It is hard to distinguish between a genuine lack of political will to address poverty and exclusion and the real difficulties of addressing an eternal problem. The European Union could be blamed for many of its actions, or lack of them, in the fight against poverty. However initiatives are being taken, and much energy is being expended in the European institutions on facilitating and empowering those working with the most vulnerable. In terms of broader policy direction, a new rhetoric is also emerging, insisting on investment and efficiency in the interests of social protection.
Owing to the financial and economic crisis during the last five years, Europe has tended to focus on “reactive” social policies which seek to help people by repairing damage already done, while still trying to reduce public expenditure and implement austerity measures. In contrast, a social investment approach focuses on prevention. Instead of assisting a given unemployed person with material provision, a social investment approach would also entail anticipatory measures to prevent this person from experiencing this social problem in the first place. Such measures would include employment training for youth vulnerable to social exclusion and incentives for pupils to stay in school, learn more skills, and thereby have a better chance of finding and keeping steady employment.
What is happening at EU level?
The European Commission released the Social Investment Package (SIP) in February 2013 to encourage EU Member States to implement a social investment approach. This approach differs from the previous approach based almost exclusively on budgetary consolidation and encourages governments not to cut funds from their social budget but rather to use these budgets more efficiently and effectively through various reforms and new programmes.
A social investment approach is centred on prevention, that is to develop policies “preparing” people to handle new, emerging social challenges rather than merely “repairing” already-existing social shortcomings that threaten the well-being of many individuals. Furthermore, a social investment approach is designed to strengthen people’s skills and capacities and help them participate fully in employment and social life.
For more information, please read Eurodiaconia policy position on Social Investment.
The modernisation of social protection systems is not a new concept. In 1999, a communication from the Commission was issued on ‘’a concerted strategy for modernising social protection’’ [COM (1999) 347 final]. More recently, the principle has been relaunched as part of the social investment approach. The idea is simple: an alternative to cuts is to increase efficiency and effectiveness. Social protection systems (and public services in general) should be reformed to have more impact, with each euro yielding a return on investment. The savings made should also enable public authorities to avoid financial cuts in essential areas such as social protection. One concrete implementation of this principle is the development of ‘’one-stop shops’’ social services responding to multiple needs in a given location. The idea is to improve coordination of sectors such as employment, health insurance and social services and address the issue of fragmentation caused by specialisation.
According to the European Commission, Member States have made progress in implementing reforms towards social investment but much remains to be done for a true modernisation of social protection systems across the European Union. The European Commission continues to push for this approach through country-specific recommendations addressed to Member States in the context of the European Semester.
A first step, the social dimension of the economic and monetary union
To respond to the widening economic and social divergences in the EU and avoid stronger polarisation, the European Commission proposed on 2 October 2013 a communication on thesocial dimension of the economic and monetary union (EMU). The idea is to go further than economic convergence and work towards a social market economy, putting emphasis on “achieving social fairness by combining job creation, skill development and the modernisation of labour markets and welfare systems”. As European Commission vice-president Valdis Dombrovskis puts it in his speech to the European Parliament in February 2015: ‘’In our view European integration on a purely economic basis with large divergences in terms of employment and social outcomes is neither desirable, nor plausible, as economic and social policies are interrelated and mutually reinforcing.’’
Jean-Claude Juncker, the president of the European Commission, referred to this need when he became President by calling for a ‘’triple-A social Europe’’. Under this ‘’social dimension of the EMU’’, the European Commission has pushed for what has already been mentioned: modernisation of employment and social protection systems, and boosting employment. The impulsion for a reinforcement of the ‘’social dimension of the EMU’’ was reiterated in June 2015 through the ‘’Five Presidents’ Report’’ which set out plans for strengthening Europe’s Economic and Monetary Union.
Since 2016 the European Commission has taken forward this initiative by working on the establishment of European Pillar of Social Rights, a new but not a first attempt to take comprehensive European action against poverty, social exclusion and unemployment, following in particular to the “Europe 2020 strategy” (launched in 2010) and its poverty reduction target and the 2013 “Social Investment package”.
What is the European pillar of social rights or ‘’social pillar’’?
From the European Commission’s perspective, the crisis has exposed and deepened the cracks in existing welfare systems, and created a real need for ‘’upward social convergence’’ between EU Member States. In other words, social protection systems should be reformed across Europe in order to reduce national differences, but this should not have an adverse effect on their performance. Rather than trying to let welfare provisions in Europe meet ‘somewhere in the middle’, and effectively downgrading the most advanced systems, the aim is to allow all national welfare systems to reach similarly high standards across Europe. The Pillar is therefore meant to stimulate the reduction of poverty and social exclusion through adequate social protection, and to support labour market access and well-functioning welfare systems, in an age of globalisation, digitalisation and decreasing job security.
How is the Social pillar to function?
The Social Pillar is not a stand-alone initiative. It is embedded in a broader strategy to achieve a ‘deeper and fairer Economic and Monetary Union’, which is focused on improving economic policy coordination, convergence and governance within the euro area. The key steps of the process are outlined in the so-called Five President’s Report, published in June 2015 and accessible here. The Five President’s Report emphasises that the process of completing the EMU necessarily includes a social dimension. It stresses that “Europe’s ambition should be to earn a ‘social triple A'” and that “for EMU to succeed, labour market and welfare systems need to function well and in a fair manner in all euro area Member States”. A stronger focus on employment and social performance is presented as a core component of a broader process of upward convergence towards more resilient economic structures within the euro area.
Whilst the Pillar is an initiative which welcomes the involvement of all 28 EU Member States, it is an obligatory measure only for the 19 members of the Eurozone (officially termed EMU, which means Economic and Monetary Union).
To know more about the European Pillar of Social Rights please read Eurodiaconia’s briefing:Why do we need a Pillar of Social Rights?
What is the content of the pillar?
The final content of the pillar is not set yet, and at the moment the European Commission is still carrying out a consultation on the Social Pillar, until the end of 2016. Eurodiaconia strongly encourages its members to respond to the consultation directly or feed into Eurodiaconia’s response.
For now, the preliminary outline for the Social Pillar lists 20 principles which outline the minimum standards that Eurozone members should grant to their citizens in order to improve the labour market and social rights. A previous proposal contained more than the double this amount, however the number was reduced to 20 in order to increase the chances of implementation. This way, the Pillar tries to strike a balance between comprehensive action and feasibility. The 20 principles are grouped into three main axes or chapters: – Equal opportunities and access to the Labour Market – Fair working conditions – Adequate and Sustainable Social Protection. The last point (adequate and sustainable social protection) includes social protection benefits and social services, such as adequate minimum income schemes and access to essential services.
To know more about the content of European Pillar of Social Rights please read Eurodiaconia briefing: What do we know about the contents of the Pillar?
To feed into Eurodiaconia’s response to the social pillar consultation or for any question on this topic, please contact Stephan.firstname.lastname@example.org
Not-for-profit social service providers seek to meet people’s needs, including basic needs such as food and housing, but they also contribute to the greater goal of developing social cohesion and reinforcing community, creating learning and work opportunities, building social capital, and enabling people to take part in society as respected and responsible citizens. This in turn contributes to economic development and strengthens society.
It is now an objective, as part of the social investment approach, to highlight the added value of the work brought in by not-for-profit social providers. For instance, advocacy work is carried out by Eurodiaconia to ensure guidance to Member States about the 2014 public procurement directive, clearly explaining the possibilities in the legislation for enabling long-term financing of quality social services and highlighting the conditions for other options for contracting of services other than procurement.
The ‘’Youth Guarantee’’ is a new approach proposed by the European Commission to addressing youth unemployment. Its aim is that Member States will ensure that all young people under 25 years old can acquire a good-quality, concrete job, education, training or apprenticeship offer within four months of their leaving formal education or becoming unemployed. EU Member States endorsed the principle of the Youth Guarantee in April 2013 (Council Recommendation).
For more information on the youth guarantee, please check the European Commission’s dedicated website here, its country-by-country website, monitoring implementation of the youth guarantee here and in FAQ.