Kostoris, Fiorella and Schioppa, Padoa. (2002) Mutual Recognition, Unemployment and the Welfare State. ENEPRI Working Paper No. 13, September 2002. [Working Paper]
Abstract
Contents: 1. Introduction; 2. Rules and Regulations on Mutual Recognition in the European Union Markets; Mutual recognition, equivalence, competition and harmonisation; "Equal treatment" and "social dumping"; The minimum threshold; 3. Proposals for the Introduction of Mutual Recognition in the European Labour Markets and Welfare States; Existing general rules for social protection in Europe; Health care; Mandatory pension schemes; Supplementary pension schemes; Classical unemployment and labour mobility; Mutual recognition and labour market rigidities: A theoretical model; 4. Policy Conclusions. [From the Introduction]. In the post-war process of its economic and social construction, the European Union has been following different paths ranging between open assimilation to mutual recognition. The former arises in the attempts, either negotiated between partners or proposed by Community institutions, to attain harmonisation, coordination, convergence, strengthened co-operation, through peer pressures or moral suasion, looking at benchmarks or at best practices. These are all forms of mediation, compromise, variable geometry between Member States, which show a certain degree of success, but also many failures, mainly because they are unable to accept unity in diversity making the large, existing heterogeneity in Europe a form not of weakness but of wealth. This is indeed the very gist of the principle of mutual recognition: its symbolic value can be easily perceived simply by thinking that, if the American currency bears the caption "ex pluribus unum", the Euro motto becomes "unity in diversity", as stated in her May 4 2000 speech by Mme. Nicole Fontaine, Chairperson of the European Parliament.... In what follows we will analyse the main reasons for the observed facts concerning the advantages of mutual recognition in three out of the four European freedoms (Section 2). We will then see the disadvantages of using an oposite principle in Union’s labour markets and Welfare States. Some possible extensions of the principle of mutual recognition in these fields will thus be proposed: using a simple theoretical game theory model, the positive implications on labour mobility and on the fight against the European classical unemployment will be shown (Section 3). Section 4 will illustrate some policy conclusions.
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