About us

Leading international thinktank and political network

Newsletter

Register for all the latest updates in our regular newsletter

Home Opinion Revitalising Europe 2020 to strengthen the social dimension
Europe 2020 • Social dimension • EU

Revitalising Europe 2020 to strengthen the social dimension

Sonja Bekker - 17 December 2014

A search for ways to strengthen the EU's social dimension should begin with building on the lessons of the past to rethink the Europe 2020 strategy

Looking at the Europe 2020 goals the conclusion is that many are supportive of a social dimension. This is valid for quantitative targets, for instance the aim to have 20 million people fewer in or at risk of poverty by 2020. Yet the employment guidelines also have objectives such as increasing participation in the labour market, developing a skilled workforce, improving education and training systems and combating social exclusion. Such aims are further encouraged by the flagship initiatives to improve young people's chances of finding employment, to develop new skills and jobs and to lower poverty and social exclusion. All these guidelines and flagship initiatives have detailed policy directions, jointly forming a good basis for the EU's social dimension. The treaty gives extra support to the creation of a social market economy and a balanced socioeconomic outcome of any legislative and non-legal proposal.

Despite the wide range of solid goals, the outcomes of the coordination activities have hardly contributed to a proper socioeconomic balance. For a large part this is related to the economic crisis. Valuable social goals have been getting much less attention than budgetary measures and structural reforms. Lately, a new momentum for social Europe has been emerging. Structurally high unemployment rates, large cohorts of young people without a decent perspective, growing poverty and rising inequality within and between countries, have led to a growing understanding that social Europe needs to be a priority. This sense of urgency may be advanced by the installment of the new commission and the outcomes of the midterm review of Europe 2020.

As such, a fair conclusion is that, in spite of having rather proper goals, the socioeconomic coordination activities within the European semester have generated unbalanced outcomes. Although this is related to the strong focus on reducing government's debt and deficit, it might also be a result of governance systems that are too complex and ineffective combinations of coordination mechanisms. Such growing complexity of socioeconomic governance is a result of the fast changes that have been made in order to strengthen economic governance. Currently, the European semester hosts the stability and growth pact, the macroeconomic imbalances procedure and the Europe 2020 strategy, while also being related to budgetary coordination and the euro-plus pact. These coordination mechanisms are all based on different treaty articles and regulations and have different legal statuses. Some put a rather strong obligation on countries to comply with targets, while others have much less binding effects. Moreover, for eurozone countries more stringent rules exist than for countries outside, thus adding to the complexity of having different rules for different countries that are nevertheless subject to the same governance processes. The process is further complicated because distinct coordination mechanisms influence each other. Their targets and policy messages overlap. This overlap sometimes generates complementary effects, however, at times coordination mechanisms also rival because they pursue contradictory goals. An example of the latter is the request of severe austerity measures while asking to mind the social consequences of the crisis.

In order to explain the confusing messages, the country-specific recommendations form a good example. These recommendations are the outcome of all coordination processes, and consist of policy suggestions that are tailored to national challenges. In recent years the role of the country-specific recommendations has been changing. What once was a rather broad policy suggestion, has been developing into quite precise outlines of specific policies that need to be implemented. Yet, while employment and social policy recommendations have always been related to non-binding coordination, such social policy suggestions have been formulated lately within the scope of the more obligating SGP and MIP. These two economic coordination cycles may result in a fine for eurozone countries if these perpetually fail to meet the targets. For France the 2014 SGP cycle has for instance resulted in a recommendation to "take steps to reduce significantly the increase in social security spending as from 2015 as planned, by setting more ambitious annual healthcare spending tarĀ¬gets, containing pension costs, and streamlining family benefits and housing allowances".  Via the MIP, Belgium has been suggested to "restore competitiveness by continuing the reform of the wage-setting system" and to "increase labour market participation, in particular by reducing financial disincentives to work, increasing labour market access for disadvantaged groups such as the young and people with a migrant background, improving professional mobility and addressing skills shortages and mismatches as well as early school leaving."

Although these recommendation are not necessarily always to the detriment of the social dimension, they do beg some questions. For example, why are issues such as health care and pensions explicitly mentioned within the context of the SGP? True, these social security provisions determine the level of public expenditure, but should a recommendation suggest amendments in such a detailed manner? And why is the MIP addressing wage-setting systems and labour participation? Are these not topics that should be explored from soft employment policy strategies? And are these employment topics then a reason to fine Belgium should the country not increase labour market access for disadvantages groups? If the answer to this question is no, why then develop such recommendations from a MIP perspective when there are alternative employment coordination routes available? Other important questions concern the effectiveness of governance. Is addressing social policies within economic coordination mechanisms the best way to come to a balanced socioeconomic outcome? And should detailed policy directions be developed at the EU level in order to generate the best result?

Inspiration for answers to these questions may be found in pre-crisis governance literature. Here, coordination-based governance has been described as having important benefits over more top-down or law-based coordination. For example, coordination-based governance allows for setting uniform targets, while giving leeway to countries to develop tailor-made routes to get there. This enables countries to take into account their particular political and socioeconomic reality while creating and implementing reforms. National challenges are often too complex to formulate feasible and effective solutions from EU level. Leeway at national level to weigh different options might generate better and more balanced results. Moreover, gives the flexibility to react to changing socioeconomic situations.

Building on these lessons from the past, current EU level developments should be rethought. For example, the changing role of recommendation entails linking proposed policy-reforms to decisions on allocating European social funds, meaning that countries that develop policies along the EU lines are likely to get funds to support policy implementation. Also the EU's evaluation of draft budgets looks at whether or not countries take into account the recommended reforms. Such developments risk placing a much greater weight on recommendations than they deserve. Country-specific recommendations are not the main goals, but merely a means to an end. The key targets are the Europe 2020 goals and countries should have enough space to find their own way towards these overarching goals. It is thus high time to rediscover the merits of the Europe 2020 strategy and find more fruitful ways to combine existing governance modes in order to reach balanced socioeconomic outcomes.

Sonja Bekker is a senior researcher in European governance and social policy at Tilburg University
 

Tags: Policy Network , Sonja Bekker , Europe , EU , Europe 2020 ,

Add comment

Name


Enter the code shown:


The Policy Network Observatory promotes critical debate and reflection on progressive politics. It is centre-left orientated but determinedly challenges social democracy. It is pro-European but restlessly questions EU institutions and practices.

Most read this month

Search Posts

search form
  • Keyword
  • Title
  • Author
  • Date posted