The European Commission published in March the 2018 country reports that analyse the economic and social policy reforms in EU member states and identify EU-wide trends in terms of convergence. It is for the first time that the European Pillar of Social Rights is integrated into the country reports, which shows the Commission’s commitment to use the European Semester as a key tool to implement the pillar.
Europe’s economy is at its highest in a decade and employment is at record levels. The labour markets continue to improve and unemployment rates are almost back at pre-crisis level. However, the economic growth has been uneven across member states. Even within the same member state, inequalities persist as benefits have not reached all parts of society, especially vulnerable groups. Areas of key concern are:
- high youth and long-term unemployment
- sluggish wage growth (wage levels lad behind productivity levels across countries and sectors)
- disposable households income remain below pre-crisis levels
- increase in share of working-poor (reaching 14% in Germany)
- skills mismatch
- gender employment gap
- labour market segmentation
- low impact of social transfers on poverty reduction
- the weakening role of social dialogue in some member states
The share of people at risk of poverty or social exclusion remains above the Europe 2020 target meaning that lifting 20 million people out of poverty is unlikely to be met by 2020.
Another worrying trend is the rising house prices in most member states, which pose a big concern for their social impact. The country reports highlight the need for investment in adequate social housing and other housing assistance.
The Commission calls upon member states to use the economic growth momentum to pursue reforms that lead to upwards social convergence. A central focus is on reforms for adequate social protection systems (including old-age pensions, healthcare, unemployment benefits and social assistance) so that all workers should have access to social protection, irrespective of the type and duration of their contract. While many member states are modernising their social protection systems by improving coverage and adequacy of benefits and services, more efforts are needed to cover all non-standard workers and self-employed, and to reverse the depth and persistence of poverty, including in-work poverty, by covering gaps in social protection design and implementation.
‘Socialising’ the Semester
The 2018 country reports mark a step in the right direction to balance the economic and social priorities. The European Semester is being ‘socialised’ in its content by paying more attention to the social dimension, especially social fairness and creation of quality jobs. For example, more attention is payed to the redistributive effect of social transfers, the multiple dimensions of inequality and to gaps in welfare coverage and access to social protection, as well as to specific vulnerable groups at highest risk of poverty and social exclusion, such as children, the homeless and Roma people.
Analysis of member states’ performance in light of the European Pillar of Social Rights was included in a separate information box of each country report. In addition, the Joint Employment Report includes indicators of the social scoreboard – the monitoring tool of the European pillar of Social Rights – and the Employment Guidelines, the basis of the country-specific recommendations, have been aligned with the principles of the pillar.
The Commission seeks to further ‘socialise’ the European Semester also in its process by raising public awareness and encouraging contributions from all stakeholders to the analytical part of the Semester exercise.
The Commission recommends member states to develop their National Reform Programmes with the support of all key stakeholders, mentioning specifically local authorities and social partners. The involvement of all relevant stakeholders is necessary to stimulate co-ownership of reform process and ensure accountability of the promised reforms.
Progress of member states in responding to the country-specific recommendations
Most progress since 2011 has been in fiscal policy and fiscal governance. Least progress is on reforms of social policies concerning poverty reduction and social inclusion. Some progress was done in skills and lifelong learning, childcare and active labour market policies.
The Commission will present country-specific recommendations by the end of May 2018, which will be the basis of the national reform programmes. It remains to be seen whether the social dimension will be as high in these recommendations as it was in the country reports.
You can read the Commission’s Communication here: https://ec.europa.eu/info/sites/info/files/2018-european-semester-country-report-communication_en.pdf