How can the new Multiannual Financial Framework (MFF) contribute to fair jobs and growth?

Oliver Dreute, Advisor on the Multiannual Financial Framework (MFF) for the European Commission’s European Political Strategy Centre highlights three focus areas for social spending in the next MFF.

Oliver Dreute

Social realities in Europe differ greatly. The welfare of a European citizen, the future of a European child, depends largely on where they live and work: employment and poverty rates differ, as do social protection and education systems.

Yet, Europe’s ambition has always been to achieve convergence towards high living standards for all. So how can the EU budget have a meaningful impact in the area of jobs, fairness and social inclusion?

The EU’s current social budget represents only 0.3 % of total public social expenditure in the EU. Nonetheless, in the past — and prior to the economic and financial crisis, it did contribute to increased convergence, by stimulating economic growth through the creation of the internal market, and with additional support from EU funds.

The new MFF has to go beyond this. By targeting three areas in particular, the future EU budget could help to deliver on what matters for Europeans.

1. Investing: The major focus of future EU spending should be to secure growth and employment by fostering innovation and the spread of innovative know-how, and to provide financial incentives for investment in those areas. The best social policy is to foster the optimum education and training, as well as securing and creating stable jobs with decent working conditions. The promotion of ‘fair’ growth and jobs should be supported through the creation of a European Labour Authority to supervise and enforce legislative measures to maintain a high level of social protection.
2. Caring: Although there can be no mistaking that social support is and will remain primarily under the responsibility of Member States, the EU budget could finance some complementary actions, e.g. supporting social innovation and social projects in the Member States, supporting skills development, labour market integration projects and the fight against poverty.
3. Securing: In previous years, tools were created at EU level on an ad hoc basis to tackle acute problems. The Globalisation Adjustment Fund or the European Youth Guarantee are such examples. Future funding of this kind of emergency measures should target macroeconomic stabilisation and be based on a sufficient budgetary reserve. The development of a European Unemployment Insurance Scheme could also be considered.