EU unions, employers reach accord on "flexicurity"

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LISBON, Oct 18 (Reuters) European Union employers and trade unions agreed today on the guiding principles for 'flexicurity' labour market reforms, aimed at making Europe more competitive while guaranteeing workers' social protection.

Portuguese Prime Minister Jose Socrates, whose country holds the rotating EU presidency, said after hosting a meeting between pan-European union and employers' organisations that the accord was a ''historic moment'' in labour relations.

''We're talking about an agreement between unions and employers at a European level,'' he told a news conference a few hours before a summit where EU leaders hope to seal agreement on a treaty to reform the bloc's institutions.

The agreement was reached between the European Trade Union Confederation (ETUC) and BusinessEurope, representing employers in the 27-nation bloc.

The EU has long debated how to keep its generous social policies when faced with an ageing population, while encouraging labour mobility to tackle fierce competition from emerging economies, especially in Asia.

Flexicurity, a policy that makes hiring and firing easier while guaranteeing retraining and generous benefits during the transition from one job to another, aims to address that.

EU Commission President Jose Manuel Barroso cited Denmark as a model to follow. He said employers and unions had agreed on the general terms of flexicurity.

''This is a consensus for a Europe that recognises we live in a more competitive world,'' Barroso said. ''We need to change to remain secure, but we need enough security to change flexibly.'' The Danish model protects the worker, not the job. It is financed by one of the highest tax levels in Europe. Similar systems apply in Sweden and Finland, also high-tax countries.

John Monks, general secretary of the European Trade Union Confederation, said the agreement ensured flexicurity was given a ''proper footing''.

''We've had a hard discussion but we have adopted the joint analysis and recommendation,'' Monks told journalists. ''It's a way of giving new life to social Europe, so that it can recover its connections to the people.'' REUTERS RSA RAI2154

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