The European Commission (EC) published - on 28 November - the Annual Growth Survey 2015, which sets out general economic priorities for the EU and provides EU countries with policy guidance for the following year.
The communication outlines the main features of the newly appointed EC’s jobs and growth agenda, and ‘recommends three main pillars for the EU’s economic and social policy in 2015: An investment boost, structural reform and fiscal consolidation’. The document also includes an annex on reinforcing the European Semester process, or cycle of economic governance coordination between the EC and EU countries, on the basis of the three pillars.
Investment boost
The communication presents a 315 billion Euro investment package in the form of a new European Fund for Strategic Investment set up by the EU institutions and the ECB hoping that EU countries, national banks, regional authorities and private investors will follow afterwards with additional voluntary contributions. The strategic investments are to take place ‘where clear needs exist and progress is expected to bring economic and societal returns’. A pipeline of projects for investment is to be established at EU level.
Structural reform
The Annual Growth Survey does not refer to social inclusion or social investment and the role of social work and care services; rather, it focuses on welfare benefits, employment, and health systems. There is the support for the modernisation of welfare systems, accompanied by some hints as to how this modernisation could take place. For instance, the communication refers to increasing retirement age, targeted social policies and rationalisation in public administration. There is however no recognition of the importance of improved needs data, service integration, developing an evidence-based approach or promoting preventative local community services.
Fiscal consolidation
The communication states that thanks to fiscal consolidation 'there has been a decrease in the number of countries with excessive deficit procedures'. However, it omits to state that fiscal austerity has had detrimental economic and social impact across a number of countries. ESN’s visits to Greece, Ireland, Portugal and Spain revealed that a high price has been paid by instituting cuts too deep and too fast to social protection systems. This has resulted in important progress within the last 10 years actually being rolled back due to fiscal consolidation policies.
Improving the European Semester governance
Finally, the AGS includes an annex on reinforcing the European Semester process. The communication highlights that the European Semester process should aim ‘to improve the effectiveness of economic policy coordination at EU level’. It omits details as to how this coordination process should take place and the other sectors with which economic policy should coordinate; certainly for us there needs to be greater understanding of the inter relationship and, therefore, the need for coordinated planning between economic and social policies.
In order to succeed in reinforcing this governance process, the communication re-asserts that ‘national parliaments, social partners and civil society need to be involved in policy implementation decided at EU and national levels’. This perpetuates a bad habit of seeing stakeholder engagement solely in terms of a dialogue with employers, trade unions and NGOs. It negates the understanding that solutions have to be found at the local level, where people live and bring up their families. Not surprisingly there has been a disconnect between the European Project and citizen engagement and the AGS 2015 fails to recognise this reality. Besides social partners and indeed social NGOs, local and regional government must be a key partner of the EC in the European Semester process. Social welfare spending accounts for more than a fifth of subnational public expenditure so social welfare is a key policy area for promoting economic and social development.
John Halloran, Chief Executive
Alfonso Lara Montero, Policy Director