No social dimension without a sound economic foundation

Choosing the right Instruments to implement the European Pillar of Social Rights Action Plan is vital to its success, argues Milena Angelova.

By Milena Angelova

Milena Angelova is President of the European Economic and Social Committee's (EESC) Study Group on the opinion on the European Pillar of Social Rights Action plan and a member of the EESC Employers' Group

16 Jul 2021

The publication of the European Pillar of Social Rights Action Plan was highly anticipated. While it can provide useful guidance for Member States and the EU institutions in their efforts towards competitiveness, growth, employment, structural reforms, productive investments and ensuring people's wellbeing, it must be underlined that there is no social dimension without a sound economic foundation.

Another important element is that the Pillar contains principles, which shall be pursued primarily through non-binding actions, based on constructive social dialogue and always taking into account different socio-economic environments and the diversity of national systems, including the role and autonomy of social partners.

EU legislation should be reserved for truly cross-border issues. Moreover, if the Union legislates on social policy, all initiatives should be based on evidence, proof that they fulfil their purpose and subject to competitiveness checks, as a control measure to avoid proposals that hinder increased competitiveness, jobs and sustainable growth.

The division of competences between the EU and Member States, where social policy is mainly a responsibility for national governments, shall be fully respected.

Competitiveness and higher productivity based on skills and knowledge are preconditions for the social dimension of the Union. Labour market developments must be supported, not over-regulated or hindered.

If Europe is to cope with global competition, growing digitalisation and new business models, innovation and flexibility are needed in terms of employment, working hours and labour mobility.

"Competitiveness and higher productivity based on skills and knowledge are preconditions for the social dimension of the Union. Labour market developments must be supported, not over-regulated or hindered"

The current situation calls for labour markets in Europe to continue to be reformed, but it shall be done in different ways in different parts of the Union, building on their different labour market models. In some EU countries, it may be a matter of changing minimum wages or achieving lower indirect labour costs.

In other countries, it may be a matter of introducing more flexible forms of employment or changing social security systems to stimulate employment. This means that preference must be given to soft law instruments, maintaining the possibility of generating and deploying flexible and tailor-made solutions.

As the Porto Declaration states that "the social dimension, social dialogue and the active involvement of social partners have always been at the core of a highly competitive social market economy", the Plan is a good opportunity to demonstrate that Member States and their social partners can deliver a proper response to the challenges that labour markets are facing after the pandemic.

Social dialogue and collective bargaining are best promoted if the state or the EU are involved neither in setting the criteria for collective bargaining agreements nor in enforcing them, and where the parties have full responsibility for both. The view of the Plan that "support to employment and workers cannot be successful without support to companies and entrepreneurs.

A vibrant economy remains central to Europe's future prosperity and a key source of new jobs" can be endorsed and shall guide its implementation. Employment creation, however, is not about new legislation or other obligations increasing the burden on companies. Competitiveness and higher productivity based on skills and knowledge represent a recipe for maintaining the wellbeing of European societies.

The possible monitoring of the Plan and the respective national reforms should happen in the framework of the open method of coordination and the European Semester.

"The possible monitoring of the European Pillar of Social Rights Action Plan and the respective national reforms should happen in the framework of the open method of coordination and the European Semester"

The European Semester should be used as the reference framework for supporting Member States' and social partners' efforts to improve – through reforms – the performance of national employment and social policies.

The existing coordination mechanisms of the Members States, as well as of the Commission, are the appropriate instruments for ensuring the engagement of all relevant stakeholders at national level in implementing the Pillar, including as regards its mid-term review.

Guidance in using the existing coordination mechanisms should be a priority for the Commission in relation to the Member States.

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