The European Pillar of Social Rights – no ‘social triple A’ for Europe

Shortly after his appointment, the new President of the European Commission, Jean-Claude Juncker, promised to strengthen the social dimension of the European Union. The so-called ‘European Pillar of Social Rights’ (EPSR) is a central element of his project. Recently, the Commission published a first draft version of how the EPSR could look.

The EPSR has three sections: ‘equal opportunities and access to labour markets’, ‘fair working conditions’, and ‘adequate and sustainable social protection’. The objectives of this initiative are more than ambitious: it aims at re-establishing a ‘social triple A’ for Europe. It is also designed to help overcome the crisis and renew convergence within the Euro area. Despite these keen aspirations, the EPSR is not intended to be enshrined in law, e.g. as part of the European Treaties. Instead of amending the ‘social acquis’, the EPSR should ‘complement‘ the legal status quo. In the Commission’s words, its purpose is to ‘operationalise’ existing social rights. So, rather than being something new, it is a compilation of social standards that already exist in European law or other international provisions.

The Euro crisis management is the biggest threat to the European Social Model

The initiative is a reaction to the social costs caused by the Euro rescue. Member states hit hardest by the crisis were subjected to drastic reform programs that prescribed strict austerity and labour market reforms aiming at increasing competitiveness (e.g. decentralization of collective bargaining, freezing of or even reductions in minimum wages). The obligation to consolidate public finances resulted in privatizations and cutbacks of social benefits. These measures not only weakened the trade unions considerably but were also disastrous with regard to both the economic development and the social situation of the countries concerned. Mass unemployment, increasing poverty and economic decline were the consequences. Thus, Euro crisis management itself has aggravated social and economic problems and is now the biggest threat to the European social model.

So, the question arises whether the Commission has learned anything and is, therefore, willing to change course. Can the EPSR fulfil the high hopes invested in it? Hardly. On the contrary, it even contains highly questionable elements.

The EPSR – a critical assessment

Before turning to its deficiencies, it should be mentioned that the EPSR does have some merit. The draft contains certain progressive approaches. For example, it supports the equal use of leave arrangements by parents, addresses the gender pension gap and emphasises the growing importance of long-term care as well as of ‘essential services’ – although the list of ‘essential services’ is restricted to electronic communications, transport, energy and financial services only. Thus, the EPSR addresses important social policy issues but, even so, it deserves to be viewed critically because of four problematic aspects.

First, its legal status is unclear. As mentioned above, the EPSR is not due to be implemented as binding in primary or secondary law. It is unlikely that such a non-binding document could have any significant effects. Second, most of its formulations are little more than slightly more concrete specifications of rather unspecific general legal provisions. Frequently, the EPSR simply rephrases established principles.

Third, its social policy principles are formulated in a way that subordinates them to the primacy of fiscal sustainability (i.e. austerity), international (price) competitiveness and a supply side social policy paradigm (flexicurity). For instance, healthcare systems should be cost-effective ‘in order to improve … their financial sustainability’. Furthermore, the retirement age should be linked to life expectancy. Also, ‘the duration of [unemployment] benefits shall … [preserve] incentives for a quick return to employment’. Equally problematic are statements about wages: ‘[m]inimum wages shall be set in a way that safeguards access to employment and the motivation to seek work’, ‘[w]ages shall evolve in line with productivity developments’.

Fourth, the EPSR is restricted to individual social rights. Although explicitly guaranteed by the Charter of Fundamental Rights, collective social rights like the right to strike or the autonomy of collective bargaining are suspiciously absent. This is striking because the massive violation of collective social rights – especially in Troika countries – is one of the severest problems of Euro crisis management. Perhaps the Commission is staying silent about these rights because it would otherwise highlight the illegitimacy of interventions in national wage policies and collective bargaining systems – be it by the Troika or the macroeconomic imbalance procedure. The same holds true for the idea of national ‘Competitiveness Authorities’ included in the ‘Five Presidents’ Report’ which is due to ensure that wages evolve in line with productivity. 

No ‘social triple A’

The EPSR does not contribute anything substantial by way of strengthening the EU’s social dimension. On the contrary, it reformulates social rights in a market-compatible way. But fiscal or competitiveness considerations have no place in a catalogue of basic social rights. Given the prioritisation of fiscal consolidation and competitiveness, it is better that the EPSR remains legally non-effective. Nor does the EPSR provide effective protection against attacks by the Troika (or the European Court of Justice) on collective social rights. It is important to note that most of the legal basis on which the EPSR rests already has the status of quasi-constitutional primary law. Yet, those provisions have not prevented the EU from ignoring, circumventing and even directly violating fundamental social rights. Thus, the real problem is not the legal status of existing provisions but the total and wilful ignorance of these principles. Strikingly, although systematically undermined, collective social rights are not even mentioned in the EPSR. To a Greek worker this can only appear to be cynical. It would already be an improvement if the EU’s ‘social acquis’ were respected. This would mean an end to illegitimate interferences in national social policy and collective bargaining that have disastrous effects on social rights. The EPSR certainly does not deserve a ‘social triple A’.