# IMMC.EESC-2023-00563-AC.ENG.xhtml.EESC-2023-00563-00-00-AC-TRA-EN.docx

| OPINION |
| --- |
| European Economic and Social Committee |
| Social Progress Protocol |
| _____________ |
| Social Progress Protocol


  (Exploratory opinion at the request of the Spanish Presidency) |
| |
| SOC/756 |
| |
| Rapporteur: María del Carmen BARRERA CHAMORRO |
| Co-rapporteur: Diego DUTTO |

OPINION

European Economic and Social Committee

Social Progress Protocol

_____________

Social Progress Protocol

(Exploratory opinion at the request of the Spanish Presidency)

SOC/756

Rapporteur: María del Carmen BARRERA CHAMORRO

Co-rapporteur: Diego DUTTO

EN

Request from the Spanish Presidency of the Council

| Request from the Spanish Presidency of the Council | Letter, 8/12/2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| | [exploratory opinion] |
| Section responsible | Employment, Social Affairs and Citizenship |
| Adopted in section | 31/05/2023 |
| Adopted at plenary | 15/06/2023 |
| Plenary session No | 579 |
| Outcome of vote
  (for/against/abstentions) | 132/102/07 |

Request from the Spanish Presidency of the Council

Letter, 8/12/2022

Letter, 8/12/2022

Legal basis

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Article 304 of the Treaty on the Functioning of the European Union

[exploratory opinion]

[exploratory opinion]

Section responsible

Section responsible

Employment, Social Affairs and Citizenship

Employment, Social Affairs and Citizenship

Adopted in section

Adopted in section

31/05/2023

31/05/2023

Adopted at plenary

Adopted at plenary

15/06/2023

15/06/2023

Plenary session No

Plenary session No

579

579

Outcome of vote
  (for/against/abstentions)

Outcome of vote
  (for/against/abstentions)

132/102/07

132/102/07

1.Conclusions and recommendations

1.

Conclusions and recommendations

1.1The EESC points out that, according to the Treaties, achieving a "highly competitive social market economy" (Article 3(3) TEU) requires the promotion of the single market and social policy under the so-called "horizontal social clause" (Article 9 TFEU). According to the latter, each and every EU policy and action plan should be designed and implemented in a way that promotes inclusive labour markets as well as adequate social protection systems.

1.1

The EESC points out that, according to the Treaties, achieving a "highly competitive social market economy" (Article 3(3) TEU) requires the promotion of the single market and social policy under the so-called "horizontal social clause" (Article 9 TFEU). According to the latter, each and every EU policy and action plan should be designed and implemented in a way that promotes inclusive labour markets as well as adequate social protection systems.

1.2The EESC agrees with the proposal in the final report of the Conference on the Future of Europe (CoFoE, May 2022) to include, with a view to advancing the social market economy
  1
  , a call for the EU, the Member States and the social partners to, among other things, introduce measures to ensure the full implementation of the European Pillar of Social Rights (EPSR, November 2017) and its action plan (March 2021), especially the most relevant objectives for the 2030 Agenda, at EU, national and regional level, by adding a social progress protocol (SPP) to the Treaties.

1.2

The EESC agrees with the proposal in the final report of the Conference on the Future of Europe (CoFoE, May 2022) to include, with a view to advancing the social market economy

1

, a call for the EU, the Member States and the social partners to, among other things, introduce measures to ensure the full implementation of the European Pillar of Social Rights (EPSR, November 2017) and its action plan (March 2021), especially the most relevant objectives for the 2030 Agenda, at EU, national and regional level, by adding a social progress protocol (SPP) to the Treaties.

1.3The EESC welcomes the fact that, through the SPP, the CoFoE promotes better guarantees ensuring that social rights are effectively protected in the event of conflict with economic freedoms (see measure 5, proposal 13), avoiding any backsliding with respect to those rights (measure 2, proposal 14).

1.3

The EESC welcomes the fact that, through the SPP, the CoFoE promotes better guarantees ensuring that social rights are effectively protected in the event of conflict with economic freedoms (see measure 5, proposal 13), avoiding any backsliding with respect to those rights (measure 2, proposal 14).

1.4The EESC welcomes the European Commission's proposal to open up the possibility of Treaty reform, as endorsed in the latest State of the Union address, and, in line with the European Parliament's proposal, considers it appropriate to include the SPP among the aspects to be reformed. The EESC believes that the CoFoE conclusions provide an appropriate roadmap for implementing this reform.

1.4

The EESC welcomes the European Commission's proposal to open up the possibility of Treaty reform, as endorsed in the latest State of the Union address, and, in line with the European Parliament's proposal, considers it appropriate to include the SPP among the aspects to be reformed. The EESC believes that the CoFoE conclusions provide an appropriate roadmap for implementing this reform.

1.5The aim of the SPP would be threefold:

1.5

The aim of the SPP would be threefold:

1)to ensure that, in the event of conflict, fundamental and social rights take priority over economic freedoms and other EU policies;

1)

to ensure that, in the event of conflict, fundamental and social rights take priority over economic freedoms and other EU policies;

2)to guarantee respect for the autonomy of the social partners and the proper functioning of national social dialogue and industrial relations systems; and

2)

to guarantee respect for the autonomy of the social partners and the proper functioning of national social dialogue and industrial relations systems; and

3)to ensure social progress by ensuring the promotion and protection of the highest standards of social rights, whether derived from national, European or international law, as well as preventing any backsliding or circumvention of that law.

3)

to ensure social progress by ensuring the promotion and protection of the highest standards of social rights, whether derived from national, European or international law, as well as preventing any backsliding or circumvention of that law.

1.6The EESC considers the Spanish Presidency of the Council of the EU a great opportunity to push forward this proposal and urges the EU institutions, in the framework of European social dialogue, to make progress with respect to this process.

1.7To this end, the EESC encourages the Spanish Presidency to promote, following appropriate analysis by high-level experts, including the social partners, a Council of Social Affairs Ministers that would agree on a joint proposal and enable a specific EU summit to be held to adopt it, where appropriate. The importance of this issue calls for maximum institutional involvement across the various levels of EU competence.

1.8The EESC appreciates that, while the proposal from the CoFoE and the European Parliament would have to be introduced either in the form of a protocol (added to the TFEU) or in the form of a cross-cutting clause (reform of Article 9 TFEU), there are other policy instruments that could contribute to the aims of the SPP. Furthermore, the EESC considers this SPP to be essential in order to strengthen the autonomy of the social partners, thereby maintaining an inseparable link between, on the one hand, ensuring the proper functioning of the single market and economic freedoms, including fair competition between the Member States and, on the other hand, respecting and promoting collective social rights.

1.9The EESC is convinced that including the SPP will enable the EU to be a leader when it comes to economic growth, promoting the well-being of as many of its citizens as possible, which will also lead to the creation and development of more robust and sustainable businesses. To this end, the SPP should make it clear that economic freedoms in the single market do not mean prohibiting restrictions, but provide for equal treatment of economic operators as a means of ensuring fair competition and a level playing field in any given market.

1.10The EESC regrets that the EU has not yet fulfilled its obligation under the Lisbon Treaty to accede to the European Convention on Human Rights, as laid down in Article 6(2) TEU. This accession is key to subjecting the EU legal order to external oversight of human rights, in the same way as any legal order based on democracy and the rule of law. To this end, the EESC also recommends that the EU accede to the Council of Europe's European Social Charter, in order to promote a harmonious coexistence between EU law and Council of Europe law in the social sphere.

2.Background, purpose and gist of the opinion

2.1The EESC notes that, in line with the history and culture of the EU, as codified in its Treaties, one of the EU's main contributions to the advancement of humanity and peace is its "European social model". The latter refers to an economic paradigm according to which maximising economic performance is inextricably linked to well-being and social progress. Achieving this "highly competitive social market economy" (Article 3(3) TEU), which is now constitutional in nature, is not intended as an end in itself, but rather, and above all, as an instrument of well-being for all European citizens (Articles 9 and 151 TFEU).

2.2The EESC also considers it necessary to draw attention to the cross-cutting nature of this close link between promoting the single market and social policy, in line with the "horizontal social clause" in Article 9 TFEU. According to the latter, each and every EU policy and action plan should be designed and implemented in a way that promotes inclusive labour markets as well as adequate social protection systems.

2.3The social market economy is based on two distinct but complementary pillars: firstly, the enforcement of competition and, secondly, social policy measures to ensure social justice by correcting negative outcomes and strengthening social protection
  2
  . However, the EESC also notes institutional, legal and policy constraints when it comes to ensuring this appropriate balance between the economic dimension of the EU (priority of economic freedoms, in particular freedom of competition) and the social dimension (effective guarantee of fundamental social rights and prohibition of social dumping).

2.4In this context, and in order to address this imbalance, the aim of the SPP would be threefold:

1)to ensure that, in the event of conflict, fundamental and social rights take priority over economic freedoms and other EU policies;

2)to guarantee respect for the autonomy of the social partners and the proper functioning of national social dialogue and industrial relations systems; and

3)to ensure social progress, ensuring the promotion and protection of the highest standards of social rights, whether derived from national, European or international law, as well as preventing backsliding or the circumvention of these rights.

2.5Moreover, the austerity policies adopted in the EU and in the Member States via the "Troika" method (also criticised by the European Parliament)
  3
  in order to tackle the Global Financial Crisis renewed this risk of social rights being eroded, with financial stability and economic growth being prioritised over social progress. This situation contrasts with the principle of social progress set out in the European Social Charter. This was reflected in the Council of Europe's condemnation of several EU countries for implementing these austerity policies and laws to the detriment of social rights. In contrast, the CJEU did not find any incompatibility with the social clause.

2.6Cases of conflict between economic freedoms and other EU policies, on the one hand, and social rights, on the other, raise important questions concerning the risk of inconsistency between the EU legal order and EU and international human rights instruments and standards. In such situations, the Member States find themselves faced with conflicting obligations in their efforts to comply with EU law, on the one hand, and their commitments under applicable EU and international human rights instruments, on the other. The SPP seeks to resolve this dilemma by clarifying that, where there is a conflict, the economic freedoms guaranteed under the EU Treaties are not a fundamental right to counterbalance fundamental human rights, including fundamental social and labour rights. This need for a balance between economic and social interests that respects human rights in cases of conflict is essential to ensure that the principle of primacy of EU law is not applied if it would violate EU and international human rights standards.

2.7The conclusions and recommendations of the final report of the Conference on the Future of Europe (CoFoE, May 2022) include, among the 49 proposals and 300 measures, that of improving the functioning of markets in order to ensure socially fairer living and working conditions, in particular for young people and vulnerable groups (proposals 13 and 14
  4
  ).

The EESC welcomes the fact that the CoFoE report includes, to this end, a call for the EU, the Member States and the social partners to, among other things, introduce measures to ensure the full implementation of the European Pillar of Social Rights, adopted in November 2017, and its action plan of March 2021, in particular the objectives most relevant to the 2030 Agenda, at EU, national and regional level, by adding an SPP to the Treaties. It is proposed that this include more effective safeguards to ensure that social rights are fully protected in cases where they conflict with economic freedoms (see measure 5, proposal 13), avoiding any backsliding with respect to those rights (measure 2, proposal 14).

2.8In view of the current and recent crises, and in order to fulfil the proposals and measures set out in the aforementioned CoFoE report, the European Parliament adopted a resolution in June 2022 calling on the European Council to initiate the process of revising the EU's founding texts. The EESC welcomes the fact that the proposed reforms include ensuring that the European Pillar of Social Rights is fully implemented, and that social progress linked to a Social Progress Protocol is incorporated into the Treaties, without prejudice to the respective competences and the principles of subsidiarity and proportionality. The EESC notes that the European Parliament also put forward similar calls for an SPP in its December 2020 resolution on a strong social Europe for just transitions.

2.9The EESC is drawing up this opinion following an express request from the incoming Spanish Presidency of the Council of the EU (second half of 2023) for an exploratory opinion setting out its position on this SPP.

3.European context and institutional, legal and scientific input on the value of adding a social progress protocol to the Treaties

3.1The EESC welcomes the willingness of the three EU institutions to focus their attention on the follow-up to the CoFoE and its proposals, in line with their respective competences under the EU Treaties. The EESC notes that active steps are being taken towards implementing the proposals of the Conference in order to improve citizens' daily lives in various areas, including the promotion of a socially fair and environmentally sustainable competitive economy (CoFoE thematic area 9).

3.2The EESC also points out that the report on the final outcome of the CoFoE (November 2022
  5
  ) contains an updated preliminary analysis of the proposals and measures, drawn up by the General Secretariat of the Council. It is clear from this analysis that:

-the General Secretariat of the Council understands the balance between social rights and the four economic freedoms to be already secure (e.g. Articles 9, 151 and 153 TFEU);

-while not rejecting the desirability of exploring the possibilities already provided for within the scope of the Treaties in order to ensure the social objectives (e.g. Article 153), the Council considers it unnecessary to restructure the Treaties in order to create a new SPP;

-the Commission has announced that it intends to propose a Council recommendation on the development of framework conditions for the social economy in the second quarter of 2023;

3.3The EESC notes that the CoFoE calls for more ambitious and assertive action by the EU, the Member States and the social partners in order to improve European citizens' well-being, in the framework of a renewed social contract, and ensure the continuous improvement of living and working conditions. To this end, the current regulatory framework allows for more committed social policies, while according to the CoFoE Final Report
  6
  other measures require Treaty reform.

3.4Similarly, giving the Charter of Fundamental Rights of the EU (CFREU) the same legal value as the Treaties, despite not being incorporated into them, improves the constitutional balance between social rights and economic freedoms, without the former being exceptions to the latter. Likewise, as stated in its preamble, the Charter of Fundamental Rights of the European Union (CFREU) reaffirms the rights derived in particular from the constitutional traditions and international obligations common to the Member States, including the European Convention on Human Rights and the Council of Europe's Social Charter. The constitutional balance improved with the entry into force of the Lisbon Treaty, which gave the CFREU the same legal value as the Treaties. However, experience shows that, in the event of conflict, the trend persists whereby economic freedoms prevail over social rights.

3.5The EESC is also aware of the positive development of EU law and CJEU case-law towards the prohibition of social dumping, in order to ensure a model of economic competition that is not only free but also fair. The judgment of the CJEU (Grand Chamber) of 8 December 2020 (Case C-620/18) is a clear example of the need to ensure a level playing field in the exercise of economic freedoms (in the case of providing services). However, experience shows that, in the event of conflict, the trend persists whereby economic freedoms prevail over social rights.

4.General comments

4.1The EESC notes that, while binding and non-binding minimum standards at European level do exist, in order to advance the implementation of the EPSR, promoting and guaranteeing a truly competitive and sustainable social market economy requires an SPP in order to reinforce the strengths of our European social market economy system, while eliminating weaknesses and adapting it to meet the challenges ahead. The EESC believes that the CoFoE conclusions provide an appropriate roadmap through which to promote it. It therefore calls on the European institutions to take the necessary steps to ensure that this CoFoE proposal is implemented.

4.2The EESC believes that, while this proposal from the CoFoE and the European Parliament would have to be introduced either in the form of a protocol (added to the TFEU) or in the form of a cross-cutting clause (reform of Article 9 TFEU), there are other policy instruments that could contribute to the aims of the SPP.

4.3Furthermore, the EESC thinks that an SPP – as a fundamental aspect of social progress – would safeguard and strengthen the autonomy of the social partners, thereby establishing a clear link between, on the one hand, ensuring the proper functioning of the single market and economic freedoms, including fair competition between the Member States and, on the other hand, respecting and promoting collective social rights. This guarantee must always be understood in accordance with the autonomy of the social partners and the proper functioning of national systems of social dialogue and industrial relations.

4.4The EESC considers it necessary, and not simply desirable, to guarantee, within this SPP, a principle of non-regression of social standards, as already recognised in the law of the European Social Charter and in the case-law of the European Committee of Social Rights, albeit not in EU law or by the CJEU.

4.5The EESC sees this protocol as a key component of a new EU economic and governance model, which should be based on going beyond GDP and building socially just (inclusive) and sustainable well-being in Europe.

5.Specific comments

5.1The EESC is convinced that including the SPP will allow the EU to converge on progress as well as on economic growth, promoting the well-being of as many of its citizens as possible (preserving the European social model), which will also lead to the creation and development of more robust and sustainable businesses. To this end, the SPP would also contribute significantly to achieving the EU's Sustainable Development Goals under the UN 2030 Agenda.

5.2The EESC believes that the EU should have sufficient competence to act, if necessary, to ensure the effectiveness of social progress, and in analogy with Protocol 27 on the single market and competition, in accordance with the provisions of the Treaties, including Article 352 TFEU.

5.3The EESC recommends that the EU fulfil its obligation under the Lisbon Treaty to accede to the European Convention on Human Rights. The EU must also accede to the Council of Europe's European Social Charter, in order to promote a harmonious coexistence between EU law and Council of Europe law in the social sphere.

Brussels, 15 June 2023

Oliver Röpke

The president of the European Economic and Social Committee

*

*
     *

N.B.: Appendix overleaf.

APPENDIX to the OPINION 
  of the

  European Economic and Social Committee

The following amendment, which received at least a quarter of the votes cast, was rejected in the course of the debate (Rule 74(3) of the Rules of Procedure):

AMENDMENT 1

| AMENDMENT 1



  SOC/756


  Social Progress Protocol



  Replace the whole opinion presented by the SOC section with the following text (explanation/reason at the end of the document): | |
| --- | --- |

SOC/756

Social Progress Protocol

Replace the whole opinion presented by the SOC section with the following text (explanation/reason at the end of the document):

Amendment

| Amendment |
| --- |

| 1.Conclusions and recommendations



  1.1The EESC notes that opinions differ among Member States and stakeholders as to whether a Treaty reform to add a Social Progress Protocol is appropriate or necessary. As indicated in the Council's preliminary technical assessment of the report on the final outcome of the CoFoE, the balance between social rights and the four economic freedoms is secured in the Treaties. The EESC believes it is important to keep this balance in the Treaties, without creating a hierarchy between social rights and economic freedoms. Furthermore, giving precedence to fundamental social rights over internal market economic freedoms by adding the Social Progress Protocol to the Treaties aims to change the fundamental principles that the EU is founded on and also amounts to an attack on the foundation of our economy, which has brought prosperity and wellbeing to the EU and its Member States. Thus, such a protocol would risk undermining the very basis for social progress.



  1.2Just as there are numerous limitations on economic freedoms, there can also be limits on the exercise of fundamental social rights such as the right to take collective action. According to the case-law of the Court of Justice of the European Union (CJEU), a restriction on economic freedoms can be accepted only if it pursues a legitimate aim compatible with the Treaties and is justified by overriding reasons of public interest. Even in this case, it still needs to be suitable for achieving the objective pursued and must not go beyond what is necessary in order to attain that objective. This can be guaranteed by applying the existing principles of proportionality and subsidiarity at EU level.



  1.3The EESC considers that the employment and social policy objectives should continue to be addressed within the current Treaties and the existing legislative and policy framework at EU and national level, while fully respecting the autonomy of the social partners; the Committee is at the disposal of the upcoming Spanish Presidency to contribute to this process.



  1.4Rather than the EU coming up with a Social Progress Protocol which would distort the balance between economic freedoms and social rights and interfere with well-defined EU and national competences, it is important to progress towards a shared understanding of what constitutes the added value of the EU in terms of employment and social policies.



  1.5It is essential for the EU to continue developing in a way that addresses economic and social challenges in an integrated manner. As already stated by the EESC, competitiveness and higher productivity based on skills and knowledge represent a sound recipe for maintaining the well-being of European societies. Economic growth and a well-functioning internal market are an important element for strengthening the social dimension of the EU. We need to reinforce the strengths of our European social market economy system while removing its weaknesses, and thus adapt it to face the challenges ahead
  7
  .



  1.6Social policy decisions should be taken as close as possible to the citizens of the EU and with full respect for the competences shared between the EU, the Member States and the social partners. This is what is needed to achieve positive outcomes for citizens, workers, businesses and society as whole. Well-articulated and well-balanced policy debates on the economic and social dimensions of the EU should be secured in future. The fact that economic development in the Member States is heterogeneous should also be better accounted for in European debates on the social dimension, to allow for realistic expectations and progress in terms of European economic and social convergence. It also means that measures leading to a regression of labour and social standards might sometimes be necessary in the short term, to allow governments to avoid even worse consequences of serious economic and fiscal downturns at national level. The assessment of the need for such measures should continue to be at the discretion of the national authorities.



  1.7For the reasons described above, the proposal to revise the Treaties in order to create a Social Progress Protocol is unacceptable and is not supported by the EESC Employers' Group.



  2.Background, EU and national context and institutional and legal framework



  2.1The EESC has prepared opinion SOC/756 following a request for an exploratory opinion by the upcoming Spanish Presidency of the EU Council, in order to provide responses to the questions presented in that request
  8
  .



  2.2The upcoming Spanish Presidency's request refers to the European Trade Union Confederation (ETUC) proposal for a Social Progress Protocol
  9
  , in the context of the outcomes of the Conference on the Future of Europe
  10
  , and the European Parliament resolution of 9 June 2022 on the call for a Convention for the revision of the Treaties
  11
  , which calls on the Council, amongst other things, "to adapt the competences conferred on the Union in the Treaties [...] in social and economic policies; to ensure the European Pillar of Social Rights is fully implemented and to incorporate social progress in Article 9 TFEU linked to a Social Progress Protocol into the Treaties".



  2.3The ETUC proposal
  12
  for a Social Progress Protocol contains four main provisions to be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union. It establishes the principles (Article 1), the definition of social progress and its implementation (Article 2), the relation between fundamental social rights and other Union policies (Article 3) and the EU competences (Article 4) to ensure social progress.



  2.4According to the ETUC proposal:



  -"Nothing in the Treaties, and in particular neither economic freedoms nor internal market, competition or other Union policy measures, shall have priority over fundamental social rights and social progress as defined in Article 2 of this Protocol. In case of conflict, fundamental social rights shall take precedence." (Article 3)


  -"No Union policy measure, in particular in relation to the economic freedoms, shall be interpreted in such a way as restricting or adversely affecting the exercise of fundamental social rights as recognised in the Member States, by Union law as well as by any other international instrument, in particular the ILO Conventions and the Council of Europe European Social Charter." (Article 3)



  2.5The EESC notes that ETUC's initial proposal for a Social Progress Protocol in 2008 was developed as a result of CJEU rulings in the Viking, Laval, Rüffert and Luxembourg cases. It also notes that, in 2010, the European cross-industry social partners issued a report on joint work of the European social partners on those rulings, in which they agreed that economic freedoms and fundamental social rights interact within their own field of competence. They have different views on the concrete implications of this interaction and especially what this would mean in terms of setting limitations on the right to take collective action and/or the freedom of establishment and the freedom to provide services
  13
  .



  2.6The EESC also draws attention to the failure of the Commission's proposal for a Regulation COM(2012) 130 ("Monti II")
  14
  and the strong reaction this initiative provoked from national parliaments in 2012
  15
  : they defended national competences, in line with the principle of subsidiarity, which shows the continued validity of Article 153(5) TFEU. That article makes it clear that the EU has no competence on the right of association, the right to strike or the right to impose lock-outs.



  2.7In the context described above, the EESC notes that views differ among Member States and stakeholders as to whether a Treaty reform to add a Social Progress Protocol is appropriate or necessary. This has been reflected for instance by the Danish Minister of Justice Peter Hummelgaard: "I have on numerous occasions in meetings with my European colleagues and the Commission highlighted the government's long-term vision to introduce a social protocol. The introduction of a social protocol in the treaties requires a treaty change. The government does not think that the time is ripe for a drawn-out treaty change process, but instead we want to deliver concrete results on the challenges faced by European citizens and companies"
  16
  .



  2.8The EESC points out that the issues that emerged in the context of the Viking, Laval, and Rüffert rulings in 2007-2008 were resolved through the revision of the Posting of Workers Directive in 2018. As the revised Posting of Workers Directive includes the principle of equal pay for equal work at the same location, in a situation similar to those referred to in the Viking and Laval judgments it would be legitimate to have recourse to the right of workers to take collective action to seek equal pay with local workers.



  2.9The request to include a Social Progress Protocol was once again put forward in the context of the Conference on the Future of Europe. In this respect, the EESC highlights the view, set out in the Council's preliminary technical assessment of the CoFoE, that the balance between social rights and the four economic freedoms is already secured (e.g. Article 3 TEU, Articles 9, 151 and 153 TFEU). The EESC fully shares this view expressed in the Council's preliminary technical assessment and does not consider it necessary to revise the Treaties in order to create a Social Progress Protocol.



  2.10The EESC regards this opinion as an opportunity to reconfirm what is stated in Article 3(3) TEU, i.e. that the EU shall establish an internal market and it shall work for the sustainable development of Europe based on balanced economic growth and, "a highly competitive social market economy, aiming at full employment and social progress".



  2.11The proposal to incorporate the Social Progress Protocol in the Treaties would change the nature and functioning of our EU social market economy by introducing the primacy of social rights over economic freedoms. By contrast, the EU Charter of Fundamental Rights has followed the right approach by protecting social rights and economic freedoms as part of the same instrument of the same legal value. Giving general priority to social rights over economic freedoms would be as wrong as giving general priority to economic freedoms.



  2.12The EESC underlines the importance of keeping the existing balance in the Treaties between social rights and economic freedoms, without creating a hierarchy between them. As stated for example in the Laval case
  17
  , while the protection of fundamental rights is a legitimate interest which, in principle, could justify a restriction of fundamental freedoms guaranteed by the Treaty, such as the freedom of establishment or freedom to provide services, the exercise of the fundamental rights does not fall outside the scope of the provisions of the Treaties, and such exercise must be reconciled in accordance with the principle of proportionality
  18
  .



  2.13Giving precedence to fundamental social rights over the internal market economic freedoms by adding the Social Progress Protocol to the Treaties aims to change the fundamental principles on which the EU is founded and also amounts to an attack on the foundation of our economy, which has brought prosperity and wellbeing to the EU and its Member States. Thus, such a protocol would risk undermining the very basis for social progress. Rather than the EU starting the process with the intention of coming up with a Social Progress Protocol which would distort the balance between economic freedoms and social rights, and interfere with well-defined EU and national competences, it is important to progress towards a shared understanding of what constitutes the added value of EU in terms of employment and social policies.



  2.14The EESC has already acknowledged that the European economic and social model is based on the shared understanding of the importance of increasing employment, social progress and productivity, as the underlying key factors for sustainable economic growth, which benefits everyone in a fair manner
  19
  . The employment and social policy objectives should continue to be addressed within the current Treaties and the existing legislative and policy framework at EU and national level while fully respecting the autonomy of the social partners.



  2.15It is essential for the EU to continue developing in a way that addresses economic and social challenges in an integrated way. This is what is needed to achieve positive outcomes for citizens, workers, businesses and society as whole. Well-articulated and well-balanced policy debates on the economic and social dimensions of the EU should be secured in future. The fact that economic development in the Member States is heterogeneous should also be better accounted for in European debates on the social dimension, to allow for realistic expectations and progress in terms of European economic and social convergence.



  2.16While striving to achieve social progress, we must also admit that there are situations where measures must be taken to address economic and fiscal situations at national level in order to prevent serious distortions on the labour market and economic development in the medium term. This may in some cases lead to a regression of social rights. Although lowering level of social standards is not the main goal, national governments sometimes need to be able to make use of this instrument in order to avoid even worse consequences of economic and fiscal downturns.



  2.17Rather than trying to solve labour market challenges across the board at European level, the EU's primary role is to provide information, possible solutions, incentives and know-how to help Member States and social partners to design, implement and evaluate policies that really address the structural labour market challenges they face, in a way that is understood by and acceptable to their societies.



  2.18Social policy decisions should be taken as close as possible to the citizens of the Union and with full respect for the competences of the Member States and social partners. On the labour market in particular, many decisions are best taken by or as close as possible to the employer and employees concerned.



  2.19In this respect, the recently published EU social dialogue initiative
  20
  is a step in the right direction, as it can pave the way to stronger social partners' organisations where this is needed in the EU, and can create more space for social partners to negotiate autonomously at the appropriate levels in the Member States with the support of their national governments.



  2.20Furthermore, it is important to adapt to the diverse ways in which Member States prioritise and shape social policy interventions in light of deeply rooted constitutional setups, political choices, policy approaches and cultural traditions in the Member States. That is why the subsidiarity principle, as enshrined in the Treaty, should remain at the centre of policy orientation.



  2.21As part of this, it is essential to recognise that the EU has a different nature than international organisations such as the Council of Europe and the International Labour Organisation. Therefore, it is not a relevant benchmark to use the frameworks deriving from these international organisations as a basis for implementation in the EU. The EU should come up with policies that are well in line with its own specific nature. At the same time, as stated in Article 6(3) TEU, fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union's law. |
| --- |

1.Conclusions and recommendations

1.1The EESC notes that opinions differ among Member States and stakeholders as to whether a Treaty reform to add a Social Progress Protocol is appropriate or necessary. As indicated in the Council's preliminary technical assessment of the report on the final outcome of the CoFoE, the balance between social rights and the four economic freedoms is secured in the Treaties. The EESC believes it is important to keep this balance in the Treaties, without creating a hierarchy between social rights and economic freedoms. Furthermore, giving precedence to fundamental social rights over internal market economic freedoms by adding the Social Progress Protocol to the Treaties aims to change the fundamental principles that the EU is founded on and also amounts to an attack on the foundation of our economy, which has brought prosperity and wellbeing to the EU and its Member States. Thus, such a protocol would risk undermining the very basis for social progress.

1.2Just as there are numerous limitations on economic freedoms, there can also be limits on the exercise of fundamental social rights such as the right to take collective action. According to the case-law of the Court of Justice of the European Union (CJEU), a restriction on economic freedoms can be accepted only if it pursues a legitimate aim compatible with the Treaties and is justified by overriding reasons of public interest. Even in this case, it still needs to be suitable for achieving the objective pursued and must not go beyond what is necessary in order to attain that objective. This can be guaranteed by applying the existing principles of proportionality and subsidiarity at EU level.

1.3The EESC considers that the employment and social policy objectives should continue to be addressed within the current Treaties and the existing legislative and policy framework at EU and national level, while fully respecting the autonomy of the social partners; the Committee is at the disposal of the upcoming Spanish Presidency to contribute to this process.

1.4Rather than the EU coming up with a Social Progress Protocol which would distort the balance between economic freedoms and social rights and interfere with well-defined EU and national competences, it is important to progress towards a shared understanding of what constitutes the added value of the EU in terms of employment and social policies.

1.5It is essential for the EU to continue developing in a way that addresses economic and social challenges in an integrated manner. As already stated by the EESC, competitiveness and higher productivity based on skills and knowledge represent a sound recipe for maintaining the well-being of European societies. Economic growth and a well-functioning internal market are an important element for strengthening the social dimension of the EU. We need to reinforce the strengths of our European social market economy system while removing its weaknesses, and thus adapt it to face the challenges ahead
  7
  .

1.6Social policy decisions should be taken as close as possible to the citizens of the EU and with full respect for the competences shared between the EU, the Member States and the social partners. This is what is needed to achieve positive outcomes for citizens, workers, businesses and society as whole. Well-articulated and well-balanced policy debates on the economic and social dimensions of the EU should be secured in future. The fact that economic development in the Member States is heterogeneous should also be better accounted for in European debates on the social dimension, to allow for realistic expectations and progress in terms of European economic and social convergence. It also means that measures leading to a regression of labour and social standards might sometimes be necessary in the short term, to allow governments to avoid even worse consequences of serious economic and fiscal downturns at national level. The assessment of the need for such measures should continue to be at the discretion of the national authorities.

1.7For the reasons described above, the proposal to revise the Treaties in order to create a Social Progress Protocol is unacceptable and is not supported by the EESC Employers' Group.

2.Background, EU and national context and institutional and legal framework

2.1The EESC has prepared opinion SOC/756 following a request for an exploratory opinion by the upcoming Spanish Presidency of the EU Council, in order to provide responses to the questions presented in that request
  8
  .

2.2The upcoming Spanish Presidency's request refers to the European Trade Union Confederation (ETUC) proposal for a Social Progress Protocol
  9
  , in the context of the outcomes of the Conference on the Future of Europe
  10
  , and the European Parliament resolution of 9 June 2022 on the call for a Convention for the revision of the Treaties
  11
  , which calls on the Council, amongst other things, "to adapt the competences conferred on the Union in the Treaties [...] in social and economic policies; to ensure the European Pillar of Social Rights is fully implemented and to incorporate social progress in Article 9 TFEU linked to a Social Progress Protocol into the Treaties".

2.3The ETUC proposal
  12
  for a Social Progress Protocol contains four main provisions to be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union. It establishes the principles (Article 1), the definition of social progress and its implementation (Article 2), the relation between fundamental social rights and other Union policies (Article 3) and the EU competences (Article 4) to ensure social progress.

2.4According to the ETUC proposal:

-"Nothing in the Treaties, and in particular neither economic freedoms nor internal market, competition or other Union policy measures, shall have priority over fundamental social rights and social progress as defined in Article 2 of this Protocol. In case of conflict, fundamental social rights shall take precedence." (Article 3)

-"No Union policy measure, in particular in relation to the economic freedoms, shall be interpreted in such a way as restricting or adversely affecting the exercise of fundamental social rights as recognised in the Member States, by Union law as well as by any other international instrument, in particular the ILO Conventions and the Council of Europe European Social Charter." (Article 3)

2.5The EESC notes that ETUC's initial proposal for a Social Progress Protocol in 2008 was developed as a result of CJEU rulings in the Viking, Laval, Rüffert and Luxembourg cases. It also notes that, in 2010, the European cross-industry social partners issued a report on joint work of the European social partners on those rulings, in which they agreed that economic freedoms and fundamental social rights interact within their own field of competence. They have different views on the concrete implications of this interaction and especially what this would mean in terms of setting limitations on the right to take collective action and/or the freedom of establishment and the freedom to provide services
  13
  .

2.6The EESC also draws attention to the failure of the Commission's proposal for a Regulation COM(2012) 130 ("Monti II")
  14
  and the strong reaction this initiative provoked from national parliaments in 2012
  15
  : they defended national competences, in line with the principle of subsidiarity, which shows the continued validity of Article 153(5) TFEU. That article makes it clear that the EU has no competence on the right of association, the right to strike or the right to impose lock-outs.

2.7In the context described above, the EESC notes that views differ among Member States and stakeholders as to whether a Treaty reform to add a Social Progress Protocol is appropriate or necessary. This has been reflected for instance by the Danish Minister of Justice Peter Hummelgaard: "I have on numerous occasions in meetings with my European colleagues and the Commission highlighted the government's long-term vision to introduce a social protocol. The introduction of a social protocol in the treaties requires a treaty change. The government does not think that the time is ripe for a drawn-out treaty change process, but instead we want to deliver concrete results on the challenges faced by European citizens and companies"
  16
  .

2.8The EESC points out that the issues that emerged in the context of the Viking, Laval, and Rüffert rulings in 2007-2008 were resolved through the revision of the Posting of Workers Directive in 2018. As the revised Posting of Workers Directive includes the principle of equal pay for equal work at the same location, in a situation similar to those referred to in the Viking and Laval judgments it would be legitimate to have recourse to the right of workers to take collective action to seek equal pay with local workers.

2.9The request to include a Social Progress Protocol was once again put forward in the context of the Conference on the Future of Europe. In this respect, the EESC highlights the view, set out in the Council's preliminary technical assessment of the CoFoE, that the balance between social rights and the four economic freedoms is already secured (e.g. Article 3 TEU, Articles 9, 151 and 153 TFEU). The EESC fully shares this view expressed in the Council's preliminary technical assessment and does not consider it necessary to revise the Treaties in order to create a Social Progress Protocol.

2.10The EESC regards this opinion as an opportunity to reconfirm what is stated in Article 3(3) TEU, i.e. that the EU shall establish an internal market and it shall work for the sustainable development of Europe based on balanced economic growth and, "a highly competitive social market economy, aiming at full employment and social progress".

2.11The proposal to incorporate the Social Progress Protocol in the Treaties would change the nature and functioning of our EU social market economy by introducing the primacy of social rights over economic freedoms. By contrast, the EU Charter of Fundamental Rights has followed the right approach by protecting social rights and economic freedoms as part of the same instrument of the same legal value. Giving general priority to social rights over economic freedoms would be as wrong as giving general priority to economic freedoms.

2.12The EESC underlines the importance of keeping the existing balance in the Treaties between social rights and economic freedoms, without creating a hierarchy between them. As stated for example in the Laval case
  17
  , while the protection of fundamental rights is a legitimate interest which, in principle, could justify a restriction of fundamental freedoms guaranteed by the Treaty, such as the freedom of establishment or freedom to provide services, the exercise of the fundamental rights does not fall outside the scope of the provisions of the Treaties, and such exercise must be reconciled in accordance with the principle of proportionality
  18
  .

2.13Giving precedence to fundamental social rights over the internal market economic freedoms by adding the Social Progress Protocol to the Treaties aims to change the fundamental principles on which the EU is founded and also amounts to an attack on the foundation of our economy, which has brought prosperity and wellbeing to the EU and its Member States. Thus, such a protocol would risk undermining the very basis for social progress. Rather than the EU starting the process with the intention of coming up with a Social Progress Protocol which would distort the balance between economic freedoms and social rights, and interfere with well-defined EU and national competences, it is important to progress towards a shared understanding of what constitutes the added value of EU in terms of employment and social policies.

2.14The EESC has already acknowledged that the European economic and social model is based on the shared understanding of the importance of increasing employment, social progress and productivity, as the underlying key factors for sustainable economic growth, which benefits everyone in a fair manner
  19
  . The employment and social policy objectives should continue to be addressed within the current Treaties and the existing legislative and policy framework at EU and national level while fully respecting the autonomy of the social partners.

2.15It is essential for the EU to continue developing in a way that addresses economic and social challenges in an integrated way. This is what is needed to achieve positive outcomes for citizens, workers, businesses and society as whole. Well-articulated and well-balanced policy debates on the economic and social dimensions of the EU should be secured in future. The fact that economic development in the Member States is heterogeneous should also be better accounted for in European debates on the social dimension, to allow for realistic expectations and progress in terms of European economic and social convergence.

2.16While striving to achieve social progress, we must also admit that there are situations where measures must be taken to address economic and fiscal situations at national level in order to prevent serious distortions on the labour market and economic development in the medium term. This may in some cases lead to a regression of social rights. Although lowering level of social standards is not the main goal, national governments sometimes need to be able to make use of this instrument in order to avoid even worse consequences of economic and fiscal downturns.

2.17Rather than trying to solve labour market challenges across the board at European level, the EU's primary role is to provide information, possible solutions, incentives and know-how to help Member States and social partners to design, implement and evaluate policies that really address the structural labour market challenges they face, in a way that is understood by and acceptable to their societies.

2.18Social policy decisions should be taken as close as possible to the citizens of the Union and with full respect for the competences of the Member States and social partners. On the labour market in particular, many decisions are best taken by or as close as possible to the employer and employees concerned.

2.19In this respect, the recently published EU social dialogue initiative
  20
  is a step in the right direction, as it can pave the way to stronger social partners' organisations where this is needed in the EU, and can create more space for social partners to negotiate autonomously at the appropriate levels in the Member States with the support of their national governments.

2.20Furthermore, it is important to adapt to the diverse ways in which Member States prioritise and shape social policy interventions in light of deeply rooted constitutional setups, political choices, policy approaches and cultural traditions in the Member States. That is why the subsidiarity principle, as enshrined in the Treaty, should remain at the centre of policy orientation.

2.21As part of this, it is essential to recognise that the EU has a different nature than international organisations such as the Council of Europe and the International Labour Organisation. Therefore, it is not a relevant benchmark to use the frameworks deriving from these international organisations as a basis for implementation in the EU. The EU should come up with policies that are well in line with its own specific nature. At the same time, as stated in Article 6(3) TEU, fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union's law.

Reason

| Reason |
| --- |
| This text comprises an amendment which aims to set out a generally divergent view to an opinion presented by the section and is therefore to be described as a counter-opinion. It sets out the reasons why the EESC considers it unnecessary to revise the Treaties in order to create a Social Progress Protocol. Rather than the EU coming up with a Social Progress Protocol which would distort the balance between economic freedoms and social rights, and interfere with well-defined national competences, it is important to progress towards a shared understanding of what constitutes the added value of EU in terms of employment and social policies. |

This text comprises an amendment which aims to set out a generally divergent view to an opinion presented by the section and is therefore to be described as a counter-opinion. It sets out the reasons why the EESC considers it unnecessary to revise the Treaties in order to create a Social Progress Protocol. Rather than the EU coming up with a Social Progress Protocol which would distort the balance between economic freedoms and social rights, and interfere with well-defined national competences, it is important to progress towards a shared understanding of what constitutes the added value of EU in terms of employment and social policies.

Outcome of the vote

| Outcome of the vote |
| --- |
| In favour:
     102


  Against:
     133


  Abstention:
     07 |

In favour:
     102

Against:
     133

Abstention:
     07

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