For A New Approach to EU Social Policy

The economic crisis has meant harsh austerity in a number of EU states. But even those that retain relatively sound macroeconomic fundamentals have engaged in belt-tightening wary of market reactions and rising spreads. The political economy of the EU is displaying worrying signs of decay, as Europe’s socio-economic model is undermined through strategies of fiscal consolidation. If the current economic policy recipe does not change in time, the danger of killing the patient in the process is very real.

There has hardly been a more appropriate time to rethink the EU’s approach to its socio-economic model. For too long, the EU has been in self-congratulatory mode priding itself of delivering competitive economic growth rates whilst preserving a strong sense of social justice among its people. As growth slows yet again and the danger of social exclusion through rising unemployment becomes an ever-growing concern, how can the EU build on its past achievements to deliver a fairer deal to its citizens?

“Europe 2020” is a promising way forward. The Commission has set out ambitious targets to be reached by that year, including a 75% employment rate and at least 20 million less people suffering from social exclusion and poverty. Smart, sustainable and inclusive growth underpinned by a balanced approach to economic policy is the cornerstones of the Commission’s agenda. To be sure, not everything with the Agenda is perfect (emphasizing budget cuts as opposed to revenue increases and being vague on the investment side are no good signs) but the overall approach is helpful and its proper implementation would do a lot of good.

But it is exactly the implementation side that makes one sceptical as to the feasibility of the targets set. Looking back at the equally laudable ‘Lisbon I’ targets, the failure of that approach is a reason for concern. The central issue here is the extent to which the targets set can actually be met by member-states, and if so, how. Agenda 2020 has rightly been adjusted to fit member-state circumstances; national targets vary from state to state in line with its realistic ability to raise employment or reduce CO2 emissions, for instance.
But even so, the EU (and the Commission in particular) has yet again no real enforcement mechanism to bring about change at national level and push Social Europe forward. The voluntary approach centred on the Open Method of Coordination (OMC) has huge potential but member-states have, overall, failed to make it work. When contrasted to the strict conditionality on economic governance that the crisis seems set to reinforce further, the ‘soft’ approach to social policy reflects the asymmetry at the heart of the integration project.

Now is the time to renegotiate the institutional architecture of how the EU works by introducing a sanctions mechanism for states that fail to meet social policy and labour market targets set at EU level, adjusted to their national conditions and thoroughly negotiated between the Commission and the member states at all levels (including at the level of national parliaments and the European Parliament). Europe 2020 provides the way forward by making available funding to meet the targets, and more could be secured by redirecting Structural Funds for social investment purposes on education and social services.

Given the inevitable scepticism for such a move in the Council, it may be a good idea to mobilize Europe’s population through the European Citizens Initiative. A petition asking the Commission to egislate on binding social policy targets accompanied by (progressively escalating) sanctions for states that cannot provide legitimate grounds for failing these targets within a reasonable timeframe could be something to consider.
Our European Union’s future will only be secure if its citizens are convinced that it remains a force for good, that it is on their side and that its active political engagement can make a difference. If the soft, voluntary approach to social policy coordination does not work, it may be time to experiment with something a bit more drastic instead. In the current climate of uncertainty, a bold institutional initiative in that direction could make a lot of difference to EU social policy.

This column is  part of the Sustainability in the Good Society Online Debate jointly run by Social Europe Journal, the Friedrich-Ebert-Stiftung London Office and Compass.

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