Thoughts on the European Pillar of Social Rights

Europe's social dimension must be developed further

2017-04-29

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On April 26, the European Commission published two much anticipated documents: (i) the recommendation on the European Pillar of Social Rights, and (ii) the reflection paper on the social dimension of Europe.¹

The former is meant to be a standalone legal text that will incorporate the basic social rights of European citizens. If adopted, it can be likened to the social policy equivalent of the European Charter of Fundamental Rights—an integral part of European citizenship.

As for the reflection paper, it is the first in a series of complementary publications to the Commission’s White Paper on the future of the European Union.² Each reflection paper focuses on a certain area of policy, exploring the state of affairs and outlining the options for European integration in the near future. The idea is to prepare for the December 2017 European Council were much about the future of the European integration process will likely be determined.

The EU has the right to act on social policy

Social policy is central to the European project, both in a legal and a normative sense. The Treaties provide for a number of provisions on such matters as gender balance, non-discrimination in the workplace, equal opportunities, and the like, while there already exists a rich corpus of relevant legislation. The EU does not provide for a fully fledged welfare system that covers such items as pensions or unemployment benefits. Europe’s role hitherto is to set principles and basic provisions across the Member States. This does not preclude initiatives at the national level, nor does it prevent governments from forwarding an agenda specific to the nation’s peculiarities. All it does is lay the foundations for the social aspects of an integrated Europe.

Still, the EU’s social dimension remains underdeveloped if compared to other major policy areas, such as macroeconomic coordination, banking and financial regulation. These have been at the epicentre of attention over the last decade or so, in large part due to the euro crisis. One cannot help think they have always been at the top of the priorities’ list, at least since the Treaty of Maastricht (which turned the European Economic Community into the European Union). European leaders decided to proceed with differentiated integration (multi speed Europe) in the creation of the euro, where they made monetary policy an EU competence but left fiscal and social policy largely confined to the domain of the nation state.

The history of the European integration process need not be a hindrance to what comes next. Indeed the economic crisis skewed the agenda on the headline issues of macroeconomic policy. Faced with an existential crisis, the Economic and Monetary Union was in urgent need of decisive action, including a range of new comprehensive legislation (two-pack and six-pack) and inter-state covenants (the fiscal compact and the ESM Treaty). The reforms that brought about the European Semester or, more generally, the economic governance, suggest that there is no real obstacle to the ever closer coordination of social policy and welfare systems.

That is so because in accordance with the EU’s distribution of competences, the responsibility over social issues is shared between the Union and its Member States.³ In practice, that means that action at the supranational level concerns the coordination of policies and the promotion of shared standards, while nations still have sufficient scope to adapt policies to their own needs, while iterating on their vision in line with national procedures. The economic governance is also a matter of shared competence between the Union and its Member States. It is why measures pertaining to fiscal policy were eventually developed at the European level, even though this domain was once seen as near-sacrosanct in the debate about further integration.

If the Treaties confer competences to the Union, it is only a matter of time or the right political circumstances before the relevant action takes place. As such, one can expect—indeed demand from—the EU to do much more on social affairs and the well-being of citizens, all while operating within the limits of the Treaties.

Couched in those terms, the proposed European Pillar of Social Rights is a welcome initiative. It is a concrete proof of the Commission’s willingness to deepen and broaden the integration process in this key area. It also reminds Member States that (a) The Commission is supposed to promote the interests of the Union at-large (the “guardian of the Treaties”), (b) social policy is an area where the EU is competent to act, and (c) with the euro crisis [mostly] done, now is a good time to lay the groundwork for future legislative proposals beyond the narrow confines of macroeconomic coordination and fiscal discipline.

The reflection papers need more ambition

While the Commission is demonstrating its eagerness to drive things forward, it simultaneously publishes a reflection paper whose tone is much more ambiguous. As with the White Paper on the future of the EU, the Commission is not willing to commit to a certain vision for the future. Instead it withdraws into a pseudo-neutral role of merely outlining the possibilities and letting Member States do as they please. The options presented are three:

1. Social policy should be limited to the freedom of movement.
2. Differentiated integration should be favoured, so that the Member States that are willing to integrate their social policies can do so.
3. The EU27 should collectively proceed with further integration on this front.

The reflection paper on the social dimension of Europe is an excellent piece of work when it comes to its data and substance. But it leaves much to be desired on the policy-making front. The Commission should not be pretending to be apolitical. It is a politicised entity by such things as the spitzenkandidaten process that brought Mr. Juncker into the Presidency, the clear pro-EU agenda of the proposed EU Pillar of Social Rights, or even the open endorsement of a candidate for the presidential elections in France. The Commission does have political preferences yet, most importantly, it is obliged by virtue of Treaty law to promote the European interest—that is the gist of being the “guardian of the Treaties”. This implies that the Commission should openly and unequivocally stand against measures that would hinder the integration process or otherwise undermine the Community acquis.

Take the prospect of a multi-speed, multi-tier Europe as a case in point. If only a coalition of willing countries were to proceed with integration on social policy, the unintended consequence would be the creation of two classes of European citizen/worker. Those who live in the single market or [part of the] euro area and enjoy access to supranationally-defined social rights, and those who live in the single market or [part of the] euro area but do not get the relevant benefits from the supranational level. Can we imagine such two-tier citizenship along the lines of, say, a North-South divide? It would be terrible.

The only meaningful form of differentiated integration in this area, would be between euro and non-euro states. Not on the basis of principle, but only because the euro-as-a-quasi-distinct-entity is already a reality. All countries whose currency is the euro should have a common social basis, just like their fiscal and economic policies are closely coordinated. Non-euro countries would be following along and have the option to engage with the core policies, also in preparation of their eventual euro membership. This is kind of how economic governance currently works. It also is the approach adopted in the proposed EU Pillar of Social Rights. It may not be the ideal, where all EU Member States work together and drive things forward at the same pace, but it does at least deliver tangible results while not leaving anyone behind.

That granted, the pattern that seems to be emerging in the White Paper and now the first reflection paper is for the Commission to act like an oracle. It positions itself in such a way as to always be proven right. Such ‘wisdom’ is superfluous. It is in direct contradiction to the actuality of this institution as a political agent. What we need is greater ambition. Clear commitments to getting things done, such as the EU Pillar of Social Rights. A plan on how to improve the lives of millions of Europeans accompanied by the concomitant legislative initiatives. Clarity of statement and boldness of action are integral parts of any effort to promote the good of the Union at-large. And this is especially true for the very subject of the social dimension of Europe. A more visible social EU is the single best answer to europhobes and xenophobic demagogues.

The times call for European action

No more pretences to neutrality. The Commission must promote the best possible scenario for Europe. That is its job. Let national governments defend their own interests. Academistic indifference and fake objectivity have no place in politics, certainly not for matters of the magnitude of European integration. This opportunistic approach of the self-styled technocratic institution that labours with technical details and operates aloof from the fray is completely out of sync with the ongoing debate about Europe. It also contradicts the Commission’s overall role and mandate. Hopefully the next reflection papers, as well as any concrete measure on the legislative front, will rectify this communication error.

The social dimension of Europe is primarily about the harmonisation of standards. Europe works to establish principles and to help foster the exchange of best practices, so that all Member States can converge to a common minimum basis. The EU’s initiatives on this front do not constitute a transfer of sovereignty from the national to the supranational level, since the Treaties have already established the clear delineation of the relevant competences. Furthermore, the EU is not really involved in transfer payments. It does not provide for unemployment benefits or pension schemes. To that end, the EU budget and system of own resources need not undergo any adjustment for the Union to act. The current framework offers sufficient scope for further developing the social dimension of Europe. Of course, one can always demand more, such as a genuine supranational fiscal capacity that will, at its core, be the foundation of a European welfare state. Ideas of this sort do, nonetheless, require thoroughgoing reforms in a number of areas, including amendments to the Treaties.

Social policy perhaps is one of the few remaining areas that is still perceived by some as a competence germane to the construct of the nation state: the ultimate expression of national will-formation. Indeed each country has its own mechanisms and particular arrangements, which have been designed and substantiated over the years. Nonetheless, the argument that heterogeneity means keeping things national is specious. The same could have been said for the euro when every country has its own currency or, more recently, for fiscal and economic policy, or indeed for the integration process in general.

Modern European states took form under different conditions and historical path dependencies. Today, they operate within the same framework and are exposed to issues that are common to all. Going forward, the thinking should be on how to properly align the continuous process of capacity-building and the refinements to the inclusive democratic state, with the reality of a united Europe. The objective should be on how to make sure that action at the national level (i) is contributing to convergence towards a commonly-agreed standard, and (ii) remains consistent with the general interests of the Union at-large. This is not an argument for uniformity, but only for the homogenisation of the fundamentals of social policy. Europe can provide standards and offer the platform for the exchange of best practices among national policy-makers, as shown by the proposal to enact a legally-binding European Pillar of Social Rights. What is now needed is the political will to build on that and greatly emphasise Europe’s social dimension.

1. There are the links to the documents pertaining to the EU social dimension: (i) recommendation on the European Pillar of Social Rights, and (ii) the reflection paper on the social dimension of Europe. Published on April 26, 2017. [^]

2. For analysis and opinion, see my Thoughts on the White Paper about the future of Europe. Published on March 9, 2017. There also is a much shorter version, Open comment on the Commission’s White Paper, which was sent to the Commission as part of their initiative to get citizen feedback. Published March 27, 2017. [^]

3. For a quick reference on the distribution of competences in the EU, refer to the relevant chapter from my Little Guide to the European Union. Published on May 9, 2016. [^]