15. 7. 82 Official Journal of the European Communities No C 178/1 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the communication from the Commission to the Council on medium-term 
projections of social expenditure and its financing 
The text referred to the Committee has not yet been published in the Official Journal 
of the European Communities. 
A. LEGAL BASIS FOR THE OPINION 
On 1 December 1981 the Council referred the abovementioned communication to the 
Economic and Social Committee in accordance with Article 198 of the Treaty estab­
lishing the European Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
197th plenary session held in Brussels on 28 and 29 April 1982. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the Euro­
pean Economic Community, and in particular 
Article 198 thereof, 
Having regard to the request made by the Council 
of the European Communities on 1 December 1981 
for an opinion on the communication of the Com­
mission to the Council on medium-term projections 
of social expenditure and its financing, 
Having regard to the decision taken by its Bureau 
on 14 December 1981 instructing the Section for 
Social Questions to draw up an opinion and report 
on the matter, 
Having regard to the opinion adopted by the Sec­
tion for Social Questions on 15 April 1982, 
Having regard to the report drawn up by the rappor­
teur, Mr Davies, Having regard to the discussions at the 197th plen­
ary session, held on 28 on 29 April 1982, 
HAS ADOPTED THE FOLLOWING OPINION 
by a unanimous vote: 
1. Instead of producing a third European Social 
Budget, the Commission proposes, in the light of 
the acknowledged limitations and shortcomings of 
the two Social Budgets, a different work-programme 
for medium-term projections of social expenditure 
and its financing for the next four years. It proposes 
to concentrate on producing a flow of short annual 
reports which will be complemented by two detailed 
policy analyses. These proposals whilst not depart­
ing from the principles that underlay the Social 
Budget go a considerable way to meet the criticisms 
levelled at the Social Budgets. The Committee in 
general and subject to the observations made below 
NoC 178/2 Official Journal of the European Communities 15.7.82 
welcomes the proposals as a fruitful direction in 
which to work during the next four years. 
2. One of the objectives of the proposed annual 
reports is to provide a summary of medium-term 
trends in 'the main constituents of social protec­
tion'. Although such consituents have not been 
defined in the document, it is understood that the 
reports will cover all the main constituents included 
in the previous Social Budgets. 
3.1. It is proposed that data on the net income 
received by typical households in various situations 
— sickness, old age, unemployment, and house­
holds with dependent children — be compared with 
net earnings. If this proposal means that a compari­
son will be made between the total income of the 
households in receipt of benefits with net earnings 
of the average worker, this would not be a compari­
son of like with like. The Committee asks the Com­
mission to find a valid basis of comparison. 
3.2. The Committee recommends that comparisons 
should be both in net terms and gross terms. 
3.3. Data which is confined to income can some­
times give a misleading impression, as certain needs 
may be met not only by the possession of cash to 
enable services to be purchased, but by the posses­
sion of services in kind. The Committee therefore 
recommends that every effort be made to gather 
together the relevant information about benefits in 
kind, particularly family benefits as well as those 
relating to periodical receipts. 
3.4. It is not clear what use the Commission will 
make of the data of net income of 'typical house­
holds in various situations of need'. The Committee 
recalls that the case study by the Expert Committee 
on Social Protection on social security provisions 
for the longer-term disabled in eight countries of the 
European Communities was a similar study which 
compared the social security provisions for the disa­
bled. It reported in April 1981 but we are still await­
ing the Commission's response to its findings. 
4. The Committee supports the proposal to collect 
data on housing and adult occupational training 
particularly as the need for this data had been iden­
tified in the guidelines for the second Social Budget. 
But the Committee also stresses the need to improve 
the information collected about personal social ser­
vices which is a neglected area of social policy, and 
also about education or aspects of education. 5.1. The Committee recommends that the detailed 
policy analyses should not merely concentrate on 
receipts/expenditure comparisons but should 
approach social policy operations and develop­
ments from as broad a viewpoint as possible. 
5.2. The Committee expects that its views and the 
recommendations of the European Parliament will 
play an important part in influencing the choice of 
the policy analyses to be undertaken. 
5.3. There are about 11 million registered unem­
ployed in the Community. This figure does not 
include those unemployed, such as the large number 
of married women in some countries and school 
leavers, who are not in receipt of unemployment 
benefit. Neither, of course, does it take into account 
those who would have been unemployed if they had 
not taken early retirement. Given the scale of the 
problem and with no solution in sight the Com­
mittee recommends that one of the priority policy 
analyses be (i) an evaluation of the macro-economic 
costs and social effects of unemployment and its 
significance for individuals and families and (ii) a 
comparison of the benefits payable to the unem­
ployed in all Member States and the conditions gov­
erning such benefits in order to build on the best of 
existing experience. 
6.1. At a time when national economies are not 
growing or growing very slowly and when there are 
cuts in rate of growth of public expenditure in many 
countries and conflict over the use of resources, the 
question of funding of social protection measures 
and which method of financing best safeguards the 
resources available for social protection whilst not 
itself prejudicing employment prospects, calls for 
maximum attention. The Commission communica­
tion does not address itself to the problem of keep­
ing social protection expenditure under control, or 
its funding. However, on 11 February the Commis­
sioner for social questions, Mr Richard, told the 
Section for Social Questions that the Commission 
would shortly be producing a memorandum on 
social security and its funding. 
6.2. It may be argued that the Social Budget, or the 
successor to the Social Budget is not the most suita­
ble document to raise the issue of financing of 
social protection expenditure. Indeed, the Commis­
sion has apparently begun the examination of the 
issue, but if that is so we have no means of judging 
whether or not such an examination is an adequate 
response. Given the importance of the issue, we 
15.7.82 Official Journal of the European Communities No C 178/3 
think it right to draw attention to the fact that it is 
not discussed in the Commission document. 
7. It is noted that the annual reports will be sent to 
the Governments of Member States and to the Euro­
pean institutions. The Committee recommends that the reports be given a wider circulation and be made 
available to appropriate specialized research institu­
tions and university departments with a primary 
interest in social policy or some aspect of it and 
funds be made available to this end. 
Done at Brussels, 28 April 1982. 
The Chairman 
of the Economic and Social Committee 
Tom&s ROSEINGRAVE