Thematic Briefing #6/2017: The European Pillar of Social Rights

Background

The European Pillar of Social Rights (EPSR) was enacted by the European Commission on April 26, 2017 in the form of a Commission Recommendation. The Pillar is meant to provide a benchmark for principles and values in the field of social rights, while, as medium-term goal, serving as a factor of convergence within the Eurozone. The project was first put forward by the Juncker Commission as it took office in 2014, driven by the need to foster upward convergence so as to reduce excessive differences in economic performance that could compromise competitiveness and undermine the European Social model.

The risks that excessive inequalities among Eurozone countries pose to the solidity of the European project were pointed out in the Four Presidents’ report of 2012, prepared on request of the European Council, which concluded that reinforcing the Economic and Monetary Union (EMU) is crucial to safeguard the sustainability and attractiveness of the European Union. Among its priorities, the Commission indeed stresses the need to deepen the EMU and even out economic imbalances among Eurozone countries. The Eurosummit of October 2014 asked Juncker to take action in this direction, which led to the Five Presidents’ report of June 2015, which contained essentially a prototype of what would become the EPSR.

The Pillar was announced by President Juncker in September 2015, starting a legislative process that would culminate two years later, after a one-year long open consultation process, which included a broad range of relevant actors, from EU institutions and parties, national governments, local level authorities and other national level organizations, private individuals, international organizations, trade unions, and employer organizations. Importantly, in January 2017, immediately after the consultation ended, the EP issued a resolution that was meant to instruct the final adjustments to the document, which would be eventually enacted on April 26, 2017. This however is no finish line, but a crucial step in a long process, and the Pillar’s capacity to deliver is yet to be demonstrated.

Political Fault Lines

The European Pillar of Social Rights includes 20 principles, structured around three main areas of intervention: 1) equal opportunities and access to the labour market; 2) fair working conditions; and 3) social protection and inclusion. These principles cover almost everything that relates to social rights, from the right to unemployment benefits, to that to life-long training and rights of children. In addition, a scoreboard has been proposed as benchmarking tool, so as to evaluate Member States’ compliance with the Pillar.

Although the Commission appears to have taken into account the most significant suggestions that had emerged during the consultation, a number of doubts remain as to the actual effectiveness of the EPSR, not to mention a number of gaps the final document has failed to address. Specifically, three issues are particularly salient with regard to the EPSR, namely that: 1) it lacks legal force; 2) national governments are responsible for its implementation; and 3) it appears as a “restatement of existing provisions”. Let’s look at these issues in detail.

Commission Recommendations are not legally binding, they serve as statements of principle that should inspire subsequent political action on the part of Member States. The GUE/NGL group in the European Parliament expressed dissatisfaction with regard to the non-binding nature of the EPSR, which they view to be an empty declaration of good intentions; the Greens criticized the point somewhat more lightly, but the substance is the same. Trade Unions and NGOs aligned with GUE/NGL in demanding a binding document, contrary to the majority of national governments and parliaments — with the interesting exception of the Italian Chamber of Deputies — and employer organizations, who supported a non-prescriptive piece of legislation.

The Pillar’s preliminary draft contained a vast set of principles, each pertaining to a different aspect and degree of EU competence, implying the legal instrument used to adopt it would have had to accommodate these elements so as to respect each body’s competences.

The sweeping nature of the Pillar’s principles led the EU’s Economic and Policy Committee (EPC) to highlight the importance of respecting national competences; it was, in this, followed by the Committee of the Regions, as it expressed a similar concern as to the potential undermining of the principle of subsidiarity. As vague and general as these principles can be, some, including GUE/NGL have pointed out the EPSR essentially restates the principles already expressed by the European Semester — the EU process for coordinating Member States’ economic policies. This, coupled with the Pillar’s non-binding nature, rendered its adoption trifling, according to Gabi Zimmer, leader of GUE/NGL.

These general concerns are reinforced by more specific criticisms directed at the actual principles enshrined by the Pillar. The Socialists and Democrats group of the EP, who supports the EPSR, demands that the recommendation be complemented with a directive on fair working conditions for all workers, which has not been included in the final document. The EPP, President Juncker’s party, which upholds the Pillar too, laments the lack of portability of social entitlements, such as pensions. This is a topic the final version of the EPSR has not addressed, which was pointed out by the European Trade Union Confederation as well; the Greens stressed instead that no concrete provisions on minimum wage and minimum income were included.

This last point leads to one of the most thorny issues of EPSR: financing and funding, problems that relate to the political significance of the whole design. One may indeed wonder how the Commission plans to balance the conflicting priorities of reducing national deficits while modernising and reforming Member States’ welfare systems.

Considering the Pillar from another perspective, besides the stated goals of the recommendation, the timing of its enactment is politically significant: it took place between the two rounds of the French presidential election, in a moment where traditional political forces are struggling to stand their ground before the success of populist and far right parties. Within this context, the EPSR also serves to signal that EU institutions do care about social protection and welfare issues. Trade unions for instance demand appropriate funding that will serve to finance these programs and ensure the desired outcomes are achieved. This element, coupled with the lack of legal force of the EPSR, has led critics to argue this is merely a consensus-gathering move. In fact, the Commission has integrated the document with a proposal for a directive on work-life balance, which specifically addresses the issues of parental leave, aiming to extend it to fathers too, and that of carers’ leave, which would be paid under the new provision.

In sum, the Pillar has elicited two types of reaction: a warmer, albeit critical one, from the biggest parties, namely EPP and S&Ds; and a frustrated and upset response from GUE/NGL, who can be said to almost reject the whole design. The Greens stand somewhere in the middle, as they do not reject the proposal, but have presented a rather detailed and exhausting list of critical points, in contrast with both S&Ds and EPP.

What’s next?

The first question for the future, related to the lack of legal force of the EPSR, is whether the EC will implement the Pillar through a set legislative measures with binding force. The proposed Directive on work-life balance is a step in this direction, but some, like the Greens, already argue it is not enough. Moreover, it is important to know when the EPSR will be adopted by Member States that are not in the Eurozone: the Pillar, initially conceived for Eurozone countries only, is now open to other Member States who wish to join. If the scope of the Pillar remains limited to the Eurozone, there is a risk that it may result in strengthening EMU countries to the detriment of non-Eurozone Member States.

In addition, the Pillar was also published as a proposal for interinstitutional proclamation — yet another non-binding instrument — which will make it easier for other EU institutions to adopt it. Yet, in order for the Pillar to have a significant impact, it will be crucial that its principles are integrated within other EU policies. In particular, the Commission itself stresses that the EPSR could complement the European Semester and will serve as reference for the “post-2020 EU financial programming period”; mainstreaming the EPSR into other policy frameworks will be crucial to determine the project’s overall success.

In November 2017, a Summit on “Fair Growth and Jobs” will be held in Gothenburg, Sweden, to gather all relevant stakeholders that have an interest in the EPSR; Commission President Juncker will attend, and the Summit will be the first opportunity for debate over social policy after the recommendation was issued.


Photo Credits CC Don Harder

Originally published at EuVisions.