The 2018 European Semester: Inclusive Growth and Social Fairness for Ireland and Europe

The 2018 European Semester: Inclusive Growth and Social Fairness for Ireland and Europe IIEA Event, Chartered Accountants House

1 June 2018

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Thank you for the invitation to speak today. The Institute has a strong track record of providing a valuable platform for the exchange of ideas on the future of Europe. Just last year, the IIEA published a study assessing the impact of Country Specific Recommendations which I know will inform today’s seminar.

I welcome the IIEA’s initiative in teaming up with the European Commission today to continue to raise the profile of a renewed Social Europe.

I would also like to take the opportunity to welcome Director General Joost Korte to Ireland. Though only in his role since March, he has shown in our discussions to date to be an open and engaging voice on progressing social and employment policies.

Country Specific Recommendations as part of the Semester process have now been in use at EU level since 2011 and in Ireland since 2014.

The process has certainly evolved over the years, with changes to the annual timelines giving Member States a greater opportunity to discuss the Commission’s proposals. In addition, the Commission has come to understand that profound policy changes at national level can take significantly longer than the twelve to eighteen month window originally envisaged under the CSR process.

The CSR process is not a perfect one, with no Member State fully implementing each and every Recommendation. But the record does show that the Commission and Member States have learned lessons from the European Semester process and adjusted their approaches accordingly.

This has led to Ireland and other Member States committing to a cycle of continuous, ongoing reforms that are necessary to ensure the European Union remains relevant in people’s lives from a social perspective, while continuing to drive sustainable economic growth.

The Semester process has strong support in Ireland. The process benefits greatly from a two way dialogue with a view to shared analysis and understanding of the issues. We believe this dialogue with Member States is essential and will continue to improve both the quality and implementation of the Recommendations.

One aspect of the Semester process that tends to get overlooked by those looking in from the outside is the capacity of Member States to learn from each other – both our successes and our mistakes, particularly through peer reviews of social policies. Informal exchanges also take place on an ongoing basis. These exchanges of best practices and policy innovations may be hard to quantify and, therefore, easy for some to dismiss as inconsequential, but they are nonetheless a valuable learning tool for national administrations in an increasingly complicated social policy environment.

Last year's IIEA report on the CSRs recognised the increased emphasis in recent years on the CSRs relating to social and employment issues. Some commentators have suggested the early years of the Semester process involved the absorption of social policy into macroeconomic policy. I think it’s now fair to say we are witnessing a correction. This ties in to President Juncker’s renewed vigour in promoting a Social Europe where, as he has stated, “we have a common understanding of what is socially fair in our single market”.

I want to turn to the 2018 Country Specific Recommendations for Ireland.

Published on the 23 May, these Recommendations are being discussed and dissected by Member States officials and the Commission this very week.

I will be joining my ministerial colleagues in Luxembourg later this month at the EPSCO Ministerial meeting to debate and ultimately endorse all Member States employment and social CSRs.

Ireland’s economic recovery is mirrored in changes to CSRs from year to year. Four years ago, Ireland had just exited the Troika programme and joined the mainstream Semester process. The emphasis of the social and employment CSRs directed at Ireland then was on labour activation and the long-term unemployed. More recently, the emphasis has shifted to policy areas where changes would more indirectly enhance the labour market. Overall, Ireland broadly agrees with the tone and subsistence of the Commission proposals which highlight important issues that we recognise are priority areas for action.

These include childcare, housing and digital skills. While each are important policy goals in of themselves, their inclusion in the Semester process relates to how improvements in each can create the contexts for sustainable employment growth and social inclusion.

I welcome the recognition by the Commission as expressed in a recital to this year’s CSRs that Ireland’s “social protection and taxation systems are very effective in curtailing poverty and inequality”. Equally, I welcome challenges to existing Irish policies in areas such as social exclusion and childcare. This type of external scrutiny forces policymakers to justify and re-evaluate existing policies and this is no bad thing.

I would like to say a word here about the role of social partners in the process. Several fora exist in Ireland for regular consultations with the social partners, including the National Economic and Social Council and the Labour and Employer Economic Forum. In my own Department, the pre-Budget Forum and the Social Inclusion Forum are also opportunities to hear a broader spectrum of views. However, what I feel is far more constructive and useful is the pattern of Government engagement with the social partners on significant legislative changes that affect workplaces and employment relations. These specific consultations are useful means of incorporating detailed inputs into reforms as they are developed by Government.

Country Specific Recommendations do not, of course, exist in a policy vacuum.

In recent years, Member States and the Commission have worked together to raise the profile of social and employment initiatives that will ultimately improve the lives of EU citizens and remind Europeans that there is more to Europe than austerity and excessive deficit procedures.

The European Pillar of Social Rights has led the way on promoting a renewed Social Europe. Ireland supported the Pillar throughout the process, publishing its own comprehensive response to the Commission’s consultation and, I think it’s fair to say, playing a leading role at EU level at ensuring the Proclamation of the Pillar of the Social Rights was a document Member States could stand over and work with the Commission to implement.

I had the privilege of accompanying the Taoiseach to Gothenburg last November where the Proclamation on the Pillar of Social Rights was declared and political commitments were made on twenty distinct social and employment policy areas under three broad categories of equal opportunities and access to the labour market, fair working conditions and social protection and inclusion. The emphasis in Gothenburg was from learning from each other’s experiences and using the Proclamation as a guide for upward convergence.

The history of European Union is littered with proclamations that, once declared, are soon forgotten. But since last November, the emphasis has shifted very distinctly to implementation of the Pillar. The Taoiseach has discussed implementation with his EU counterparts at two European Councils since then, with the European Council stating last March that the Pillar “is a shared political commitment and the responsibility of the EU and its Member States.” The Commission has contributed with its Communication on monitoring the implementation of the European Pillar of Social Rights, reiterating its commitment to mainstream the priorities of the European Pillar of Social Rights in all EU policies.

Implementation of the Social Pillar is happening. While discussions are continuing at EU level in the coming weeks, the likelihood is that Ministers will agree General Approaches on some of the initiatives supporting the Pillar later this month at EPSCO, such as the Work-Life Balance Directive and the Directive on Transparent and predictable working conditions.

The Commission has also worked to incorporate the Social Pillar into the Semester process this year, including through the Country Specific Recommendations. Indeed, in several policy areas where the Commission has not brought forward proposals for a recommendation or a directive, it has chosen to advance the Pillar through specifically targeted CSRs identified as appropriate for Member States. Commissioner Thyssen has commented that this year’s focus on employment, social and educational issues is a very deliberate follow up to giving practical effect to the political declaration made last year in Gothenburg. Indeed, references to digital skills in Ireland’s 2018 CSRs have their origins in the Commission’s Social Scoreboard, an intrinsic part of measuring progress under the Pillar.

More recently, last March, the Commission launched the Social Fairness Package. Though distinct from the Social Pillar, the underlying justification is the same – to give new impetus to Social Europe. In addition to enhancing access to social protection, the Package proposes a new European Labour Authority which aims to streamline current initiatives and enhance cooperation between Member States. While discussions between Member States are still at an early stage, Ireland welcomes the proposal and looks forward to ensuring it becomes an instrument that helps ensure workers and employers who cross the EU’s internal borders are always treated in a fair and just manner.

All these fine initiatives and Country Specific Recommendations would not get very far without proper financing.

CSRs are overwhelmingly financed by Member States and the Commission has grown to understand that increasing funding and the capacity to absorb that funding can take time.

EU funding is also required to make Social Europe a meaningful concept. As negotiations get underway on the Multiannual Financial Framework, we fully realise that social policies must fight with competing policies to ensure adequate funding for the seven years post-2020. The Commission launched its proposal on the second of May, highlighting that “strengthening the social dimension of the Union, including through the full implementation of the European Pillar of Social Rights” is needed. I welcome the Commission’s ambition and will support Commissioner Thyssen and Director General Korte in their efforts to secure the necessary funding to underpin the development and maintenance of key social and employment policies at EU level.

Finally, before Director-General Korte speaks, I want to commend the Commission for its partnership with Member States in adopting a flexible approach to the Semester process, committing to incremental improvements in the CSR process and working with Ireland towards the common goal of inclusive growth and social fairness.

The integration of the European Pillar of Social Rights into the CSR process this year demonstrates a continuing capacity for innovation and adaption in the EU Semester. The years ahead include significant challenges in relation to EU budgets and social policy instruments, but a well-established commitment to continuous reforms and a firm vision laid down in the Social Pillar is an excellent basis for moving forward together.

Thank you.