Economic, employment and social policies in the new EU 2020 strategy

EUROPEAN COMMISSIONDG Employment, Social Affairs and Equal OpportunitiesSocial protection and inclusion policies

Walter WOLF

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’Smart, sustainable and inclusive growth’http://ec.europa.eu/eu2020/index_en.htm

7 EU ’flagship initiatives’• Smart: innovation, youth on the move

digital agenda• Sustainable: resource efficiency,

competitiveness• Inclusive: new skills and jobs, ’European

Platform against Poverty’

Europe 2020

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(1) ensuring the quality and the sustainability of public finances;

(2) addressing macroeconomic imbalances;(3) reducing imbalances in the euro area;(4) research, development and innovation,

digital economy;(5) improving resource efficiency and reducing

greenhouse gases;(6) improving the business and consumer

environment, modernising the industrial base;

EU 2020 integrated guidelines adopted in July 2010

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(7) increasing labour market participation and reducing structural unemployment;

(8) developing a skilled workforce responding to labour market needs, promoting job quality and lifelong learning;

(9) improving the performance of education and training systems at all levels and

increasing participation in tertiary education;(10) promoting social inclusion and combating

poverty.

EU 2020 integrated guidelines continued

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• 75 % of aged 20-64 employed

• 3% of EU's GDP invested in R&D

• 20/20/20 climate /energy targets• Early school leavers down to 10% and 30-34 with tertiary education up to 40%

• Lifting 20 million people out of poverty and exclusion

Europe 2020 The 5 EU headline targets

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• Recognising that the success of the Strategy relies on all its goals being achieved together

• Reducing poverty through active social security will help sustaining demand

• Reinforcing labour supply and better employment opportunities for all

• Reducing poverty will enhance children’s chances to do well at school

• Reducing poverty will enhance participation of all in society

Europe 2020 An integrated strategy

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Commission decision of September 29

• Based on the ten basic principles for Roma inclusion • The EU Framework will seek to ensure a more efficient

monitoring of and support to national and European efforts with regard to Roma integration

• To that end, and in the frame of the Europe 2020 Strategy, the Commission will invite Member States to present their own national strategies for the inclusion of Roma which could feature in their national reform programmes.

• The forthcoming flagship initiative on a "Platform against poverty" will constitute an integrated framework of actions to support horizontal priorities

• The European Commission also expects Member States to be explicit and ambitious about Roma when setting their national Europe 2020 targets in the fields of poverty reduction, employment and education.

EU Framework for National Roma Integration Strategies in April 2011

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‘Open Method of Coordination’ (OMC)http://ec.europa.eu/social/main.jsp?langId=en&catId=750

• Definition of common Objectives and agreed indicators

• Reporting to national partners and to the EU (EC, Council, EP)

• Facilitating mutual learning and exchange of good practices

• EU and national poverty reduction targets

EU Social Inclusion Process

EU social protection and inclusion strategyOverarching Objectives

• social cohesion, equality between men and women and equal opportunities for all through adequate, accessible, financially sustainable, adaptable and efficient social protection systems and social inclusion policies.

• effective and mutual interaction between the Lisbon objectives of greater economic growth, more and better jobs and greater social cohesion, and with the EU's Sustainable Development Strategy.

• good governance, transparency and the involvement of stakeholders in the design, implementation and monitoring of policy

The 2006 Social Inclusion Objectives

• access for all to the resources, rights and services needed for participation in society, addressing exclusion, and fighting all forms of discrimination

• the active social inclusion of all, both by promoting participation in the labour market and by fighting poverty and exclusion

• that social inclusion policies are well coordinated and involve all levels of government and relevant actors, including people experiencing poverty, that they are efficient and effective and mainstreamed into all relevant public policies

Making a decisive impact on the eradication of poverty and social exclusion by ensuring:

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In-work poverty also remained stable at 8%.The risk of poverty of the unemployed is much higher and was even on the rise, highlighting concerns about the adequacy of safety nets.

At-risk-of poverty rates by groups, EU, 2005-2008

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5

10

15

20

25

30

35

40

45

2005 2006 2007 2008

Unemployed: 44%

Children: 20%Elderly: 19%Total: 17%

Employed: 8%

Despite economic and employment growth poverty was not reduced before the crisis

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Trends on jobless households

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8

10

12

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2001 2002 2003 2004 2005 2006 2007

58

60

62

64

66

Adults (18-59, not students) living in jobless households (left axis)

Children living in jobless households (left axis)

Unemployment rate (left axis)

Employment rates (right axis)

Source: Labour Force Survey. (All figures in percent)

• Staying around 10%...

• Data from before the crisis…

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Possible gains in the efficiency of social transfers

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Expenditure on social protection benefits (excluding pensions) - % of GDP, 2007

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Source: SILC 2008 & ESSPROS 2007

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Gaps in social safety nets

• In some countries 80% of longer term unemployed do not get any benefits poverty rate for unemployed is 44%

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Impact of the crisis• Economic recovery hampered by the sovereign debt

crisis. • Fiscal consolidation stepped up in several countries • expected GDP growth for 2010 remains modest

(1.2%) + increasing fears of a “double dip” recession.

• Unemployment > 10% and expected to stay high • Social expenditure (social protection, education and

health) ~ 70% of public expenditure in the EU. Social protection > 40% of public expenditure.

• Fiscal consolidation will affect social expenditure: a challenge for social polices aimed at addressing poverty and exclusion

• The social situation is likely to further deteriorate and poverty is likely to increase.

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Commission original proposal• Reducing poverty by one fourth by 2020,

lifting 20 million of people out of poverty –People at risk of poverty are those who live with less

than 60% of the median income in their country–Poverty line varies from less than 100€ to more than

1000€ across EU countries–80 Million people at risk of poverty in the EU–Varies from 9.1% to 25.6%

• Headline indicator used to measure and monitor poverty in the EU and in most MS

• It reflects the role of work, education and social protection in preventing and alleviating poverty

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Target adopted in June 2010 EU level target

–“Lifting 20 millions people out of poverty or exclusion by 2020”

–Based on 3 existing EU social inclusion indicators: • At-risk-of-poverty, • (severe) material deprivation (adopted in February 2009), • people living in jobless households (just in time agreement on

new definition)

• National targets–Member States are free to chose the most appropriate

indicator to set their national target –Member States to show how they will contribute to

meeting the EU level target, in dialogue with the Commission

18Source EU-SILC(2008); % of total population

Past trends (2005-2008)

People at-risk-of-poverty or exclusion

At-risk-of-poverty rate

Severe material deprivation rate

Workless households (provisional)

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5

10

15

20

25

30

2005 2006 2007 2008

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Severe material deprivation• Definition: People whose living conditions

are severely constrained by a lack of resources:

They experience at least 4 out of 9 deprivations: people cannot afford i) to pay their rent or utility bills, ii) keep their home

adequately warm, iii) face unexpected expenses, iv) eat meat, fish, or a protein equivalent every second day, v) a week of holiday away from home once a year, vi) a car, vii) a washing machine, viii) a colour TV, or ix) a telephone

• A non monetary measure of poverty• Based on a single European threshold –

reflecting the disparities across the EU It concerns 8.3% of the EU population varying from 1% in LU to 33% in RO

• List of items to be reviewed in 2015

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People in workless households

• Definition: People (aged 0-59, not students) living in a family where no one works (or very little)

• Reflects long-term exclusion from the labour market, for individual workers and the family members who depend on them

• Strong link to child poverty and intergenerational transmission of poverty

• It concerns approx. 8% of the total EU population, varying from 4% to 14%

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120 Million people at risk of poverty or exclusion

80 Mio people at risk of poverty

40 Mio people materially deprived

40 Mio people in workless households

Million people

People at-risk-of-poverty 80

+ Those materially deprived, not at-risk-of-poverty 22

+ Those living in a workless household, not at-risk-of-poverty, not deprived

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Total: People at-risk-of poverty or exclusion 120

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People at risk of poverty

People materially deprived

People in workless households

Country A focusing on raising living standards

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People at risk of poverty People

materially deprived

people in workless

households

Country B focusing on labour market inclusion

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Next steps• National targets

–Member States free to set their targets on the most appropriate indicators, given national circumstances and priorities

–Bilateral dialogues between Commission and each Member State to establish the link between national target and EU target

• Monitoring of the target at EU level–Part of the monitoring of the 5 headline targets

• Eurostat website–http://epp.eurostat.ec.europa.eu/portal/page/portal/e

urope_2020_indicators/headline_indicators

EUROPEAN COMMISSIONDG Employment, Social Affairs and Equal Opportunities

Further Information

DG Employment, Social Affairs and Equal Opportunities‘Social Inclusion’ website

http://ec.europa.eu/social/main.jsp?catId=751&langId=en