The EU Competition Policy's ‘Social' Paradox: Moving Towards ‘Full' Employment with Austerity?
Anca D Chirita
This paper aims to explore the influence of Keynesian and neo-Keynesian employment theories on Article 3 of the Treaty on the European Union which aims to achieve ‘full’ employment and that of the neo-liberal ideology which aims to achieve a highly competitive ‘social’ market economy. The intersection of competition with employment theories and social policy, in particular the link between efficiency-driven fierce, but aggressive, competition and austerity through job cuts is an under-researched area of competition law. This gap has become apparent since microeconomics and behavioural economics are now mainstream areas of inter-disciplinary research between law and economics, while the ties between macroeconomics and competition law are still under-developed.
The dynamics of increased competition and competitiveness have attempted an integration of labour economics through the social feature of the highly competitive market economy. The value of solidarity remains an elusive projection. Although the Treaty aspires to reach ‘full’ employment, the reality of the European Union demonstrates a different reality. Unemployment statistics delivered by Eurostat in January 2015 reveal an unemployment rate of around 23.8 million. In the euro area ‘seasonally-adjusted’ unemployment rate was 11.2%, which reveals a higher real unemployment rate which is far away from full employment. Solely Germany and Austria enjoy it with an unemployment rate of 4.7% and 4.8% respectively. Unfortunately, with an unemployment rate of 25.8% and 23.4% respectively, both Greece and Spain experience a severe depression. However, a greater depression is being experienced by youths, the highest unemployment rates being inevitably in Greece and Spain, followed by Croatia, Italy, Cyprus, Portugal, Slovakia and Ireland. In the EU, the overall youth unemployment rate stands currently at 23.1%. Should these figures be correlated to governmental debt figures, they reveal themselves as being the highest in the most depressed economies, namely, Greece with 176%, Italy with 131.8%, Portugal with 131.4%, while the overall governmental debt in the EU has fallen to 86.6% towards the end of 2014.
This paper argues that increased competitiveness acts as an antagonist driver that demands more negative effects on social welfare and security. Increased and aggressive competition for jobs, in other words the creation of employment-based competition, triggers even more austerity. It becomes an impossible mission to reconcile ‘full’ employment in theoretical equilibrium with the existing austerity cuts and the perils of job insecurity. Therefore, this paper argues that the EU Treaties’ utopian projection of full employment clashes with the predicament of austerity through job cuts. Since unemployment targets have been missing in the ‘convergence’ criteria to join the Eurozone, this paper goes on to criticise the austerity obsession as being in breach of the Lisbon’s Treaty promise to deliver Keynes’ ambition towards achieving ‘full’ employment, given than only half of the EU population is in active employment.
See Eurostat, ‘Government debt fell to 92.1% of GDP in euro area’, 22 January 2015.
See e.g. AD Chirita, ‘The Impact of the EU Crisis on Law, Policy and Society’ 16 CYELS(2014).