrain the behaviour of the member states. In their estimate the EU is rather a stringing together of different regimes than a simple separation between intergouvernmental and supranational. The seperation of powers takes place rather between different policy-fields than between intergouvernmental and supranational institutions.¹²

The theory of supranationalism is answering the question of different rates in the integration process. Within the EU-common-market, economic interests are privileged. Entrepreneurs and business stakeholders have a fundamental interest of stronger integration because their interests are rather considered at european level than at national level where they have to deal with other strong stakeholders.¹³

The theory of supranationalism is a good framework to understand why common market issues, for example the effects of demographic aging on productivity, leads to action of supranational institutions which have fundamental effects on other policy fields like Employment and social and policy.

2. Why influence the demographic aging the EU economy?

In its communication paper of 1999, the European Commission points out the important role of the demographic developement in the upcoming decades. Decline of working age population and the aging of workforce as well as the increasing pressure on pension systems and public finances were identified as major threats.¹⁴ In another communication paper of 2002 , the EU-Commission corroborated again its assumptions from 1999:

„ Given its impact on the demand for public pensions, health care and long-term care ageing presents a considerable challenge to the long-term sustainability of public finances. Beyond the immediate financial impact, the ageing of populations also has wider implications for economic growth, inter alia, as a result of the shrinking of the potential workforce and potentially important effects on the level of aggregate savings. “ ¹⁵

The European Commission set out four demographic trends which are responsible for this developement: 1.) Low fertility rates; 2.) The retirement of the baby-boomer-generation; 3.) A ever-increasing life expectancy and 4.) Current flows of immigration. Low fertility rates and an increase of elder people lead to a decline of the working-age-population which can only be marginally reduced by immigration.¹⁶

„ By 2014 the working age population (20-64) will start to shrink, as the large baby-boom cohorts born immediately after World War II are now entering their sixties and retiring. The number of people aged 60 and above in the EU is now rising by more than two million every year, roughly twice the rate observed until about three years ago. “¹⁷

The EU-Commission points out, in its commission communication paper from 2006, that the number of people in work will increase until 2017 while after, a total decrease cannot be refused. This will lead to a decrease by 30 Million people in work until 2050.¹⁸ To a similar result came a report in 2010 of the European Foundation for the Improvement of Living and Working Conditions (EUROFUND).¹⁹

Such forecasts are seen a bit more skeptical by Wolfgang Lutz, director of the institute for demography at the Austrian Academy of Sciences:

„ Aufgrund dieser Unsicherheiten von Prognosen ist es auch durchaus problematisch zu sagen, die Bevölkerung werde im Jahr 2050 so und so gro ß sein oder die Personen im erwerbsfähigen Alter 2030 so und so viele sein. Das ist dann günstigstenfalls ein „ best guess “ , also eine bestmögliche Vermutung. So ein Ergebnis ist zwar wahrscheinlich aber in keiner Weise sicher. “ ²⁰

[...]

¹.Cf. Mandel, Ernest (1994), Einführung in den Marxismus, Köln, ISP, in: Beckmann, Martin (2005), Marxistische Politische Ökonomie, in: Bieling, Hans-Jürgen; Lerch, Marika (Hrsg.) (2005), Theorien der europäischen Integration, Wiesbaden, VS Verlag, P. 121

² Cf. Beckmann, Martin (2005), Marxistische Politische Ökonomie, in: Bieling, Hans-Jürgen; Lerch, Marika (Hrsg.) (2005), Theorien der europäischen Integration, Wiesbaden, VS Verlag P. 121-122

³ Beckmann (2005), Marxistische Politische Ökonomie, P. 122

⁴ Cf. Beckmann (2005), Marxistische Politische Ökonomie, P. 126-127

⁵ Beckmann (2005), Marxistische Politische Ökonomie, P. 126

⁶ Cf. Beckmann (2005), Marxistische Politische Ökonomie, P. 126-127

⁷ Cf. Häckel, Erwin (1975), Multinationale Konzerne und Europäische Integration, Bonn, Forschungsinstitut der deutschen Gesellschaft für auswärtige Politik, in: Bieling, Hans-Jürgen; Lerch, Marika (Hrsg.) (2005), Theorien der europäischen Integration, Wiesbaden, VS Verlag, P. 130

⁸ Cf. Bieling, Hans-Jürgen (2005), Intergouvernementalismus, in: Bieling, Hans-Jürgen; Lerch, Marika (Hrsg.) (2005), Theorien der europäischen Integration, Wiesbaden, VS Verlag, P. 91

⁹ Cf. Wallace, Helen, Pollack, Mark A., Young, Alasdair R. (2010), Policy-Making in the European Union; Chapt. 2; Oxford, P. 19

¹⁰ Cf. Bieling, Hans-Jürgen (2005), Intergouvernementalismus, P. 102-106

¹¹ Cf. Nölke, Andreas (2005), Supranationalismus, in: Bieling, Hans-Jürgen; Lerch, Marika (Hrsg.) (2005), Theorien der europäischen Integration, Wiesbaden, VS Verlag, P. 145-147

¹² Cf. Nölke (2005), Supranationalismus, P. 150-151

¹³ Cf. Nölke (2005), Supranationalismus, P. 154-155

¹⁴ Cf. European Commission (1999), Communication from the Comission: Towards a Europe for All Ages, Promoting Prosperity and Intergenerational Solidarity, at: http://ec.europa.eu/employment_social/social_situation/docs/com221_en.pdf, access on: 19.03.2013, P. 4-6

¹⁵ European Commission (2002), Communication from the Commission to the Council and the European Parliament: Europe´s response to World Ageing, Promoting economic and social progress in an ageing world, A contribution of the European Commission to the 2nd World Assembly on Aging, on: http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2002:0143:FIN:EN:PDF, access on: 19.03.2013, P. 6

¹⁶ Cf. European Commission (2006), Commission Communication: The demographic future of Europe - from challenge to opportunity, Brussels, P. 3-5, at: http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0571:FIN:EN:PDF; access on: 18.02.2013

¹⁷ European Commission, Eurostat (2011), Demography Report 2010: Older, more numerous and diverse Europeans, P. 2, at: http://ec.europa.eu/social/BlobServlet?docId=6824&langId=en, access on: 21.02.2013

¹⁸ Cf. European Commission (2006), Commission Communication: The demographic future of Europe - from challenge to opportunity, Brussels, P. 5 ¹⁹ Cf. Eurofund (2010), Demographic change and work in Europe, Ireland, at: http://www.eurofound.europa.eu/ewco/surveyreports/EU0902019D/EU0902019D.pdf, P.7-8, access on: 19.02.2013

²⁰ Lutz, Wolfgang (2006), Was kann die Demographie und was kann sie nicht?, in: Europa altert - na und?, Demographie im Spannungsfeld zwischen seriöser Wissenschaft und einseitiger Interessenspolitik, Dokumentation der gleichnamigen Tagung vom 11.12.2006, AK Wien, Bildungszentrum, P. 11