Finnish social minister: Europe needs ‘a paradigm shift’ towards the economy of well-being

Aino-Kaisa Pekonen, minister for Social Affairs in Finland, during a press conference. [European Union]

Working towards a more inclusive economic growth in Europe is one of the Finnish presidency’s main priorities. Finnish minister Aino-Kaisa Pekonen lays out her vision for “the economy of well-being”.

Aino-Kaisa Pekonen is minister for social affairs and health in Finland, the country currently holding the EU’s six-month rotating presidency. She responded in writing to questions from EURACTIV.

“The economy of the well-being” sounds more like a change of paradigm rather than a simple objective for a rotating EU presidency. Is it your intention to try to trigger a bigger change?

The economy of the well-being emphasises the interlinkage between economic growth and people’s well-being. Both are needed, and they reinforce one another.

Yes, indeed we need a paradigm shift. However, many international players, such as the International Monetary Fund, the World Bank and the OECD, have already recognised this. It is now time for the EU to step up to the same level of discussion.

The Finnish EU Presidency has only six months to put things into motion. How can this vision of inclusive growth be translated into concrete proposals at EU level?

Finland’s Presidency is taking place at a very interesting period of transition, with a new Parliament and a new Commission starting their work. This is exactly the right time to take new approaches on board.

We are the first presidency to implement the strategic agenda of the Council. The new Commission will prepare its work programme and we hope that the EU can reach an agreement on its future budget during our presidency.

Anyway, we know that we are only launching the discussion on the economy of wellbeing, and we expect the next presidencies, Croatia and Germany, to continue on this theme.

One of the biggest challenges for the EU is the digital revolution and its impact both for the labour market and social security systems. Is digitalisation a threat or an opportunity for the economy of the well-being?

We would very much like to think of digitalisation as an opportunity, although we must ensure that such opportunities are equally accessible for all.

Education plays also a key role in guaranteeing that we do not create digital gaps. We started our presidency with a major event, the Silver Economy Forum in Helsinki in July, where questions on how digital solutions could help ageing people live healthy and decent lives longer were discussed.

Digital solutions, in particular, artificial intelligence, will create new opportunities in care work, for example. Hands will be freed from routine and heavy physical duties to take on other forms of care work. We have to be tough in politically directing these changes, which will come about in the near future.

It seems difficult to leave environmental policy aside when talking about sustainable growth. Can we ensure the ‘economy of the well-being’ without an ambitious climate policy?

One core element of the economy of well-being is that it goes hand in hand with the implementation of UN Agenda 2030 and sustainable development goals. A horizontal approach is a prerogative.

Finland’s Presidency will promote an ambitious climate policy for the EU. But we stress that this must be done in a socially sustainable way. Environmental degradation is a cause of many social and health problems which often affect those who are most vulnerable.

So I would say that our approach is very much in line with climate targets and other environmental targets. In our governmental program, Finland aims to be the world’s first fossil-free welfare society and one objective is that Finland will achieve carbon neutrality by 2035. And all the measures should be carried out in a way that is fair from a social perspective and that involves all sectors of society.

Some of the initiatives towards a more social EU in the past have faced resistance from member states. Are you concerned about this for your agenda?

As you know, the legislative agenda for the social sector is very thin at the moment. We have just got a new European Parliament. I had the privilege to meet many MEPs in July, and I’m sure that the Parliament will start to work effectively very soon, so that we can proceed with Regulation 883 [on the coordination of social security systems], for example.

We stress that the European Pillar of Social Rights must be implemented effectively, and we are expecting the new von der Leyen Commission to provide a proposal in that regard soon. For our part, we will support the next presidencies when they deal with these proposals.

One of the focuses of the economy of well-being is gender equality. President-elect Ursula von der Leyen seems committed to this as well. What can the EU do in this area that has not been done yet?

In general and in terms of the economy of well-being, gender is a very relevant issue. An OECD report predicts that different measures to improve gender equality in the EU will increase GDP by almost 10% by 2050.

Compared with the social and health sector, where the EU’s powers are rather limited, gender provides great opportunities for EU-level actions. Therefore we are urging the new Commission to adopt a high-level Gender Equality Strategy, which should aim to strengthen gender budgeting, for example.

How does it fit Ms von der Leyen’s proposal of ensuring a European minimum wage in the approach of the economy of well-being?

As far as I know, there are no formal proposals to that end yet, but of course, we know that this is an important issue for some member states, trade unions and civil society. Some interesting papers on this topic have been prepared under the Social Protection Committee.

Our governmental program states that an up-to-date minimum regulation of social rights and working life, together with more effective implementation, is vital for strengthening the social dimension of the EU.

So we are not afraid of discussing this item. I am very much in agreement with the Commission’s President-elect Ms von der Leyen, who stated that minimum wages should be set according to national traditions, through collective agreements or legal provisions.

You, as many before you, propose to further strengthen the social dimension of the European Semester. What would you propose that others did not?

First of all, our Presidency is taking place at a crucial moment, and we have a great opportunity to influence long-term strategic decisions. The social dimension has existed in the EU from the very beginning, and people’s well-being is one of the key aims of the EU and its member states according to the Treaties and the Charter of Fundamental Rights of the EU.

However, we recognise the need for a better balance between economic progress and social cohesion. The world is changing rapidly, and this challenges both Europe’s economy and the well-being of its citizens. These challenges are best met when we are not working in silos, but rather recognizing the interdependence between well-being and economy.

In your programme, you advocate for a horizontal approach in policymaking by EU decision-makers and member states. Did the Finnish presidency have this in mind when developing its programme? Is the EU structure fit for purpose in this sense?

Our program is very much target-oriented. It is clear that issues like climate – and social policy, too – touch all sectors. During our previous presidency in 2006, Finland launched the concept of “Health in all policies”. The economy of well-being has very much the same approach.

That means that we do not necessarily need new competencies; nor do we necessarily need new structures. However, to give an example, we should convene joint meetings between ministers for economy and social affairs in the future.

During her first speech before the European Parliament, von der Leyen said that “it’s not people that serve the economy. It’s the economy that serves our people.” Are you confident in having her as an ally on this? What is your view on the vision of a more social Europe that she has presented so far?

As I said previously, I very much commend the first interventions of Ms von der Leyen and how she prioritises the social dimension. Some parts of her program could have come straight out of our presidency agenda. Our governmental program states that in a Nordic welfare state, the economy is managed for the people, not the other way round.

Nevertheless, we must wait to see the working program of the new Commission. And you can count on us to do our utmost to influence that paper.

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