Brussels, 4 March 2010
No exit strategies without effective social policies – new report
Welfare systems and specific short-term policies have been vitally important in mitigating the social and economic impact of the crisis, says a new EU report presented today. The 2010 'Joint Report on Social Protection and Social Inclusion', to be discussed by Employment and Social Affairs Ministers on 8-9 March, focuses on drawing lessons from Europe's response to the crisis. It presents key messages on how to orientate policies in the short to medium term to ensure a lasting recovery while also helping to address long-term structural challenges. The report will contribute to the Spring European Council on 25-26 March.
"People are ultimately what Europe is about, and the crisis has highlighted the strength of the European social model and the EU's joint approach to tackling the crisis' social impact," said László Andor, EU Commissioner for Employment, Social Affairs and Inclusion. "Although situations differ considerably between Member States, policies to protect households and individuals and prevent exclusion have been crucial in limiting the worst effects of the crisis. We must now make sure these policies are fully integrated in our long-term economic and employment strategies,. The inclusion of a headline target on poverty reduction in Europe 2020 is a reflection of that concern and of lessons learnt over the past decade. "
This year's Joint Report highlights the following areas on which to focus efforts:
The crisis and the joint monitoring of its social impact has emphasised the added value of EU's role in mutual learning, exchange of good practice, and policy co-ordination through the Open Method of Coordination on Social Protection and Social Inclusion (Social OMC). This is a role that will be considerably strengthened as part of the Commission's proposals for a new Europe 2020 Strategy.
Regular and systematic assessment of the contribution of the EU's economic and employment strategy to social progress will be necessary. The new Flagship Initiative the "European Platform against Poverty" announced in Europe 2020 will address this concern . The aim is to build on the current European year for combating poverty and social exclusion and raise awareness about poverty and social inclusion issues. The Social OMC would be strengthened and integrated into the platform.
Policy intervention and European welfare systems proved instrumental in containing the economic and social impact of the crisis. But the full human cost of the crisis is still unfolding.
Recovery will take time. Reversing rising unemployment – likely to reach 10.3% for the EU as a whole in 2010 – and avoiding long-term exclusion are major challenges.
The crisis has highlighted great diversity within the EU. Several countries lack the financial means to meet rising demand for public intervention. Some have large gaps in their safety nets.
At the same time, increased pressure on public finances – social spending is expected to rise from 28% of GDP in 2008 to 31% in 2011 – calls for more effective and efficient social inclusion and social protection, in line with the principles of access for all, adequacy and sustainability.
The crisis has aggravated poverty and exclusion, including child poverty. Many countries report increased pressure on last resort schemes. We need to act to limit the impact.
Balanced active inclusion strategies have a key role to play when designing exit strategies. By combining adequate income support, access to the labour market and to quality services, they can help fight poverty, get more people into work, and make social spending more efficient.
Housing exclusion and access to healthcare are areas of concern. Health is an area where rethinking priorities and increasing efficiency can lead to substantial economies.
Pensions have offered good protection to current pensioners, but the crisis is likely to impact on all pension schemes and aggravate the ageing challenge. With the increasing role of funded pensions, a better balance needs to be struck for pension savers between security, affordability and returns.
The Joint Report is accompanied by a Commission services working document which provides a more detailed thematic account of challenges and policy responses.
2010 Joint Report on Social Protection and Social Inclusion, and its supporting documents: http://ec.europa.eu/social/main.jsp?catId=757&langId=en