Nordic Council of Ministers: Neighbours catching the same wind

When the Nordic employment ministers meet on 15 September during the Danish Nordic Council of Ministers presidency, they do so with the exhibition Matisse – A Second Life and Louisiana Museum of Modern Art as a backdrop. 

They meet on the home turf of the host minister, as tradition demands. The Danish Employment Minister, Claus Hjort Frederiksen, grew up in the small fishing hamlet of Humlebæk, a few kilometres outside Copenhagen, with a pretty view across to the Swedish coastline. 

From left: Secretary General Per Unckel, the Nordic Council of Ministers'Secretariat, Minister for Employment, Hans Karlsson, Sweden, State Secretary Helge Eide, the Ministry of Labour and Social Affairs, Norway, State Secretary Ragnhildur Arnljótsdóttir.

There has always been a lot of contact across this sound, and the Minister himself found his wife on the other side, he explains to his Nordic colleagues. Not an uncommon story, illustrating the close relations between the Nordic countries. These relations manifest themselves in a generations-old co-operation between the peoples of the Nordic countries, and in the formal co-operation on a parliamentary and governmental level which paved the way for the now more than 50 years old common Nordic labour market. 

There is more to this meeting than the colourful luxuriant painting of Henri Matisse and the beautiful nature of the venue. The Danish presidency has drawn up a comprehensive programme. It includes the joint fight to reduce sick leave and how to develop a better working environment, drives to increase mobility between the countries and the exchange of information on how to include more people into the labour market. But they also discuss which Nordic interests are at risk within the EU, and how best to exchange experience and information on new measures which are being introduced to the national labour markets. 

“Iceland’s unemployment of 1.8 per cent is impressive, and we don’t understand how you do it”, says host Claus Hjort Frederiksen. 

In a European context, the Nordic countries are known for their low unemployment. Thanks to an active labour market policy, unemployment in Norway is now below 4 per cent, while Denmark and Sweden have around 5.5 per cent unemployment. Finland is the exception, with nearly 9 per cent unemployment. The Nordic countries are among the best in the world on almost all parameters which measure success. 

“We don’t start a major reform in Norway before we have looked at what other Nordic countries are doing in the same area”, the State Secretary from the Norwegian Ministry of Labour and Social Affairs, Helge Eide, tells NLJ. 

“The challenges are much the same, even if the solutions might vary. But even more important than the Ministers’ meeting is the close exchange of experience among civil servants, which always provides an input into political decisions”, he says. 

“And the co-ordinated Nordic initiatives in the EU are also very useful for Norway.” The Ministers discuss the agenda for the coming council of the EU labour and social ministers, as well as other current topics relating to the EU.

Weakened flexibility

“EU is out of step with the flexible labour market”, says the Danish Minister of Employment Claus Hjort Frederiksen. He feels the Union is heading in the wrong direction in its work on the new directive regulating working time. 

“Denmark doesn’t care what working hours apply in Great Britain. The challenge isn’t competition within the EU, but on the global market.” 

He also thinks the Commission is wrong to demand that state employment support must be given for a full 12 months. In Denmark, state employment support is a tool in the active labour market policy which aims to make it easier for more people to get work. For this to remain an efficient tool, it must be possible to limit the duration of the state support. 

“This is putting the breaks on our goal to improve flexibility in the labour market”, says the Danish Minister. 

He also shares the Swedish concern for the European Court of Justice‘s attitude towards the Swedish collective agreements. This is one of the consequences of the increased labour and service mobility following the EU enlargement. Sweden is one of three countries in Europe which chose to open its labour market to new workers from day one. The other Nordic countries have introduced temporary measures which impose certain limitations on the mobility of workers, while Germany has completely closed its borders. 

According to a study by the Norwegian research foundation FAFO, ordered by the Nordic ministers, the increased mobility has not led to imbalance, but nevertheless unease among workers in the Nordic countries’ labour markets. In Sweden this unease is exemplified in the Vaxholm conflict, a fairly normal labour dispute by Swedish standards, which has now ended up in the EU Court of Justice. 

“Swedish employees are very nervous about the outcome in this case”, says the Swedish Minister Hans Karlsson. 

“Should we be allowed to adjust the Swedish collective agreement system like we always did, or will this lead to change? The paradox is that the Nordic model has the best results. If we aren’t allowed to use this model in the EU, we live in a strange world. Sweden and the whole of the Nordic area will loose out if the decision making process is taken away from the citizens. In Sweden the main organisations the Confederation of Swedish Enterprise and the Swedish Trade Union Confederation negotiate agreements on salary levels. EU’s reputation will loose out if we get a ruling which limits Sweden’s collective agreement system.”

 It is common for labour unions in both Sweden and Denmark to take industrial action to force unwilling employers into agreeing new tariffs, also for temporary foreign workers. If the EU Court of Justice rules against the Swedish workers, it will be a threat to the Nordic model. The Danish Minister also expresses his support to Sweden:

 “It is very important that the collective agreement is respected. If the Court doesn’t recognise that, it doesn’t bear to think about the consequences.” 

The ministers agree to send the FAFO report “Mobility of Labour and Services after the EU enlargement: Nordic differences and commonalities” to the EU Commission. They want to highlight the joint work which is being done on the Nordic level. They also welcome the fact that Iceland and Norway, both EEA countries affected by EU regulations on the free movement of labour and services, will be represented in the High Level Group which will assist the Commission in its work on a report for the Council on the EU enlargement and temporary measures.