Informal Council discusses social investment

At the informal meeting of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) in Madrid on 14 July a joint Spanish-Belgian initiative on social investment was discussed. According to EU Commissioner for Jobs and Social Rights, Nicolas Schmit, the experience of the COVID-19 pandemic has shown how important social policy is for Europe. Social policies had contributed significantly to the resilience of the European Union. These measures are investments in the future of Europe and not simply government spending.

European Union as a major player

Spain and Belgium stressed the importance of the European Union in social policy during the informal Council meeting. This is done through joint social policy initiatives. But budgetary, economic and fiscal policies also have a significant influence on social policy. It is important for the two Member States to anchor the common principles of the European Pillar of Social Rights (EPSR) also in the economic and financial governance of Europe.

Reform of economic governance

The Council is therefore currently working on a review of its economic and fiscal governance framework. This is to be adapted for the EU to the current geopolitical, economic, environmental and social challenges. The review is to be adopted at the end of the Spanish Council Presidency. A clear reference to the EPSR and a prioritisation of social investments is important to both countries.

European excessive deficit procedure 

The Spanish-Belgian initiative proposes that expenditures for social investments no longer be taken into account in the European deficit procedure. For this to be feasible, the European Commission and the relevant Committees of the Member States must work on the definition and operationalisation of social investments: they must be clearly definable and their success measurable.

Evaluation by the Ministers of Finance

However, anchoring social investment in the European framework for economic and fiscal governance also means giving finance ministers the right to evaluate it. Technically, this means that they agree on a time period in which the previously laid down goals from social and financial policy must be achieved. There must be consensus that only policy approaches with quantifiable targets are considered as social investments.

Ultimately, the question is whether social policy wants to submit to such a control regime. The Madrid Informal Council has opened the discussion on social investment.