USEU LABOR/SOCIAL AFFAIRS HIGHLIGHTS FIRST QUARTER

UNCLAS SECTION 01 OF 03 BRUSSELS 001122

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DEPT FOR DRL/IL; DOL FOR ILAB; FOR LABOR REPORTING OFFICERS
AND ATTACHES

E.O. 12958: N/A
TAGS: ELAB SOCI PHUM SMIG EUN USEU BRUSSELS
SUBJECT: USEU LABOR/SOCIAL AFFAIRS HIGHLIGHTS FIRST QUARTER
2004

REF: A. 2003 BRUSSELS 5469


B. BRUSSELS 916 (NOTAL)


1. (SBU) Summary: This quarterly report provides readers with
analysis, priorities, and outreach/meetings related to EU
labor and social affairs January-March 2004. We examine EU
efforts to recast its employment goals debate and EU concerns
on the impact on enlargement on EU labor and social
objectives. Key outreach, since ref a, include meetings with
International Confederation of Free Trade Unions (ICFTU) head
Guy Ryder on Iraq, with AFL-CIO international affairs head
Barbara Shailor on transatlantic labor relations, and USEU
participation in an European Social and Economic Committee
(CESE) working group on improving transatlantic relations.
USEU also attended a moving joint EU/European Jewish Congress
(EJC) Conference on "Anti-Semitism in Europe." Looking ahead,
we are interested in increased communication and cooperation
among the ICFTU, the European Trade Union Confederation
(ETUC) and the World Confederation of Labor (WCL). End
Summary

Guiding debate from "firing" to "more" employment
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2. (SBU) Commission labor market experts believe the EU-15
will fall short of meeting their intermediate 2005 Lisbon
Process employment goals (notably getting more females, 55-64
year olders, and able-bodied workers into the labor market).
As this is a politically sensitive topic, a top cabinet
advisor to now-departed European Commissioner Diamantopoulou
told us that the EU is finding it convenient to couch the
debate as a "response" or a "wake-up call" to the November
2003 Kok Employment Taskforce report "Jobs, Jobs, Jobs" (a
study funded and published by the EU but only "reflecting the
opinion of the Taskforce). Our Commission interlocutor argued
that this "outside" report gives the EU some room to maneuver
by helping it recast the debate from the politically
unpopular "hiring and firing" issue of the 90's to the more
politically palatable need for EU member-states to get more
workers into the workforce and out of the long-term
unemployed, under-employed, or early retirees or what
Commission likes to call the EU "full employment policy."

Enlargement: Social and Labor concerns
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3. (SBU) Many of our Commission colleagues in DG-employment
are noting with concern, that with the 10 new members
entering May 1, overall EU unemployment will increase from
about 8 percent to over 9 percent and that overall EU
performance on meeting its Lisbon goals will be set back.
For example, with older workers the Lisbon goal is to have 50
percent in the workforce by 2010; currently among the EU-15
slightly over 40 percent are in the work force; with
enlargement, this number will drop to 39 percent. Similar
backward steps are expected not only on the other employment
goals but also on reducing the EU's poverty rate and the
fight against "social exclusion." Of particular concern to
DG-Employment is that they fear an increase in "social
exclusion" and discrimination against the Roma . With the ten
countries, the Commission estimates that the Roma population
in the EU increases from about one million to an estimated 8
million making them the largest ethnic minority within the EU.


4. (SBU) There has been much recent media and political
attention to the most outwardly dramatic impact of
enlargement, the flow of workers from the new member-states
to the current EU members (ref b). Ref B cited a recent
Commission study suggesting that even without currently
planned temporary restrictions by virtually all current
member-states on labor mobility from the 10 new members, the
maximum movement would have been about 220,000/year over the
next year - not a huge impact in a population of 450 million
workers. However, one DG-Employment official told us that
what worries the Commission even more is the overall impact
of enlargement on the EU total employment rate (defined as
the percentage of the working age population with 70 percent
being the Lisbon Process target). The Commission has
estimated that enlargement will drop the EU-15 employment
rate from 64.3 percent (using a 2002 statistic) to an EU-25
rate of 62.4 percent -- the lowest rate of employment since

1998. The European Employers Group (UNICE) has calculated the
rate of employment for the EU at 25 at 62.8 percent, slightly
higher than the Commission but still the lowest since 1999.

Ongoing priorities
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5. (SBU) Over the longer-term, we are following with
interest ICFTU/ETUC "rapprochement" and some tentative
cooperation between the ICFTU and Christian-Democrat World
Confederation of Labor (WCL) - two international trade unions
that have been competing with each for decades. At the next
ICFTU executive board meeting at the end of March, ICFTU
relations with the WCL are likely to be discussed.

ICFTU concerns and challenge in Iraq
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6. (SBU) After months of careful talks between the
International Confederation of Free Trade Unions ICFTU and
Arab trade leaders, the ICFTU -- nudged by the AFL-CIO and
the UK Trade Union Congress (TUC) -- sent in a multinational
trade union team into Iraq in February to assess the
situation on the ground. ICFTU head Ryder told us that he
sought to avoid having the ICFTU being seen as a "Western
Imposition" and believed that it is necessary to have the
support not only of Iraqi workers but also the trade union
movements in nearby Arab countries. Complicating the ICFTU's
efforts in Iraq is the fact that the old Ba'athist pro-Saddam
trade union movement was never affiliated with the ICFTU;
rather it was a member of the old Soviet-dominated World
Federation of Trade Unions (WFTU). While the Ba'athists
unionists remain tainted by their long history of supporting
Saddam Hussein, they are an established and recognized labor
union. How to deal with them, and newly emerging post-Saddam
trade union movements, remains one of the ICFTU's biggest
challenges.

CESE Review of Transatlantic Relations
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7. (U) We note a recent increase in colloquia and thinktank
activities in the last year focused on transatlantic
relations. The European Social and Economic Committee (CESE)
has created a working group to examine transatlantic
relations and to come up with recommendations on how to
improve them. Supported by the EU, CESE is made up of
employer and worker representatives, i.e. the so-called
"social partners," to examine all aspects of European Union
activity (not just economic, labor, or social affairs). At
CESE's invitation, we discussed transatlantic relations March
1 with them where we highlighted the importance of the New
Transatlantic Agenda (NTA) in helping guide US/EU dialogue.
One interesting aspect of the CESE study group has been its
recognition that disagreements over political and security
issues "spill over" and affect economic and social relations
that are directly relevant to the more "bread and butter"
priorities of the social partners.

AFL-CIO: Cooperating with European counterparts
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8. (SBU) AFL-CIO international affairs Department head
Barbara Shailor called on us March 2 to talk about AFL-CIO
relations with the ETUC and the ICFTU. She said that AFL-CIO
is very pleased with ICFTU's performance under SYG Ryder. She
noted that for the first time in years, the AFL-CIO is
working well with the European Trade Union Confederation
(ETUC); the new ETUC president, John Monks, (former head of
the UK Trade Union Confederation - TUC) is also a
long-standing close friend of AFL-CIO President Sweeney.
Shailor was also interested in being briefed on transatlantic
relations after Iraq and during the Irish Presidency. On her
mind was the possibility of resurrecting the now largely
dormant transatlantic labor dialogue (TALD). While she
wondered what might benefit from putting greater ETUC/AFL-CIO
cooperation in the TALD framework, she did take the point
that there is a great deal of interest in reexamining
transatlantic relations to see if they might be better and
that the labor movements, like the business sector or
consumers, might have a greater role to play.

Canadian Labor Ministry's EU Priorities
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9. (SBU) We met with Thomas Townsend, Health and Social
Affairs Counselor, for the Canadian Mission to the EU. He
spends most of his time analyzing EU labor market and
employment trends for the Canadian Ministry of Labor (his
home office). His highest reporting priority is EU efforts
to meet its Lisbon Process goals, particularly in the
Employment area. Even though his home Ministry lacks the
kind of memorandum of understanding that the US Department of
Labor has with DG-Employment, the EU and Canada try to do two
educational exchange programs per year on topics of mutual
interest. This spring, Canada and the EU will do a
"Roundtable on Labor Market Employment." (Townsend, who is
new to Brussels, expressed his personal amazement by the
amount of time he spent with his EC colleagues over whether
to call the event a seminar, a workshop, or a roundtable.)
The major topics to be covered are likely to be the three
main Lisbon Process employment targets.

SEIU Courtesy Call
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10. (U) Taking a break from their public relations efforts to
enlist support from the ETUC and European Parliament (EP) for
their campaign against Group 4 Falck and its US subsidiary,
Wackenhut, Service Employers International Union (SEIU, the
largest union in the AFL-CIO)) International President Andrew
Stern and International Secretary-Treasurer Anna Burger paid
a call on USEU to introduce themselves. They noted their
efforts with the EP have found some resonance as the Group 4
Falck is the EP security contractor. At their request, we
reviewed US/EU labor cooperation on the role of the disabled
in the workplace as well as US/EU relations writ large.

EU/EJC Anti-Semitism Conference
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11. (U) USEU attended the February 19 EU/EJC Conference on
Anti-Semitism in Europe. A virtual consensus emerged that
there is a "European dimension" to anti-Semitism and that it
is not only a member-state problem. Given this, there was
also general agreement that "Europe" has to respond to it on
a Europe-wide basis. Another important and related
"breakthrough" of sorts was a clear recognition that the
debate of whether anti-Semitism exists in Europe is over; one
participant dramatically said the February 19 conference
"marks the end of denial in Europe of anti-Semitism."
Speakers included EC President Prodi, German FM Fischer, EJC
head Benatoff, and writer Elie Wiesel. We reviewed the
conference with an EU Council Secretariat human rights
experts who told us that the next big step in this dialogue
on anti-Semitism will be the special OSCE session in Berlin
-- an event that Fischer said Germany was proud to host.

Foster