|
|
7 October 1994
Doc. 7170
1403-6/10/94-8-E
REPORT
on the medical and welfare rights of the old:
the ethical and political dimension
(Rapporteur: Ms ÖZVER,
Turkey, Group of the European People's Party)
Summary
As Europe overcomes its division and the international economy grows truly global, the general principle of social protection is being called into question in Europe.
Political institutions, in their capacity as guardians of democracy, should take a clear stand on behalf of vulnerable groups: old people are at the centre of the debate due to their large number and budgetary impact, but also because of the real and serious problems they face.
Europeans should reflect together on the policies to follow as regards the elderly.
Immediate measures are called for to ensure a continued political transition in the East, and to safeguard social cohesion in the West, in recognition of the fact that priorities and urgent tasks may be different. The report examines them in detail.
I. Draft recommendation
1. The Assembly notes that there is a risk that, as they take on greater importance, the scientific (and medical) lobby as well as the economic lobby will supplant political and legislative power when it comes to defining the main lines of welfare policy; the traditional rules of social welfare are in danger of being replaced by policy rules of purely financial considerations.
2. In order to avoid this unacceptable prospect, the political authorities, in their capacity as guardians of democracy, must make decisive choices in social matters relating to vulnerable sections of the community. Because of its human and budgetary importance, its tangible nature and the seriousness of the problems faced, the medical and social welfare of the old is at the centre of this debate.
3. The end of division of Europe and the ideological divide provides an opportunity, in the medium to long term, for a more objective joint appraisal to be made of what policies to adopt in response to the ageing of our populations and the place of the old in society. It will be necessary for society to make fundamental choices, which will have to be put to the citizens' vote.
4. Nevertheless, for the moment, the Assembly cannot fail to note that the situation and the concerns of the two Europes, east and west, are currently quite different and call for correspondingly different measures.
5. The present economic situation in central and eastern Europe makes it impossible to draw up any long-term plan for social protection; what it demands is urgent action to preserve minimum social protection, centred on the most vulnerable sections of the community, and in particular on the old; these social priorities are essential in order to ensure that the transition is politically viable.
6. Western Europe, for its part, is in a recession. It must maintain cohesion between generations. To achieve this it must aim to preserve jobs for the active population, maintain the income of the retired and look after the sick.
7. Accordingly, the Assembly recommends that the Committee of Ministers call upon and help the states of central and eastern Europe, whether already members or candidates wishing to join the Council of Europe, to take minimum short-term measures aiming:
i. to guarantee adequate minimum incomes for the vulnerable core of the community (the unemployed, the sick, the disabled and the old) in order to avoid tension and conflict;
ii. to combat the deterioration of the public health system and to maintain or establish wieldy structures for primary health care (community health centres for example), which are less expensive and financially accessible for people with very low incomes, such as the old;
iii. to develop local services for the old and introduce or develop training for welfare workers;
iv. to make public social services more effective so as to provide real support for the community and families.
8. In addition, the Assembly recommends that the Committee of Ministers call on the western European member states to reaffirm their attachment to social cohesion and show this by adopting:
i. an employment and labour policy which establishes a new place for the old in active economic life:
a. by breaking down the clear-cut distinction drawn today between periods of activity and inactivity and between those who work and those who do not work,
b. by rethinking the concept of hierarchy in the workplace in order to avoid the adverse effects of gerontocracy and the risks of rejection of the old,
c. by providing vocational training which enables mature workers to adapt to changes and thus avoids the alienation and exclusion that occur because they are old rather than because they are not efficient;
ii. a retirement and pensions policy which encourages solidarity between the generations and guarantees the right to retirement, representation and involvement in the community for pensioners and the independence and neutrality of pension funds;
iii. a suitable policy for the control of public health costs which avoids financial excesses and rejects ethical aberrations such as unequal treatment of patients, or treatment withdrawal or euthanasia on financial grounds;
iv. a health and social policy which gives priority to:
a. an all-round approach to providing for the risk of dependence,
b. the use of new technology making it possible to "delocalise" medical care and provide treatment in the home,
c. an increase in local services for the old providing better quality of life and creating large numbers of jobs.
9. The Assembly further recommends that the Committee of Ministers invite the various relevant steering committees to take into account this recommendation when implementing the intergovernmental programme of activities.
II. Explanatory memorandum1
Contents
Page
I. INTRODUCTION 6
II. GENERAL SITUATION IN EUROPE 7
1. Situation in eastern Europe 8
A. Welfare protection under the former regime 8
B. Problems of welfare reform 8
C. General options 9
D. Financial crisis of pension schemes 10
E. Deterioration of the public health system 10
F. Welfare priorities during the transition period 10
1. Adequate minimum income 10
2. Wieldy care facilities 10
3. Local services 11
4. Training for welfare workers 11
5. Improvement of local authority services 11
G. Conclusion 11
2. Situation in western Europe 12
A. Economic activity/inactivity 13
B. Maintaining retired people's standard of living 14
C. Health and welfare policy towards the dependent 15
(methods, costs and limits)
D. Welfare protection and employment 17
1. New technology and new demand for services 17
2. Local assistance to the old 18
3. A strategy of thrift and flexibility 18
4. Qualifications, training and integration 19
E. Conclusion 19
III. GENERAL CONCLUSION 20
ADDENDUM: Russia 21
I. Introduction
For some years the crisis of the welfare state has been challenging the shape of welfare policy as a whole; hence the need to redefine the aims of policy towards the old, on the basis, among other things, of the various existing standards of provision.
Technology and science are taking on ever more importance, short-term results are in many cases what dictate new standards of provision and are shaping the development of our institutions, the structure of welfare systems is being eroded, and there is a danger of the economy and employment becoming the be-all and end-all and welfare systems becoming mere afterthoughts.
The scientific (and medical) lobby has developed into a major influence as a result of the great progress achieved by science (in such areas as fundamental research, clinical research, alleviation of pain, palliative care and genetics). Demographically, this progress has been one of the main factors in the increase in life expectancy, which, however, is posing a new social problem because of the resultant gradual increase in the dependent section of the population and its care requirement.
The economic lobby, arguing the need to be competitive in order to survive in the world market, now insists on deregulation and universal flexibility. Economic activity is affected by changes in economic systems (controlled economy/market economy) which are triggering radical concomitant changes in economic institutions: in eastern as in western Europe there has been a surge in unemployment, which in eastern Europe has been accompanied by steep monetary depreciation.
Is there a danger of the political and legislative power being supplanted by these lobbies and influences and of ethics — that is, the traditional rules of our society — coming up against a politics ruled by purely financial considerations?
Given the unacceptability of that prospect, and of invoking democratic pressures or economic constraints in order to dismiss any thinking about human beings, history or the existential and social implications of our supposedly shared ethic, this is probably the time to reassert the necessity of rebuilding welfare systems, in western as well as eastern Europe, and demonstrating our powers of adaptation to changed circumstances.
Aristotle considered politics the noblest of the sciences as being concerned with the whole of human activity; in the social field, the political arm, as the custodian of democracy, now needs to be taking a clearer line on various issues; one of these, as we move beyond the welfare state, is medical and welfare protection for the old, which, given its importance in human and budget terms and the immediacy and seriousness of the problems involved, is going to require decisions by government sooner or later. It is fair to say that the importance of old-age medical and welfare policy throughout Europe makes it no mere managerial question but a matter for a new ethical and political doctrine which entails setting out the basic options for society and putting them to a vote of the people directly and concretely affected by them.
Only a politics that takes into account the human condition, the humanistic dimension of our social ethic, will achieve a transition from short-sighted social policy to a welfare policy that gives people back their freedom and gives them scope for achievement, creating a new dynamic within which the elderly have their place in society.
Politics does not achieve instant results of course (it helps to change attitudes by working away at them slowly, patiently and diligently) but it suggests that there are no historical inevitabilities or necessarily lost causes, and history abundantly demonstrates that whatever is desired by all is achievable. Politicians therefore need a grasp of the whole of reality and not just of one of its parts, and it is for them to point the way towards a re-unified vision of human beings.
Despite all the difficulties which Europe is experiencing politically and economically, a historic opportunity presents itself to redefine the rights of old people as part of a new European unity and solidarity.
II. General situation in Europe
Geopolitically, the fall of the Berlin Wall has put an end to a divided Europe. We are seeing a reshaping of Europe, with new borders being recognised, the unresolved problems caused by previous redrawings of borders after older conflicts, present borders being contested and nationalism resurfacing.
The upheavals in central and eastern Europe have triggered both political/military and economic/social reorganisation which has not yet produced new, clearly defined structures.
The ending of the east-west antagonism which for over forty years largely governed international relations is now bringing to light numerous deficits and uncertainties calling for a new political and economic scheme of things in Europe and a new European social contract.
In this European family reunion two very different countries are playing a dominant role: Germany has been a major force for integration since the prompt reunification of the two Germanys made it the largest country in the European Union; while Russia has an exceptional and fundamentally important place as the biggest and potentially most powerful country in Europe, located off-centre both geographically and culturally.
It is worth noting that our various states do not all have the same hierarchy of political and economic/social rights. Some of them have traditionally placed individual and political rights higher than economic and social rights (despite having well-developed welfare systems — this applies to some western European countries), while others have given precedence to economic and social rights (with universal protection) over individual and political rights (this was the system in the Soviet Union).
The changes are stripping our welfare systems of their ideological frameworks and eventually are going to radically alter them, but at the same time they are a chance to get together and take a more objective look at what policies to adopt in response to ageing of the population.
1. Situation in eastern Europe
A. Welfare protection under the former regime
The transition from a controlled economy to a market economy and the switch from state enterprise to private enterprise has structurally weakened welfare systems under which acquired economic and social rights were unassailable and which were wholly state-run, the welfare budget being wholly subsumed in the state budget. That system produced a standardisation of living conditions and income. But the advent of a market economy has rendered unworkable a system of universal welfare benefits unlinked to occupational activity.
In the early years of the transition in central and eastern Europe it was wrongly believed that market forces on their own would solve production problems and problems of distribution of resources. Now, however, it is clear that the market alone in no way solves the distribution problem, in particular the allocation of earnings between consumption and investment and between the working and non-working populations.
As the antithesis of the Soviet model, the capitalist model was attractive to many people who were not very familiar with the free market economy and its social market rules and who did not realise that the market system was itself in crisis. The fall in production which accompanied the reorganisation process in eastern Europe caused a large rise in unemployment and poverty, resulting in a sharply increased need for social provision at the very time when recession meant less money was available.
Politically, it was thought to begin with that freedom of expression was itself a guarantee of a well-regulated society, at a time when it was being realised that a clear new social contract and a consensus on the social cost of reform was necessary.
B. Problems of welfare reform
The new social blueprint in eastern Europe has to contend with various constraints on welfare reform.
The first problem is quite simply that of doing away with a large number of benefits regarded as established entitlements but which made protection extremely expensive.2
In economic terms, the transition has caused a steady widespread fall in production, a reduction in household disposable income,3 and a decline in national tax revenue.
This rationing of resources is affecting the formulation of long-term welfare policy — at the moment it is very difficult for the legislative and the executive to draw up an overall legal framework for welfare protection.
Reforms and adjustments to the old regulations have been and are being carried out nonetheless in all the eastern European countries and are testimony to the real effort that is being made on behalf of welfare protection. But the difficulty of laying down foundations for structural reform of social security is considerable.
Although a great deal of thought has been given to these matters, putting measures into practice remains difficult.
C. General options
Most countries in eastern Europe are keen to move towards social-security-based insurance systems,4 though there are some advocates of private insurance systems.5
This presupposes:
—co ntingency-specific insurance systems (invalidity, sickness, unemployment, old-age pensions);—
—th e introduction of individual accounts;—
—se parate funds for the different risks, as in any insurance system;—
—tr aining of specialists to manage the different social-security sectors;—
—ma rshalling stable, controlled sources of finance. At a transition stage, when enterprises are precarious, basic issues arise such as what size of contribution is required and what proportion should be paid by the employer and employee;—
—th e political will.D.
D. Financial crisis of pension schemes
The pensions crisis highlights the serious disproportion between the working and non-working populations. This is a result not just of the general demographic problem in Europe but also of the former retirement pension system, under which a pension was sometimes just for a certain number of years worked (the social insurance system) but in many cases amounted to a welfare benefit based on type of work, family membership, degree of incapacity, number of children, etc.; such awards were made without regard to any question of balancing a budget.
E. Deterioration of the public health system
Health systems of the Soviet type were entirely state-run and in principle were free of charge, but for some years there has been noticeably less investment in the sector and illegal payments have become a firmly established practice, very often making services unaffordable for the old. There are similar developments in pharmacy, where the cost of medicines (many of which are imported) is not reimbursed.
F. Welfare priorities during the transition period
National financial crisis in all the central and east European countries and generally very low revenue make it impossible to draw up a new social contract right away. For the time being only short-term or medium-term measures can be adopted, to meet the most basic welfare priorities:
1. Adequate minimum income
Despite the budget crisis in those countries there needs to be an adequate minimum income for the unemployed, the sick, the disabled and the old, who are most vulnerable sections of the community during the transition. Without provision for an adequate minimum income, hardship and social tensions are liable to cause severe social disruption.
2. Wieldy care facilities
There is an urgent need to maintain or establish basic facilities for primary care (dispensaries, medical centres, etc.) in order to take pressure off larger, more complex facilities (hospitals), which would deal only with cases referred to them by the primary care facilities.
There are various advantages to such an arrangement:
a. it makes good any gaps in the system being reorganised and it averts a problem of illegal payments;
b. basic facilities are less expensive and are thus compatible with small budgets;
c. facilities of this kind are badly needed by the old, whose incomes have suffered considerably.
3. Local services
There is a shortage of residential care facilities for the old, and domiciliary assistance, care and services are seldom available. There is therefore a good case for the provision of local domiciliary services, particularly as in most of these countries there is still a valuable tradition of family and neighbourhood support to old people. Support of this kind is worth encouraging or setting up.
4. Training for welfare workers
This creates an urgent need to introduce or develop training for welfare workers6 so as to provide back-up for existing supportiveness.
5. Improvement of local authority services
Local authorities also need making more effective in the welfare sphere so as to provide support to the community and the family.7
G. Conclusion:
The present economic situation in central and eastern Europe8 makes it difficult to draw up any long-term plan for welfare protection for the time being; what it demands, as a first step, is urgent action to preserve basic protection, which needs retargeting on the most vulnerable sections of the community (which include the old) in order to ensure that the transition is politically viable.
In the short term the solution will largely lie in helping those countries achieve the prerequisites for growth of internal demand and raising the standard of living. Support from, among others, all the European countries is therefore essential.9 10
In the long term, however, it will be necessary to work out a new social contract establishing a clear link between the price to be paid for the transition today and the future social blueprint. The new social contract will have to be subjected to public debate.
Politicians, trade unions,11 and the people are changing course, and elderly welfare must not be neglected even though there are great budget difficulties to contend with. The point must be made that improvements of social protection will not be an aim to which everyone subscribes until national income has risen enough to make its achievement possible.
Laying the legal, institutional and human foundations of a market economy is an essential part of the process. Nevertheless, it will have to be consistently borne in mind that social welfare is essentially a political matter, and that the basic options in the planning of national welfare systems hinge on conceptions of fairness and solidarity which are peculiar to the individual country and its political tradition and history.
International organisations keen to offer co-operation in the welfare field are aware that their role consists in helping the countries of central and eastern Europe to work out their own welfare models (reflecting tradition, the moral climate, and family and social structure) rather than trying to export ready-made models.
2. Situation in western Europe
Western Europe is characterised by welfare systems which are particularly highly developed, but the growth of unemployment, which is both a waste of resources and a source of social trauma, is placing a strain on welfare funding and posing a challenge to our concepts of solidarity. In the face of what is a major crisis there are three objectives which welfare policy must reconcile if strife between generations is to be avoided: keeping the working population in work, maintaining retired people's standard of living, and providing care for the sick.
A. Economic activity/inactivity
There are various aspects to the question: increasing numbers of unemployed benefit recipients (low economic growth); increasing numbers of elderly benefit recipients (ageing of the population); and the rising cost of unemployment, retirement and sickness insurance schemes.
The financial cost of the non-working population is regarded as excessive. The unprecedented transformation12 which European states are undergoing13 is liable to affect the basic welfare machinery and necessitates redefining the system in order to preserve the fundamental unity both of the system and society. Hence most western countries are reviewing the way in which welfare protection operates in an attempt to make it more effective and reduce its costs by greater selectiveness and development of more responsible attitudes.14 Only a co-ordinated and coherent approach to the economic crisis can prevent a break-up of welfare protection — and economic and social cohesion is the mainstay of European construction.
In general, too clear-cut a distinction is drawn between economic activity and inactivity: in the lifetime of the individual there are various stages — childhood, education, activity or inactivity, retirement — and these can very well be viewed, from an overall, long-term standpoint, as making up a continuum. In the present circumstances, in any case, any member of the working population may well alternate periods of economic activity with periods of economic inactivity, and the two could perfectly well be seen as going together.
In addition, there is a case for a rethink on the concept of hierarchy in the workplace15 so as to counter the adverse effects of gerontocracy and create a different role for older people in working life. The answer to preserving social solidarity is a radical change in employment policy,16 which needs to be made central to overall strategy.
The approach may be termed a "social economy" one.
A new generation of goals is emerging which is actuated by different development thinking.
As pointed out by the Commission of the European Communities, production systems and patterns of work and consumption are changing worldwide, the eventual effects will be comparable to those of the first industrial revolution, and the concern must be not to delay the change but to control it so as to avert the traumas of adjustment which were a feature of last century and which would be unacceptable in present circumstances.17
B. Maintaining retired people's standard of living
There is a wide range of retirement pension provision in Europe (state pension, basic pension, supplementary pension, pay-as-you-go and funding schemes, etc.). All have their virtues and their limitations. Each country is convinced of the need for co-existence of the various approaches and for joint provision by the state and the people.
Raising adequate finance for retirement pensions at a time of undoubted ageing of the population and of adverse economic and social prospects certainly poses a problem, but it is a matter of social justice and solidarity between generations given that, whether through payment of taxes (where pensions are taxable) or social security contributions, the retired have made inputs to the economy. These are important issues which pose a great challenge to European society, and warrant full guarantees because they affect one of the fundamental aspects of our democracies:
a. a guarantee of the right to retirement;18
b. a guarantee of proper representation and involvement of retired people in the political process;19
c. a guarantee of the independence and neutrality of the funds concerned to avoid appropriation of retirement funds to other priorities.
C. Health and welfare policy towards the dependent (methods, costs and limits)
At present we have technical resources (new medicines and new investigative techniques such as nuclear magnetic resonance imaging) which are powerful and expensive. We readily accepted the rising cost of this new technology during the period of economic expansion. But the budget problems we are now having place our societies in the position of having technical medical capabilities but not necessarily the money to use them.20
We are going through a period of radical change which is going to transform our system of medical and health protection, and we have to adjust while exerting an influence on developments: there is a very real risk, in the industrial countries, of curbing rising care costs by inappropriate means. The role of government will be to avert financial aberrations (there is a price the community footing the bill is prepared to pay) and ethical aberrations such as patients receiving service according to their financial means21 and treatment withdrawal or euthanasia on financial grounds.
Nonetheless the hardest problem posed by greater life expectancy is not financial provision for retirement pensions or expenditure on care but the quality of provision for the dependent to allow them to be full members of the community.
It is worth looking at what Germany's health policy has accomplished here: chronic illness (and resultant dependence) have been brought back under the general health scheme. As a result there are no longer exclusions of certain types of illness, with means-related provision for the dependent. Under the new arrangements the elderly dependent person is a patient all of whose needs (whether in the medical, health or welfare spheres) are recognised as giving rise to entitlements and are properly met in all three areas regardless of his or her financial means. The policy Germany has adopted is indicative of its powers of adjustment to realities and of respect for old age. The protection it now affords to the elderly dependent is now equal in standard to the near-ideal arrangements which the Netherlands and Scandinavia have long had.22
France has long been seeking an equitable solution but so far has not succeeded in co-ordinating provision for the dependent, wavering between a state service and a local service provided by the département or the commune. With several funding schemes involved (medical, health and welfare provision are separately financed), needs are not being adequately met since each funding agency is keen to restrict expenditure.23
Purely financial arguments are unacceptable: only a full all-round view of elderly health and of financing of health protection for the elderly will produce a coherent system. Capability of such vision may be a test of whether government is up to making fundamental choices. The key problem, politically, is reconciling thrift, service to the patient, and respect for the individual human being. Two bills at present before parliament testify to French politicians' engagement with the crucial matter of dependence.24
D. Welfare protection and employment
Certain avenues of reflection on what policy should be suggest it is not impossible to reconcile budget stringency with respect for individual rights.
It is possible to think in terms of employment and welfare protection as being interconnected. There are various aspects to this.
1. New technology and new demand for services
The transition to an information society, with all the possibilities it opens up, is ultimately comparable to the first industrial revolution. The availability of new information and communications technology transforms many areas of economic and social life. A revolution this may be but it also has tremendous potential for job creation, even though it necessitates a highly developed capacity for adjustment and therefore, in many cases, new forms of welfare protection. New needs are emerging in the health sector, for instance. Present technology makes it possible to delocalise certain components of domiciliary care for example, and for some aspects of these to be dealt with by the patients themselves or by less specialist staff (by such means as distance supervision and computerised diagnosis), and computerised aids in the home25 are a further addition to the domiciliary facilities that can be provided.
The spread of new technology thus creates new markets for services and generates jobs in service provision to the old.
2. Local assistance to the old
If the emphasis in structure policy were put on service sectors in which new social needs are emerging it might well provide work for a large proportion of the available labour supply. At present a great many of the needs and hopes of the old (and very old) are not being met. Meeting them would allow old people to live on comfortably and satisfactorily in their own homes and save them the unwanted expense of residential care, expense which is unnecessary when there is an alternative to institutionalisation. Stepping up local services to the old (health care, meals on wheels, help with housework and getting out of the house, etc.) has the potential to create large numbers of jobs.26 Each country, therefore, needs to strike the right balance in accordance with specific needs and budget constraints.27
3. A strategy of thrift and flexibility
While it is necessary not to over-regulate in employment matters, the same applies in medical and welfare protection, of old people among others. Administrative rigidity and compartmentalisation cause delay and inefficiency in meeting old people's needs, and this is both expensive and seriously detrimental to old people's quality of life and the national budget.28 29
4. Qualifications, training and integration
Present thinking has long moved away from the idea of once-and-for-all education. The emphasis now (because of the constantly changing pattern of working life) is on developing life-long training opportunities so that people can top up their skills to meet new needs.30
If this approach were to become general, it would make a major contribution not only to the war on unemployment but also to helping the older worker to become occupationally adaptable. Adaptability training would prevent some job losses which are ascribed to age rather than poor performance. Adding new skills to the older worker's experience makes for powerful new capabilities. Lifelong training is not only a source of motivation but also ensures that workers do not retire because of difficulty in adjusting to the changing demands of the job, a prime cause of dissatisfaction and ill-health in retirement.
E. Conclusion
Since 1945 the western countries have set up extensive systems of medical and welfare protection for the elderly.
Globalisation of the economy and the resultant crisis have brought to light inadequacies in systems which are also expensive to operate. In health policy it is very evident that regulation of expenditure on care is possible provided the whole community shares the cost burden, care needs are better assessed and expenditure is better supervised. This particularly applies to all aspects of provision for elderly dependence. As regards the distinction between economic activity and inactivity, a radical rethink on economic activity is called for: particular thought needs giving to the purposes it serves, whether it meets society's needs (the concept of serving the community), the resources at its disposal (new technologies), and waste of skills (experienced workers being discarded). The exercise is necessary in the interests of maintaining both employment and retired people's standard of living.
III. General conclusion
Despite genuine efforts, medical and welfare protection for old people in central and eastern Europe and Russia is encountering serious difficulties because of shortage of resources. This makes it impossible to produce full and universal arrangements straight away. Modest, short-term measures are all that is feasible: preserving and guaranteeing an adequate minimum income and providing care facilities and local services.
An economic upturn, the political courage to tackle the priorities — health and income to cover the basic necessities — and the west's support will make it possible subsequently to set up comprehensive long-term welfare machinery. Western Europe has the necessary infrastructure and trained welfare and medical services. In spite of present economic problems it remains fully capable of maintaining a high standard of medical and welfare protection provided: the delivery of assistance and care is evaluated, co-ordinated and closely supervised, it makes the most of its workforce's skills and the available technology, economic inactivity (unemployment, pre-retirement, retirement, etc.) is correctly rationalised and administration is made more flexible and more effective — that is, brought closer to the people. In a word, provided an effort is made to tackle inefficiency, which generates needless expense and social misery.
Addendum
Russia
In the transition picture Russia has a noteworthy place as being the largest country in Europe in terms of surface area, population, human resources and natural resources. Politically and militarily, its position and influence are crucial to European equilibrium; the Russian economy is vital to east-west economic recovery and is affected by the turbulence in the various world economic systems, between which the price of labour and welfare varies greatly, causing fierce competition and self-defence. In the welfare sphere, protection at present involves two organisational and financial systems which are being drastically modified.
1. There is a shift from the centralised, unified system, which has now been divided up into different funds: a pensions fund and a social insurance fund (1990), an employment fund (1991), and a sickness insurance fund (1993).
2. The financing of welfare protection has likewise undergone a major change, the state having pulled out and workers being required to pay a (small) personal contribution towards protection against risk. Nearly all the weight of welfare funding is now borne by enterprises31 (though a large number of public enterprises do receive state subsidies regardless of profitability); but most are set to be privatised. From the outset the basic reform has involved privatisation of the main groups of enterprises but also a social security safety net for the neediest and those most affected by the restructuring of the Russian economy, under an anti-inflationist approach which the IMF has already tried out in eastern Europe: it combines a tight schedule of structural reform, withdrawal of subsidies from inefficient enterprises, and reallocation of such subsidies to provide funding for the aforementioned welfare safety net.
In Russia, as it happens, there is a well established tradition of industry performing a welfare role: the main groups of industries provide employees and former employees (the old) with numerous welfare facilities such as accommodation, medical services, nurseries, holidays and food parcels.32
This welfare provision is particularly appreciated in that there are shortages of goods and the general welfare system increasingly provides only minimal cover. Former employees of the enterprises concerned are less severely affected by the economic crisis than other retired people as a result of continuing to receive such benefits.
In the matter of sickness insurance, major enterprises clearly intend further developing their internal medical infrastructure rather than using insurance companies as provided for in the reform of the health system.33
But although this policy of industry's plays a major role in social protection and remedies many of the present shortcomings in the state system, it is a factor for social inequality (in particular in the case of old people outside the industrial system or privileged sectors). There is no getting away from the fact that no major reform of the welfare system is really under way at the moment, despite the state's many endeavours.34
Reporting committee: Social, Health and Family Affairs Committee.
Budgetary implications for the Assembly: none.
Reference to committee: Doc. 6699, Reference No. 1819 and Doc. 6706, Reference No. 1822 of 5 November 1992.
Draft recommendation unanimously adopted by the committee on 20 September 1994.
Members of the committee: Mrs Hĺvik (Chairwoman), MM. Rathbone, Marques (Vice-Chairmen), Mrs Albrink, MM. Andriukaitis, Banks, Bloetzer, Bowden, Brugger, Bugli, Buzatu, Curto, Deguara, Dionisi, Mrs Fleetwood, MM. Geoffroy, Gouteyron, Mrs Guourova, Mr Gusenbauer, Mrs Halonen, Mrs Hřegh, MM. Jacquat (Alternate: Mr Daniel), Jurgens, Koucký, Laanoja, van der Maelen, Maginas, Malachowski, Mazzone, Meyer zu Bentrup, Mozetič, Mulvihill, Ottenbourgh, Ms Özver, MM. Palacios (Alternate: Mrs Moreno), Paunescu, Pini, Mrs Ragnarsdottir, MM. Raska, Regenwetter, Reimann, Robles Orozco, Schwimmer, Sofoulis, Mrs Soutendijk-van Appeldoorn, MM. Ternak, Vajda, Wielowieyski, Mrs Wohlwend, MM. Wolfgramm, Yürür.
N.B.: The names of the members present at the meeting are printed in italics.
Secretaries to the committee: Ms Coin and Ms Meunier.
1 1The report was written by a consultant, Mrs Delperée, Research Centre on Ageing, University of Louvain (Belgium).
2 1Although retirement pensions were not very high (except those of a number of privileged categories, such as miners, railway workers, the armed forces, and the police), they were enhanced by numerous entitlements to free goods and to health and welfare facilities, and basic necessities — such as energy, housing and transport — were heavily subsidised; in addition, retired people had the right to continue doing paid work while drawing their pensions (this right has been greatly restricted).
3 1 As a result of the first waves of redundancies, central and eastern Europe have had to cope with a totally new phenomenon, unemployment.
4 2 Copied from western European models such as France or Germany.
5 3 The problems with systems of this kind are on the one hand the danger of ending up — in the health system, for instance — with a two-tier system with a low standard of provision for anyone unable to afford contributions to the optional scheme, and on the other a system of benefits which vary in standard according to occupational status.
6 1 For example, a European Community project on behalf of Romania is now under way to establish a trainer training course in social gerontology, to be run by Bucharest University (in collaboration with the Ana Aslan Foundation). The aim is to train welfare workers (nurses, social workers, psychologists, etc.) in providing local services to old people.
In addition, San Diego University in the United States has offered to provide a short course for welfare professionals with a view to setting up a pilot day centre in Romania.
7 2 Poland's 1990 Social Work Act set up a full, carefully targeted, decentralised system of welfare help, run by the voivodships and municipalities, but municipal budgets are too small to meet needs. Further, the vast majority of staff have no training in welfare work.
8 3 At present there are inequalities of economic development: Hungary, Poland, the Czech Republic and the Slovak Republic, now linked by a series of regional agreements, form a group which has the benefit of western proximity and investment.
9 1 A Commission of the European Communities white paper has pointed out that integrating central and eastern Europe and the former Soviet Union into the world economy will help strengthen growth in that region and worldwide.
10 2 The White paper also acknowledged that Community relations with central and eastern Europe have taken on particular importance in the context of the new world economic order and the new international division of labour. It was in the Community's interest, it said, to develop collaboration with the countries closest to it as far as possible since Community partnerships with central and eastern Europe might be the key to the realisation of regional growth potential as well as enabling the Community to nudge central and eastern Europe into step on the principles of competition and social protection which were basic to the Community model of market economy.
11 3 It remains to consider the whole question of trade unions' role in post-communist society, and such matters as representativeness requirements, negotiation arrangements and dispute-settlement machinery.
12 1 According to the Commission of the European Communities white paper, the conflict between budget trends and pay trends, which have been very slow to come into line, and the constant pressure exerted by monetary policy are the main factors behind the present recession.
13 2 The situation varies greatly from country to country, and this of course necessitates qualifying any statement: Italy, which is directly affected by the disintegration of Yugoslavia (there are large Italian minorities in Croatia and Slovenia) and the economic collapse of Albania (it is giving large amounts of aid to Albania in order to avert massive emigration) is having to contend with a heavy overall debt burden simultaneously with an uncertain political climate, and has still not carried out structural reform of the health system or pensions system. This does not help the circumstances of Italy's old people. In welfare protection, Portugal is lagging a little behind its European partners (among other things, retirement pensions are inadequate) but is making consistent efforts to further its economic and social development. Finland is in a delicate economic and political position (internationally its attention is divided between relations with Moscow, which are complicated by the issue of the Baltic countries, and European integration) and is facing challenges to the principles of the welfare state, particularly as regards the unemployed and the retired.
14 3 Belgium has put forward a "social pact" and a "master plan" (with which the trade unions have taken issue as proposing a treatment for Belgium's economic ailments which is essentially based on budgetary stringency, monetary orthodoxy, reducing wage costs and speedier achievement of employment market flexibility).
15 1 As hierarchy is seen as a superposition of tiers of responsibility and power (which increase with progress up the scale of, say, age), the outcome is a wielding of power by older people (gerontocracy) and reaction against the old is made likelier. A more democratic approach might consist in replacing hierarchy, to some extent, by a horizontal interlocking of functions and responsibilities and in authority being wielded on a basis of ability and delegation of specific responsibilities. This would enable old people to perform important functions while relinquishing the power which seniority conferred on them.
16 2 For some thirty years, more particularly on account of demographic factors, there has been an increase in the number of job seekers whereas the number of jobs available has not grown to the same extent. Unemployment in the European Community is high and may rise to 18 million jobless by the end of 1994. The central aim of the Commission's strategy is an ambitious one, involving creating 15 million jobs.
17 3 White paper.
18 1 The right to retirement cannot be called into question either by the executive power or by the ordinary legislative authority on the grounds of budgetary imperatives; hence the need for a more or less far reaching constitutional guarantee.
19 2 In some countries retired people can find themselves excluded from debate because they no longer contribute financially and no longer have their own trade union spokesmen.
20 3 GOT, Claude, La Santé, Flammarion, 1992, pp. 11 and 17: "It would be unacceptable if we had the means of preserving life and were unable to use them for financial reasons. The attendant ethical and political dilemmas are going to loom large in our societies, and need tackling before developments get out of hand. We risk worsening the present inequality as regards maintenance of health and compounding it by inequality of prospects of recovery from illness. A realistic course would be to place the emphasis on effectiveness of health action in order to reduce inequality more successfully and combine respect for the individual human being with optimum use of our resources. We need a philosophy and an ethic based on objective awareness of the technical and economic realities of medical and welfare action ... The main problem in the period ahead will be to define our priorities without making technical capability the sole criterion."
21 1 Refusal to treat certain medical conditions.
22 2 On Thursday 10 March 1994 Germany's two main political parties (the CDU and the SPD) agreed on arrangements for a compulsory insurance scheme to finance care for the elderly dependent" (Le Monde, 12 March 1994, "German wage-earners to finance dependence insurance"). The planned scheme will pay for domiciliary care with effect from 1 January 1995 and for residential care with effect from 1 July 1996. Under German legislation of 20 December 1988, domiciliary assistance to dependent persons was already a right under the health insurance scheme and was therefore not subject to the individual's financial means.
23 3 Dependent Persons Bill, document No. 90, Assemblée Nationale, explanatory memorandum, p. 4, issued 27 April 1993: "The multiplicity of financing schemes causes deadlock, as each argues that funding is the responsibility of the others ... the domiciliary help available varies extraordinarily from one pension scheme to another."
24 1 Bill No. 90, tabled by Mr Bachelot and Mr Chamard, rightly points out in its explanatory section that "the very concept of dependence is still not recognised in our health and welfare legislation" and suggests drawing up "a national plan of action on behalf of the elderly dependent". It suggests that new arrangements should centre on three components: "basic provision of preventive care and support at département level, introduction of a dependence allowance, and financial provision for a fund in each département in aid of dependent persons". Article 1 of the bill accordingly lays down the principle that "the nation should henceforth demonstrate its solidarity with dependent persons to enable them to continue living dignified lives ... as a further expression of such solidarity, there needs to be provision for the dependent such that all are afforded the necessary support, services and care".
Out of concern for justice for the old and the dignity of old age, the bill "eschews any possibility of seeking compensation" from the dependent person's estate.
The other bill, tabled by J.J. Weber, National Assembly document No. 252, issued on 8 July 1993, refers in its explanatory remarks to "comprehensive provision" for dependent persons, including multidisciplinary teams, and to a policy commitment to enabling dependent persons to stay on in their own homes and to "providing support to the carers". However, the proposed dependence allowance is to be means-tested and is conditional on the family paying maintenance and on expenditure being recoverable from the estate.
The problem of aid to the dependent is thus still to be solved in France.
25 1 Sweden, for example, makes a great deal of computerised equipment available to the handicapped and the old, and this reconciles economy with respect for individual freedom of choice.
26 2 In its draft budget for 1992, Norway, which also has an unemployment problem, set about raising demand for goods and services (to the old among others), as a way of generating employment.
27 3 There is no comparison, here, between the budget provision which the Netherlands is able to make for the elderly and that which Greece can make. Greece, which is in a difficult geopolitical position, is having to practise austerity. The Netherlands, despite all its buoyancy, has had to make some welfare cuts (in particular in its very generous work incapacity allowances) but is still one of the best European providers of old-age medical and welfare protection.
28 1 To take a simple example, shortage of personnel or inflexibility and delay in assessment of the individual's finances deprive old people of domiciliary services in some countries, and this can cause a deterioration in health which could easily have been prevented; this in turn can lead to costly hospitalisation, often followed by placement in a home and consequent loss of quality of life.
29 2 An example of adapting the regulations: the United Kingdom, whose policy on aid, care and services to the old is of considerable interest as it is, reasserted a number of principles in its Citizen's Charter published on 22 July 1991. This is in fact a series of charters covering every aspect of government and administration (the health charter, for instance, entails improvement of health services and greater regulation of public services). In effect the charters contain lists of duties which public services are required to discharge, with a view to improving the provision of assistance and services.
30 3 Bill Clinton told a conference on 14 and 15 March 1994 on employment in the seven leading industrialised countries that when he spoke to young people he always told them they would probably have to change jobs seven or eight times in their working lives. There was going to be constant restructuring and loss of jobs and the state must therefore assist reemployment by providing life-long training.
31 1 Enterprises are required to pay contributions totalling 39% of the wage bill.
32 2 Industry hopes, by this means, to retain its workforce and highly trained technologists and to develop employee loyalty by the provision of substantial benefits both in cash and kind.
33 1 Under the Health Insurance Act which (partially) came into force on 1 January 1993, the arrangement is that firms pay contributions, on their employees' behalf, to insurance companies, which enter into agreements with medical centres.
34 2 In early 1992 Russia's Ministry for Social Protection set up a federal fund for welfare support to the population, and drafted a bill introducing a minimum income.