The labour market and the European Union

The Austrian labour market is affected by membership of the European Union in different ways.

Economic integration

• Simplifies foreign trade
• Increases the export opportunities for Austrian companies
• and creates and safeguards employment in Austria.
• It increases levels of competition and
• has an effect on productivity and innovation.
• Free movement of labour permits all citizens of the Union to work in any country of the EU (with the exception of the transitional arrangements affecting the twelve Member States which joined from 2004)

Following the transfer of monetary policy to the European Central Bank and the obligation to carry out restrictive fiscal policy (Maastricht criteria), the adjust processes have been increasingly supported by labour market policy. It has remained within national competencies, but the EU has a coordinating and promoting role:

In November 1997, the Luxembourg European Council initiated the European Employment Strategy (EES) (Luxembourg process). The EES is based on an annual programme of planning, support, monitoring and adjustment in order to coordinate the national policies and measures of the Member States to combat unemployment. Until 2004, National Action Plans for Employment (NAPs) were drawn up.

In 2005, the Lisbon Strategy was revised. Efforts were to be increasingly concentrated on the development of strong and sustainable growth as well as the creation of more and better jobs. This revitalisation of the Lisbon Strategy led to a complete reworking of the EES. The 2005 reform integrated the European Employment Strategy into the Lisbon process and is based on four mechanisms:

• The integrated guidelines for growth and employment
  (the guidelines are now presented together with the guidelines for the macro- and microeconomic policy of the EU for a period of three years)
• The National Reform Programmes (NRP) of the individual countries
• The annual report of the Commission on growth and employment
  (which analyses the new national reform programmes presented by the 25 Member States)
• The recommendations of the Council.

In 1957, the European Social Fund (ESF) was established by the Treaty of Rome. It is the EU's most important source of financial support for the European employment strategy. The ESF is one of the four structural funds of the EU, which were set up to reduce differences in levels of prosperity and standards of living, and to promote the regions of Europe which are in difficulties for various reasons. This is normally described as ‘the promotion of economic and social cohesion'.