The European Semester 2018 Autumn Package
Tentative steps towards implementing the European Pillar of Social Rights.
Dr. S-W – 01/2018
The European Semester is an annual cycle of economic and fiscal policy coordination of the EU Member States, which started in 2011. In addition to its existing function, the European Institutions intend to make it the key instrument for implementing the European Pillar of Social Rights. However, there is very little of this to be seen in the current cycle.
The ‘kick-off packet’ for the European Semester 2018 was released by the European Commission on 22 November 2017. It consists of the following components:
- Annual Growth Survey 2018
- Macroeconomic Alert Mechanism Report 2018
- Euro area recommendation for economic policy
- Draft Joint Employment Report
- Proposed amendments to the Employment Guidelines
- Communication on budgetary plans in the euro area
Annual Growth Survey 2018
The report itself contains few surprises. Its guiding principle is the ‘magic trinity’ of structural reforms, investment and responsible budgetary policy; these three strands are given equal weighting. Some topics are also represented by the ‘principles’ of the Pillar or are reinforced by it. Examples of this include the call for affordable preventive and curative health services, and better work-life balance. New forms of work should be given adequate social protection and the transition to permanent employment contracts should be encouraged. All workers, including the self-employed, should have the same opportunity to access retirement benefits. Also noteworthy is the emphasis on the right to a minimum income for people with limited financial resources.
However, none of the aforementioned guidelines that are listed in the report are really new, even if it is stated that some positions are directly derived from the principles of the European Pillar of Social Rights.
Joint Employment Report 2018
References to the European Pillar of Social Rights continue in the draft Joint Employment Report. In line with the Pillar, many Member States have improved social protection for people who are self-employed or in non-standard work; in particular with regards to parental leave, unemployment benefits, sickness benefits and encouraging labour market participation. Another section is devoted to the topic of ‘safeguarding pension adequacy’. Recent reforms to improve minimum pensions, reduce the tax burden on lower pensions and strengthen supplementary pensions were all positively rated. In terms of health policy, the report praised efforts to improve accessibility to primary health care services and preventative services. Reforms in specialist and hospital care focused on streamlining their financial sustainability.
Monitoring the progress made by each country in the individual areas is predominately done via in-depth analysis of the Social Scoreboard underpinning the pillar, even though this is yet to be done systematically. The scoreboard is based on 14 indicators and replaces the ‘Scoreboard of key employment and social indicators’ from 2013. The overall performance of the Member States is measured against these indicators. Rather coyly hidden in a footnote is an acknowledgement that, with a few exceptions, these indicators are part of existing assessment frameworks and tools jointly defined by the Employment Committee and the Social Protection Committee (‘Dashboards’).
Assessing the Member States’ overall performance based on these indicators, both in comparison to the EU average and over time, is not exactly new. However, to strengthen the ranking system, each Member State is now assigned to one of seven categories, ranging from ‘best performers’ to ‘critical situations’. Denmark, Sweden and Austria were the best overall performers; Greece, Romania and Italy the worst. Germany ranks at the top in terms of employment and unemployment rates, but was also above average in terms of at-risk-of-poverty, remuneration, medical care coverage, and digital skills. The only indicator which can give Germany reason to be concerned is ‘Young people neither in employment nor in education or training’ (NEET).
In addition to the 14 existing indicators, the Social Protection Committee is preparing two more indicators, including one on minimum wage schemes. The Commission has also announced that, together with the Member States, it will be considering further benchmarking as part of the Pillar.
Finally, the principles of the European Pillar of Social Rights are also taken up in the proposal for employment guidelines. The European Commission proposes amending Guidelines 5-8 to align them with the principles of the Pillar. This would improve how to deal with issues such as precarious employment conditions, abuse of non-standard employment contracts, access to adequate social housing and a better balance work-life balance.
The Autumn Package still needs to be discussed and approved by the European Parliament and Council. In spring 2018, the Member States will present their national reform programmes. At the end of February, the Commission will publish country reports guided by the Pillar of Social Rights. This will be followed by country-specific recommendations, also reflecting the Pillar. The semester ends in July 2018 when it is adopted by the Economic and Financial Affairs Council.