European Semester 2022 – the Spring Package and the impact of the ongoing crises

Jun 13, 2022

On 23rd May the European Commission published its Spring Package, that includes, among others, the Country Reports and the Country Specific Recommendations (CSR) and marks one of the main stages of the European Semester cycle. The European Semester is an instrument of coordination in the area of economic, fiscal and social policy across EU countries. During the years of the pandemic, the cycle was adapted to the epochal changes and challenges that Europe – and the world – were facing. In fact, in 2021 the Semester was temporarily modified to enable synergies with the Recovery and Resilience Facility (RRF) and the CSR were limited to budgetary coordination, temporarily putting aside their previous function of identifying more comprehensive policy reforms for Member States.

Starting from 2022, the Semester is getting back to its policy coordination role and has resumed the Country Specific Recommendations, as well as the Country Reports in their original form. The coordination with the Recovery and Resilience Facility was maintained.

What are the main elements of the Spring Package 2022?

The escape clause of the Stability and Growth Pact remains active until 2024: the escape clause, activated in 2020 to enable Member States to enact emergency measures aimed at contrasting the social and economic consequences of the Covid-19 pandemic will remain active until 2024. The Commission considers that the increase of the prices and the general economic uncertainty and downturn caused by the war in Ukraine urged the clause to be extended until the end of 2023. SOLIDAR welcomes this decision, but cautions EU institutions that re-introducing the clause in the future would lead to an austerity-driven approach that – as the recent past has shown – will lead to wider social inequalities that will ultimately affect the wellbeing of people living in Europe.
Energy independence and transition to climate neutrality at the core: Reducing energy dependency from Russia is identified by the Commission as a high priority which requires Member State to concentrate their endeavours to achieve these objectives as soon as possible. The newly introduced REPowerEU Plan and its connection with the RRF are identified by the Commission as useful instruments to this end. It is therefore not a surprise that all CSRs contain guidance in the fields of “Renewable & energy infrastructure” and “Energy Efficiency”. SOLIDAR urges EU decision-makers to seize this momentum to accelerate the path to a just transition, putting in place transformative action aimed at making our societies and economies peaceful, equitable and climate-neutral.
The European Pillar of Social Rights as the guiding framework towards a more social Europe through the crisis: The European Commission reiterates that the Social Pillar is the framework that ensures fairness in the EU and highlights that its implementation is “crucial to achieving upward social and economic convergence”. This is particularly important to tackle the consequences of the pandemic and of the war on the groups in vulnerable situations, including on the people fleeing Ukraine. The Commission also states that “Member States’ continued reforms and investments will be crucial to support quality job creation, skills development and smooth labour market transitions”. However, this is reflected only partially in the CSRs that contain guidance for reforms related to the labour market only in the case of 6 countries. No recommendation is formulated for Member States when it comes to wages and wage setting, which fails to provide guidance in tackling the phenomenon of in-work poverty that risks increasing due to the price hikes. Considering the Commission’s proposal for a directive on adequate minimum wages in the EU – and Principle 6 of the EPSR – this seems to be not in line with its stated objective of ensuring that all workers have access to adequate wages and is a risky missed opportunity in our view. On the other hand, 9 Member States were target of recommendations concerning “Poverty, social inclusion & social protection”, which is a welcome sign of the intention of the Commission to mitigate the social impact of the ongoing crises. Progress regarding the implementation of the SDGs within the EU is also monitored through the European Semester, which confirms the synergy initiated in 2020 between the two frameworks.

The Council will discuss and adopt the Spring Package before the summer. After that, Member States will be responsible for the implementation of the recommendations stemming from the Package.

Besides the specific observations on the content of the Spring Package, SOLIDAR advocates for the ongoing EU economic governance review to lead to a coordination instrument that moves away from austerity measures and that promotes public social and green investment for the achievement of just green and digital transitions, as well as for the implementation of the European Pillar of Social Rights and its Action Plan at national level. Civil society must be part of the review and implementation process as this is key to ensure that the social component of the European Semester is strengthened, for a more Social Europe that leaves no one behind, especially during crises and transitions.