Social security reform postponed until next European Parliament

European Parliament in Strasbourg [Patrick Seeger/EPA/EFE]

Deep divisions among MEPs made it clear on Thursday (19 April) that the social security coordination directive, aimed at enforcing the rights of mobile workers, would be postponed for the next European Parliament, after May’s EU elections.

“The report is not at all ready for a vote in plenary,” MEP Helga Stevens (Belgium, ECR) told the chamber, claiming its adoption should be postponed. “The vote will only highlight the division in the Parliament in the last parliamentary session,” she defended. 

A narrow cross-party majority (291 votes in favour, 284 against and 6 abstentions) ended up backing Stevens’ motion to postpone the vote. EU lawmakers will, therefore, start the process again under the new legislature. 

“The conservatives and liberals, with the help of some social liberal members, following a group of member states, have blocked any real progress for workers moving within Europe,” Guillaume Balas (France, S&D), rapporteur of the file, regretted.

Balas put the text to vote to conclude the first reading and avoid a potential reexamination of what has been assessed as a rather progressive position by the Parliament after the elections.

The social security coordination directive enforces the rights of mobile workers, including frontiers and posted worker, across Europe. Last time it was revised was fifteen years ago. The Commission concluded that the legislation was outdated and it did not fit the current world of work.

Commissioner for Social Affairs Marianne Thyssen told the chamber on Wednesday (17 April) that the update “is much needed to address new challenges and opportunities in the fields of long-term care, unemployment benefits, family benefits and the rules on applicable legislation for posted workers”.

Thyssen called on MEPs to support Balas’ report, although without success, insisting “that the compromise we reached should inspire us for the work that remains to be done”.

“By refusing to vote on newly updated rules on social security coordination, they refused to guarantee to all EU workers effective social protection that does not discriminate anyone,” Ballas concluded.  

The modernisation of the legislation could have been the cherry on the top of the European Pillar of Social Rights, as the Commission has managed to pass twenty-four out of the twenty-seven proposals tabled during its mandate.

In the last plenary session, MEPs approved the establishment of the European Labour Authority and the directive on transparent and predictable working conditions, particularly important in a moment of growing incertitude for non-traditional workers.  

“In the Parliamentary history of Europe, never before we have seen so much progress made in social affairs,” Commission President Jean-Claude Juncker argued in Strasbourg. 

MEPs approve the creation of the European Labour Authority

On Tuesday (16 April), MEPs approved the creation of a European Labour Authority, as well as several positions that favour the rights of European workers and combat social dumping. But major changes still need to be made. EURACTIV France reports.

National divisions

“I count on the wisdom of the member states for this dialogue to be concluded,” Juncker said a few days ago during a conference on the Future of Work, about the need for an agreement on the file. 

It did not work. In spite of the efforts by the Romanian presidency to find a compromise that could accommodate the position of the Parliament and the concerns of some member states, particularly in the East, EU ambassadors rejected the provisional agreement. 

The Netherlands, Belgium, Luxembourg, Germany and Austria were already against the general approach the Council agreed on and therefore, their opposition did not come as a surprise. Sweden and the Czech Republic rejected the compromise as well. 

Malta, Hungary and Poland decided to abstain, allowing a blocking minority to stop the text from moving forward to the Council of Ministers. 

The same divisions seen in the Council were visible during the Parliament debate on the matter, as northern and western MEPs shared their concerns on the legislative file. 

For some, the new legislation does not prevent fraud. Citizens working in a member state other than theirs could export unemployment benefits to their country of residence for a limited period of time. 

As it will be the country in which the citizen has worked carrying the cost and not the country of residence, workers enjoying unemployment benefits from one member state wouldn’t be subject to the applicable rules.

Some countries consider that under this system, workers might not be encouraged to search for a job. “The modernisation will provide the national administrations with better tools to fight fraud and abuses,” argued Thyssen. 

Other member states and MEPs wanted to introduce in the legislation the indexation of family benefits. This would mean a reduction of the benefits when the members of the family are residing in a different member state. 

This practice is currently illegal according to the EU law, as it is discriminatory. The Commission started an infringement procedure against Austria in January precisely because of this. 

“The paradox is that we have a market that allows free movement but we have very different social security systems and therefore, workers are in a very vulnerable position in terms of portability of their rights and protection. This was the aim of the revision,” Balas argued. 

“Free movement of workers only exists if mobile workers preserve their social protection,” agreed Thyssen who warned that the modernisation of the social security coordination should not be further postponed. 

Thyssen announced on Tuesday (16 April) the Commission will launch a debate on moving to qualified majority voting in recommendations on the harmonisation of social security systems in Europe.

If neither the member states nor the Parliament has been able to agree on doing so only on mobile workers, it seems rather unlikely they will for all national systems.

Family benefits: Austria in dispute with the EU

Since the beginning of the year, Austria has been working towards adapting family allowances to the costs of living of the employee’s home countries. The EU criticised the government of Vienna – but it has countered. EURACTIV Germany reports.

[Edited by Sam Morgan and Georgi Gotev]

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