Active Ageing: the EU Policy Response to the Challenge of Population Ageing

3. EU Policy approach to Population Ageing

The common challenges of population ageing led the EU to a process of renewed interest to find European solutions through greater co-ordination and convergence of polices. This induced the EU to develop an adequate response to the challenge of ageing.
In the following section the paper will briefly analyze EU approach to ageing in general (various political, financial and legal instruments) as well as the active ageing policy in particular.

3.1 EU general Approach to ageing

Against the background of the population changes, the EU member states have committed themselves to co-ordinating their active ageing policies at EU level.
Policy and action at EU level supports the active ageing through policy coordination, through the exchange of best practices (benchmarks), through financial instruments, and through legally binding acts that outlaw discrimination in employment on grounds of age.

3.1.1 Policy Coordination Approach

Within the policy coordination approach are included the following facets of the policy convergence at EU level: (a) European Employment Strategy (EES), (b) Open Method of Coordination (OMC) on pensions, (c) Benchmarking (d) Corporate Social responsibility, (e) Healthy and Safety at Work, and (f) European Social Dialogue. We will briefly analyze the first three instruments which are the most important ones.
a. European Employment Strategy (EES)
The EES is designed as the main tool to give direction and ensure coordination of the national employment policies at EU level. On the basis of the new provisions of the Amsterdam Treaty on Employment (Articles 125-130), the Luxembourg European Council (November 1997) launched the European Employment Strategy, also known as ‘Luxembourg process’. The following European Councils have provided fundamental orientations for the future directions and shape of the EES. The most important Councils were the Lisbon European Council (March 2000) — which updated the strategy by setting medium term employment targets and integrated it into a wider framework of policy co-ordination (COM, 2002). The EES was completed at Stockholm (March 2001) adding one additional target, i.e. to raise to 50% the employment rate of older workers by 2010. It was further strengthened at the Barcelona European Council (March 2002).
b. Open Method of Coordination on Pensions
The Open Method of Coordination (OMC) is a new ‘soft law’ method of governance at EU level, which complement the traditional community or ‘hard law’ method such as the directives and regulations (Winchell 2006). The OMC is initiated and developed in the field of EES as a new mode of governance of the employment policies at the European level. It is defined as a means of spreading best practices and achieving grater convergence towards the EU goals and to help member states to progressively develop their own policies in accordance with these goals (COM, 2002). The Laeken European Council (December 2001) recommended to use the OMC in the area of pensions “to help Member States progressively develop their own polices so as to safeguard the adequacy of pensions whilst maintaining their financial sustainability”.
There is general agreement among both the academic and policy making community that the OMC-type governance process has ‘meaningful and novel effects’ (Winchell 2006) and that it has demonstrated its added value in fostering partnership and new working methods both at national and EU level (COM, 2002). The OMC places reform pressure on the lagging countries by mere comparison (indirect naming and shaming, WB, 2001). Moreover, it has been argued that the OMC concept is so far the most subtle answer in the search for a new balance between convergence and respect for national diversity (Jacobsson and Schmid 2002).
c. Benchmarking
Benchmarking or the exchange of the best practices is one of the aspects of the OMC. Benchmarking is defined as the best practices which the EU political leaders identify in other EU Member States and the efforts they then make to improve national performance (De La Ponte, 2001). Therefore, benchmarking builds on sharing of knowledge and of experiences as well as on mutual learning from each other, (Jacobbsson, 2002). In 2005 the Commission has launched a new programme on mutual learning centered on the exchange of the good practice, through the organization of the ‘peer reviews’ in the member states, (COM, 2005). At EU level, for example, Finland stands out (either alone or with other EU Member States) as setting an example on various aspects of active ageing policies: first, early retirement in a coherent manner (Jepsen and Hutsebaut, 2003); second, along with the Netherlands, setting an example of social dialogue, and third, with Denmark, providing a benchmark for lifelong learning (Jepsen and Hutsebaut, 2003; Piekkola, 2004). Other scholars also maintain that the EU should identify benchmarks coming from other flagship countries on active ageing such as Switzerland, (Giarini, 2003; Pieokkola, 2004). Giarini argues that the Swiss system of four pillars “(…) è probabilmente quello che l’Europa intera finirà per adottare entro 10 o 20 anni” (Giarini, 2005).

3.1.2 Financial Instrument: European Social Fund (ESF)

The ESF is the key financial instrument available at European level, supporting the European Employment Strategy. Under the Employment Guidelines (2003), the ESF “supports the delivery of policies and strengthens the institutional capacity in the field of employment”. The ESF provides support to member state policies on active ageing through two of its policy fields for action: developing and promoting active labour market policies, and promoting lifelong learning policies (COM, 2004). The Next Generation of the ESF (i.e. 2007-2013 period) is designed to keep in line with the objectives and priorities of the EES by supporting, inter alia, the national policies promoting full employment.
The instruments analysed above, constitute the Union’s policy coordination approach which is composed of instruments belonging to ‘soft law’ method (Winchell, 2006) or ‘soft regulations’ (Jacobson, 2002) in the sense that they are not enforced by the threat of formal sanctions, but rather through iteration and communication. But EU, in order to combat the discrimination (including on the grounds of age), has developed the Union’s right-based approach which is composed of ‘hard regulation’ or ‘hard law’, i.e. legally binding acts.

3.1.3 Legal Instruments to outlaw the discrimination on the grounds of age

The Union’s rights based approach to combat the discrimination on employment including on the grounds of age finds its legal basis on the following acts of EU law:
• Article 13 of the EC Treaty, expressly laid dawn the rules to combat discrimination on grounds of age;
• Articles 21 and 25 of the Charter of the Fundamental Rights (Nice, December 2000) which widens the prohibition of discrimination including on the grounds of age;
• Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation (27/11/2000).This Directive obliges member states to prohibit discrimination on the basis of age;
• Council Decision 2000/750/EC establishing a community action programme to combat discrimination (2001-2006) (27/11/2000). This action programme targets discrimination in all spheres of life including that directed against older persons.
The age-discrimination legislation is adopted with a view to counter the negative employer’s attitude and to prohibit discrimination and the perverse effect of some companies’ human resource policies towards the older workers (Jepsen and Hutsebaut, 2003). yet, the EU law adopted to combat the discrimination has limits which will be analysed in section 6.3 below.

3.2 Evolution of the Active Ageing Approach in the Policy Agenda of the Eu

The ideas underpinning active ageing can be traced back to the 1960s but, in the 1990s, a new concept of active ageing began to emerge under the influence of the WHO (Walker, 2003). The innovative phrase ‘active ageing’ was coined by the World Health Organization (WHO, 2002), in the framework of the global policy agenda on ageing in the late 1990s. Later this term was adopted by the EU as a common concept for the policy response to population ageing.
Until 1999 the deliberations took place at national level and the EU initiatives to promote the access to the world of work did not include older people among the specific target groups. The turning point came in 1999 when the older workers issues began to be addressed in the European Employment Strategy. Since then the developments of the active ageing agenda at EU level followed swiftly.
In a 1999 Communication “Towards a Europe for all Ages”, the European Commission put a strong focus on higher employment rate of older workers (COM, 1999). Since the beginning, the EU considered that ageing is not a separate issue to be tackled in isolation from other ones. The EU response to ageing was therefore developed as part of the overall strategy of mutually reinforcing policies launched at the Lisbon European Council (2000) and confirmed at subsequent European Council meetings in Nice (December 2000), Stockholm (March 2001), Gothenborg (June 2001), Laeken (December 2001) and Barcelona (March 2002).
These European Councils resulted in an orientation towards active ageing polices at EU level, (COM, 2002). The Lisbon European Council set a new strategic goal for the EU “to become the most competitive and dynamic knowledge-based economy in the world”. The Lisbon Strategy committed the EU to an overall employment rate of 70% by 2010. Since then, extending working life by improving the incentives and opportunities for older workers has become a major priority in European Strategies for employment and for adequate and sustainable pensions (Nielsen, 2005). To that end, the Stockholm European Council agreed that 50% of the EU population in the 55-64 age-group should be in employment by 2010. Where as the Barcelona European Council concluded that a “progressive increase of about five years in the effective average age at which people stop working in the European Union should be sought by 2010”. In its synthesis report to the 2004 European Spring Council, the Commission identified active ageing as one of the three priority areas for which swift action is needed to deliver the Lisbon Strategy (COM, 2004).
To sum up, although active ageing is a multi-faceted approach, at EU level, the promotion of the active ageing is reflected in two complementary targets that the EU has set itself: increasing the employment of the older workers (Stockholm target) and delaying the exit from the labour market (Barcelona target) (COM, 2004).

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