FRIEDRICH-EBERT-STIFTUNG EMPLOYEE FINANCIAL PARTICIPATION 3 EUROPEAN CONTEXT Since the beginning of the twentieth century, EFP has been touted by social reformers as one possible response to desires voiced by employees(Adams& Sumner, 1905). However, the adoption of specific legislation at national level had to wait for a favourable post-World War II political context. Virtually all liberal democracies in Europe have developed legislation and practices that encourage(rather than impose by law) this solution through taxation, corporate regulation, pension systems, and so on. The basic underlying principle everywhere has been that financial participation should provide additional benefits to employees above and beyond salaries and wages. At EU level, we have the European Council Recommendation on employee participation in company profits and results(so-called PEPPER), which was issued in 1992. The Recommendation calls on Member States not only to ensure that national legislation does not inhibit these forms of participation, but also to consider tax incentives to encourage them. Furthermore, we have the European Commission Communi ­cation of 2002 on this topic, which sets out the principles for granting EFP: De asemenea, Comunicarea Comisiei Europene din 2002 pe această temă clarifică principiile adoptării PFS: EFP should usually be granted on a voluntary basis as far as enterprises and employees are concerned(compulsory granting of EFP is hence not excluded) EFP should be open to all employees. EFP should be managed transparently, with information and consultation being provided to employees and their representatives EFP should be granted based on a predefined calculation formula EFPs should be designed to avoid unreasonable risks to employees and not to replace salaries and wages and bonuses. Debates in the European Parliament have shown that it is not appropriate to devise a single general model for employee financial participation at EU level. The European Parliament, through a resolution, clearly supported a rich repertoire of justifications for different models of employee financial participation, such as: profit participation, individual capital participation, workers' participation in cooperative models and capital participation plans. The basic idea is that there should be support at Community level for(a) highlighting the potential of these systems as well as the obstacles that the Commission and the Member States have to fight against;(b) EU-wide measures such as awareness-raising campaigns, exchange platforms for good practice, financial education of citizens, increased transparency and information, more incentives and reflection on transnational barriers. The dominant European practice at European companies is the payment of cash, with the form of participation based on shares characteristing the American liberal model. A survey conducted by the European Foundation for the Improvement of Living and Working Conditions(2009 European Company Survey) 1 canvassing 27,000 human resource specialists showed that“most European countries have national policies that promote the financial participation of employees in a deliberate political effort to strengthen financial participation and wealth creation among them” ³. But only 5% of EU companies with more than 10 employees offered share-based participation, while 14 percent of them offered profit-sharing plans. In Denmark, 13 percent of companies shared profit by granting shares, followed by Belgium, with 11 percent. But while in these countries we are talking about profit-sharing with a large portion of employees, in countries like Romania and Sweden, where 11 percent of companies have sharing plans, the beneficiaries were the management and administrative staff. According to the same European Company Survey, this time from 2013, 30 percent of companies with more than 10 employees gave employees the right to participate in profit. With regard to profit-sharing through cash payments, a way of sharing offered to the entire workforce of a company, the champion is far and away France, a country with mandatory sharing by law for companies with more than 50 employees(about 35%), followed by the Netherlands(25%), Sweden(24%t) and Finland(23%). At the bottom of the ranking are Italy(3%) and Greece(4%). 3 https://www.worker-participation.eu/National-I ndustrial-Relations/Across­Europe/Financial-Participation According to the 2015 European Working Conditions Survey, 13 percent of European employees receive income from 6