EIRC Foundation European Integration and Regional Competitiveness

Filippo Strati - Studio Ricerche Sociali - www.srseuropa.eu

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EIRC Foundation European Integration and Regional Competitiveness

European Union Experts EUE - AISBL

Social Economy as a way to social inclusion; status of play in Bulgaria, the Italian Experience and the European Social Policy: ideas for the new programming period 2014-2020

Sofia 5 October 2010

Technical University

The European Social Policy within the perspectives of the EU 2020 Strategy

Filippo Strati - Studio Ricerche Sociali Italy

(member of the EU Network of Independent Experts on Social Inclusion)


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The presentation foci:

A) Important changes in the EU institutional, strategic and governance architecture

B) Progress in the EU social policies since 2000

C) Critical points of the past and current debate and challenges in the near future


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A) Important changes in the EU institutional, strategic and governance architecture

The new “Lisbon” Treaties with the associated Charter of Fundamental Rigths (1/12/2009)

The new Strategy (EU 2020) compared with the past Lisbon Strategy


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The New Treaty on European Union

Founding Values (Art. 2)

Respect for human dignity, freedom, democracy, equality and human rights, including the rights of persons belonging to minorities.

“These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail”.


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The New Treaty on European Union

Overarching Objectives (Art. 3)

Peace and well-being; sustainable development; a highly competitive social market economy; economic, social and territorial cohesion; full employment and social progress; a high protection and improvement of the quality of the environment; scientific and technological advancement; social justice and protection; equality between women and men; solidarity between generations and among Member States.

The Union “shall contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child”.


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The New Treaty on the Functioning of European Union

Five important “Horizontal Clauses” in defining and implementing policies and activities

Equality Clause (Art. 8) to eliminate inequalities, and to promote equality, between men and women.

Social Clause (Art. 9) to guarantee adequate social protection, to fight against social exclusion, to promote high level of employment, education and training, to protect human health

Anti-discrimination Clause (Art. 10) to fight against discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation

Environmental Clause (Art. 11) to promote sustainable development and environmental protection (Art. 11)

Consumer Clause (Art. 12) to protect consumer rights


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The New Treaty on the Functioning of European Union

Three important “Governance pillars” in defining and implementing policies and activities

Broad guidelines of the economic policies adopted by the EU Council in agreement with the Member States (Art. 121) to achieve the EU Objectives (as defined in Art. 3 of the Treaty on European Union) (Art. 120).

Employment guidelines consistent with the broad guidelines and adopted by the EU Council in agreement with the State Members (Art. 148).

Recommendations concerning each Member State, proposed by the EU Commission, adopted by the EU Council and communicated to the EU Parliament, through a regular overall assessment and monitoring of economic and employment developments (Art. 121.2 and Art. 148).


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The Charter of Fundamental Rights of the European Union

The same legal value as the Treaties

The Charter places the principle of human dignity as its first Article and Title, through which all other rights are formulated and pursued: freedom, equality, solidarity, citizenship and justice.

Human dignity includes also the right to:

- Social security benefits, social protection and services, social and housing assistance, sufficient resources for a decent existence in order to combat risks of social exclusion and poverty (Art. 34).

- A high level of environmental quality and protection (Art. 37).


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The EUROPE 2020 Strategy and the previous Lisbon StrategyThe EU 2020 Strategy was designed as the successor of the Lisbon Strategy

Lisbon Strategy Vision (launched in 2000)

EU 2020 Strategy vision(launched in 2010)

European Union (EU) as the most competitive economy in the world and achieving full employment by 2010

EU as a social market economy based on smart, sustainable and inclusive growth, also to come out stronger from the crisis, delivering high levels of employment, productivity and social cohesion.


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The Lisbon Strategy and the EU 2020 Strategy

Lisbon Strategy: 3 Pillars EU 2020 Strategy: 3 mutually reinforcing priorities

- Economic pillar: a competitive, dynamic, knowledge-based economy.- Social pillar: modernisation of the European Social Model by investing in human resources and combating social exclusion.- Environmental pillar, (included by the Göteborg Strategy for Sustainable Development in 2001): decoupling economic growth from the use of natural resources

– Smart growth: developing an economy based on knowledge and innovation.

– Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion.

– Sustainable growth: promoting a more resource efficient, greener and more competitive economy.


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Public consultation on the EU 2020 Strategy

Between November 2009 and January 2010. Background considerations included the following ones:

1- The conservation and a more efficient utilisation of energy, natural resources and raw materials are key drivers of economic competitiveness and productivity.

2- The application of greener technologies constitutes new sources of employment.

3- Growth and jobs alone do not secure a reduction in poverty and social exclusion.

4- Gender equality, social cohesion and solidarity, integration of immigrant population, lifelong learning and education, income support, social services and pension systems are effective ways to fight inequality, poverty and child poverty with a close attention to vulnerable groups in an ageing society.

The EU Commission received nearly 1,400 contributions from a wide range of stakeholders (e.g. EU-level bodies, NGOs, experts, trade unions, employers and professional associations, political parties, consumer organisations, citizens).


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EU 2020 Strategy: Five Headline Targets and Seven Flagship Initiatives

5 Headline Targets on: employment rate; Research and Development (R&D); climate change and energy; education.

7 Flagship Initiatives linked to the Headline Targets:

- social and territorial cohesion to allow people to live in dignity and to take part actively in society (European platform against poverty - EPAP)

- decarbonisation of the economy and the decoupling of economic growth from the use of natural resources (Resource efficient Europe)

- research and innovation (Innovation Union); support to business, especially SMEs, to compete globally (An industrial policy for the globalisation era); high-speed internet for households and firms (A digital agenda for Europe);

- modernisation of labour markets to increase labour participation throughout the lifecycle (An agenda for new skills and jobs);

- education systems (Youth on the move)


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The European Platform against Poverty (EPAP)

To ensure that the benefits of growth and jobs are widely shared and people experiencing poverty and social exclusion

To increase visibility, improve communication and dissemination, enhance mutual learning processes

To improve quality and continuous involvement of relevant stakeholders

To develop the Open Method of Coordination and to benefit from the experience, instruments and activities in the field of social protection (pensions, health and long-term care) and social inclusion

To enhance capacity and quality of initiatives and measures at both EU and national level to deliver the social dimension of the Europe 2020 strategy

To foster the social impact assessment of policies according to the horizontal “social clause”

To develop indicators that reflect the multidimensional nature of poverty and social exclusion


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The European Councils of March and June 2010:

1) Agreed on Five Headline Targets of the EU 2020 Strategy

- Member States should, in close dialogue with the Commission, rapidly finalise their national targets, taking account of their relative starting positions and national circumstances, and according to their national decision-making procedures.

2) Gave its political endorsement to the Integrated Guidelines for economic and employment policies, which will be formally adopted after the European Parliament's opinion.

3) Defined a governance framework between the EU and the Member States


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EU 2020 Strategy: Five Headline Targets 2020

1. People at risk of poverty and social exclusion Down by 20 million at least

2. Climate change and energya. Greenhouse gas emissionb. Share of renewables in final

energy consumptionc. Energy efficiency

“20/20/20” (already formulated in the 2007 Energy Policy Action Plan)

a. 20% reduction compared to 1990 levels (30% if the conditions are right)

b. Up to 20% c. 20% reduction

3. Research and Development (R&D) Up to 3% of GDP

4. Employment rate for population (women and men) aged 20-64 Up to 75%

5. School drop-out rates Share of 30-34 years old with tertiary education

Down to less than 10%Up to 40%


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EU 2020 Strategy: Poverty Targets 2020

People at risk of poverty and social exclusion Down by 20 million at least

Member States set their national targets on at least one of three indicators:

At-risk-of poverty rate Equivalised disposable income below 60% of the national median income (after social tranfers)

Material deprivation At least 4 out of 9 indicators relating to economic strain, durables, housing and local environment

Jobless households Households where the adults work less than 20% of their total work potential during the past year (12 months)


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EU 2020 Poverty Targets: some estimates (1)

People EU 27 in million

Bulgaria in million

At risk of poverty and social exclusion 120 2.9

At-risk-of poverty rate 80 1.62

Materially deprived 20 out of 40 1.22 out of 2.4

In jobless households 20 out of 45 0.06 out of 0.6

(1) Carin Lindqvist-Virtanen, Social Protection Committees’ Indicator Subgroup (ISG), EU Belgian Presidency

Conference on EU Coordination in the social field in the context of EU2020, La Hulpe 14-15.9.2010


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Integrated Guidelines (IGs) in the Lisbon Strategy and in the EU 2020 Strategy

Lisbon Strategy: 24 IGs 2005-2008, confirmed for 2008-2010

EU 2020 Strategy: Draft 10 IGs, largely stable until 2014.

For macroeconomic policies (6), microeconomic policies (10) and employment policies (8).

Two IGs (number 17 and 18) with some reference to social and territorial cohesion and to inclusive labour markets

One IG (number 11) to encourage the sustainable use of resources and strengthens the synergies between environmental protection and growth.

For the economic policies (6) and employment policies (4)

One IG (number 10) to promote social inclusion and to fight against poverty

One IG (number 5) to improve resource efficiency and to reduce greenhouse gases


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EU 2020: Draft Integrated Guidelines for economic policies of the Member States and the Union

1) Ensuring the quality and the sustainability of public finances

2) Addressing macroeconomic imbalances

3) Reducing imbalances in the euro area

4) Optimising support for R&D and innovation, strengthening knowledge and unleashing the potential of the digital economy

5) Improving resource efficiency and reducing greenhouse gases emissions

6) Improving the business and consumer environment and modernising the industrial base


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EU 2020: Draft Integrated Guidelines for employment policies of the Member States

7) Increasing labour market participation and reducing structural unemployment

8) Developing a skilled workforce responding to labour market needs, promoting quality and lifelong training

9) Improving the performance of education and training systems at all levels and increasing participation in tertiary education

10) Promoting social inclusion and combating poverty


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Ingredients of the draft Integrated Guidelines 10: Promoting social inclusion and combating poverty

1) equal opportunities, anti-discrimination, gender equality, people empowerment, opportunities at different stages of people’s lives

2) close attention to vulnerable groups, e.g. one-parent families, minorities, including the Roma, people with disabilities, children and young people, elderly women and men, legal migrants, homeless

3) access for all to high quality and affordable services (e.g. social field, housing and health care)

4) labour market participation and lifelong learning to prevent in-work poverty

5) benefit systems to ensure income security during transitions and to reduce poverty

6) social protection systems (pensions, health and long-term care) to ensure adequate income support, access to quality services, while encouraging participation in society and in the labour market

7) full use of the European Social Fund (ESF) and promotion of social economy and social innovation


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The EU 2020 Governance Framework

- The strategy implementation is based on a thematic approach and country surveillance.

- Thematic approach reflects the EU dimension, showing the interdependence of Member States economies. It refers to the 3 mutually reinforcing priorities and the deliver of the 5 headline targets also by means of the 7 flagship initiatives;

- Country surveillance is based on country reporting to achieve the EU 2020 in the EU Member State.

- The Member States prepare National Reform Programmes to identify the main bottlenecks to growth and to indicate how they intend to tackle them.

- The Integrated Guidelines (IGs) will continue to be the basis for policy recommendations that the Council may address to Member States both for the thematic approach and the country reporting.


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The EU 2020 Governance Framework- Recommendations shall be fully in line with relevant Treaty provisions

and EU rules and shall not alter Member States' competences.- Recommendations regarding the thematic approach would provide

detailed advice on micro-economic and employment challenges.- Recommendations under the country surveillance would address issues

with significant macroeconomic and public finance implications.- Recommendations would be sufficiently precise and provide s time-

frame within which the Member States are expected to act (e.g. two years).

- Progress towards the headline targets will be regularly reviewed by the EU Commission through an annual report and issuing policy recommendations and warnings. If a Member State has not adequately responded to a policy recommendation of the Council or develops policies going against the advice, the Commission could issue a policy warning.

- The EU Council provide overall guidance and steering for the strategy to foster inter alia horizontal (between different policy sectors) and vertical (between different levels of government).


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The EU 2020 Governance Framework- The EU Parliament has a co-legislator role and is “a driving driving

force for mobilising citizens and their national parliaments”.- All national, regional and local authorities should implement the

partnership, closely associating parliaments, as well as social partners and representatives of civil society, contributing to the elaboration of National Reform Programmes as well as to its implementation.

- The EU Economic and Social Committee as well as the Committee of Regions should also be more closely associated in the strategy process.

- Exchange of good practices, benchmarking and networking - as promoted by several Member States – are recognised as another useful tool to forge ownership and dynamism around the need for reform.

- The Open Method of Coordination (OMC) on social exclusion and social protection (Social OMC) is reaffirmed as a platform for cooperation, peer-review and exchange of good practice, and as an instrument to foster commitment by public and private players to reduce social exclusion, and take concrete action, including targeted support from the structural funds, notably the ESF.


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B) Progress in the EU social policies since 2000

The Open Method of Coordination (OMC)

The Social OMC


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The Open Method of Coordination

“The OMC is a mutual feedback process of planning, monitoring, examination, comparison and adjustment of national (and subnational) policies, all of this on the basis of common objectives agreed for the EU as a whole. Through this peer review exercise (which involves the European Commission and all Member States), and thus the sharing of experience and good practices, all the countries can learn from one another and are therefore all in a position to improve their policies.” (Marlier E. et al., 2007)

OMC-type processes have interested several policy fields, e.g.: employment, education, training, immigration, asylum, disability, health and safety, youth policies, environmental protection, research, innovation, information society, enterprise promotion, structural economic reform, fundamental rights.


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The Open Method of Coordination and the Community Method

OMC: a main instrument of “soft law” to orient governance mechanisms and planning development according to common guidelines, objectives, indicators and mutual learning processes (e.g. peer reviews) throughout the EU territory.

Community Method: the main instrument of “hard law” (e.g. the Treaty, the Charter of Fundamental Rights and all the other acts of EU legislation)

OMC and Community Method are complementary and mutually reinforcing.


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OMC processes after the 2005 revised Lisbon Strategy

The revision of the Lisbon Strategy (2005) and Sustainable Development Strategy (2006) streamlined OMC processes (e.g. rationalisation, simplification, integration and synchronisation).

Three main documents:

Lisbon Strategy “Growth & Jobs” = National Reform Programme (NRP); integrating the employment, economic, social and environmental strands

Social Protection and Social Inclusion = National Strategy Report (NSR) integrating social inclusion, pensions, health care and long-term care policies

Sustainable Development Strategy = National Progress Report on the European Sustainable Development Strategy (NSDS); integrating environmental policies, public health, social inclusion and poverty, demography and migration policies.


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The Social OMCProvides a framework for national strategy development, as well as for coordinating policies between EU countries on issues relating to poverty and social exclusion, health care and long-term care as well as pensions.

The open method of coordination is a voluntary process for political cooperation between the EU Member States.

OMC is formed by 5 main elements (strengthened since 2006):

1) Common Objectives

2) Common Indicators, which show how progress towards these goals can be measured.

3) National policies, through which National governments translate the common objectives into national plans (National Strategic Reports, NSR).

4) Joint Reports (EU JR), through which the national reports are assessed by the Commission and Council; EU JR reflect what EU-level initiatives have achieved in individual countries.

5) Mutual learning process and dialogue between the EU Member States to stimulate innovation and the sharing of good practices (e.g. the Peer Review seminars).


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The Social OMC

Social Inclusion: 2000Pensions: 2001Health and Long Term Care (LTC): 2004

2000 – 2005: commonly agreed EU Objectives without linkages (e.g. 4 for Social Inclusion)

Since 2005 (Lisbon II): one integrated Social OMC between the 3 policy strands (social inclusion, pensions, health and LTC)

2005 – 2010: 12 commonly agreed EU Objectives, 9 of them specific (3 each strand) and 3 overarching Objectives to help linkages (horizontal issues): 1. Promote social cohesion, gender equality and equal opportunities for all 2. Mutual interaction between the Lisbon objectives and with the EU Sustainable Development Strategy3. Good governance, transparency and the involvement of stakeholders


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EU commonly agreed Objectives for Social Inclusion

Social policy: a “dual role” as productive factor for economic performance and key instrument to reduce inequalities and promote social cohesion. Employment policy: the best safeguard against social exclusion.

2000-2004 2005-2010

Participation in employment and access by all to resources, rights, goods and services

Access for all to the resources, rights and services, preventing and addressing exclusion, and fighting all forms of discrimination

Help to the most vulnerable Active social inclusion of all, both by promoting participation in the labour market and by fighting poverty and exclusion

Prevention of the risks of social exclusion

Mobilisation of all relevant bodies Co-ordination and involvement of all levels of government and relevant actors


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Social OMC: key phases and main documents

2000-2005 2006-2010

EU15 (old members): National Action Plan Inclusion (NAP) 2001-2003 and 2003 – 2005; update report 2003-2005EU10 (new members): NAP 2004-2006; update report 2004-2006Pensions Reports in 2002 and 2005Preliminary National Policy Statements on Health Care and Long-Term Care in 2005

Streamlining started from 2006. EU25: National Strategy Report on Social Protection and Social Inclusion (NSR) 2006-2008EU27: NSR 2008-2010National Reform Programmes (NRP) 2005-2008 and 2008-2010, following the Lisbon Integrated Guidelines and with a section on NSR

EU Commission: Joint Reports on Social Inclusion 2002, 2003 and 2004; Joint Reports on Social Protection and Social Inclusion 2005; Report on Social Inclusion in Europe 2006 concerning the national update reports

EU Commission: Joint Reports on Social Protection and Social Inclusion 2006, 2007, 2008, 2009 and 2010


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OMC processes

The OMC process was more effective in the Lisbon Strategy (NRP) with respect to the social inclusion and social protection policies (NSR), while it remained substantially voluntary in sustainable development (NSDS).

E.g.: EU country-specific recommendations and “points to watch” for the NRP; only general comments for the Social OMC in terms of country-challenges; no comments on NSDS.


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Most evident weaknesses of OMC processes

- official documents (NRP, NSR and NSDS) often considered as a reporting exercise, to be submitted to the EU Commission, rather than strategic action plans

- a pervading bureaucratic and administrative attitude (e.g. “copy and paste") instead of a coherent and constructive integration of the documents

- general objectives and guidelines rather than precise qualitative and quantitative targets.

- a substantial lack of analysis on the “feeding in” and “feeding out” interrelationships between different policies; in Social OMC “feeding in” is the contribution of social protection and social inclusion policies to employment and economic policies, while the contribution of the latter to social policies is called “feeding out”.


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Most evident weaknesses of OMC processes

- lack of Environmental and Social Impact Assessment of strategies and national plans

- scarce improvement in horizontal (between policy fields and the relevant departments / ministries) and vertical (between different level of government, e.g. national and sub-national) co-ordination

- mere consultation of stakeholders rather than an effective participation in decision-making processes

- small circles of policy makers, practitioners and experts involved in the preparation of the documents


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Reasons why of weak Social OMC

- economic and employment matters considered more important than environmental, poverty and social exclusion issues

- as a consequence, a deeper imbalance between policy pillars, for which growth and jobs (a cornerstone of the Lisbon Strategy) are seen as prevalent instruments to fight against poverty and social exclusion

- unfortunately these instruments are necessary but not sufficient to tackle income disparities, regional disparities, gender and ethnic disparities, household hardships, environmental degradation and quality of life as a whole.


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C) Critical points of the past and current debate and challenges in the near future

From Lisbon Strategy to EU 2020 Strategy

Challenges of the EU 2020 Strategy


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Critical points of the past and current debate: from Lisbon Strategy to EU 2020 Strategy

According to the UN 1992 Rio Declaration on Sustainable Development and the associated Agenda 21, an effective strategy to fight against poverty and social exclusion must take into account:

- the impact of environmental conservation and protection on those who depend on natural resources for their livelihoods

- the impact of economic growth policies on the environment and consequently on poverty due to depletion of the natural resources and of their quality.

In other words, the right to the environmental quality cannot be divorced from those to social inclusion and human health.


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The Göteborg Strategy for Sustainable Development of 2001 was more in line with the principles stated in the UN 1992 Rio Declaration and the associated Agenda 21.

The Lisbon Strategy of 2000 was purely focused on economic issues; the social pillar was an additional component depending on “Growth & Jobs”; the environmental pillar was based on techno-optimism associated with “Growth”; no linkages were defined between environmental degradation, poverty and social exclusion.

The re-launched Lisbon Strategy of 2005 attempted to identify and analyse the interrelationships between economic, employment and social pillars (e.g. “feeding-in” and “feeding-out”) while only general reference were made to environmental issues and limited institutional interfaces were defined with the sustainable development strategy.


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The EU 2020 Strategy was conceived by the EU Commission as “a European strategy for smart, sustainable and inclusive growth”, but it was approved by the EU Council in June 2010 as “a new strategy for jobs and growth” closely in line with the previous Lisbon Strategy.

The word, and the concept, of sustainable development, progressively disappeared in the key official documents, while being replaced by sustainable growth, sustainability of public finances and so on.

The meaning of sustainability become that of “continuity” at same or higher rates or levels of any type of activity (economic, financial and so on).

The original meaning of sustainability was instead “reconciliation between humanity and nature” through the wise use of natural resources at a level that is not likely to damage the environment.


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Sustainable Development was universally recognised in 1987 by the Brundtland Commission (United Nation) as

- a development that meets the needs of the present without compromising the ability of future generations to meet their own needs

- a process in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are all in harmony, and enhance both current and future potential to meet human needs and aspirations.

Following these definitions and the scientific debate, development cannot be confused with growth.

Development consists in the pursuit of values and beliefs necessary for life (e.g. equity and social inclusion, unity and diversity, democracy and justice, freedom and solidarity, environmental integrity and diversity) through norms and ways of acting.


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Considering a wide range of concepts, development can be defined as the process whereby human beings use their knowledge, understanding and capacity to improve the quality of the ecosystems with which they interact, including the other components of nature.

Growth consists in the increase of goods and services (e.g. environmental, productive, technological, social, cultural and health) through human activities.

Growth is quantitative as it takes into account the amount of goods and services over a given time and from a specific ecosystem. It is therefore possible to measure their increase or reduction over time.

The general belief in a linear and continuous growth without limits is the highest risk to natural ecosystems, which have exhaustible resources and

services.


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Growth may occur (e.g. income and consumption) without development (e.g. unequal income distribution, poverty and pollution).

Likewise, development may occur (e.g. better environmental and health conditions) without growth or with de-growth (e.g. absence of or reduction in production and consumption that are harmful to the environment and living beings).

As a result: sustainable (continuous) growth is an oxymoron, having the exact opposite meaning of sustainable (wise and fair) development based on social, economic and environmental

justice.


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The public consultation on EU 2020 strategy underlined key challenges that still remain to be addressed:

- more holistic approach with an equal weight assigned to social, environmental, employment and economic dimensions

- strengthening the social dimension and its links with the environmental, employment and economic pillars

- strengthening gender equality as an inherent pillar of the new strategy

- linking the fight against climate change and environmental degradation with the fight against poverty and social exclusion, inequality, insecurity and all types of discrimination

- better integrating the EU 2020 Strategy with the Sustainable Development strategy, Social Agenda, Cohesion Pact, Energy and Climate Change, Stability and Growth Pact.


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- pursuing effective monitoring and benchmarking systems concerning the Headline Targets (and Integrated Guidelines) both at EU, national and sub-national levels

- developing indicators “beyond GDP” (gross domestic product) to assess progress

- developing Social Impact Assessment of any policy in close relation with Environmental Impact Assessment

- providing more binding recommendations and arrangements while strengthening the open method of coordination (OMC) processes

- enhancing a full and equal partnership between different levels of government (multi-level governance) and between different policies (multi-dimensional approach)

- reinforcing participation of and ownership by stakeholders

- improving communication.

Documents

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