Upon the implementation of the European Pillar of Social Rights (ESSR), a report on the future of social protection and the welfare state was prepared by a high-level expert group on behalf of EU Social Affairs Commissioner Nicolas Schmit. The report makes 21 concrete recommendations for future initiatives on how the EU can respond in an inclusive and sustainable way to longer-term trends such as demographic change, globalisation, new forms of work and the digital and green transition.
The Corona pandemic has highlighted many weaknesses and undesirable developments in our economic system and, especially in the social sector, has revealed gaps in protection and structural problems in national social security systems. In the wake of the pandemic, the European Commission proposed numerous temporary measures, for example SURE, an instrument to reduce temporary unemployment risks in the Member States. Nevertheless, recent data show that deficits exist in various fields: 40% of the EU working population is employed in new or alternative forms of work and does not have sufficient social protection. In 2021, 16.5% of 20-34 year olds were neither employed nor in education.
Recommendations of the High-Level Group
The Report of the High-Level Expert Group was presented on 7 February 2023 by the Chair of the Group and former Social Commissioner Anna Diamantopoulou. It is to be welcomed that the report contains a strong plea for a high degree of social protection and for social investments accompanied by many good recommendations. The High-Level Group states that there is no one-size-fits-all solution for the different welfare state systems in the EU. However, it formulates 21 strategic recommendations to modernise and strengthen them in six areas:
- Supporting children, young people and families
A stronger focus on early childhood care is called for, in line with the 2022 revised Barcelona targets for childcare: A childcare rate of 45% for children under 3 years and 96% for children between 3 and 6 years should be achieved by 2030. As the report also stresses, early childhood care is a fundamental prerequisite for promoting women's participation in the labour market, as well as being important for children's social and cognitive development. Member States are also encouraged to prioritise the implementation of the 2020 reinforced Youth Guarantee.
- Ensuring integrative social protection and lifelong learning
Higher, more robust labour market participation should - according to the report - be achieved, for example, through higher employability, qualifications in the sense of lifelong learning and income support. The experts are calling for measures to promote re-employment and job retention to ensure that unemployed and vulnerable groups are not left behind.
- Adequate income in old age and high-quality long-term care
A major drawback compared to the otherwise high quality of the report is the section on pensions and the economic impact of demography. Here, once again, analytical deficits and contradictions already identified in the past are repeated, which are again accompanied in the report by calls for a higher retirement age. On the positive side, there is reference to the EU care strategy and the importance of social protection for long-term care, the costs of which should be borne by society as a whole through contribution and/or tax-funded public benefits.
- Ensuring an inclusive range of services
What is needed - according to the high-level expert group - is affordable, energy-efficient and universal housing and energy-efficient public transport that is accessible to all. Greater involvement of NPOs and social economy is also important.
- Ensuring sustainable funding of the welfare state
The report also states that social investment also represents a dividend for the welfare state and calls for a "Golden Rule for Social Investment". An effective lifelong learning policy also contributes to a higher level of employment and wages and thus increases revenues from taxes and social contributions. It is also very positive that the expert group is in favour of higher corporate taxes and wealth taxation to fund the welfare state. In particular, tax evasion and fraud must be combated.
- Further strengthening of EU capacities to ensure social protection
Finally, the report calls for further legislative initiatives to be considered in order to comply with all principles of the European Pillar of Social Rights, to ensure uniform enforcement across the EU and to limit unfair competition in social protection standards.
EU Commissioner Nicolas Schmit underlined the need of putting these recommendations into practice as soon as possible in order to ambitiously advance the EU's social agenda: "Well-designed social protection systems play a key role in protecting citizens from poverty, supporting transitions and smoothing income fluctuations, as well as acting as a macroeconomic stabiliser."
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EU-Commission: High-Level Group presents its recommendations on the future of social protection and the welfare state - Employment, Social Affairs & Inclusion