UNEMPLOYMENT IN THE CONTEXT OF EUROPEAN UNION [601209]

UNEMPLOYMENT IN THE CONTEXT OF EUROPEAN UNION
INTEGRATION

Professor Doctor Alexandru Cioarna,
Assistant Lecturer Doctor’s Degree Candidate Teodor Cilan

Abstract: The matter of unemployment is extremely serious, it cannot be either quickly or simply
solve d, but through serious measures taken by each state and social partners. The recommendations of
European institutions stick to the level of some principle statements, defining general solutions whose
appliance is not able to reduce unemployment. After the adherence, at least theoretically, the Romanians
can enjoy the access on European labor force market, just like any other citizen from European Union
member states, they will be able to work without a working license, they will benefit from medical
insuran ces, and they will bring their contribution to the pension fund. In fact, there are all kind of barriers
connected to free circulation of labor force within European Union, some of them mentioned in the present
work, and others added to these.

1. The present unemployment within the UE. Particularities

Although it presents a series of particularities in time and space, the
unemployment phenomenon has a general character. This fact is supported by its
position within European Union which apart from being a world-wide economic force
(over 20 percent of global production), confronts itself with the special issue of
unemployment.
The present situation of labor force market inside the UE is based on two main
reasons: • the difficulties regarding resistance to econo mic shocks (lack of coordination
policies aiming at achieving growth and stability); • the ability to face present changes on
labor force market (dysfunctions inside the social protection systems and policies) . This
thing can be noticed from the date in th e table below.

Unemployment dinamics inside EU
Period

Country Unemployment rate (%)
2003 2004 2005 2006 2007
EU – 27 – – – 7,9 7,5
EU – 25 9,0 9,1 8,7 7,9 7,5
EU – 15 9,0 9,1 8,7 7,9 7,2
Austria 4,3 4,8 5,2 4,7 5,2
Bulgaria 13,7 12,0 10,1 9,0 8,0
Czech Republic 7,8 8,3 7,9 7,1 6,0
Poland 19,6 19,0 17,7 13,8 11,3
Hungary 5,9 6,1 7,2 7,5 7,5
Romania 7,0 8,1 7,2 7,3 8,7
Slovakia 17,6 18,2 16,3 13,4 11,7
Slovenia 6,7 6,3 6,5 6,0 5,6
Source : Eurostat, 2008

From a study undertaken by St atistics European Office (Eurostat), we can see a
series of data regarding EU unemployment. Thus, in EU 25 the unemployment rate was

of 8.8% in May 2006 and of 8.9% in April while in May 2007 it rose to 9.1%. The lowest
unemployment rates have been recorde d in Ireland (4.2%), Austria (4.6%), Great Britain
(4.6% recorded in March), Luxembourg (4.7%) and Denmark (4.9% recorded in April).
The highest unemployment rates have been recorded in Slovakia (15.5%) and France
(9.8% ). On a global level, 14 European Uni on states have recorded an unemployment
rate decrease, there has been recorded an increase in 9 others and, in 2 states it has
remained stable. According to Eurostat, the number of unemployed rose to 19.1 million
people in May.
The number of unemployed in Romania in 2007 has known a slight increase to
728,000 people, the unemployment rate according to International Labor Bureau (ILB)
criteria reaching the level of 7.3%, a level close to that of the previous year (7.2%) . On
sexes, the unemployment rate was higher amongst men (8.2%) and lower amongst
women (6.1%). On residential areas, unemployment has been more sever in urban
areas, (8.6%), and lower than the rate, in rural areas (5.6%). On categories of age, the
highest level of unemployment has been recor ded amongst young people (15 -24 year
olds), with a rate of 21.0%, affecting middle school graduates (7.6%) and university
graduates (3.8%).
On a European level, unemployment rate amongst men has been of 6.4% and of
8.3% amongst women. Unemployment rate in Romania for young people below 25 was
of 23.4% in March 2008, compared to 20.2% registered in March 2007. The population
over 25 years old recorded a rising unemployment rate of 6.1%, compared to the end of
the first quarter of 2007 (5.7%). A rising rate rather close to that of Romania has been
recorded in Hungary, where unemployment rose from 7.3% in March 2007 to 8.1% in
March 2008.
EU unemployment analysis allows us to underline some of its particularities: • rigidness
and disparities between different national labor force markets (unbalanced minimal
wages, different regulations regarding u nemployment pays a .s.o.); • r egional disparities
of European unemployment (regions with lower unemployment rate and others mo re
affected by this phenomenon); • u nemplo yment affects unequally different population
categories (more pronounced amongst women) ; • european unemployment is mainly a
structural one, depending on the way prices form on the commodity market and the
ways incomes a re formed on labor force market; • t he differences between social and
private cost of labor force and different taxation rate (social insurance systems)
influencing national unemployment rate discrepancies ; • m ajor differences between
European unemployment rates determined by institutional f actors and migrations of
population (an average of 5% of population of EU, about 18 million people have a
different nationality from that of the country where they live, two thir ds being foreigners
outside EU).

2. European strategy of labor force occupanc y

The major aims of EU strategy for the present period have been presented to
Lisbon European Council (2000). They are based on the profound changes undertaken
by society (globalization and intensified competition in all fields, information technologies
development and intensification, with radical influences upon teaching system and
education.) The council has settled a fundamental strategic objective for European
Union to become by 2010 the most competitive knowledge based economy. Taking into

considerat ion the fact that the major problem of most European states is unemployment,
its eradication by 2010 is another EU priority.
On the occasion of the above mentioned event, there have been identified a
number of low weak points of European labor market stru cture : • the insufficient number
of jobs in the field of services; • s erious lack of balance on a regional level within EU
(especially between centre and periphery) ; • a high long term unemployment rate
(almost a half of the total of unemployed have been w ithout a job for a year of more) ;
• the low level of women’s participation to labor force market (EU women’s
unemployment rate i s 3% higher than that of men’s); • important demographic changes,
firstly those connected to demographic aging ( according t o the statistics, the percentage
of old population – 60 year olds and over – inside the total population, is to grow from
18.8% in 2000 to about 22% in the year 2020, being more stressed inside female
population and in the rural areas); • n atural unemploym ent rate also from the
perspective of its connection with inflation (in the cases when inflation rate is stable, it
may be the result of economic policy measures and not only a cause of them).
Following Lisbon strategies, member states policies of labor fo rce occupancy
must support three interdependent key objectives: complete occupancy, labor quality
and productivity, social cohesion and inclusion.
Policies of labor force occupancy stipulate achieving EU average as it follows: • a
general occupancy rate of 67% in 2005 and 70% in 2010; • a n occupancy rate for
women of 57% and respectively 60%; • a 50% occupancy rate for elderly (55 – 64 year
old.
Tasks established on a national scale must be consistent with the expected
results on the EU level and must take into account the specific national circumstances.
Occupancy rates growth is to be achieved in tight connection to labor quality and
productivity growth. The quality refers to: • the quality of the working place ; • life long
learning and career improvement ; • qualifications, gender equality ; •health and labor
protection ; • flexibility and security ; • inclusion and labor market access ; • labor
organizing and achieving a balance between work and private life ; • social dialog and
workers’ involvement ; • discrim ination eradication ; • labor general performance.
Occupancy is vital for ensuring social inclusion, occupancy policies must facilitate
occupancy participation through: • access to a quality occupan cy for all persons able to
work; • f ighting against discrim ination on labor market; • p reventing people from being
fringed on labor market, and so on.
Social and economic cohesion must be promoted through regional disparities
cuts in the field of occupancy and unemployment, by means of a serious approach to
occupa ncy problems in EU disadvantaged regions and offering real support to the
process of social and economic reorganization.
Romania has decided to apply the European Occupancy Strategy and reach the
objectives established at Lisbon.
The objective of occupancy rate increase will be achieved through ensuring
superior rhythms of economic growth needed to reduce economic discrepancies in
terms of moderate and realistic growths of labor productivity.
Also foreign investments flow will generate new jobs. An importan t role in this
matter will belong to: • going on with the process of privatization a nd reorganization;
• labor force requalification and conversion ; • increased role and rate of small and
medium enterprises; • r elative cut of labor force cost pol icies by means of taxation cuts;

• Fighting against structural unemployment effects relying on specific programs of active
measures whose costs in unemployment insurances budget will tend to decrease.

3. Measures and policies to unemployment decrease in Eu ropean Union

It is admitted the fact that carrying out a job inside European Union meets certain
barriers. Thus, according to statistics provided by European Integration Ministry, when a
person wants to become employed in another European Union member sta te, he/she
must ask for his/her qualification acknowledgement in advance from an authority of the
hosting country. Sometimes a period of supplementary training is imposed or filling in a
skills test. Regulations in this matter are extremely rich and in con tinuous change.
After the adherence, a citizen that may wish to work in another state will have to
address to the Consulate of Embassy of that country in order to find out what
professions need acknowledgement.
Besides all those shown above, there are other obstacles that emigrants must
face: • limited or delayed access of foreign workers to national social protection systems
(Great Britain) ; • limited occupancy of jobs that can be occupied by citizens of the o rigin
country (the Netherlands); • a pplying restrictive regulations referring to requested
transition periods from 2 to 7 years (Denmark, Belgium, the Netherlands, Finland,
Austria and Germany).
The White Charta adopted in December 2007 contains the Medium Term
Strategy aiming at Economic Growth, C ompetition and Labor Force Occupancy and
basically wishes to introduce measures aiming at reviving European economy
competition. The major concern is to create the premises for the labor force market to
adapt to rapid changes in productive systems, in orga nizational management and in
consumption habits.
The planned program of action contains a pack of activities that member states
should apply to promote labor force occupancy with community support. This program is
based on essential conditions such as: • healthy integrated economy ; • open economy ;
• social cohesion ; • much more decentralized economies ; • educational process
improvement and that of qualification programs quality ; • aiming at decreasing indirect
cost for labor force ; • increase the logistic and financial role of EU in the field of new
information and communication technologies ; • social pan – European dialogue flexibility
and modernization.
The main financial tool used to support member states in order to over passing
these problems is The Eu ropean Social Fund. The amounts given to each country take
into consideration unemployment rate, the number of long term unemployed, national
and regional prosperity, and so on.
Although they are used in the labor force policy, still there is a distinction between
passive measures that aim at diminishing social effects of unemployment, without
attacking its causes (unemployment pays, before time retirement); and active measures,
aiming at actions to unemployed training and requalification, the help and the
subventions given to create new jobs, expenses regarding labor force placement. The
expenses for the two categories represent different shares from GDP (in the 90s, there
have been allotted 0.8% of the communitarian GDP for active measures and, 1.45% for
the passive ones).

If situation or cyclic unemployment can be reduced with the help of traditional
policies of demand stimulation, then structural unemployment decrease imposes specific
methods such as: • educational a nd training systems improvement; • revising
procedures of wages collective negotiati on and unemployment pays system;
• supporting geographic mobility with the purpose of reducing incompatibilities between
available qualifications on local and regional markets on one hand and , the
qualifications demanded by e ntrepreneurs, on the other hand; • improved activity of
institutions dealing with labor force placement and sharing information regarding jobs
availability.
In close connection with the underlined measures, the Commission has
formulated a series of recommendations regarding diminishing general effects on a
social scale caused by introduction of unique currency as it follows: • dialogue
improvement between social partners responsible of wages settlement and occupancy
increa se, • correlation of nominal wages increase with the necessity of maintaining
price stability in the Euro zone, • agreements regarding wages must take into account
the differences in producti on between states ; • encourage social dialogue by national
gove rnments ; • establishing national programs of action t o increase labor force
occupancy; • training systems improvement; • reduction of social taxation level
undertaken by employees ; • make activity of orientation and labor force placement
offices more efficient; • encouraging part – time and other forms of employment ; • reform
the social insurance system.
To conclude, the matter of unemployment is extremely serious, it cannot be either
quickly or simply solved , but through serious measures taken by each stat e and social
partners. The recommendations of European institutions stick to the level of some
principle statements, defining general solutions whose appliance is not able to reduce
unemployment.

4. The Romanians and the labor force market

After the adhe rence, at least theoretically, the Romanians can enjoy the access
on European labor force market, just like any other citizen fro m European Union
member states, they will be able to work without a working license, they will benefit from
medical insurances, and they will bring their contribution to the pension fund.
European labor market is open to Romania beginning with January 2007 and is
made up of 29 states: the 25 EU member states and also Iceland, Norway, Switzerland
and Lichtenstein.
In fact, there a re all kind of barriers connected to free circulation of labor force
within European Union, some of them mentioned in the present work, and others added
to these. Thus, certain countries in the EU may demand a limitation of labor force flow
coming from Rom ania, or even stopped for maximum 7 years since the adherence. The
most restrictive countries regarding the Romanians are northern and central countries
(Scandinavia, Austria, Germany and the Netherlands). More permissive are the
southern ones (Italy, Spai n and Ireland).
Romanian labor force migration has represented an important subject of research
for recent impact analysis regarding European integration effects. The specialists have
underlined some interesting tendencies.

Firstly, it is about jobs polari zation, occupied by the Romanian emigrants. The
fields that Romanian emigrants are more likely to find a job are placed at the extremes:
either with high specialization (information technology, medicine, architecture), or the
lowest, most of the times refu sed by the population of the respective country (unqualified
employee, porter, scavenger). The most standardized professions in the EU are those
that are the subject of so -called social directives (applied to architects, lawyers,
physicians, dentists, vets , nurses and midwives). This is about mutual acknowledgement
of the above mentioned qualifications between the interested states , based on criteria
that must be fulfilled.
At the time being, those who have graduated a university in Romania and want to
find a job in another country, based on the degree, they can do this only in the
neighboring countries and only for certain qualifications. In other countries, they can do
this only if they take certain exams or if they attend training there.
European Union co untries have been very cautious with the issue of free
circulation of labor force coming from the 10 states that adhered on May 1st, 2004,
although they ascertained that labor force migration has not significantly risen after this
date.
The majority of Rom anian public opinion perceives the migrationist phenomenon
as a movement for work, only a small part of it considers that emigrants make money
out of thefts of begging.
Data analysis of the impact study called “The migrationist phenomenon from the
perspect ive of Romania’s adherence to European Union” allows us to underline some
interesting conclusions. Thus, labor force flow towards EU space will increase,
reoriented towards major directions. The main aimed countries are usually those from
Western and South ern Europe (Spain, Portugal, France, Italy, and Greece ). Although
Germany is a favorite destination, according to tradition, the number of those who
choose this alternative is decreasing.
After the adherence, two tendencies will point out: • temporary migr ation for work,
to the prejudice of the permanent one (t he average duration of migration for work is a
few years ); • the option for legal migration increases , as it ensures a greater earning s
security and a higher rate of social protection.

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