Tohtori Pentti Arajärven puhe Sosiaali- ja terveysturvan keskusliiton järjestöseminaarissa 18.10.2006

The relationship between social rights and market freedoms – is it possible to have a better balance?

The essential characteristic of a welfare state is that public authorities bear considerable responsibility for the welfare of individuals and families. At the EU level the aim is to modernize the European social model and to invest in people. The ultimate objective is to achieve full employment and equal opportunities for all. More specifically, the aim is to prevent poverty and promote social inclusion. The structure of a welfare state is not defined solely by the economy. Similarly, there is no social policy system that would inevitably be ’the best’ for a certain economy.

In order to create a common market when the European Community was being established, the Treaty was made on customs union and on removing the legal and administrative barriers to the free movement of goods, workers, services, and capital. Those fundamental freedoms have acquired a key role in the development of the EU through their primacy and direct legal effect as confirmed by the European Court of Justice (ECJ). According to this, national courts and authorities are obliged not to apply legislation that is in conflict with EU laws. Constitutional Courts or some other bodies have in some Member States questioned the absolute primacy of EU law, especially if the protection of the basic rights provided by the EU has not been considered as good or as effective as the national protection for these rights.

ECJ respects fundamental rights as guaranteed by the European Convention on Human Rights and as they result from the constitutional traditions common to the Member States as general principles.

Two documents of basic rights have been created in the EU. The documents are the Charter of Fundamental Rights of the EU (approved as a declaration in Nice in 2000), and the Constitutional Treaty (including the Charter of Fundamental Rights of the EU).

The most important of the human rights conventions in the field of social protection is the revised European Social Charter. In article 12 the states undertake to maintain at a satisfactory level a system of social security and to endeavour to raise progressively the system to a higher level. Minimum security in article 13 of the ESC requires ensuring everybody’s right to medical and social assistance as a subjective right.

Through the basic rights, the legislator has given assignments itself and restricted its own executive power. Human rights often have similar effects. The public authorities must work actively to ensure the fulfilment of basic rights and to protect individuals against violations of their rights. They have duties concerning legislation, administration, preparing and implementing budgets, and implementing laws.

The freedoms of the internal market can and must be restricted when necessary. The conditions for restricting the freedoms of the internal market must be tested as follows: 1) does the national legislation or something similar restrict the freedom to provide services, 2) can the restriction be justified on objective grounds, and 3) is the restriction necessary, free of discrimination and in the right proportion to the goal aimed at?

The Charter obliges as a principle, the institutions of the EU. In the future, the basic rights may play an important role in establishing a balance with the fundamental freedoms of the Union. It is not yet clear to what extent the basic social rights may develop into a direct protection for an individual’s rights in the EU, or to what extent they can be considered to oblige the Union and the Member States to work actively to implement them. Therefore, the strength and effectiveness of the basic social rights is connected with the question of how well they can function as acceptable grounds for restrictions on, or exceptions to, the other provisions included in the Treaty.

The right operating conditions might be created by issuing a directive that would clarify the position of social policy on the internal market and by adopting in the legislation the Charter of Fundamental Rights of the EU. The former would provide predictability and stability for the decisions of ECJ. The Charter of Fundamental Rights would create a counterbalance constructed on social, educational and cultural rights to the fundamental freedoms and the initiatives of the Commission. After all, the Union exists for people, not for the market.