European Semester: First-ever EU ‘social indicators’ fail to impress

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The European Commission’s social affairs and employment policy recommendations to EU countries have been criticised as inconsistent and a “missed opportunity.”

It was the first time the EU executive included ‘social indicators,’ such as unemployment, social exclusion and poverty, in its annual country-specific policy recommendations. The recommendations, published yesterday (2 June), are part of the European Semester, a yearly cycle of economic policy coordination among member states.

Social Affairs and Employment Commissioner, László Andor, said that the recommendations are “not only about monitoring fiscal policies and competitiveness developments.”

“One of the biggest challenges we face today deals with the growing divergences in the employment and social situations of member states within the euro area. The core-periphery gaps keep widening. As a result of the economic crisis, some member states are witnessing declining household disposable income, rising inequalities, poverty and social exclusion,” Andor said.

The scoreboard for employment and social indicators focuses on five main criteria; overall unemployment levels, youth unemployment, household income, poverty risk and income inequalities.

>> Read: EU prepares first ‘social monitoring’ report

Youth unemployment                                             

Since the launch of the Youth Guarantee scheme last year, the Commission has focused on youth unemployment issues in its economic recovery efforts. 

Eight member states with high youth unemployment levels were flagged for “serious implementation problems” of the Youth Guarantee scheme: Spain, Italy, Slovakia, Croatia, Portugal, Poland, Bulgaria, and Ireland.

The EU’s executive has also devoted attention to the problem of precarious jobs across Europe, especially in Spain.

Despite member states’ efforts on market labour reforms, “segmentation of the labour market persists, with an increasing number of part time and precarious jobs. In order to reduce labour market segmentation, we recommend measures to favour sustainable quality jobs including through reducing the number of contract types – notably in the case of Spain,” Andor said.

The Spanish government introduced precarious work arrangements, similar to the German mini-jobs, which have now become widespread, involving about 40% of work arrangements.

But the UK’s ‘zero-hours contracts’ which have been denounced as unsustainable and inadequate, including by the Commission, were not included in the Commission’s remarks.

The French press has also flagged inconsistencies regarding the EU executive’s recommendations on the French minimum wage.

“The level of the minimum wage in France is such that it provides one of the highest purchasing power levels in the EU. The minimum wage should therefore continue to evolve in a manner that is supportive of competitiveness and job creation,” the Commission report said without formulating clear proposals. This prompted journalists to wonder whether it represented a “barely veiled attempt to push for a reduction of the minimum wage.”

Missed opportunity

Although it was welcomed by civil society and trade unions, the social scoreboard failed to impress some stakeholders who still see it as too weak.

The European Anti-Poverty Network (EAPN)’s director, Barbara Helfferich warned that even though the indicators are “useful […] the Commission is measuring data from one or two years ago, while in the social field, the impact of austerity has immediate effects.”

The trade unions’ reaction was harsher. European Trade Union Confederation’s secretary general, Bernadette Ségol said, “To generate growth and avoid deflation, the European Commission needs to allow wages to rise. Instead its recommendations seem to be about keeping wages down and promoting inequality.  

“Nothing was said about real wages staying behind productivity. In Poland for example there is now a huge gap between wages and productivity which urgently needs to be addressed. The recommendations are a missed opportunity.”

The European Union treaties however give very little power to the Commission in the field of social policy.

EU heads of states and government said at their June 2013 meeting that “the social dimension of the Economic and Monetary Union (EMU) should be strengthened.” 

Discussions over the reinforcement of EMU will conclude at the December 2013 EU summit, the statement said. EU leaders vowed to take the first step in October by introducing statistical indicators to better monitor social and labour market conditions.

Following up on the summit calls, the European Commission is drafting proposals to deepen the social dimension of the EMU.

  • 19 June: Council of Employment and Social Affairs meeting

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