Ursula von der Leyen, reaffirmed, promised initiatives on affordable housing and poverty. Ending poverty by 2040 should be the goal.
It is essential that the democratic centre in Europe holds. But if that centre is to hold, it must live up to the scale of the concerns and the challenges that people face in their lives.
The political guidelines of Ursula von der Leyen, setting out her stall last Thursday for a second five-year term as president of the European Commission, suggest a Europe more directly responsive to the needs of its citizens. Von der Leyen was confirmed that day by a sizeable 401-284 majority in the European Parliament, arguably by offering the most ‘Brussels’ of all the stereotypes—the grand compromise.
The guidelines for the commission nod towards the Greens by doubling down on the target of a 90 per cent reduction in greenhouse-gas emissions by 2040. Growth, competitiveness and ambitious investments—the key promise of Von der Leyen’s European People’s Party—are however presented as the driving force of the continent. There is tough talk on ‘law and order’, migration and asylum and the ‘European way of life’ for the European Conservatives and Reformists (although that was not enough to woo the Italian far-right leader, Giorgia Melloni). And, last but not least, commitments to the social-market economy and the 2017 European Pillar of Social Rights (EPSR) are addressed to the Socialists and Democrats.
Europe needs to be brave enough to bet on social policy—where it is currently constrained by the restricted European Union competences in the social sphere—to propel more inclusive growth and to abolish poverty. A bold step forward in the vision for a social Europe must come hand-in-hand with an overdue revision of the European treaties, which currently stand as the main adversaries to making ‘the principle of the European Pillar of Social Rights a reality across our Union’, as the guidelines put it.
Affordable housing
The guidelines promise a first-ever European Affordable Housing Plan. Von der Leyen acknowledges that European households are spending an ever-growing portion of their income on housing expenses. Between 2010 and 2022, average house prices increased by 47 per cent and rents by 18 per cent, while median incomes in the EU27 rose by 31 per cent. The interest-rate hikes following the pandemic and energy crisis have further increased the cost of purchasing a home through traditional financing, potentially creating a generational gap in home ownership.
Current owners with fixed-rate mortgages are insulated from these rate hikes and disincentivised from selling their homes. This further reduces the housing stock, particularly for family housing, as older Europeans tend to occupy larger homes than they require, while younger families struggle to find appropriately sized and priced apartments for their growing needs.
A potential solution is for governments to start taking social housing seriously by increasing the housing stock specifically for these particularly supply-constrained categories. France is the only member state of the Organisation for Economic Co-operation and Development spending more than 0.2 per cent of gross domestic product to support social housing and such expenditure has been declining in the last decade in real terms.
The guidelines envisage a doubling of planned cohesion-policy investments in affordable housing and revision of state-aid rules to enable further housing-support measures. These would show commitment to ensuring that ‘citizens have a right to stay in the place they call home’, as von der Leyen told the parliament.
Anti-poverty strategy
Another important commitment in the guidelines is to an also-unprecedented European Anti-Poverty Strategy. The promise is to ‘address the root causes of poverty’ and ‘help people to get access to the essential protections and services they need’. Poverty is deeply connected to (un)employment, gender and household size, social and ethnic background and place of living—and welfare states have a considerable impact on the living conditions associated with these characteristics.
Translating this commitment into actionable policies—of which the long-sought-after directive on minimum incomes should be the first port of call, following the successful directive on adequate minimum wages—will be the task of the new commission. The strategy will only be successful if it includes the voices of all those affected and concerned by poverty: low-income and precariously employed households, civil-society organisations, the social partners and the academic world must all have their say.
Decent work at adequate wages is crucial to reduce poverty. It is the core promise of the European social-market economy. But blindly promoting work is not enough: in-work poverty is an unfortunate reality. We need to ensure that everyone, in or out of the labour market, has sufficient resources to live a life in dignity, sharing European prosperity.
Legislative actions
It is hard to overstate the significance of the EPSR, presented by the prior commission under Jean-Claude Juncker, for the hard-law implementation of this EU social agenda. Many have called the framework, arising from the Eurosceptic backlash after the sovereign-debt crisis, a ‘game-changer’ for the social dimension.
Still, change comes slowly and in gradual steps. Of the three main chapters of the pillar, experts find that translation of the third—covering social protection, inclusion and the reduction of poverty—into the EU legal acquis has been insufficient. The European Anti-Poverty Strategy should be developed with urgency, with a clear focus on legislative actions.
The EPSR also needs more than repetitive political endorsement. Announced in Gothenburg in 2017, it was reaffirmed in Porto in 2021 and earlier this year in La Hulpe (Belgium). (Indeed, Hungary and Sweden abstained from the latest declaration.) Encouraging upward social convergence among the 27 national social models is a difficult exercise, but it is necessary for keeping the critics of the social model on board.
Bolder vision
The 2024-29 political guidelines and the high-level EPSR targets for 2030 provide a cautiously optimistic picture for European social policy. New aims for housing and poverty are to be welcomed. But already one can ask: what comes after 2030?
A new and bolder social vision is needed during the second Von der Leyen commission, elaborated in dialogue with civil society and citizens. The 2030 objective is to reduce the number of people at risk of poverty or social exclusion by 15 million. Ending poverty for everyone should be the goal for 2040.
Dr Henri Haapanala is an FWO (Flemish research council) junior research fellow at the Herman Deleeck Centre for Social Policy, University of Antwerp. His research focuses on labour-market inequalities and European social policy.
