Competitiveness may be among President Von der Leyen’s top priorities for the foreseeable future, but it must not come at the cost of Europe’s social foundations. The launch of the European Commission’s 2025 Work Programme once again highlights a concerning reality – the wellbeing of people is being overlooked in the race for economic gains.
While the new Work Programme announces the European Pillar of Social Rights Action Plan revision as an important milestone, we are concerned that the social agenda is largely being sidelined in favour of a stronger focus on productivity, competition, and defence. Ever-increasing geopolitical tensions mean that strengthening Europe’s security and defence capabilities is also likely to divert much-needed investment away from social policies.
This shift in strategic direction is even more apparent in the Competitiveness Compass, the European Commission’s guiding vision for a more competitive EU. The Compass outlines an approach that focuses on growth and investment, over social protection and wellbeing. Despite Mario Draghi’s warning in his report that “productivity growth and social inclusion [must] go hand in hand”, the Compass’ narrow interpretation of social policy focuses almost exclusively on skills development and labour market participation.
The Competitiveness Compass misses the mark on social inclusion
The EU’s competitiveness in the global economy is important. However, the Compass fails to acknowledge the competitive advantage of investing in our social model, or to integrate a strong social agenda in line with the European Pillar of Social Rights that supports people’s wellbeing, resilience, social inclusion and participation.
While strongly based on the 2024 Draghi and Letta reports on competitiveness and the single market respectively, the Compass fails to mention a third crucial report – the high level group report on the future of social protection and the welfare state. Reference to last year’s Declaration on the Future of the European Pillar of Social Rights signed by 25 EU Member States alongside the European Commission, the European Parliament, social partners and civil society is also notably lacking.
Instead, the Compass makes numerous proposals that benefit businesses and industry, relying on the flawed assumption that competitiveness gains for companies will automatically trickle down into benefits for all people. At the same time, the Compass misses the opportunity to suggest measures supporting social economy enterprises that pursue sustainability and social goals, in addition to business ones. Furthermore, the ambition for businesses to “cut red tape”, as advocated for by the Compass, puts workers’ rights and wellbeing at risk. Our Social Rights Guide to the Competitiveness Compass provides a full breakdown of how the Compass misses the mark across many social policy areas.
Social rights must be a cornerstone of the EU’s competitiveness agenda
The policies focused on enhancing competitiveness outlined in the Compass prioritise productivity, attracting investment, and boosting trade. While these priorities are important to support financing Europe’s social protection systems, they do not necessarily translate into increased wellbeing for the average person and particularly groups in vulnerable situations. This also requires protecting people’s social rights: mental and physical health and care, affordable housing, quality jobs, work-life balance, education, access to affordable quality services and adequate social safety nets are not automatic by-products of a competitive market, but are fundamental investments in a thriving, resilient and competitive society.
Competitiveness cannot be achieved through a social race to the bottom. On the contrary, Europe can only be competitive if it strategically invests in its people throughout the lifecycle. To avoid leaving people in vulnerable situations behind, it should support investments in strong social protection systems contributing to strong and resilient societies. The new action plan on the European Pillar of Social Rights will be the chance for the Union to reiterate its commitment to strengthening its social model by implementing ambitious actions to achieve its headline targets and setting new plans and legislation in motion under its 20 principles.
The EU needs to remind itself of its aim, as set by the treaties, which is “to promote peace, European values and the wellbeing of its people”. We call on the European Commission to use 2025 as the opportunity to give the EU’s social compass, the European Pillar of Social Rights, equal priority and resources as it does to its competitiveness agenda to ensure all EU policies are founded on and support the European social model rather than dismantle it.
