From GDP to wellbeing: shifting the EU’s economic priorities

We often hear that proper investment in social policies and in social and essential services is simply ‘unaffordable’. However, at Social Platform we understand the reality those at risk of poverty and social exclusion face and what under-investment really costs our societies. 

The truth is that if there is the political will to do so, a more social Europe is not only financially possible but also beneficial to all. With the European Commission’s reform of the economic governance rules still underway, there is an important opportunity to shift priorities towards the wellbeing of people and planet and enable investment where it is needed the most. 

We know that the EU faces huge economic, social and climate challenges, including building a greener, more sustainable future. Unfortunately, the recent proposal on reformed fiscal rules presented by the European Commission a few months ago are incompatible with the huge social and green investments needed to tackle these massive societal challenges.  

By focusing primarily on debt and deficit reduction, these proposals could potentially lead to a return of austerity measures for some member states – an outcome that has already shown to be hugely damaging to people’s wellbeing. The concern is that the rules would force countries with high deficit ratios to implement significant and fast budget cuts. Public policies and services, such as social protection, education, care, and social services, could be vulnerable to these cuts. Given that in many cases these areas are already under significant financial pressure after years of underinvestment in the past, further budget cuts would undoubtedly have huge ramifications for the most vulnerable in society. 

A more social Europe means that economic, social and green priorities must go hand in hand. It means that tackling inequalities, promoting wellbeing and ensuring that the transition towards a climate-neutral economy happens in a fair way.  

 To do this, we need a systemic shift towards a wellbeing economy that goes beyond GDP measures, building a fair taxation system that focuses on redistribution of resources. This shift must be done with the creation of strong social protection floors for all, aiming to address the root causes of inequality and creating safety nets for all. Rather than ensuring people only have the bare minimum to survive, we should be finding ways to support people to thrive.  

 Ultimately, we need to stop seeing funding for social policies and services as something that only benefits those who rely on them the most. Investment in these areas is key to ensuring a good foundation for our societies to grow and prosper, without leaving anyone behind. From recent crises of the global COVID-19 pandemic to the ongoing cost of living crisis, Europe’s social policies have been put to the test and people from all backgrounds and demographics have relied on this support.  

With more challenges on the horizon, including the just transition to a climate neutral economy, the EU needs to think carefully about how these new fiscal rules will enable investment in a social Europe that will build resilience to future crises as well as support those already at risk.