To be social or not to be? That is not the question!

7 June 2018
To be social or not to be? That is not the question!

One would not say that Hamlet, Prince of Denmark, is at his best when he delivers perhaps the most famous soliloquy in the history of theatre: "To be or not to be? That is the question". Shakespeare's tragic character finds out that his father was assassinated by Claudius, the dead king's own brother, and he is angry over his mother's marriage to the very same Claudius. A challenging situation, to say the least, which explains the character's deeply morose mood.

Thankfully, modern day reality is less brutal, but politically existential questions present themselves in all shapes and forms. With the 2021-2027 EU budget being negotiated as we speak, the European elections just round the corner, in less than a year's time, and according to a 2017 Eurobarometer survey, with 46% of Europeans not trusting the EU, it is blatantly obvious that there is an urgent need for progressive policies to respond to citizens' growing concerns. Effective social policies are a prerequisite for the EU to be able to empower and protect its people. Therefore, there can be no choice between a social Europe and a non-social one, the question being purely rhetorical.

It is true that the past few years have seen a recovery in the economic growth of the EU with recent forecasts predicting the highest growth rate since 2010. However, this is not enough to make up for the nearly 10 years of no or slow growth, with marked disparities amongst EU Member States still persisting. In fact, the performance of southern European countries, in particular, is below average, while on many indicators the eastern European countries are no longer converging at previous speed. Looking at the bigger picture below and proposing progressive policy solutions illustrate why more and better social Europe is the way forward.

… to suffer the slings and arrows of outrageous fortune…?

A look at the social situation in Europe

For the average European, the recent crisis was very much of an outrageous fortune, taking ruthlessly aim at their jobs, public services and overall quality of life. In fact, there has been no significant progress in terms of upward social convergence in living and working conditions in the last decade. The EU is far from reaching its employment and social policy targets formulated before and during the crisis, including the Europe 2020 objectives. At the same time, measures to relaunch growth have improved the employment rate but the quality of jobs created and the real demand for labour reveal that the situation has mostly deteriorated. Convergence between social groups has been observed mainly because overall conditions have worsened with the crisis and there has been an equalisation from the bottom. At the same time, as a result of changing work patterns, technology and globalisation, there is an upward trend towards more precarious and atypical forms of work, which, in conjunction with social protection systems weakened by austerity, can no longer ensure adequate working and living standards.

The at-risk-of-poverty (AROP) rate - that is the share of population living in households with disposable income that is lower than 60% of the median household income - was on average higher in 2016 at 17.3%, than it was in 2005 when it was at 16%.  The AROP rate also rose in all but a handful of Member States between 2005 and 2016 and the average level is quite alarming with several countries having a "at-risk-of-poverty" rate which goes above 20% (Romania, Bulgaria, Estonia, Greece, Spain, Latvia, Lithuania, Italy).

Although by 2017, the EU28 employment rate had caught up with its pre-crisis levels, reaching 71.1%, the situation varied substantially across countries. In 10 EU countries, employment rates in 2017 remained below 2008 levels, by the widest margin in Greece (-7.8pp), Cyprus, Spain and Denmark. It is worth noting that the total volume of work (that is, a total number of paid working hours of all persons in employment) remained in 2016 2pp below the 2008 levels. At the same time, the number of workers that are forced to opt for atypical employment solutions is alarmingly high. Moreover, minimum wages in most countries remain too low for even a full-time worker to sustain a decent living standard and real wages are not increasing in line with productivity as a result of prolonged fiscal constraints, lack of investments and deregulation of the labour markets.

Meanwhile, the unemployment rate, standing in 2017 at 7.4%, after having reached 11% in 2013, unemployment levels remain very high in countries worst hit by the crisis such as Greece (21.2%) and Spain (17.2%), while in Italy, Croatia and Cyprus unemployment rates were above 10%. What is worrying is the fact that the youth unemployment rate remains at 18.7% in the eurozone, according to Eurostat. Youth unemployment rates vary widely across the Eurozone countries. Greece, Spain, and Italy have the highest around 40%. Even countries like France and Finland have high youth unemployment, hovering at 22.5% and 20.5%, respectively. To complete the picture, the so-called NEETs (young people Not in Employment, Education or Training) in the EU28, reached 11.6% and 18.8% for the age brackets of 15-24 and 25-29 respectively. The worst outcome was noted in Greece (33.5%), followed with a considerable margin by Italy (19.9%), Bulgaria (18.2%) and Romania (17.4%).

Moreover, the EU average of government expenditure devoted to social protection and expressed as a ratio to GDP, is just over 19%, with even a slight decrease in spending per capita since 2010 despite the growing levels of need, and marked divergences between the southern Member States and the rest of the EU. It is worth noting that the effectiveness of social protection systems in the EU has generally been declining since 2011, with a downwards convergence towards that of the euro area. Social protection appears to be following the general macroeconomic trend, with a slight improvement in some countries, but with persisting gaps between southern and northern Europe.

…or to take arms against a sea of troubles, and, by opposing, end them?

Progressive solutions for a more and better social Europe

The crisis has undeniably created a sea of troubles for Europeans. The best arms to oppose them are definitely not the prolonged and stifling austerity measures that have swept away in the last decade the European social model. What we need is a progressive policy mix, both horizontal and sector-specific, which should be capable of tackling growing inequalities in the labour market, consolidating and enhancing social protection and committing to a Europe characterised by high social standards. Local and regional authorities are the first in line when it comes to implementing social policies and because of their proximity to citizens, they are best placed to evaluate the effectiveness of such policies, therefore, they should have a say in their design. The Group of the Party of European Socialists (PES Group) in the European Committee of the Regions (CoR) has succeeded in leaving a strong progressive footprint in the elaboration of all CoR positions on social issues, arguing that social progress is not only a matter of social fairness but it also makes economic sense.

The adoption of the European Pillar of Social Rights last November carried a strong symbolic but also political weight insofar as it created momentum for further action. However, what was proclaimed in Gothenburg needs to be translated into strong measures at European level, which is a challenge in the current climate of contestations vis-à-vis the community method, in the wake of the Brexit referendum and amidst growing populist and anti-European political forces.

With regard to horizontal measures, it is essential to strengthen the social dimension of all European public policies. The contribution of local and regional authorities is essential because they know the realities at grassroots level, this is why they should be directly involved in the design and implementation of relevant policies. It is regrettable in this respect that their role is not acknowledged in the proclamation of the European Pillar of Social Rights. More concretely, we call for the addition of a social progress protocol at the next treaty change, putting social rights explicitly on a par with economic freedoms. Moreover, the evaluation of all EU policies must consider their impact upon (in)equality, social progress, social justice and labour rights in the EU through, for instance, the establishment of a social scoreboard. Binding indicators for imbalances and inequality, considering both economic as well as employment and social performance, should be introduced in the European Semester and the Macroeconomic Imbalance Procedure.

Meanwhile, Europe cannot become more social without a drastic improvement of working conditions, which have deteriorated not only because of the crisis but also with the advent of platform economy. It is indeed high time for an EU framework directive on decent working conditions for all forms of employment, with mandatory social protection coverage, universal access to healthcare, a ban on zero-hour contracts, minimum income security and wage increases in line with productivity gains. Such standards cannot be left to national governments alone because the race to the bottom - an all too familiar phenomenon in the light of globalisation, unfair competition and shrinking national budgets - will not be stopped unless European action is introduced.

Responding to the European Commission proposal for a Directive on transparent and predictable working conditions in the EU, CoR PES Group rapporteur Isolde Ries urges inter alia that the proposed minimum requirements relating to working conditions be expanded to include a ban on zero-hours contracts and the right to guaranteed working hours and more rights in connection with dismissal. She also calls for special attention to be paid to non-standard forms of employment, including the on-demand and intermittent employment contracts, which apply to 4-6 million workers in the EU.

Workers' right to disconnect – that is, the right of people not to engage in work-related electronic communications during non-work hours – and the need for effective work-life balance that does not penalise women, who are traditionally the main family carers, has been vehemently defended by CoR PES Group rapporteur Nathalie Sarrabezolles, who  regrets that the scope of the relevant new European Commission directive is limited to workers with a contract of employment or an employment relationship and does not cover the various forms of atypical work, including concealed employment relationships and economically dependent jobs (i.e. bogus self-employed).

The PES Group in the CoR is convinced that a European Labour Authority, invested with real powers and endowed with appropriate financial means, is essential for the effective enforcement of labour standards with a view to ensuring decent working conditions, especially in the context of cross-border or posted workers. CoR PES Group rapporteur Doris Kampus will defend the merits of such an Authority, which should play a mediatory role between Member States, support fair labour mobility and effectively fight social fraud.

It goes without saying that, in order to boost employment, improve social conditions and generate growth, the macro-economic context must be conducive to upward convergence and restore the fiscal capacity of all levels of government, with an emphasis on local and regional authorities, which are key to the provision of public services. In his response to the European Commission Reflection Paper on the Deepening of the EMU by 2025, Christophe Rouillon, CoR rapporteur and PES Group 1st Vice President, argues for a convergence strategy that would complement existing European policies to strengthen economic, social and territorial cohesion and build on the following proposals: a) creating euro area fiscal capacity, including preparations for accession to the euro area, to establish incentives to promote social and macroeconomic convergence; b) turning part of the European Stability Mechanism (ESM) into an integrated non-monetary European instrument; and c) establishing a convergence code supplemented by a system of incentives for structural reforms, the scope of which would be defined according to their European added value. He reiterates, in this context, the CoR call for public investment by local and regional authorities and ESIF co-financing under the European Structural and Investment Funds (ESIF) not to be included in structural expenditure.

Indeed, the future of cohesion policy - the EU’s main solidarity tool for reducing inequalities between and within Member States - within the EU budget for 2021-2027 is a key concern for the PES Group in the CoR, especially since the new Multiannual Financial Network effectively cuts the Fund rather than increasing it. We strongly regret this development because a strong cohesion policy that shows the EU's added value in our cities and regions through concrete projects is more than needed at a time in which populism and Euroscepticism are on the rise. A firm position of the PES Group is that social and economic cohesion cannot be held hostage to an austerity agenda and it opposes conditionality.

With regard to the new European Social Fund (ESF+), Catiuscia Marini, previous CoR rapporteur and PES Group President, had stressed its key role in promoting employment and social inclusion, while rejecting any attempts to nationalise it. By the same token, she considers it extremely important to ensure the necessary flexibility to be able to adapt ESF programming to any new challenges that might arise and firmly believes that, in order to tackle these challenges the ESF should remain an integral part of the ESIF and of cohesion policy. The European Commission proposal for ESF+ has some positive elements, such as the possible continuation of the regional allocation of funds but disconnecting rural development, recentralizing cross-border cooperation (INTERREG) and letting the ESF shift away from cohesion are worrying indications of a lack of an overall vision.

The above policy proposals are by far not an exhaustive list but perhaps a clear indication of what needs to be done to get Europe more social and to empower its citizens to recover from the multiple traumas of the financial and economic crisis.

No more time for soliloquies!

Soliloquies, as theatrical devices, have a very dramatic effect because actors speak their innermost thoughts addressing the audience rather than another actor. Talking to oneself is indeed poignant, revealing a character's introspective nature and anguished quest for truth and purpose. Which fits perfectly Hamlet's frame of mind, but not that of the European socialist family!

With the European elections just under a year ahead and the UK leaving the bloc next March, this is the last chance for progressive politicians – not only at European but also at national, regional and local levels - to strive to have an impact on the way Europe is being shaped in the current conjuncture and on the perceptions of ordinary people about social democracy and its ability to offer them a real alternative.

More and better social Europe is clearly the way forward, and Social Democrats in the EU must join forces to deliver on the ground, opting for resolute action now. All we need is a strong unifying and genuinely progressive political figure to become the Spitzenkandidat of the Party of European Socialists and to share his/her vision and determination to make social Europe a reality. Not a minor challenge indeed.