Adopted at the Executive Committee 11-12 March 2014
Europe 2020 not yet fit for purpose
In the very beginning, the Europe 2020 strategy, like its predecessor the Lisbon Strategy, relied on instruments which were not efficient, in particular, the open method of coordination. Then economic governance structures were established to better coordinate economic policies, and Europe 2020 had to fit into this new governance architecture, which was not conceived to help it reach Europe 2020 (namely employment or social) objectives.
Europe 2020 is not on the same footing as the procedures of the European Semester and the Annual Growth Survey (AGS). Furthermore, the goals of Europe 2020 and the five priorities of the Semester (fiscal consolidation, restoring lending, promoting growth and competitiveness, tackling unemployment and social consequences, modernising public administration) are neither identical nor coherent.[1] The Commission underscores that „the order of this list does not reflect a hierarchy of priorities“, but is proud of the “substantial progress made on fiscal consolidation”: “Progress in fiscal consolidation is visible over time”, “the process of consolidation is noticeable at country level” etc. (AGS 2014). In terms of priorities linked to a corrective policy, there are some doubts, as the first priority “fiscal consolidation” is the only one linked to corrective measures.
Comparing the AGS and Europe 2020 shows that these two strategies head in opposite directions: The AGS underscores that “some important progress has already been achieved” through REFIT and the Commission announces an “annual REFIT scoreboard” to simplify the business environment and reduce red tape. The ETUC underscores that no important progress has been achieved on the Europe 2020 objectives.
The goals of Europe 2020 are clearly subordinate to the economic goals of the European Semester. The Commission pretends that the “framework has started to deliver results” but this cannot be said of the Europe 2020 goals. The policies of the European Semester might be appropriate for attaining its goals, but not the 2020 goals. For instance, austerity is a policy which may be appropriate for enforcing fiscal consolidation – but the austerity policy has counterproductive and negative effects on innovation, research and development, on the alleviation of poverty, employment, and climate change, and is in fact, a hindrance.
On the contrary, one could say that the current economic governance architecture diminishes the capacity to reach the goals. How might structural reforms, decimated public services, or budget consolidation, help for instance to increase the R&D budget? While hundreds of billions have been poured into bailout funds since the start of the financial crisis in 2008, no substantive increase in R&D is discernible. It can be concluded that the new governance architecture will not help, but rather hinder, the realisation of the Europe 2020 goals. And some European policies, as the strategy for equality between women and men are completely overlooked and ignored by Europe 2020.
On unemployment, the AGS 2014 concedes that the rates “remain historically high”, “leading to growing divergence in employment and social outcomes”. Mass unemployment is increasing with already 26 million Europeans unemployed, with youth unemployment figures ranging alarmingly high in many Member States, and the risk of poverty increasing with 120 million Europeans living in or at risk of poverty. The social impact of the crisis is immense; the economic and financial crisis is creating conditions for a widespread social crisis with a growing gap in the distribution of resources. There is growing evidence that the crisis is having a disproportionate impact on women who were already disadvantaged on the labour market and at greater risk of poverty and social exclusion. The recent development of economic governance has increased disequilibrium and social imbalances.
Towards a new approach to Europe 2020
In view of the mid-term review of Europe 2020 scheduled for 2015 several options are available:
- add more indicators and a scoreboard and continue to ask the Commission to make the goals binding; or go further and;
- link Europe 2020 to new tools and put Europe 2020 on the same binding level as economic governance; or
- abandon the Europe 2020 strategy and ask for a more efficient instrument together with an ambitious social policy agenda.
In order to transform Europe 2020 into a success story, first and foremost, the austerity policy has to end and a second, more appropriate policy in favour of employment, research and innovation, education, the alleviation of poverty and against climate change has to be designed. The European Semester gives the main priority to fiscal consolidation and does not have a positive effect on the 2020 goals.
Interestingly, the language of the Commission has shifted recently. While there are still the 5 targets and 7 flagship initiatives[2] to achieve Europe 2020, the instrument is no longer the open method of coordination, but the new economic governance structures which are presented as having been put in place to achieve the 2020 objectives. The delivery of Europe 2020 seems to depend on economic governance, but the latter looks more like a pill to swallow. “The delivery of Europe 2020 relies heavily on the new governance structures and processes that the EU has been putting in place since 2010. At the heart of these is the European Semester, (…) reform commitments by the Member States and country-specific recommendations”[3]. Here we are entering a circle with a snake who bites its own tail. Europe 2020 is presented as containing the objective of the new economic governance structure. But part of this new governance structure are austerity and fiscal consolidation policies which impede the capacities of the Member States to reach the objectives.
The solution advocated by the Commission is to add some additional indicators and a scoreboard so that in the end the delivery will be complete and encompassing. “By helping to detect key employment and social challenges in the EU, and to ensure a timely policy response, the scoreboard would also help with meeting the Europe 2020 targets. (…) The ultimate aim of these comprehensive tools is to identify and commonly agree on a set of key labour market and social challenges that Member States face on their progress towards the Europe 2020 objectives. The scoreboard would not represent a re-statement of the Europe 2020 policy ambition, but would rather aim to detect developments in the socioeconomic situation across the EU that require closer monitoring. Its purpose and character would be complementary to those of these monitoring tools.”
In other words, the scoreboard would help to identify key challenges (like the well-known need for labour market reforms, flexibility etc. pp.). However, nothing seems to be foreseen which could complement the old and new indicators with a system triggering preventive and corrective actions in order to deliver on the Europe 2020 goals. Adding more indicators to the already existing ones might improve the knowledge base and the analysis of trends across Europe, but has no immediate corrective effect, so will not be able to alter economic policy.
Europe 2020 - towards new tools to deliver
The ETUC is now at a crossroads – either to defend the old approach to Europe 2020 based on OMC and the de facto subordination under the economic governance procedures, or use the opportunity to redefine the rules for Europe 2020. The discrepancy between the ambitious employment target and dramatically high unemployment must be tackled urgently and not diluted in an unspecific long term approach. A lost generation must be avoided at any price.
The Europe 2020 targets must be anchored in a new architecture of social and economic governance on an equal footing with the economic goals, together with an ambitious social agenda.
- The Commission has to monitor from within the economic governance structure;
- that the reports from the Member States follow the Europe 2020 goals
- and has to take them up in the country specific recommendations.
If this tool is not sufficient to steer it in the right direction of convergence, approximation and real progress towards the 2020 goals, the Commission should propose more ambitious incentives to reach the Europe 2020 employment and social goals.
The ETUC can continue to support the Europe 2020 goals under the following conditions:
- the Commission incorporates the 2020 goals into a new architecture of social and economic governance, in particular the European Semester, taking them into account in the AGS and the CSR but on an equal footing, and not subordinated, to economic and fiscal goals;
- the social and employment indicators should be linked to regular (yearly) decisions on preventive and corrective measures to achieve the objectives – for instance a budget increase to reach the 3% R&D, specific measures and investments to increase high quality employment, etc.
Once these conditions are fulfilled a new potential beyond the outdated and partially failed approach can be developed. The ETUC is ready to participate in the process of re-determining the rules in a new pro-active approach which is necessary right now and which cannot wait for the mid-term review in 2015.
In many Member States the participation of social partners continues to be rather formal or insufficient. The ETUC reiterates its demand[4] that the involvement of the social partners needs to be organised in a serious way and systematically, as well at European and national level, and that trade union suggestions are taken into account.
[1] “five key targets have been set for the EU to achieve by the end of the decade… employment; education; research and innovation; social inclusion and poverty reduction; and climate/energy. The strategy also includes seven ‘flagship initiatives’ … supporting the Europe 2020 priorities such as innovation, the digital economy, employment, youth, industrial policy, poverty, and resource efficiency.”
[2] https://ec.europa.eu/info/strategy/european-semester
[3] http://www.etuc.org/documents/etuc-position-europe-2020-strategy-%E2%80%93-assessment#.UzKzofldXbQ
[4] ETUC position on Europe 2020 Strategy – an Assessment. Adopted at the Meeting of 5-6 March: 2013/sites/www.etuc.org/files/EN-ETUC_Position_on_Europe_2020_Strategy_-_an_Assessment_2.pdf