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Last Friday I was in Vilnius, Lithuania, to discuss with the Minister of Economy the social dimension of the Economic and Monetary Union, an essential issue that will be on the table of the EU leaders on June 27.

We are still confronted with the issue that “social” and “economic” policies are often considered by the Ministries of Economy as oil and water – they do not go together.

But it’s quite the contrary: we know from our members that social and economic policies are the two legs that allow the EU body to move ahead. It’s very difficult to walk on one leg, especially if the social one is hurt all the time.

Instead of talking metaphorically or theoretically, here are two examples of interactions between social and economic policies taken directly from the Lithuanian 2013 National Reform Programme. Lithuania will hold the EU presidency as of July 1.

The first example is that in a country with an economy among the fastest growing in the EU (+3,6%), there is a big discrepancy between rural and urban areas in terms of school dropout – a social issue. According to the ministry of economy, “the main causes for such increasing regional differences are considered to be inadequate school network, underdeveloped infrastructure of educational support, insufficient qualifications and competences of teachers”. Yet at the same time, the government has to tighten its budget deficit to respond to EU recommendations. Here is a clear social dimension of the economy. Investing in the school today will reduce tomorrow’s school dropouts and will ensure the social integration of Lithuanian youth, qualifying them for employment in their country. Social investment now will be good for the economy of tomorrow.

The second example is costless. This is to counteract the argument that social policies are always costly and that at a time of crisis we cannot afford them. The Lithuanian government is making a huge effort to reduce the national energy consumption (on average, they pay 20% higher prices than the rest of the EU). What we advocate with our members is that the first beneficiaries of energy efficiency measures (insulation of roof and walls for example) should be those on the lowest income because unfortunately, they are often the ones with the highest energy bills. This policy does not have any extra cost: it is more about a better targeting of the beneficiaries to ensure that those that need it the most, benefit from it first.

So I hope that I convinced you a bit that the social dimension of the Economic and Monetary Union is essential to ensure that social policy and economic policies are not considered as oil and water anymore.
Pierre Baussand

Director