European Pillar of Social Rights highlights social dimension of European Union

Maria Vaalavuo
Research Manager, National Institute for Health and Welfare

Online publication Future of Europe
© SOSTE Finnish Federation for Social Affairs and Health, February 2019

The European Pillar of Social Rights seems to have quite tangible goals – it deals with issues that are familiar and understandable to the citizens, such as education and childcare. But it remains to be seen how the rights contained in it translate into practices in the EU countries. However, the symbolic meaning of the Pillar is still important as the member states are politically committed to its goals.

From euro crisis to enhanced social dimension

The European Pillar of Social Rights published in the spring of 2017 compiles 20 goals for the promotion of employment and social protection in the member states. The Pillar increases visibility on what the EU does and what it should be doing to develop its so-called social dimension. In dealing with the social, economic and financial impacts of the economic crisis which began in 2008, the theme has become revitalised in the deliberations of the Commission.

During the darkest years of the economic crisis, the Commission was blamed for intervening with its austerity policy with the ability of the member states to safeguard the benefits and services to their citizens. Too severe remedies were prescribed on the crisis countries, which had disproportionate effects on the lives of people. Now the Commission wishes to show that social issues are also considered in the Union policy.

The concern is also motivated by the need to boost the activities of the EU and the Economic and Monetary Union, in particular. According to some estimates, the handling of the economic crisis was complicated by the differences between the euro countries. The Pillar of Social Rights is hoped to promote the harmonisation of social standards and the employment market. The Pillar therefore only concerns the euro countries. The other member states can participate if the so wish. Attempts are made to decrease the heterogeneity of the countries for the euro economy to function more efficiently and for the member states to have better possibilities to cope with future recessions. The Commission wishes that by implementing the Pillar it will be able to support the countries in the upcoming reforms.

Social rights appear in Treaties

The President of the Commission Jean­Claude Juncker has suggested that the social dimension of the Union should be fortified. The idea is that it would increase the citizens’ trust in the EU institutions and the fruits of the integration process. The Commission wishes to show that the EU benefits citizens, too, and not just the elites and corporations. Throughout its history, the EU has been an economic project above all, which is defined by the development of the common market; social policy has been subordinate to it. However, claims on the social dimension to side with the economic integration have been made ever since the Rome Treaty was signed in 1957.

Progress was made particularly in the Lisbon Treaty that was signed in 2009, after which the visibility of social rights and social policy has grown in the EU. The Treaty e.g. contains reference to the EU Charter, which defines the basic rights at EU level. The Lisbon Treaty prescribes that in all its activities, the Union should pay attention to the sufficient social protection and promotion of health of the citizens.

According to the Lisbon Treaty, in all its activities, the Union should pay attention to the sufficient social protection and promotion of health of the citizens.

However, the Treaties only afford limited competence to the Union in the field of social policy. The member states decide on the coverage and level of their social protection according to the subsidiarity principle, which explains the significant differences between the countries. Yet, the development of the common single market has also required certain uniform rules from the beginning of the European integration, the purpose of which is to promote the coordination of the social protection of the employees travelling within the EU.

In addition, equality between women and men has long been set out for at EU level as well as issues concerning health and safety at work. It is notable that when the forming Treaty of the Union, the 60-year-old Rome Treaty, was celebrated in 2017, the leaders of 27 EU countries committed themselves to the social principles. All the EU institutions such as the Commission, the Council of Ministers comprised of the minsters of the member states, and the European Parliament committed themselves to comply with the principles of the Pillar of Social Rights.

Better possibilities for monitoring and comparison

The European Pillar of Social Rights is basically very concrete, but it is a different issue how it will translate into tangible measures. The Pillar compiles already existing EU legislation. It also contains new initiatives, standards and rights. However, the Union is not empowered to decide on them all. The Commission emphasises that they will be implemented together, through the actions of the member states.

It is important to note that the Pillar does not provide the EU with new powers in matters of social policy; such competences are provided for in the Treaties. The Pillar offers a better opportunity than before to monitor and compare the conditions and social policy solutions in the member states. It is part of the so-called open method of coordination that the member states and the EU agree on priorities and goals and the indicators and their reference values. In cooperation with the member states, the European Commission estimates whether the goals have been met and which of them leave room for further development. The method includes the promotion of mutual learning and information sharing on good practices between the member states.

The Scoreboard of Social Indicators has been created for the assessment of the attainment of the social goals, and it shows the ranking of each country in the EU comparison. It also shows which direction the country is heading regarding a certain indicator, e.g. education and lifelong learning or poverty and income inequality.

There is little research on the impacts of the EU on the social policy of the member states, however. The European integration, particularly common competition legislation and single market, affects the context in which national social policies are made, but it is more difficult to show what impacts a non-binding open method of coordination has produced. The impacts in different countries may also differ due to the different initial level, decision-making institutions and political atmosphere.

In recent years, the importance of the European Semester has also emerged. In the process, member states are issued with recommendations on the strengthening of the economy and improvement of social conditions. The focus was intitially on economic and finance policy steering but the number of “social recommendations” has grown in the past couple of years. The quality of the recommendations has also changed. The countries have been provided with more leeway in how a certain goal, e.g. reduction of old-age poverty rate, is achieved – whether minimum pensions are increased, services added or the service fees of social and healthcare lowered. The member states themselves wish that the EU will not impose measures but that it will set up goals, which each country can try to achieve by suitable means. The dialogue between the Commission and the member states has also been increased, which enables the discussion of how the goals can be met realistically.

Attempts made to promote social rights

The Commission has proposed several initiatives to promote the implementation of the Pillar of Social Rights. The proposal for a Directive on Work-Life Balance has been long discussed, and now it has finally proceeded to the European Parliament. The proposal e.g. contains an extension of the paternity leave. The reform would not affect the duration of the paternity leave in Finland, as Finland already complies with the minimum requirement. Important for Finland, however, may be the expansion of the social protection of those in atypical jobs, e.g. gig-economy workers. The Commission has paid increasing attention to their situation. One argument for the Pillar is precisely the transformation of work and increase in atypical jobs.

Important for Finland, however, may be the expansion of the social protection of those in atypical jobs, e.g. gig-economy workers.

It is hard to obtain an overall picture of the actions related to the Pillar of Social Rights. It would be advisable for the Commission to lay out a comprehensive plan on how to promote the Pillar. For the sake of clarity, it would be sensible to list item by item which EU legislation already exists, what initiatives and recommendations have been submitted and which legislative proposals are in the process. The social policy role of the EU would then become clear to the citizens as well.

Practical implementation proves the success of the Pillar

The Pillar contains many vague concepts, which leaves much scope for the member states in the implementation. Such concepts include ”good quality”, ”sufficient benefits” or ”affordability of services”. This is typical of the rhetoric of the EU social policy, and due to the vagueness, the member states are likely to be able to accept the Pillar better. The definitions offer the member states a choice on how to attain the same goals with methods that befit their institutional and cultural heritage. The Commission can also support new openings as well as separation from old practices that have been identified as weak.

In social issues, the EU cannot impose sanctions, unlike in economic policy. It is thus unclear what happens if a member state cannot achieve the goals set upon it. The lack of sanctions makes implementation of the Pillar challenging. A further problem is how sanctions can be formulated so as not to make the member states recoil or to prevent other undesirable impacts. If a sanction would e.g. mean that the aid granted by the European Social fund would be withheld, a country would not receive support to the development of its system when it would most need it. However, economic sanctions are not so straightforward either, and are negotiated between the Commission and the member states.

The Court of Justice has been important in solving matters of social policy when it comes to how the Member States interpret Directives. It remains to be seen what kind of emphasis will be given to the Pillar of Social Rights in the decisions of the Court.

The rights of Finns are not endangered by the Pillar of Social Rights. It contains acts and goals about minimum levels. If they so wish, the member states can also arrange more comprehensive and generous social protection and services. The Pillar is likely to have more impact in countries where the initial level is weaker. Many proposals rising from the Pillar do not necessarily improve the situation in Finland, because in EU comparison Finland is already often among the best achievers.

Finland should take a more active role

Finland did not participate in the public consultation concerning the Pillar of Social Rights, even though the Finnish welfare model could be our best export product and model for European developments. Our welfare model and the related knowhow could be ”sold” at EU level, even though the Pillar would not change the Finns’ rights one way or another. Of purely selfish reasons, Finland could be assumed to be interested in what kind of social and labour market standards exist elsewhere in Europe. Some years ago, there was talk about social dumping: it was feared that social and employment protection would weaken everywhere when companies move production into countries where labour is cheap and social protection is weak. The Pillar of Social Rights aims to do the opposite: to weed out any potential for social dumping. It also improves Finnish competitiveness as a country of good social protection.

Finnish welfare model and the related knowhow could be “sold” at EU level.

For example, the candidates for the Finnish parliamentary elections and European Parliament elections should be asked what they think about the Pillar and how they see its tangible meaning. Some of the representatives have taken a negative stand in social issues in the European Parliament. They have argued that social issues do not fall within the competence of the EU. Social issues are familiar and important to the citizens, and they should receive information about them through the media as well. When people would be better informed, they could also associate the EU with positive things, which affect people’s welfare and health. The Commission has e.g. a European Globalisation Adjustment Fund alleviating the negative effects of globalisation, from which the Nokia workers who lost their jobs in Salo received support.

The Pillar of Social Rights can make it easier to inform the citizens about EU level activities and goals. The Pillar provides a framework which compiles the 20 principles of social Europe, to which the EU is committed. When these principles can be found in a single declaration, it is easier for the citizens to demand that they should be implemented in their own country as well.

When the 20 principles of social Europe can be found in a single declaration, it is easier for the citizens to demand that they should be implemented in their own country as well.

As a framework, the Pillar is important and will probably be so in the future as well, also depending on the policy definitions of the new Commission appointed in 2019. Some of the rights have already been defined in EU legislation; some are proceeding, and some do not appear to be realistic. However, the issues involving the social dimension now occupy a prominent place in the future visions of the Union.

Great Britain has often been blocking social policy issues – and been a frequent partner of Finland when negotiating about social matters. The exit of a major objecting voice from the Union may facilitate the strengthening of the social dimension. It may also bring the remaining countries closer together.

Finally, it is worth noting that the social measures at EU level should not be evaluated by the same standards as national social policies. The logic is different. In the core of national social policy, lies the right of taxation and hence redistribution of income. The EU has no recourse to such measures. It has been forced to develop other means to move matters forward, and this has involved sprints and slower periods. The Pillar has brought new energy and style to the sprint.

This is an article of the online publication Future of Europe.
© SOSTE Finnish Federation for Social Affairs and Health, February 2019