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On 16 November the European Commission released the Annual Growth Survey (AGS) Package. This set of documents kicks off the annual cycle of economic governance known as the European Semester, setting out general economic and social priorities for the European Union and providing Member States with policy guidance for the following year.

The draft Joint Employment Report describes a situation of uneven improvements and persistent divergence among and within Member States. Besides some good signs in the labour markets – with the employment rate in the age group 20-64 at 71.1% for the first time since 2008 – negative trends remain, with unacceptable levels of poverty and inequality, which have stabilised on a high level in historic terms.

Against this background, reading the AGS 2017 gives you mixed feelings. On the one hand, there are lots of positive elements and a significant improvement in language, with the need for social fairness and to fight inequality repeatedly mentioned. The document indeed speaks about the importance of setting strong social standards and promoting inclusive growth, about the need to improve the adequacy and coverage of income support schemes, access to quality services, investment in social infrastructures – notably childcare and long-term care – and quality of jobs, focusing on the level of wages to fight in-work poverty, and improving budgetary situations by collecting additional revenues by closing existing tax loopholes and not only through cuts in public expenditure. It also calls for improving the progressivity of our tax systems to reduce inequalities and for a better and more effective use of flexibility in EU budgetary rules.

On the other hand, it maintains the main policy priorities of previous years: the so-called virtuous triangle of investment, structural reforms and responsible public finances. It is also a very comprehensive document that seems written in order to please everybody, as everybody can easily find something to agree with in it. It calls for public investment, but also sustainability of public finances, or states that we need strong social protection systems while highlighting that health and pension spending accounts for a large share of Member States’ public expenditure on social protection and needs to be brought under control. There is also no mention at all of important initiatives such as the European Pillar of Social Rights or the 2030 Agenda for Sustainable Development. The importance of civil dialogue and a meaningful involvement of citizens and civil society organisations in the process is not stressed at all.

The double focus on quality and adequacy and on financial sustainability and cost-effectiveness is not a new one in the semester. Though this year more space have been given to address concerns about the inclusiveness and sustainability of our economic systems, much will depend on what elements are picked up and prioritised for implementation. When looking at the language used in the AGS and in the draft recommendation for the euro area, the differences are striking. Most of the good elements around social protection included in the former are indeed missing or weakened in the latter.

However, this is no time for business as usual as failing to deliver on the promised policy change will have major negative consequences for the EU project.

That’s why this year’s semester cycle will be a credibility test for Europe. Together with our members and in cooperation with dedicated coalitions working on this process, such as the Semester Alliance, we will monitor it closely.