Towards A European Pillar Of Social Rights: An Opportunity Not To Be Squandered

In March 2016 the European Commission presented the preliminary outline of a European Pillar of Social Rights as part of the work undertaken towards a deeper and fairer Economic and Monetary Union (EMU). The Pillar is not meant to introduce new social rights and principles, but rather to complement and operationalise the existing EU social “acquis”, namely the competences and rights in the social field set out in EU law. Understood as official recognition that the reactions to the Eurozone crisis neglected the EU’s social dimension, the Pillar definitely has symbolic merit. However, does the draft text of the Pillar live up to the expectations of providing a counterweight to the economic rationale dominating post-crisis EU governance? This contribution aims to highlight the shortcomings that need to be addressed, if the EU aspires to drive future social reforms via the Pillar.

Objectives and structure

According to the Commission, the adoption of the Pillar pursues two main objectives. First, the Pillar aims to overcome the negative effects of the Eurozone crisis on the labour markets and social welfare systems of Member States. In this sense, it attempts to respond to the widespread criticism of imposed, aggressive austerity measures by highlighting the legacy of the Union in the social field and the protection of social rights. Second, the Pillar builds on the “Five Presidents’ Report on Completing Europe’s EMU”, which famously introduced the idea that “Europe’s ambition should be to earn a social triple A”. In doing so, the Pillar aims to give greater prominence to social considerations in the coordination of economic policies through the European Semester, highlighting the relevance of employment and social concerns in this governance instrument otherwise seen as a purely economic tool.

With regard to its content, the preliminary outline of the Pillar is structured around three main headings: (1) equal opportunities and access to the labour market, (2) fair working conditions and (3) adequate and sustainable social protection. Thus, two-thirds of the Pillar is dedicated to the labour sector. Under these three headings, different principles are spelled out that are meant to operationalise the corresponding rights of the Charter of Fundamental Rights and the social policy provisions of the EU treaties. To better situate each principle, the outline also indicates the challenges that it intends to address. Rather than going into these principles in-depth, this contribution makes some general observations regarding the potential and weaknesses of the Pillar.

Potential

Establishing a Pillar of Social Rights would definitely have some merit as a first step in healing the social wounds of Europe. The Eurozone crisis presented an unprecedented opportunity for the EU to interfere, in sweeping and incisive ways, with the financial and social policies of Member States. New instruments and procedures of economic governance have drastically increased the capacity of EU institutions to impose reforms in national social and labour systems. Being fully embedded into economic governance, however, social policy reforms are decided primarily on the basis of competitiveness and indicators of fiscal consolidation. This is a method that is highly contested in theory and has proven dubious in practice, since it leads to social provision resting mainly on markets, with public safety nets playing a minimal role.

Against this background, the introduction of a social policy instrument, such as the Pillar of Social Rights, could help to underline the qualitative difference between economic and social policy and to disprove the conviction prevailing in post-crisis economic governance that the collapse of the distinction between fiscal goals and social policy is irreparable. In this regard, the reference to the Charter of Fundamental Rights could prove to be of particular importance, since its application in the context of crisis management has so far been heavily contested by EU institutions, including the Commission. Rather than simply restating the applicability of the Charter, the Pillar could put forward some social indicators, such as the Gini-coefficient or the at-risk-of-poverty rate of the working age population, in order to operationalise the social rights guaranteed in the Charter.

Shortcomings and missed opportunities

Despite its potential, the first draft of the Pillar displays some significant shortcomings. The first problematic aspect, which could undermine its actual impact, is its unclear legal nature. Although not decided yet, the Pillar is most probably not intended to be enshrined in EU primary law, for example as part of the EU treaties. The Commission announced that it will need to take account of the legal framework at EU level and of the fact that the Pillar focuses only on the euro area. The Pillar could be perceived as a serious effort to stimulate the social dimension of the EMU only if it were established as a legally binding document.

Second, even though labelled a “Pillar of Social Rights”, the preliminary outline does not include social rights, but rather social policy guidelines and principles. The language of rights is remarkably absent from the draft document, with the risk that the reference to the Charter of Fundamental Rights acquires a purely decorative character. Moreover, many of the suggested principles are in effect marginally more concrete specifications or even simple repetitions of already existing legal provisions. For instance, the third part of the Pillar referring to social assistance and protection reproduces principles already set out in the White Paper “An Agenda for Adequate, Safe and Sustainable Pensions” published by the Commission in 2012.

Third, on many occasions the social policy principles proposed are suggested to primarily serve the traditional aims of economic policy, such as fiscal sustainability and economic competitiveness. For example, “minimum wages shall be set […] in a way that safeguards access to employment and the motivation to seek work”. In the same vein, healthcare systems “shall encourage the cost-effective provision of care […] in order to improve their financial sustainability”. Even though social policies should accommodate concerns surrounding efficiency, such as the financial sustainability of welfare systems, they primarily pursue objectives of non-efficiency such as equity, accessibility and the quality of social services. Hence, the prioritisation of considerations relating to economic efficiency carries the risk of blind subordination of social rights to purely market-driven choices, which already dominate the post-crisis European governance framework, instead of fostering the non-efficiency elements of the EU’s social dimension.

Lastly, the choice of addressing the Pillar exclusively to euro area Member States, while leaving the initiative open to other countries on a voluntary basis, is anything but self-evident. The legal sources invoked by the draft, namely the Charter of Fundamental Rights and the Treaty provisions, bind the Member States as a whole and not only Eurozone states. In fact, making the common currency the criterion for deciding the focus of the Pillar is a further signal that economic rationale prevails over social policy considerations.

Outlook

In sum, the development of a European Pillar of Social Rights should be welcomed as an attempt to defend European social values in a period when matters within social policy are framed primarily as a burden on public finances and an obstacle to economic success. Nevertheless, the preliminary outline of the Pillar presented by the Commission is still far from the desired outcome. The draft text fails to give concrete suggestions on how to operationalise social rights in the framework of the new EU economic governance and treats social policy as subordinate to economic policies. These weaknesses will have to be overcome, if the Pillar aspires to become a weighty reference tool to drive social reforms in the EU and not just a simple reminder of the existing EU social “acquis.”