Divergence between EU countries in terms of unemployment and poverty levels as well as working conditions has been identified as major destabilising factors in the European Union. The Gothenburg declaration by EU leaders about the European Pillar of Social Rights is only a first step to addressing these issues.

The social agenda of the EU has evolved markedly in the last 30 years. Former European Commission President Jacques Delors knew that the Single Market would not gain public support without a social dimension. He therefore made it acceptable to working people by launching a cycle of social policy legislation, devoting a large share of the EU budget to Cohesion Policy and establishing EU level dialogue between employers and trade unions (‘social dialogue’). This ‘Delors Compact’ was later supplemented by the Lisbon Strategy (2000), and its “2^nd edition” called Europe 2020 (2010).

Two major developments that have taken place since Delors was President: the eastward enlargement of the EU and the eurozone crisis.

The recent exercise in drawing up a European Pillar of Social Rights, together with the confirmation of the importance of the social dialogue by the current Commission President Jean-Claude Juncker, revives key components of the original ‘Delors Compact’, even if a renewed commitment to a robust Cohesion Policy is still outstanding. However, any meaningful development of the social agenda today depends on facing two major developments that have taken place since Delors was President: the eastward enlargement of the EU and the eurozone crisis.

East-West imbalance and the social question

The enlargement of the EU to the east created a divide in Europe in terms of productivity and wage levels. The good news is that there is economic convergence between East and West. However, the EU has to make efforts to ensure that economic growth is coupled with convergence in terms of social policy standards. In the long run, this is the real solution to the problem of social dumping, which has been the main focus of legislative activity in the past decade.

Upholding the right to free movement and ensuring equal treatment for mobile workers remains a pivotal issue. But today, in this context, a key question is how the peripheral regions (mainly the eastern ones) can rebuild human capital, which is being lost through constant migration towards the West. Besides, the EU must remain active in addressing the situation of the Roma and promoting integration, which is arguably Europe’s biggest social challenge today.

The North-South imbalance still requires adequate treatment and the Gothenburg declaration of social rights can only be seen as a start.

 Countering North-South social divergence
What killed social convergence in the past decade, leading to dramatic disparities between North and South in terms of unemployment and poverty levels, was the eurozone crisis. Since the economic recovery has started, many (in particular from the centre right) believe that no further action is needed to improve the functioning of the Economic and Monetary Union, and some do not care at all about its social dimension. This is, however nothing but a recipe for a repetition of the disasters of 2011-13. The North-South imbalance still requires adequate treatment and the Gothenburg declaration of social rights can only be seen as a start. Stopping divergence along this axis requires a proper stabilisation capacity (e.g. unemployment insurance), while restoring convergence necessitates an EU strategy to develop and maintain social investment models in the peripheral regions.

Going beyond Gothenburg

A 21st century EU social agenda must address new issues like the impact of digitalisation on labour. It also remains important to reconcile economics with our social policy objectives and monitor the social dimension of all policy areas and tools, from trade to competition. However, the critical question today is whether the EU can also provide material support to its member states and regions in a systematic way to meet common social standards and achieve commonly agreed goals. This brings us to the concept of a Social Union.

Financial and economic governance has been deepened in recent years but this has to be followed up with more robust social governance. Popular support may be lacking for a United States of Europe but, with the right arguments, it can be built up in favour of a Social Union.

photo: European Commission