Start of the 2023 European Semester cycle – can it help address the cost-of-living crisis?
According to the European Commission, low- and middle-income households are expected to face a 12% increase in living costs. As we have been hearing from our members and their members, the rise in the cost of living we have already seen in recent months is simply unaffordable, putting them at increased risk of poverty and social exclusion.
The European Commission’s 2023 Autumn Package offers important guidance on how Member States should try to tackle some of these challenges in the coming year. With the support of our members, Social Platform provided input on the social aspects of the package to the Social Protection Committee (SPC) and the Employment Committee (EMCO). So, in the difficult context of the current cost-of-living crisis, what does the Semester have in store for Social Europe?
The good news is that the Autumn package fully recognises the magnitude of the cost-of-living crisis and calls on Member States to adopt more targeted measures to protect vulnerable households and makes recommendations for some necessary long-term reforms. Both approaches will be key to protecting people throughout this crisis and beyond. As more than 70% of measures adopted by Member States so far are not targeted to vulnerable groups, this is crucial, as without adequate measures, the number of people at risk of poverty is bound to increase.
The package rightfully asks Member States to improve the adequacy of social protection, including minimum income schemes, which most Member States have been allowing to erode, meaning that gaps in coverage and uptake remain. While we welcome the Commission’s proposal for a Council Recommendation on minimum income, we continue advocating for a framework directive, which we consider indispensable to lift people out of poverty and meet our 2030 poverty reduction target. The package also rightly states that wages, especially minimum wages, need to be raised to reduce the risks of increasing poverty in the cost-of-living crisis. Turning the Minimum Wage Directive into reality with ambition will be crucial here.
Overall, the package reminds Member States of the importance of turning the Social Pillar and related targets as well as the various equality strategies, adopted by the EU in recent years, into reality. We would have liked to see a clear mention of the issue of discrimination, which keeps many people out of employment, pushes them into poverty and blocks them from accessing equal opportunities.
Social service providers, including not-for-profit providers, support an increasing number of people in this crisis, including people fleeing Russia’s war in Ukraine. However, while the package highlights the importance of modernising social services and improving their quality, the aspect of investment is missing. Social service providers are facing increased operational costs due to rising energy prices and inflation and adequate investment in is key to enable them to play their crucial role in supporting people to lead decent lives.
In this context of high uncertainties, the Commission’s recommendation to Member States to take a neutral or even prudent fiscal stance in 2023 could have a negative impact. Member States’ must have the capability to make the investments needed to address the cost-of-living and energy crisis as well as push forward just green and digital transitions.
We welcome that the Semester increasingly includes social and environmental priorities and that it therefore monitors the implementation of many EU strategies, processes, and legislative and non-legislative initiatives. However, we are concerned that the current design of different Semester documents does not allow to coherently cover all these different priorities. Especially, for the country-specific recommendations (CSRs), which are often broad and limited in number, we are concerned that an increasing number of important priorities will not be addressed in CSRs and therefore, their implementation might not be sufficiently monitored in the Semester.
Finally, we welcome that the package underlines the importance of improving the timing, quality, transparency, regularity, and predictability of national level exchanges with civil society on the Semester. Indeed, the approach to civil dialogue, especially at national level, remains often too ad-hoc. Structured processes across national ministries with clear consultation structures, timetables, and resources for civil society involvement are needed to enable civil society organisations to be engaged. Guidance by the European Commission on how Member States should improve civil dialogue would be highly welcome here.
We will continue our engagement with the European Commission, the Social Protection and Employment Committees and other stakeholders to continue pushing the social dimension of the process to make sure it addresses existing socio-economic challenges pushes for progress on the just green and digital transitions.