Select Committee on European Scrutiny Fifteenth Report



FIFTEENTH REPORT

The European Scrutiny Committee has made further progress in the matter referred to it and has agreed to the following Report:—

CO-ORDINATION OF SOCIAL SECURITY WITH ASSOCIATED COUNTRIES

Draft Council Decision on the position to be taken by the Community within the Association Council established by the Europe Agreements between the European Communities and their Member States, of the one part, and the Republics of Hungary, Poland, Bulgaria, Slovakia, Slovenia, Lithuania, the Czech Republic and the Republics of Latvia, Romania and Estonia of the other part, with regard to the adoption of provisions for the co-ordination of social security schemes.
(a)
(20891)
5234/00
COM(99) 675

Hungary.
(b)
(20892)
5235/00
COM(99) 676

Poland.
(c)
(20893)
5236/00
COM(99) 677

Bulgaria.
(d)
(20894)
5238/00
COM(99) 684

Slovakia.
(e)
(20895)
5240/00
COM(99) 682

Slovenia.
(f)
(20896)
5241/00
COM(99) 681

Lithuania.
(g)
(20897)
5242/00
COM(99) 679

Czech Republic.
(h)
(20898)
5243/00
COM(99) 680

Latvia.
(i)
(20913)
5239/00
COM(99) 683

Romania.
(j)
(20914)
5237/00
COM(99) 678

Estonia.
Legal base: (variously) Articles 37-41 of the Europe Agreements with the associated countries; unanimity
Department: Social Security
Basis of consideration: Letter of 6 April 2000
Previous Committee Report: HC 23-ix (1999-2000), paragraph 2 (16 February 2000)
To be discussed in Council: No date set
Committee's assessment: Legally and politically important
Committee's decision: (all) Not cleared; progress reports requested

Background

  1.1  On 16 February 2000, we considered a proposal to give effect to the Europe Agreements on the co-ordination of social security schemes with ten applicant States. We left the documents uncleared, principally because it seemed to us that there was a significant difference of view between the Government and the Commission on whether the proposals went beyond the provisions envisaged in the Europe Agreements. The Government held that the Agreements only provided for co-ordination in the three areas of social security provision to which they specifically refer. The Commission appeared to think that the specified matters were illustrative not determinative. We asked the Minister to explain her reasons and those of the Commission, and to let us know the views of other Member States.

The Minister's letter

  1.2  In her letter of 6 April 2000, the Parliamentary Under-Secretary of State at the Department of Social Security (Angela Eagle) says that:

    "The relevant provisions in each of the Europe Agreements are those cited by the Commission as the legal basis for each proposal. These provisions contain an exhaustive list of the three respects in which social security can be co-ordinated. They read as follows:

    "With a view to co-ordinating social security systems for workers of [the relevant] nationality legally employed in the territory of a Member State and for the members of their family legally resident there, and subject to the conditions and modalities applicable in each Member State:

      "—  All periods of insurance, employment or residence completed by such workers in the various Member States shall be added together for the purpose of pensions and annuities in respect of old age, invalidity and death and for the purpose of medical care for such workers and such family members;

      "—  Any pensions or annuities in respect of old age, death, industrial accident or occupational disease, or of invalidity resulting therefrom, with the exception of non-contributory benefits, shall be freely transferable at the rate applied by virtue of the law of the debtor Member State or States; and

      "—  The workers in question shall receive family allowances for the members of their family as defined above.

    "Thus the Agreements create the power to provide for only three things:

      "—  aggregation, only for old age, invalidity and death benefits and benefits in kind;

      "—  exportability, only of contributory old age, death and industrial injury benefits; and

      "—  family allowances to be paid only in the State of employment, without aggregation.

    "The other Articles cited as the legal base are those that provide for the Association Council to adopt provisions to implement the co-ordination measures and detailed rules for administrative co-operation for their application, and the requirement that those provisions should not affect bilateral obligations where they provide more favourable treatment.

    "In its explanatory memorandum to each proposal the Commission observes that the Europe Agreements with the countries of Central and Eastern Europe are a means towards their joining the Community. It states that this ultimate goal is taken into account in the draft decisions insofar as they are based on the acquis communitaire in this field, especially EC Regulation 1408/71, which co-ordinates Member States social security systems. The Commission goes on to say that the Community has already found it necessary in the past to draw up provisions similar to those which need to be adopted for implementation of these Agreements, in particular Decision No. 3/80 of EEC-Turkey Association Council derived from Article 39 of the Additional Protocol to the EEC/Turkey Association Agreement.

    "In proposing to adopt much of the provision of EC Regulation 1408/71, which co-ordinates Member States social security schemes, the Commission appears to take the view that it is possible to go beyond the clear words of the Europe Agreements to adopt more wide-ranging measures than Agreements describe. The Commission evidently draws an analogy with Decision 3/80 of the EEC-Turkey Association Council, which provides a framework for social security co-ordination between the EC and Turkey. This is more wide ranging than the social security provisions in Article 39 of the Additional Protocol to the EC/Turkey Agreement, which are similar to those in the Europe Agreements. (Most of the provisions of Decision 3/80 require further implementing measures before they can take effect. There has been no proposal for such measures.).

    "There are many significant differences in wording between the Europe Agreements and the EEC/Turkey Association Agreement and, for that reason, I doubt that the analogy with Decision 3/80 is sound.

    "The stated purpose of the Europe Agreements is less extensive than that of the EEC/Turkey Association Agreement. The legal basis for Decision 3/80 is Title II Chapter 1 of the Additional Protocol to the EEC/Turkey Agreement. This talks of freedom of movement for workers and the social security provisions in Article 39 of the Additional Protocol to the Agreement appear in that context. By contrast, the Europe Agreements contain no such general statement of intent. I would not accept, therefore, that it is possible to go beyond the clear words of the Europe Agreements in order to achieve a broader purpose, as the Commission seems to be seeking to do.

    "These proposals have not yet been discussed among the Member States. They were on the agenda for the Central Europe Working Group meeting on 31 January, but the Group concluded that it had not the technical expertise to deal with social security matters. We await further developments."

Conclusion

  1.3  We are grateful to the Minister for her response. We note that the issue of the scope of the legal base remains unresolved.

  1.4  We do not wish to question the Minister further on it at this stage but it is a significant point. We accept that the Minister's approach is arguable but, on the other hand, see the force of the Commission's broader interpretation of the legal base. We therefore wonder whether underlying the legal argument, there are political or financial objections to a comprehensive co-ordination of social security systems. There is also the linkage between this measure and the Commission's proposals for revision and extension of existing Community legislation on the co-ordination of social security between Member States, to which we referred in our earlier Report. So we leave the documents uncleared and ask the Minister to continue to keep us in touch with developments on the legal point and the progress of the documents generally.


 
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