On 19 June 2024, the European Semester process - the EU’s governance tool that coordinates Member States’ policies – entered its next stage: the publication of the 2024 Spring Package. A couple of days later, we presented our views on the Spring Package at the bi-annual meeting of the Social Protection Committee and the Employment Committee on the European Semester.
What’s in the 2024 Spring Package?
As usual, the Spring Package contains a communication, country reports and proposals for country-specific recommendations (CSRs). This year every country received one CSR on fiscal policy, one on the implementation of national recovery and resilience plans (NRRPs) and cohesion policy programmes, and one on outstanding or new challenges, with a focus on competitiveness. The package also contains revised Employment Guidelines and a report analysing the situation of several Member States regarding the deficit limit of 3% of deficit-to-GDP.
What are our views?
We are concerned about the overall framing of the package around competitiveness and fiscal sustainability. Competitiveness is an important goal, but it must not be done at the expense of fair working conditions, decent wages or the quality of our social protection systems, health, care and social services. In this context, some fiscal CSRs focused on cutting costs without recommending how, in parallel, to protect the quality and affordability of services are concerning.
We call on the EU institutions to go about this differently this time, by strengthening investments in people’s living and working conditions. If we take measures that reduce the rights and opportunities of the capital that we have, which is people – who have suffered multiple consecutive crises and years of underinvestment that eroded their quality of life – we will not become more competitive. Resilient social systems that enable people to live a decent life should be first a goal in and of itself, in line with the overall aim of the EU as per its treaties, rather than something that is only supported when it helps competitiveness.
Similarly, the package focuses strongly on fiscal sustainability, in line with the newly reformed EU fiscal rules (for our views on these new rules, read our blog here). We are concerned that without an increased attention on social and quality employment priorities, the fiscal consolidation requirements many Member States will face under the new rules will have a very negative impact on the quality of our education, social protection, health and care systems. This is already visible in some CSRs which call on the Member State to improve the fiscal sustainability of pension systems & cost-effectiveness of health & long-term care. Fortunately, the communication does remind the importance of guaranteeing the quality, affordability, accessibility and availability of services, health and care systems and the need to strengthening their resilience and capacity.
We support calls by the Commission to speed up implementation of the RRF and CSRs. Considering the strengthened link between CSRs and the fiscal-structural plans required under the reformed fiscal rules, we also see the need to update CSR design. CSRs are currently based on a gap analysis and fiscal-structural plans will need to include reforms and investments addressing CSRs and common EU priorities, including the European Pillar of Social Rights. However, the potential for steering reforms and investments through CSRs in national plans is limited if CSRs themselves are quite limited in scope.
We also call on Member States to actively engage civil society organisations in the development of these new plans, as they can provide first-hand knowledge of the barriers people face and make decision-making more evidence-based, democratic and simply effective. We also reminded them that civil society organisations often struggle engaging with economic and finance ministries and that it is crucial for ministries to actively engage them in through regular, structured, meaningful civil dialogue.
Finally, we reminded the European Commission and Member States of the need to strengthen public investment to fill existing gaps, as existing measures, such as the Social Climate Fund, do not have adequate resources to match the ambition of the Green Deal while safeguarding marginalised people. In the context of fiscal consolidation demands under the new fiscal rules and costly delays in achieving the just transition, gaps will likely increase. We welcome calls for tax reform to increase revenue and agree with recommendations to shift taxation away from labour and towards environmental taxation through the “polluter pays principle”. However, this must target big polluters and not those most vulnerable to the impact of the green transition. Environmental objectives must not widen existing social inequalities. Moreover, we see a truly progressive taxation system and the taxation of great wealth as crucial ways to foster public investment.
We also reminded that the current focus on encouraging private investments, by completing the Banking Union and advancing the Capital Markets Union, is insufficient to fill investment gaps. Additionally, elected democratic governments, not businesses that do not necessarily represent the interests of all people, especially more vulnerable groups further away from the labour market, need to take the lead in ensuring investment. This is especially the case as many urgently needed investments do not have a “business case” and will not be picked up by private investors. We called for more progressive taxation, including on great wealth, a stronger EU budget and tools to create new EU own resources, which will be a major objective of this coming EU mandate. They are indispensable to finance a truly just transition and a stronger, more resilient and inclusive Europe.
