Social warning mechanism becomes an analytical framework

The Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) discussed the proposal for an analytical framework for social convergence on 12 June. Building on the Belgian-Spanish initiative to introduce a social imbalance procedure at the Porto 2021 Social Summit, the Employment Committee (EMCO) and Social Protection Committee (SPC) have developed this analytical framework. This is to identify progress but also additional need for action in social convergence in the different areas of the European Pillar of Social Rights. This is also intended to strengthen the social dimension in the European Semester.

Belgian-Spanish initiative

In the run-up to the Porto Social Summit in May 2021, Belgium and Spain have called in a "non-paper" for the EU to address social as well as economic imbalances. To this end, they have proposed a new procedure that would trigger more detailed follow-up discussions at committee and ministerial level in the case of social imbalances, along the lines of the Macroeconomic Imbalance Procedure (MIP). The MIP was introduced in autumn 2011 in the wake of the Euro as well as the economic and financial crisis. It is intended to prevent and correct risky macroeconomic developments. The task of the MIP is to trigger an urgent need for action at EU and Member State level. The MIP thus determines the further direction of the European semester. From the point of view of Belgium and Spain, a social imbalance procedure should be added to the MIP.

This initiative was discussed during the EPSCO Council on 15 October 2021 and met with a divided response. While several Member States, including Germany, explicitly support the proposal, others doubted its added value.

Analytical framework for social convergence

During the French Council Presidency, the EMCO and the SPC were given the mandate to develop proposals on how to strengthen the social dimension in the European Semester, building on the Belgian-Spanish initiative. To this end, the two committees set up a joint working group in September 2022. The final report of which was adopted by EMCO and SPC on 12 May.

The working group's considerations are aimed at strengthening the central goal of upward convergence, i.e. convergence towards the most efficient social security systems, laid down in the European Pillar of Social Rights (ESSR) for the area of social and employment policy.

Integration into the European Semester

The working group proposes a two-step analysis: In the first step, the joint employment report will identify Member States that are making little progress towards upward social convergence. For this purpose, a new analytical framework based on the Social Scoreboard will be developed. In the second step, in-depth "social convergence reports" would be prepared for these Member States, which could inform the Council on challenges to upward social convergence and merge with the European Council's country-specific recommendations.

In contrast to the Belgian-Spanish initiative for a warning mechanism on social imbalances, the analytical framework for social convergence is not at the beginning of the European Semester and does not determine the direction of the European Semester together with the MIP. Instead, the analytical framework helps in better integrating the EPSR into the European semester. This is intended to give greater consideration to the common European goal of upward social convergence in the drafting of country-specific recommendations.

What happens next?

EPSCO discussed the analytical framework for social convergence on 12 June and forwarded it to the European Council, which will discuss the further development of the European Semester on 29 and 30 June.