Diplomatic Economic Club^{® Since 1997}

The Council’s recommendations coped with the member states intentions to follow the decisions of the policy guidance in the European Social Investment Package. There are some clear ways forward along the lines of investment, innovation and involvement. Active participation, constructive suggestions and enthusiasm to work together represent a collective desire to implement the policy proposals in the Social Investment Package.

Social investment initiative is crucial to address the social emergency triggered by the crisis and ensuring Europe’s social models are adequate and sustainable in the long-term. These issues were discussed during a recent conference organized by the Social Protection Committee, the European Economic and Social Committee, the European Parliament, the Committee of the Regions, the social partners and other stakeholders on the Package, which have been positive altogether.

It has been proved that adequate social benefits and services that focus on developing people’s capabilities from cradle to grave bring a high social and economic return.

Investing as early as possible to prevent hardship from arising later and ’preparing’ people to cope with life’s risks rather than simply ’repairing’, is the most effective way forward.

For example, accessible quality early childhood education and care services can contribute to increasing female employment (on a full-time and part-time basis) and at the same time tackling childhood disadvantage at an early stage.

Housing-first approaches to homelessness can save people’s lives from deteriorating further, and provide the best chances for reintegrating them into society; and they are more cost-effective.

Well-designed welfare systems can protect people from hardship, safeguard the economy from shocks, develop people’s skills and improve their ability to participate in society and the labour market. This can help the individual, families and society to adapt to such risks as changing career patterns, new working conditions and population ageing, and it can reduce the need for policy to counter those risks. Conversely, the lack of a coherent social investment strategy may result in significant economic and social damage.

The approach proposed by the Social Investment Package contains guidance on how to help the states carry out the structural reforms needed to make their social policy more effective and efficient, with a view to guaranteeing a suitable standard of living, improving people’s development opportunities, and facilitating their participation in the society and the labour market.

The Social Investment Package will feed into the European Semester framework for steering and monitoring Member States’ economic and social reforms.

The Social Open Method of Coordination, (Social OMC) will also help the member states to share experience and disseminate best practice and will also feed into the European Semester, while the Social Protection Committee will serve as a vehicle for cooperative exchange between Member States and monitoring the performance of social protection systems.

Besides policy guidance, the EU also provides the Member States with financial support to their social investments.

The Commission believes that, if the EU’s efforts to meet its quantified objective for reducing poverty are to be credible, a minimum percentage of Cohesion Policy funding — amounting to at least 25% — must be devoted to investing in people and employment and social reform through the European Social Fund.

The Social Investment Package also offers the member states guidance on how best to use EU financial support, in particular from the European Social Fund. It shows how the European Social Fund can be used in different social policy areas to address structural challenges, as identified in the country-specific recommendations, through social investment. For instance, this may involve improving pathways to work for people with altered working capacities or; combating early school-leaving and tackling the educational segregation of children from marginalised backgrounds, including Roma; and by providing access to affordable, quality early-childhood education and care.

The Commission is currently finalising operational guidance on how to use the European Social Fund, to support social investment, in all four of the Fund’s investment priority areas: promoting employment, investing in education, combating poverty and enhancing institutional capacity.

Member States are supposed to make full use of the opportunities presented by the European Social Fund in these areas.
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Socio-economic disparities are a bigger problem for the stability of the currency union than of the European Union. When unilateral currency devaluation is not an option, the individual Member States have fewer economic adjustment tools available.

Social imbalances need to be detected and recognised collectively at an early stage. This means that macro-economic coordination and surveillance within EMU should include social indicators and targets for assessing progress, and not only economic and financial ones.

The Commission has been looking at a social scoreboard of key employment and social indicators for detecting social imbalances and triggering collective preventive action before employment and social problems develop disproportionately.

Such a scoreboard would have two aims:
it would give the social-policy dimension greater visibility when macro-economic decisions are taken at euro-area and Member State level; andit would strengthen monitoring and coordination in the field of employment and social policy with a view to identifying and alleviating major difficulties in good time.

The Commission is currently developing ideas on how to strengthen governance of employment and social policy in connection with EMU. The reform of EMU needs to go hand in hand with further steps to foster its legitimacy and accountability; the Commission is preparing a position paper on the social dimension of EMU for adoption early June 2013.

The member states must be ready to do everything possible to ensure that employment and social cohesion are given substance in EU policy, on a par with financial consolidation and economic growth. The Social Investment Package is one such endeavor in the EU’s on-going efforts to strengthen the social backbone of all common European projects.

Eugene Eteris, European Studies Faculty, RSU, Riga Baltic-course.com