On 16 July, the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) approved the social and employment policy aspects of the country-specific recommendations as well as the employment policy guidelines. This year's social policy was focused on upward social convergence - a core element of the European Pillar of Social Rights (EPSR). The Council also approved a joint opinion by the Employment Committee (EMCO) and the Social Protection Committee (SPC). It identified the challenges facing upward social convergence. An initial evaluation of a pilot project that will analyse how convergence will be developed on a country-by-country basis was also undertaken. The two committees are in favour of continuously incorporating such analyses in multilateral monitoring mechanisms.

European Semester

The European Semester provides the framework for coordinating and monitoring economic and social policies within the EU. The cycle begins in November, when the Commission defines the priorities for the coming year. It ends in October of the following year, when the national governments submit their draft budgets.

The Joint Employment Report for the 2024 European Semester includes, for the first time, a new country-specific analysis covering upward social convergence, which was prepared as part of the pilot project. The basis for this was the analytical framework jointly agreed upon by the EC and the Council. The first step was to identify the risks to upward convergence for all 27 member states and to name the countries for which an in-depth analysis is needed. They are Bulgaria, Estonia, Hungary, Italy, Lithuania, Romania and Spain. The results of this analysis have been incorporated in the country-specific recommendations for these seven countries.

Results of the analysis

Gender, age, socio-economic background, nationality and ethnic origin often determine access to educational and training opportunities, fair working conditions and high-quality social, care and health services. This applies in particular to the countries that were analysed in-depth. However, the factors listed above also represent major barriers to the progress of social and employment policies for the remaining member states. In their statement, SPC and EMCO emphasised that the resilience of member states to current and future challenges will depend on social and employment policies encompassing everyone.

Guidelines for the employment policies of the Member States

The spring package also included adopting the employment guidelines. This year, they were supplemented by education and training issues, new technologies, artificial intelligence and algorithmic management. Recent policy initiatives such as platform working, affordable housing and tackling labour and skills shortages have also been incorporated in the guidelines.

Country-specific recommendations for Germany

The country-specific recommendations for Germany recommended that measures be implemented in 2024 and 2025 to reform the financing of statutory pension insurance. The projected future increase in pension expenditure as a proportion of gross domestic product would reduce the scope of the fiscal policy. The proportion of pension expenditure financed by tax revenue has now risen to over 100 billion euros. Introducing generational capital would not provide any substantial relief here as the projected capital accumulation would have to be financed by public debt. At the same time, the spread of company and private pension schemes is stagnating.

What's next?

SPC and EMCO will conduct another evaluation of the social upward convergence pilot project during the second half of the year.