Mutual Recognition, Unemployment and the Welfare State

  • Fiorella Kostoris Padoa Schioppa

Abstract

Apparently the principle of mutual recognition seems able to promote the four fundamental freedoms foreseen by the Treaty of Rome. However — unlike what happens in the commodity, service and capital markets — not only is it far from being adopted in the labour market, but the European Union endorses in this sector an opposite principle, named ‘equal treatment’, while labelling the mutual recognition as a form of ‘social dumping’. Given that labour market problems cannot be discussed without a joint consideration of social protection policies, one has also to add that European welfare states generally utilize host rather than home-country rules, contrary to the principle of mutual recognition. However, there are no deep, logical reasons for using opposite principles in one of the four fundamental European freedoms. Quite the reverse; on logical grounds it is unlikely that, in spite of different standards and legislations, European Member States are able to be equivalent in protecting health, environment and the cultural heritage, but not workers’ rights. Thus, Nicolaïdis (2000) seems correct in saying that:

Formally, mutual recognition can be defined as … a transfer of regulatory authority from the host State (or jurisdiction) where a transaction takes place, to the home State (or jurisdiction) from which a product, a person, a service or a firm originate. This in turn embodies the general principle that if a professional can operate, a product be sold or a service provided lawfully in one jurisdiction, they can operate, be sold or provided freely in any other participating jurisdiction, without having to comply with the regulations of these other jurisdictions.1

Keywords

Migration Europe Income Assimilation OECD 

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Notes

  1. 2.
    This wording is traditionally accepted, as stressed for example by Mattera. However, Weiler prefers the term ‘functional parallelism’, because for imports-exports the existing standards of one Member State have to functionally correspond to those of the others. According to Weiler, this explains ‘the practical failure of the principle of mutual recognition. In many cases, there are lines of products created on the basis of regulatory regimes with substantial differences, among which there does not exist a functional parallelism. In this situation, only standard harmonization may solve the question and it cannot be reached through the jurisdictional instruments; moreover, in some cases, the very nature of the product requires one standard for the whole of Europe’. Admittedly, the implicit assumption of the present chapter is different from Weiler’s position. See Weiler, J.H.H., ‘La costituzione del mercato comune’, in M. Cartabia and J.H.H. Weiler (eds), L’Italia in Europa. Profili istituzionali e costituzionali, Bologna, Il Mulino, 1997.Google Scholar
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    See Padoa Schioppa Kostoris, F. (2000), ‘Commentaire’ to Freyssinet, J., ‘La Réduction du Taux de Chômage: les Enseignements des Expériences Européennes’, in Conseil d’Analyse Economique (ed.), Réduction du chômage: les réussites en Europe, Paris, 2000, where the author stresses the positive correlation existing in Europe between the unemployment variation in the 1990s and the labour-market degree of overprotection. The paper highlights the positive correlation between the labour-market regulatory rigidities and the unemployment rate in the year 2000.Google Scholar
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    Kostoris Padoa Schioppa, F., in collaboration with S. Lubicz, ‘State Aid and the Principle of Mutual Recognition’, in C.D. Ehlermann and M. Everson (eds), European Competition Law Annual 1999: State Aid Control in the European Union — Selected Problems, Oxford, Hart Publishing, 2001.Google Scholar
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© Fiorella Kostoris Padoa Schioppa 2005

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  • Fiorella Kostoris Padoa Schioppa

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