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Good timing can be a key factor in the influence which a policy analysis may have. There are some fundamental issues such as, say, the elimination of poverty or Youth unemployment which governments are most likely to be prepared to tackle at the beginning of their period of office or later on when they begin to be accused of running out of steam. Attempts to persuade governments to tackle such issues at other times when there is no public pressure to do so are likely to end up in the long grass however rational the case for addressing them, unless of course they are taken up by a policy unit.

Governments are more open to new thinking at some times than at others. Where consideration of a policy issue is still at an early stage and thinking is still fluid, it is easier to influence it than later partnerships-for-energy-efficiencywhen thinking has hardened. The chances of influencing thinking are even greater in Election year.

The first session of the EPSCO Council under the Greek Presidency, the chair stressed the fact that “the EU strategy’s targets remain valuable as axis of political and administrative mobilization both at the European and the member states level”, adding that “Europe 2020 is an essential tool for achieving economic and social convergence, there is a need to strengthen the social dimension of EU’s strategy.

Recent policy analysis contribution have studied the need for A EUROPEAN SOCIAL UNION. As this policy brief suggest, European welfare states are in a continuous process of reform and many need further reform. This Policy Brief,by  Frank Vandenbroucke (2014) argue that we need to develop a coherent conception of a European Social Union (ESU).

The political legitimacy of the European project depends on its capacity to avoid a negative trade-off or, in other words, to avoid a zero-sum game between national cohesion and pan-European cohesion.

The pan-European notion of solidarity refers to upward economic convergence and cohesion on a European scale. But it also refers to the rights of individuals to improve their own lives by working in a Member State other than the Member State where they were born, or to the rights of patients to benefit, under certain conditions, from medical care in other Member States than their state of residence, etc.

Solidarity within national Member States refers to social insurance, income redistribution, and the balance of social rights and obligations, which define national welfare states

Consecutive enlargements as well as monetary unification made this complex notion of solidarity even more demanding and difficult to handle. There is a risk that the contractual arrangements overlap with existing cohesion policy programmes with a clear social commitment. Relying on migration as an adjustment variable and making a success of it, implies societal choices. Contractual arrangements and cohesion policy operational programmes should be made consistent and complementary policy tools, in order to increase – instead of merely substitute – efforts at the EU level in employment and social policies.

Vandenbroucke use the expression ‘Social Union’ deliberately, for three reasons:

  1. First, it invites us to propose a clear-cut concept, in contrast to the rather vague notion of ‘a social Europe’, which often surfaces in discussions on the EU.
  2. Second, it signals that we should go beyond the conventional call for the EU to gain a ‘social dimension’. As a matter of fact, it would be wrong to assert that the EU has no social dimension today. The coordination of social security rights for mobile workers, standards for health and safety in the workplace, directives on workers’ rights… This constitutes a non-trivial acquis of fifty years of piecemeal progress.

The EU also developed a solid legal foundation from which to enforce non-discrimination among EU citizens. The notion of a ‘European Social Union’ is not premised on a denial of that positive acquis.

But if the next steps we have to take can build on that acquis, their nature and rationale respond to a new challenge. We have to understand the novelty of that challenge, which is about more than just adding ‘a social dimension’.

3. Third, the emphasis on a Social Union is not a coincidence. A European Social Union is not a European Welfare State: it is a Union of national Welfare States in which European countries would cooperate with an explicit social purpose. A European Social Union should not be seen as an idealistic bridge too far. Instead, a Social Union is both desirable and necessary for the eurozone and wider European integration.

WHY DO WE NEED A EUROPEAN SOCIAL UNION?

Vandenbroucke argue that the the idea of ESU, which are incorporated into the Treaty of European Union,  marks a return to the inspiration of the founding fathers of the European project. The case for a European Social Union is first and foremost based on a functional argument with regard to EMU. Members of a currency area are confronted with a trade-off between symmetry and flexibility.

Treaty of Rome of 1957: the simultaneous pursuit of economic progress on the one hand, and of social progress and cohesion on the other, both within countries (through the gradual development of the welfare states) and between countries (through upward convergence across the Union).

The extent to which Member States can uphold social standards in a context of free movement is particularly relevant with regard to minimum wages.

Proposing a European Social Union may seem an idealistic bridge too far, given the state of play of European politics today. However, Frank Vandenbroucke hope to show that the idea is neither far-fetched nor unduly idealistic. The core idea can be summarised as follows:

In policy terms, the challenge is to make long-term social investments and medium-term fiscal consolidation mutually supportive and sustainable, under improved financial and economic governance. In political terms, European citizens need a reformist perspective that gives the social acquis they cherish a credible future. A European Social Union should build on that acquis; simultaneously, building on that acquis requires reform. That is the quintessence of the call for a ‘social investment pact’.‘social investment’ as a unifying policy concept for the EU.

A Social Union would support national welfare states on a systemic level in some of their key functions (such as macroeconomic stabilisation) and guide the substantive development of national welfare states – via ESUgeneral social standards and objectives, leaving ways and means of social policy to Member States – on the basis of an operational definition of ‘the European social model’.

In other words, European countries would cooperate in a union with an explicit social purpose – hence, the expression ‘European Social Union’. Such a ESU is not only desirable, it is also necessary.

We should take social objectives into account at the highest level of EU decision-making.

Indeed, what is seen by some as ‘the dynamics of upward convergence’ associated with the enlargement of the EU, is seen as social dumping by others. It´s not to say that an operational concept of ESU is already on the table. But, we are in unchartered territory: important issues need to be clarified. First of all, we must be clear about the rationale and motivation for a ESU.

The European Union should react by showing greater unity, solidarity and courage. We should be guided by the spirit of those Treaties and not just letter. We should be able to go beyond national interests when the gravity of times so requires.

The European year of Citizens 2013 was an excellent opportunity to bridge the gap between European and the European institutions. Twenty years after EU citizenship was first enshrined in the Maastricht Treaty, we can now rightly claim that what was initially regarded rather superciliously as a mere appendage to national citizenship is gradually acquiring greater strength, meaning and legitimacy.

What we see today is the exact opposite: increasing divergence which undermines the sustainability of the EMU. Excessive social imbalances threaten the monetary union as much as excessive economic imbalances (Vandenbroucke et al., 2013).

Youth unemployment and child poverty are two examples. These imbalances should be a matter of common concern for all eurozone members. Politically, social divergence in the eurozone threatens the sustainability of the project in that it will steadily undermine the credibility of the European project.

A comparatively high level of youth unemployment and child poverty is synonymous with an investment deficit that may be cause and effect in a vicious circle of underperforming labour markets, child care, education systems and transfer systems. If some members of the eurozone get trapped into such a vicious circle, the resulting bad equilibrium creates a problem with regard to the economic symmetry that is required among the members of a monetary union.

The challenges of growth, job creation, and inclusion are closely intertwined. Women’s participation in the EU labor market is also a part of the growth and stability equation. Women are more likely than men to invest a large proportion of their household income in the education of their children.Most inequalities result from particular welfare production regimes (i.e. combinations of product market strategies, skill profiles and the political-institutional framework that supports them).

Compared to men, women face an additional set of issues when making skill investment choices (see Estevez-Abe 1999). In short, compared to men, it takes more institutional support to encourage women to make specific skill investments. Recent research indicates that the ability of governments to influence levels of equality is constrained by the structure of wage-bargaining institutions. A trade-off exists, between the potential policy goals of equality and private service sector employment creation.

Social protection does not always mean “politics against markets” (Iversen et al, 2001) social protection rescues the market from itself by preventing market failures. More specifically, Union of national Welfare States in which European countries cooperate in social protection aids the market by helping economic actors overcome market failures in skill formation and policy goals of employment creation (developing clear job entry patterns) stability required for growth. However, the effect of these policies will always be constrained by the existing institutional environment, in particular, at guaranteeing their compensation for the dislocations associated with economic change.

Welfare state performance depends on the complementarity of effective investment in human capital – by means of education, training and child care – and effective protection of human capital – by means of adequate transfer systems and health care. The redistributive role of social protection remains important per se. The Social Investment Package, launched by the European Commission in February 2013, presents a similar argument.

Fears of social dumping, but also welfare tourism, are causing considerable social and political tensions with regard to labour migration. Other arguments in favour of adding an active social dimension to the EU transcend the eurozone problematic, as they apply to the EU as a whole. A well-known argument holds that economic integration without social harmonisation induces downward pressure on social development in the most advanced Member States. The extent to which Member States can uphold social standards in a context of free movement is particularly relevant with regard to minimum wages.

A social investment strategy offers an interesting perspective, with regard to both pan-European cohesion and national cohesion. The strong record of Northern welfare states, with regard to both employment and poverty, has been linked to their long-term orientation towards ‘social investment’, i.e. activation, investment in human capital, and capacitating social services such as child care (Hemerijck, 2013). Obviously, investment in education and child care are no panacea; welfare states also differ with regard to the effectiveness of their social protection systems. For instance, Greece does not have a system of minimum income assistance, and minimum income protection in Italy is generally considered to be inadequate.

Social Protection Performance Monitor – should be further defined and the social dimension should be mainstreamed into all EU policies, notably into macroeconomic and budgetary surveillance, rather than it being constituted as a separate social pillar.

Vandenbroucke argue; In principle, the Europe 2020 frame should guarantee such mainstreaming; in practice, the social and education objectives of Europe 2020 do not carry the same weight as the economic and budgetary objectives. This is, first and foremost, a political problem, and solving it presupposes the willingness to take social objectives into account at the highest level of EU decision-making.

Fundamentally, the challenge is to preserve the regulatory capacity of national governments and social partners, whilst allowing labour migration and the cross-border delivery of services. Reconciling national regulatory capacity with mobility has also constituted – and still constitutes – a challenge in the domain of health care. The impact of the European legal constellation – notably legislation shaping the internal market – on a sector such as health care shows that a neat separation between ‘market issues’, belonging to the supranational sphere, and ‘social issues’, belonging to the national spheres, is unsustainable.

Finally, ‘Social Investment Pact’ for the EU (Vandenbroucke, Hemerijck, Palier, 2011). Obviously, a ‘Package’ is not a ‘Pact’; the idea of a ‘Pact’ underscores the sense of reciprocity that is needed: all Member States should be committed to policies that respond to the need for social investment; simultaneously, Member States’ efforts in this direction – notably efforts by Member States who face a difficult budgetary and economic context – should be supported in a tangible way. In fact, this means that we should revisit the fundamental goals that have been part and parcel of the European project since the Treaty of Rome of 1957:

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