The European Commission consultation on the “European Pillar of Social Rights

pillar 1

The European Commission has launched a public consultation on what should be included in a ‘Pillar of Social Rights’ for the Eurozone, the 19 EU member states which use the Euro as their currency.

This is timely. It is clear that the ‘European Project’ is in crisis.  Poverty is increasing and more and more people are not able to afford the basics of a decent life.  Cutbacks in income supports and services as well as changes to protection for people on low incomes and in insecure work, introduced during the recession, are becoming more deeply embedded in most countries.

Since the economic crisis of 2008, people in Ireland have been particularly aware of the importance of the Eurozone for the policies which affect our lives. Politicians and journalists argue about whether successive Governments or the ‘ECB/EC/IMF Troika’ are to blame for decisions which have devastated services and supports for people on low incomes. For people effected the point is not so much to place the blame as to change the decisions and policies underlying them.

Now, decisions about tax and spend, spending priorities and new measures to promote ‘competitiveness’ take place largely within the structures of the Eurozone. Being part of the Eurozone brings with it increasingly strict rules about balancing budgets and reducing deficits.

This is a normal part of sharing a currency. However, there are as many ways to balance a budget, and as many ways to make an economy more competitive, as there are to skin a cat. The actual operation of the rules depends on the strength of pressure groups at work and the ideology of the people sitting around the various tables.

EAPN has argued for many years that the European Union as a whole needs stronger social policy. From the start, European law has always centred on market integration, and later fiscal and financial integration. This has been balanced, to a greater or lesser extent, by social policies which are mainly decided by national governments.

Without an agreed ‘social floor’ to protect income and rights, free trade and monetary union will push down conditions as countries scramble to attract investment in a ‘race to the bottom.

This is even more true of the Eurozone, whose decisions have such direct effects on policies but which not developed the same level of democratic accountability and openness as the wider European Union.

This is why the discussion launched by the Commission on a ‘Pillar of Social Rights’ for the Eurozone is so important.

 

The public consultation

The European Commission’s public consultation on the development of a European Pillar of Social Rights was launched in March and will run until the end of 2016 and result in the publication of a White Paper early in 2017.

The White Paper will include a number of principles which participating countries will use to screen the performance of their employment and social policies. It will not result in any new rights but try to ensure that existing ones are more effectively implemented.

While all EU countries are welcome to join in the focus is on the 18 Euro zone countries in the Economic and Monetary Union (EMU) but other EU countries can join in if they wish.

In its consultation document the Commission recognises that during the crisis there was a failure to effectively implement existing EU social rights and that poverty and inequality grew.

They also note rapid demographic changes, advances in technology and changes in work practice which provide new challenges. This is why the Commission is setting out to review existing rights and to see how they can be more effectively implemented in the future.

 

What the consultation will cover

The consultation was launched along with a first attempt at a draft Pillar of Social Rights which covers the three areas of:

Equal opportunities and access to the labour market (skills, education and life-long learning, flexible and secure labour contracts, secure professional transitions, active support for employment, gender equality and work-life balance, equal opportunities).

  1. Fair working conditions (conditions of employment rights, wages, health and safety, social dialogue and involvement of workers).
  2. Adequate and sustainable social protection (integrated social benefits and services, health care and sickness benefits, pensions, unemployment benefits, minimum income, disability benefits, long-term care, childcare, housing and access to essential services).

 

EAPN Ireland response

EAPN has long being calling for a more balanced approach to social and economic policy in Europe and with poverty and inequality still at crisis levels across the EU and three quarters of a million people living below the poverty line in Ireland such a proposal to strengthen social rights is certainly well overdue. Poverty and inequality need to be prevented and tackled because of the damage they do to people and society in general and not because they are seen as blocking economic growth. This must be the driver for the consultation.

EAPN Ireland will respond to the consultation and try and ensure it is as effective as possible. We have to wait and see if the ambition of a ‘Pillar of social rights’ will result in any real change but it is important to take the opportunity on offer.

The focus of the consultation is on social and employment policy but as we have become very aware of in the past number of years, social progress is very much dependent on what approach is taken to economic policy and how the European Semester is implemented. If economic and social policy do not complement each other, then there will be little change.

It is also a concern that the consultation is focused on those countries in the Eurozone rather than the wider EU. While this is obviously a problem for those countries which are not participating, it could also limit the possibility for any real change that a Pillar of Social Rights can have even in the Eurozone countries.

EAPN Ireland has produced a briefing on the Consultation which is available here: Briefing on the European Pillar of Social Rights (003)

 

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European Commission Country Report gives food for thought

The European Commission report:

  • Highlights growth in Poverty: 30% of children at risk of poverty
  • Points to gaps in services infrastructure
  • Criticises decisions to cut taxes and forgo new income (Irish tax take is 29.7%, as against EU average of 39.1%)

By Paul Ginnell, Policy Officer, EAPN Ireland

 country report

As polls closed on election day on February 29th, the European Commission published its annual Country Report for Ireland.  They had not wanted to publish it before 10:00pm in case it was seen to be influencing voters. As it turns out there is quite a lot in the report that would be of interest for those voting on the day and I would encourage you to have a look.

The report includes a detailed analysis on a broad range of areas with the emphasis on macroeconomic concerns but also addressing a range of areas relevant in addressing poverty and social exclusion including housing, health and one section covering the labour market, education, social policies and inclusive growth which covers childcare.

 

Gaps in public service infrastructure

One of the most important messages from the Report is that Ireland has large gaps in its public services infrastructure, which also suffered major cuts during the crisis. This has resulted in increasing issues for the quality and adequacy of the services which now need immediate investment. The specific areas which are highlighted are in transport, housing and water infrastructure while education and health are also highlighted but as less severely affected by cuts.

 

Low overall tax take

The next section of the report is on taxation, which is the key source of the resources necessary to invest in in this infrastructure. The report highlights that Ireland’s overall tax take is low by EU standards with the Irish Government collecting taxation equivalent to 29.7% of GDP in 2015, whereas the EU average is 39.1%. The Report looks at various areas of taxation, which makes interesting reading. It is critical of the Government’s recent decisions to cut taxes or forego the opportunity to bring in revenue in some areas as both regressive and as not geared towards broadening the tax base.

While the issue of broadening the tax base is important in addressing the gap in public services the Commission should really not be surprised that investment in Ireland’s public service infrastructure, already underdeveloped before the crisis, has suffered so much during the crisis. These cuts were a direct response to the austerity policies promoted by the Commission itself as part of the troika and implemented by the last two Governments in Ireland.  Investment in social infrastructure is also restricted by the expenditure rules Ireland is tied to under the EU’s Stability and Growth Pact.

 

Education needs investment

In the section of the report dealing with education the Commission specifically highlights that the decrease in expenditure in the area of education has had a negative impact. It specifically points out that the increase in the student-teacher ratio in many schools, a reduction in the allocation of language support and the withdrawal of both the Visiting Teacher Service and Resource Teachers for Travellers could in turn have a negative impact on the quality of educational outcomes in the future. These specific cuts were used by EAPN Ireland to highlight to the troika and the Government at the time, that short term measures to make savings and reduce budget deficits would result in longer term social and economic costs. These impacts are now apparent.

 

Increase in Poverty

The report highlights that relative poverty and income inequality have increased with three in ten children now at risk of poverty and social exclusion. These too are as a result of policy decisions in a range of areas. In addressing the issue of poverty and inequality the Country Report focuses mainly on the Government’s measures to address the low work intensity of households. While supporting people to access quality work with a living wage is very important the Commission, and the Government, need to take much wider analysis of the causes and solutions to addressing poverty and inequality. Access to quality social services, addressed in other parts of the report, also have a key part to play. While the report does highlight that social transfers have been effective in greatly reducing poverty levels it does not address the need for an adequate income for those depending on social welfare supprts. Current social welfare payments for those of working age are €20 below the poverty line and are far off the levels needed to provide people with a minimum standard of living as calculated by the Vincentian Partnership for Social Justice.

 

In picking up on issues missed in the past by the Commission the Report does highlight the need to invest in quality, as well as affordable childcare. In the area of health it goes past solely focusing on cost effectiveness to highlighting the inequality that exists in the Irish two tier health system, but does not go as far as addressing the poorer health outcomes for those from those with lower incomes and from more disadvantaged groups in society.

briefing

Where this comes from

These Country Reports are published as part of the EUs European Semester process and the Report for Ireland is meant to inform the Irish National Reform Programme, which they will send to the Commission in April, and the Country Specific Recommendations Ireland will receive from the EU in May.  As the name suggests the Recommendations give very specific guidance to the Government on policy changes they want to see put in place.

Hopefully when the Commission does issue its Recommendations in May it will include one asking the Government to develop a new all of Government anti-poverty strategy which addressing the different dimensions of poverty, including ensuring the people have an adequate income, whether they are in or out of work.

The European Commission’s Country Report is available at: http://ec.europa.eu/europe2020/pdf/csr2016/cr2016_ireland_en.pdf

 

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