A Spring Package with limited social ambition – Austerity wins over Environmental and Social Objectives   

On 19 June the European Commission released the Spring Package, the set of documents part of the European Semester cycle, which include the Country Reports, the Country Specific Recommendations (CSRs), the Employment Guidelines and the chapeau Communication. This release comes a few months after the new economic governance rules have been adopted. As we observed for these new rules, also the Spring Package points towards a renewed attention for economic and financial stability at the expense of the necessary social and green investments. However, some social concerns have been adequately addressed by the Commission. 

Through the Spring Package the Commission analyses the economic and social situation of the Member States in the Country Reports and based on this elaborates the CSRs with action points for the countries to improve their situation. This assessment also builds on the evaluation by the Commission of the medium-term fiscal structural plans or the related annual progress reports. Moreover, the Commission summarises the general trends and makes overarching observations in its chapeau Communication. In the Employment guidelines it focuses on the state of the national labour market. The proposals made in the Spring Package by the Commission have been agreed by the Council on 16th July.  

The reference in the Commission’s communication to shifting labour taxation towards recurrent immovable property taxation and the mention of the “polluter pays principle” is welcome. However, more attention must be paid so that this principle targets big polluters and not the most vulnerable to the green transition, ensuring that environmental objectives do not widen existing social inequalities. Moreover, a clearer call for a truly progressive taxation system is missing.  

In the Communication, the labour market situation is analysed in quantitative terms. This means that no emphasis is given to the quality of employment. This improves in the Employment guidelines, in which reference to “quality jobs”, fight against “in-work poverty”, “adequate working conditions” is made. However, the quantitative dimension of employment objectives remains stronger. A more prominent role of the qualitative criteria of employment should be integrated into the Semester.   

Similarly, education is mainly interpreted as a tool to generate a skilled “work force” downplaying its indispensable role in fostering democratic values and social inclusion. However, the call for the recognition of non-formal and informal competences and of the importance of lifelong learning in the Employment guidelines are positive elements. The complete lack of reference to migrant workers and the recognition of their skills is a major weakness. 

The Social Convergence Framework is included for the first time in the Semester. This framework was introduced by the Spanish and Belgian Council Presidencies with the objective of promoting upward social convergence and the pursuit of social priorities. Albeit not perfect the Framework is a step forward in the direction of increasing the weight of upward social convergence in the Semester. It is crucial that in the future this mechanism is kept and strengthened. Moreover, the lack of automaticity between Social Convergence Framework and the CSRs is also a shortcoming to be addressed

Concerning the CSRs, SOLIDAR’s members share the overall assessment that social objectives are not adequately prioritised. In some instances, the need to fulfill economic and financial obligations overcomes the need for social investment, which confirms that economic and financial objectives are the top priority for the Commission, even when they come at the expense of social goals. 

Looking more closely to some of the countries, the following has been observed by our members: 

  • Italy’s Pension System Under Pressure: Although general considerations on the public expenditure are understandable, there are some recommendations that are unacceptable from a social justice perspective, such as the call for a reduction of the expenditure for pensions, the lack of reference to any measure to increase wages and the request to suspend all forms of energy benefits without alternative guidelines on how to tackle energy poverty. What safety nets will be in place for populations in a vulnerable situation? 
  • Spain’s Social Ambitions Sidelined: The main recommendations revolve around macro-economic goals and not enough emphasis on social objectives is given. On the contrary, these recommendations represent an obstacle to social investment. Moreover, no mention of the key social priorities identified by our Spanish members and their CSOs partners were adequately reflected in the recommendations including a National Pact to Fight Poverty, measures to improve access to housing for marginalised groups and foster 4-day work week model. A one-size-fits-all approach fails to address each member state’s unique needs. 
  • Germany’s Poverty Problem: While the Country Report for Germany notes that the risk of poverty, particularly for children, remains high and that there are significant wealth disparities, the Country Specific Recommendations lack concrete measures to combat poverty and inequality. In light of the multiple crises and their social and societal impacts, future investments are needed in areas such as climate protection, modern infrastructure, a sustainable economy, and social services. 

Note:

The Commission has proposed excessive deficit procedures for Belgium, France, Italy, Hungary, Malta, Poland and Slovakia 

To conclude, despite some improvements to foster the role of social objectives in the European Semester, like the Social Convergence Framework, and despite underscoring some relevant social matters in the CSRs or in the Country Reports, it is clear that a lot needs to be done for the social component of the Semester to carry the same weight as the macroeconomic one that the Commission systematically prioritises. This approach, which confirms the unfortunate austerity direction that the economic governance has resumed, is not reconcilable with the need for ambitious social and environmental investments needed to carry out a Just transition.  A quick U-turn is needed to match the ambitious environmental and social goals of the EU with its macroeconomic framework. The economy must serve the people and the planet, not the other way around. To progress in this direction, the involvement of CSOs in the Semester cycle is pivotal.