Effects of the energy price increase

VS – 03/2023

On 14 March, the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) adopted the Joint Employment Report of the European Council and the European Commission and adopted the conclusions of the Annual Report on Sustainable Growth and the Joint Employment Report. This year's report focuses on the impact of the rise in energy prices following the Russian attack on Ukraine. The conclusions call on Member States to counteract the social and economic impact of the energy price increase and mitigate losses in purchasing power of dependent workers, especially those with low incomes.

Energy poverty and the impact of energy price increases on the cost of living

The report notes that the EU labour market has fully recovered from the COVID-19 pandemic and has exceeded pre-pandemic employment levels as of the third quarter of 2021. Also, income inequality in the EU seems to have remained stable during the COVID-19 crisis.

Nevertheless, the high and strongly rising energy prices pose a new challenge. This increases the risk of energy poverty. As price pressure increases go beyond the energy sector, it becomes increasingly important that temporary support measures are targeted at vulnerable households. Member States have introduced measures to support access of low-income households to energy in order to prevent and mitigate these risks.

First evaluation of the objectives agreed in the action plan on the European Pillar of Social Rights

At the Social Summit in Porto on 7 May 2021, the European Commission and the Member States adopted an Action Plan on the European Pillar of Social Rights. Among other things, it sets targets to be implemented across Europe by 2030:

  • an employment rate of at least 78 per cent in the European Union;
  • the participation of at least 60 per cent of adults in continuing education and training programmes each year;
  • reducing the number of people at risk of social exclusion or poverty by at least 15 million, including 5 million children.

Subsequently, Member States have set national targets for this purpose, which together exceed the targets laid down for the EU as a whole.

The joint employment report now evaluates progress at European and national level for the first time. The development between 2019 and the last available data is primarily shaped by the COVID-19 pandemic. The report also highlights that there are still large differences in the performance of social protection systems between Member States.

Part of the European Semester

The joint employment report is part of the European Semester. This is an annual European policy coordination process from November to June to achieve common financial, economic, labour market and social policy objectives. The joint employment report analyses employment and social policies in line with the principles of the European Pillar of Social Rights. At the same meeting, EPSCO also adopted the conclusions on the Annual Report on Sustainable Growth 2023 and the Joint Employment Report 2023. It calls on Member States to take into account the priorities and outcomes of both documents in their National Reform Programmes to be prepared by the end of April.