Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Working together, working better - A new framework for the open coordination of social protection and inclusion policies in the European Union
Date: 2005-12-22
Institutions: European Commission
Subjects: EU policy, European Union, economic and social cohesion, pension scheme, social policy, social security

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.12.2005 
COM(2005) 706 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Working together, working better: 
A new framework for the open coordination of social protection and inclusion policies in 
the European Union 

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1. 

INTRODUCTION 

The European Union is committed to modernising its social model, based on the shared values 
of social justice and the active participation of all citizens in economic and social life. In its 
contribution  to  the  recent  informal  meeting  of  Heads  of  State  and  Government  in  Hampton 
Court, the Commission reaffirmed the need for Europe to modernise social protection systems 
in  order  to  ensure  their  future  viability.  Policies  must  continue  to  promote  social  cohesion, 
equal  opportunities  and  solidarity  between  generations  while  responding  better  to  economic 
and social change and promoting growth and employment.  

The EU has in recent years sought to foster coordination and learning among Member States 
about  modernising  and  improving  policies.  The  Open  Method  of  Coordination  (OMC)  has 
allowed  the  Commission,  Member  States  and  other  actors  to  have  a  constructive  exchange 
about shared policy objectives, good practice and good governance, all the while respecting 
subsidiarity. The OMC has stimulated Member States to intensify their efforts to fight poverty 
and social exclusion and promoted policy exchange about ensuring adequate and sustainable 
pensions in the future. 

This communication sets out the Commission's proposals to create a streamlined framework 
for further development of these exchanges. It takes account of experience gained to date; of 
how the Member States and other actors assessed the OMC – what works, what doesn't – in a 
recent evaluation; and of wider developments, notably the revision of the Lisbon Strategy. It 
aims  to  create  a  stronger,  more  visible  OMC  with  a  heightened  focus  on  policy 
implementation,  which  will  interact  positively  with  the  revised  Lisbon  Strategy,  while 
simplifying reporting and expanding opportunities for policy exchange. 

1.1. 

Background: OMC as applied to social inclusion and pensions 

The OMC in this area developed in the light of the strategic objective of the Lisbon European 
Council of March 2000, which included the creation of "greater social cohesion". Following 
the Council's call for EU-level work "to make a decisive impact on the eradication of poverty" 
(para.  32)  and  on  the  future  adequacy  and  sustainability  of  pension  systems  (para.  31),  the 
Social  Inclusion  Process  and  the  OMC  on  Adequate  and  Sustainable  Pensions  were 
established. The European Council later sought to extend the work to the future of healthcare 
and long-term care. 

Under  the  Open  Method  of  Coordination,  Member  States  agree  to  a  measure  of  joint 
development  of  policies  without  calling  into  question  subsidiarity.  It  is  a  flexible  method, 
allowing  exchange  and  coordination  in  a  way  and  to  a  degree  appropriate  to  the  policy  in 
question.  As  applied  to  social  inclusion  and  pensions,  it  has  involved:  agreeing  common 
objectives  which  set  out  high-level,  shared  goals;  preparation  of  National  Action  Plans 
(NAPs) for Inclusion and National Strategy Reports (NSRs) for pensions, in which Member 
States  set  out  their  policy  plans  for  an  agreed  time  period  to  meet  the  common  objectives; 
evaluation of these plans/strategies in Joint Commission/Council Reports; and joint work on 
indicators  to  allow  mutual  understanding  and  evaluation  and,  where  appropriate,  target 
setting.  The  OMC  has  provided  a  framework  for  exchange  and  learning  and  has  promoted 

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openness,  transparency  and  the  involvement  of  stakeholders,  European  and  national,  as  a 
means to better policymaking.1 

The added value of the inclusion process has been to make clear the multi-dimensionality of 
poverty and exclusion and the consequent need for full, joined-up policy responses. It has also 
promoted  good  governance,  openness  and  the  participation  of  actors.  The  pensions  process 
has  forged  a  consensus  that  a  concern  with  adequacy,  sustainability  and  modernisation  of 
systems must underpin pension reforms. Both processes have brought new issues to the fore – 
for  example,  the  need  to  fight  child  poverty  in  order  to  break  the  inter-generational 
perpetuation of exclusion; and the need to promote longer working lives if pension systems 
are  to  be  sustainable.  Both  continue  to  grow  and  have  successfully  involved  new  Member 
States, who produced their first NAPs on inclusion in July 2004 and first NSRs for pensions 
in July 2005. 

1.2.  Why streamlining? 

The Commission proposed to "streamline" the work on inclusion and pensions, together with 
the planned work on health and long-term care, to form an integrated process, as far back as 
May 2003. The aim was twofold: to create a stronger process; and to integrate better with the 
Lisbon  process,  in  particular  the  Broad  Economic  Policy  Guidelines  (BEPGs)  and  the 
European  Employment  Strategy2.The  Commission  proposed  a  structure  for  reporting  and 
evaluation  across  the  three  fields  and  a  timetable  synchronised  with  the  BEPGs  and 
Employment  Guidelines.  Member  States  were  broadly  supportive: 
they  wanted  a 
simplification  of  reporting  but  not  a  weakening  of  the  distinct  nature  and  scope  of  the 
inclusion and pensions processes. It was agreed to proceed gradually, with certain elements of 
the  package  –  the  start  of  work  on  health  and  long-term  care  and  the  creation  of  an  annual 
Joint Social Protection and Social Inclusion Report – being addressed during 2004-2005. The 
final  element  –  the  adoption  of  new  common  objectives  for  the  three  strands  plus  new 
procedures to apply from 20063 – is the subject of this Communication. This Communication, 
therefore, builds on a broad shared understanding between the Commission and the Member 
States.  

It also takes account of developments since 2003, such as the launch of work on health and 
long-term care. Member States submitted Preliminary Policy Statements in April 2005 and a 
reflection paper based on them has been agreed. Member States agree that the streamlined 
OMC  can  usefully  be  applied  to  this  area  to  stimulate  policy  development,  highlight 
common challenges and facilitate mutual learning. 

Most  importantly,  the  relaunch  of  the  Lisbon  process  in  March  2005  has  sharpened  the 
context into which work on social protection and inclusion must fit. The revised Lisbon strategy 
concentrates  on  policies  to  boost  growth  and  employment4  and  seeks  to  overcome  the 
implementation gap identified in the review of Lisbon. Separate reporting under the OMC on 
social protection and social  inclusion will continue, with social protection issues relevant to 

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For  the  evolution  of  the  two  processes,  including  common  objectives,  national  reports,  joint 
Council/Commission  Reports,  studies  and  ancillary  activities,  see  the  following  websites:  for  social 
inclusion  http://europa.eu.int/comm/employment_social/social_inclusion/index_en.htm;  for  pensions 
http://europa.eu.int/comm/employment_social/social_protection/pensions_en.htm 
These have now been combined to form the Integrated Guidelines for Jobs and Growth 2005-2008 
2006 was chosen to allow synchronisation with the then timetable for the BEPGs and the EES 
European Council of 22-23 March 2005, Presidency Conclusions 

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the  new  Integrated  Guidelines  also  being  reflected  in  national  reform  programmes.5  At  the 
same time, reflecting the European Council's vision of "growth and employment making for 
social cohesion", policies within the revised Lisbon agenda will contribute to social cohesion 
and  inclusion.  Thus,  the  OMC  should  parallel  and  interact  closely  with  revised  Lisbon  – 
"feeding  in"  to  growth  and  employment  objectives  while  Lisbon  programmes  "feed  out"  to 
advance  social  cohesion  goals.  The  OMC  should  also  respond  to  the  implementation  gap 
challenge. 

1.3. 

The evaluation of work under the OMC: the views of Member States and policy 
actors 

The Commission sought to take account of the views of stakeholders before putting forward 
its  proposals  for  streamlining.  It  asked  Member  States,  social  partners,  NGOs  and  social 
protection  institutions  to  complete  a  questionnaire  on  the  OMC  and  its  working  methods. 
There  has  been  a  large  response  which  provides  a  comprehensive  view  of  what  Member 
States and other stakeholders want.6 

It  is  clear  that  stakeholders  value  the  OMC  and  feel  that  it  has  a  positive  impact  on  policy 
making. They welcome the fact that it shows the Union’s support for the shared values behind 
social policies and ensures a social policy voice within EU decision making. They want it to 
make  more  visible  the  positive  role  played  by  good  social  protection  and  inclusion  policies 
and  to  support  the  modernisation  of  policies.  Accordingly,  streamlining  should  make  the 
OMC more effective and give it a higher profile. 

Stakeholders broadly support a sharpened process with simplified reporting, provided that this 
does  not  erode  what  has  been  achieved.  Streamlining  should  bring  together  the  three 
strands of work, but allow the specific features which are important to each to further 
develop.7 New integrated common objectives should not reduce the scope for an in-depth 
focus in each policy field. 

Stakeholders particularly value the OMC as a means to learn and exchange on policies. They 
value the mechanisms, such as the peer review programme and trans-national projects, which 
have  grown  up  alongside  the  core  task  of  reporting  and  evaluation.  They  welcome  the  fact 
that the new Progress budget line will in future facilitate such activities across the full range 
of the OMC. Streamlining should support more learning and integrate it better with the 
work of reporting and evaluation.  

The importance of good links between the OMC for social protection and social inclusion and 
other  EU-level  processes  is  stressed.  Good  interaction  with  the  revised  Lisbon  Strategy 
and the re-launched Sustainable Development Strategy is underlined. 

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Commission Staff Working Paper SEC (2005) 622 of May 2005 
A  full  summary  and  conclusions  are  contained  in  a  Commission  staff  report  which  accompanies  this 
Communication. Contributions to the evaluation are published on the internet at   
http://europa.eu.int/comm/employment_social/social_inclusion/index_fr.htm 
The evaluation did not review work in relation to health and long-term care. Nevertheless, the view that 
the  OMC  should  respect  the  specific  circumstances  of  the  field  can  be  drawn  from  the  exchanges 
discussed in section 1.2. 

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Promoting good governance and openness in policy making is seen as a key objective. The 
streamlined process should aim to further the practice of involving actors, to date most 
developed on the inclusion side.  

2. 

NEW COMMON OBJECTIVES FOR THE STREAMLINED OMC ON SOCIAL PROTECTION 
AND SOCIAL INCLUSION 

The  Commission  proposes  the  following  common  objectives  for  the  streamlined  OMC  on 
social protection and social inclusion. They build on the Nice objectives for inclusion and the 
Laeken pensions objectives and aim to allow the momentum developed in both spheres to be 
maintained. The primary concern continues to be to promote good policy-making for a high 
level of social protection and social cohesion, while, secondly, ensuring good interaction with 
the revised Lisbon priorities of growth and employment and with bridging the implementation 
gap  identified  in  the  review  of  Lisbon.  Particularly  for  social  inclusion,  the  more  general 
presentation of objectives should allow Member States to focus on the policy priorities most 
important  in  each  national  context,  for  example,  homelessness,  child  poverty  and  the 
alienation of youth, immigrants and ethnic minorities, disability, e-inclusion or inequalities in 
education  and  training.8  They  reflect  lessons  from  the  analysis  of  the  2005  implementation 
NAPs  for  inclusion:  that  inclusion  objectives  need  to  be  mainstreamed  into  relevant  public 
policies, including structural fund  programmes  and  education  and training policies; and  that 
policy making is enhanced by good governance. 

The proposal comprises "overarching" objectives, providing a general framework for the work 
across the OMC as a whole; plus three groups of objectives specific to each policy area. 

2.1. 

The  overarching  objectives  of  the  OMC  for  social  protection  and  social 
inclusion are to: 

(a) 

(b) 

(c) 

Promote  social  cohesion  and  equal  opportunities  for  all  through  adequate, 
accessible,  financially  sustainable,  adaptable  and  efficient  social  protection 
systems and social inclusion policies. 

Interact  closely  with  the  Lisbon  objectives  on  achieving  greater  economic 
growth and more and better jobs and with the EU's Sustainable Development 
Strategy. 

Strengthen  governance,  transparency  and  the  involvement  of  stakeholders  in 
the design, implementation and monitoring of policy.  

2.2. 

The following objectives apply to the different strands of work: 

2.2.1.  Making a decisive impact on the eradication of poverty and social exclusion: 

(d) 

Ensure  the  active  social  inclusion  of  all  by  promoting  participation  in  the 
labour  market  and  by  fighting  poverty  and  exclusion  among  the  most 
marginalised people and groups. 

8 

See  the  key  policy  priorities  identified  in  the  Joint  Council/Commission  Report  on  Social  Inclusion 
2004 and the 2005 Report on Social Inclusion in the 10 new Member States and the challenges ahead 
listed for Member States in the Joint Social Protection and Social Inclusion Report 2005. 

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(e) 

(f) 

Guarantee  access  for  all  to  the  basic  resources,  rights  and  social  services 
needed  for  participation  in  society,  while  addressing  extreme  forms  of 
exclusion and fighting all forms of discrimination leading to exclusion. 

Ensure that social inclusion policies are well-coordinated and involve all levels 
of government and relevant actors, including people experiencing poverty, that 
they  are  efficient  and  effective  and  mainstreamed  into  all  relevant  public 
policies,  including  economic,  budgetary,  education  and  training  policies  and 
they  are  gender 
structural  fund  (notably  ESF)  programmes  and 
mainstreamed. 

that 

2.2.2.  Providing adequate and sustainable pensions: 

(g) 

(h) 

(i) 

In  the  spirit  of  solidarity  and  fairness  between  and  within  generations, 
guarantee  adequate  retirement  incomes  for  all  and  access  to  pensions  which 
allow  people  to  maintain,  to  a  reasonable  degree,  their  living  standard  after 
retirement. 

In  the  context  of  sound  public  finances,  ensure  the  financial  sustainability  of 
public  and  private  pension  schemes,  notably  by:  supporting  longer  working 
lives  and  active  ageing;  ensuring  an  appropriate  and  fair  balance  of 
contributions  and  benefits;  and  promoting  the  affordability  and  ensuring  the 
security of funded and private schemes. 

Ensure  that  pension  systems  are  transparent,  well  adapted  to  the  needs  and 
aspirations  of  women  and  men  and  the  requirements  of  modern  societies, 
demographic ageing and structural change; that people receive the information 
they need to plan their retirement and that reforms are conducted on the basis 
of the broadest possible consensus. 

2.2.3.  Ensuring accessible, high-quality and sustainable healthcare and long-term care: 

(j) 

(k) 

(l) 

Guarantee access for all to adequate health and long-term care and ensure that 
the need for care does not lead to poverty and financial dependency. Address 
inequities in access to care and in health outcomes. 

Promote  quality  in  health  and  long-term  care  and  adapt  care  to  the  changing 
needs  and  preferences  of  society  and  individuals,  notably  by  establishing 
quality standards reflecting best international practice and by strengthening the 
responsibility of health professionals and of patients and care recipients. 

Ensure  that  adequate  and  high  quality  health  and  long-term  care  remains 
affordable  and  sustainable  by  promoting  healthy  and  active  life  styles,  good 
human  resources  for  the  care  sector  and  a  rational  use  of  resources,  notably 
through  appropriate  incentives  for  users  and  providers,  good  governance  and 
coordination between care systems and institutions. 

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3. 

PROCEDURES AND WORKING ARRANGEMENTS FOR A STRENGTHENED OMC 

3.1. 

Reporting and evaluation arrangements. 

Based  on  these  common  objectives,  national  strategies  for  social  protection  and  social 
inclusion, which address the specific challenges of each pillar while drawing out high-level 
and summary messages across the sector as a whole, will be drawn up. They will include: 

A common section containing: 

•  An assessment of the social situation, reporting on major trends and challenges 

in poverty and social exclusion, pensions and health and long-term care; and 

•  A  presentation  of  the  overall  strategic  approach  for  modernising  social 

protection and social inclusion policies. 

This part would be prepared by reference to the common overarching objectives and 
supported by appropriate EU-level indicators. 

Three thematic plans covering social inclusion, pensions and healthcare. They should 
be  forward  looking  and  set  out  prioritised  national  objectives  translating  the 
common objectives into national policy plans. Each will serve as a national plan for 
the  specific  policy  field.  Thus,  for  inclusion,  the  aim  is  to  maintain  the  role  of 
strategic  planning  and  objective  setting  of  the  National  Action  Plans  for  Inclusion, 
with  an  enhanced  focus  on  being  strategic,  setting  priorities  and  policy 
implementation. For pensions, the role of the National Strategy Report in setting out 
a  strategy  for  modernisation  of  the  pension  system  to  meet  current  and  future 
challenges should continue. In practice, given that Member States submitted National 
Strategy  Reports  for  Pensions  in  July  2005,  the  first  streamlined  submissions  on 
pensions  in  2006  should  be  very  light.  The  plan  for  health  and  long-term  care  will 
focus on identifying issues on which mutual exchange and learning can take place. 

The  Commission  will  draft  a  Joint  Social  Protection  and  Social  Inclusion  Report  for 
Council/Commission  adoption  prior  to  the  subsequent  Spring  European  Council.This  will 
summarise  main  issues  and  trends  and  assess  Member  States'  progress  in  reaching  the 
common objectives. It will review "feeding in" to Lisbon and assess how progress towards the 
Lisbon goals of employment and growth is impacting on social cohesion. 

More detailed exploration of key issues and good practices in the three policy fields will be 
undertaken in occasional Commission staff reports. 

3.2. 

Timetable for reporting and evaluation 

The  National  Strategies  on  Social  Protection  and  Social  Inclusion  would  normally  cover  a 
forward-looking period of three years. In order to fit in with the new Lisbon timetable, first 
reports  should  be  submitted  in  September  2006.  This  will  facilitate  "feeding  in"  relevant 
issues  –  such  as  how  benefit  systems  support  labour  market  participation  and  how  longer 
working  can  be  supported  by  pension  systems  and  healthy  ageing  strategies  –  to  National 
Reform Programmes due in October 2006. Given that the first reports will arrive one year into 
the Lisbon three-year cycle (2005-2008), they would, exceptionally, cover a two-year period 
only (2006-2008). 

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Member States will not be required to deliver national strategies in intervening ("light") years. 
They may, if they wish, report on any new initiatives or on progress in implementation9.The 
OMC  in  light  years  will  concentrate  on  in-depth  analyses  of  specific  issues  and  on 
disseminating  policy  findings.  The  Joint  SP  and  SI  Report  in  such  years  could  report  on: 
indicators, both common and national, of progress; policy developments reported by Member 
States; a review of interaction with the Lisbon process; and analyses of specific policy issues. 

3.3.  Working arrangements: supporting more mutual learning 

One  of  the  clearest  findings  from  the  evaluation  is  the  value  which  stakeholders  attach  to 
exchanges of practice and mutual learning, such as the peer review programme, trans-national 
exchange projects, the annual Round Table on Poverty and Social Exclusion and the annual 
encounter  with  people  experiencing  poverty.  The  planned  PROGRESS  budget  line  will  in 
future  support  similar  exchanges  across  the  full  range  of  the  OMC.  They  should  be  given 
more  prominence  within  the  future  OMC  and  be  better  integrated  with  reporting  and 
evaluation. The Commission proposes to take advantage of the new timetable proposed above 
to promote more mutual learning and the exchange of good practices, particularly in the light 
years.  

3.4.  Working arrangements: involvement of actors and governance 

The  streamlined  OMC  should  redouble  the  focus  on  promoting  good  governance, 
transparency and involvement of actors. Involving stakeholders in the process will strengthen 
it  by  enhancing  its  visibility,  encouraging  ambition  in  objective  setting  and  increasing  the 
focus on policy implementation. 

Accordingly, the stakeholder involvement which has grown up in the inclusion field could be 
extended  to  the  other  strands,  always  having  regard  to  the  differences  between  them. 
Moreover,  as  the  third  overarching  objective  suggests,  the  OMC  could  promote  good 
governance, transparency and involvement not simply in its own working but as an objective 
for social policy making more generally. This will require a focus on different issues in the 
different  strands.  For  inclusion,  the  emphasis  would  be  on  promoting  participation  in 
decision-making,  ensuring  policy  coordination  between  branches  and  levels  of  government 
and mainstreaming a concern with poverty and exclusion into national planning. For pensions, 
a particular challenge is to make pension systems understandable and to provide citizens with 
the information they need to plan their retirement. For health, the priority is likely to be good 
policy coordination between different parts of the system and good information to citizens. 

3.5.  Working arrangements: indicators 

As  outlined  at  3.1  above,  the  National  Strategies  for  Social  Protection  and  Social  Inclusion 
could, at the level of overarching objectives, be supported by common indicators illustrating 
main social trends and broad objectives; and by more detailed indicators within each policy 
field.  

The  Commission  and  Member  States  could  work  during  2006  to  reinforce  and  simplify  the 
use of indicators to support the new common objectives, while taking account of the specific 
objectives, policy priorities, methodological approaches and state of development of the three 

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They could also do so in the Annual National Lisbon Reform Programmes. 

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strands.  The  work  on  indicators  should  aim  to  better  support  the  monitoring  of  policy 
outcomes, including how they impact on women and men and families. Indicators to monitor 
deprivation  also  need  to  be  strengthened.  During  the  transition  to  EU-SILC,  there  will  be  a 
lack of comparable data on income and living conditions on which many of the indicators are 
built. The Commission and Member States will therefore have to reflect on how to measure 
progress and allow cross-country comparisons during this time.  

There should be a renewed focus on target setting in relation to poverty and social exclusion. 
Target setting has always been a part of the social inclusion process, in line with the European 
Council's demand at Lisbon to "make a decisive impact on the eradication of poverty" and its 
invitation  to  Member  States  at  Barcelona  in  March  2002  to  set  targets  "for  significantly 
reducing  the  numbers  of  people  at  risk  of  poverty  and  social  exclusion".  There  has  been 
steady  but  slow  growth  in  their  use.  There  have  also  been  many  recent  exchanges  between 
Member States about issues surrounding the formulation, implementation and measurement of 
targets; these should be developed. 

The  evaluation  of  the  OMC  produced  many  suggestions  for  new  indicators  and  possible 
targets, as did the Luxembourg Presidency Conference of June 2005 on "Taking Forward the 
EU Social Inclusion Process".10The work should draw on these. 

3.6. 

Enhancing the visibility of the OMC 

Greater visibility for the OMC would achieve several objectives. It would inform citizens of 
the  EU's  supportive  interest  in  social  protection  and  inclusion  policies.  The  common 
objectives and the policy exchanges taking place under the OMC could contribute positively 
to the policy debates taking place in all Member States. 

Taking  advantage  of  the  planned  lighter  rhythm  of  reporting  and  evaluation,  more  attention 
could be given to publicising the OMC. The practice of holding national seminars open to all 
actors has heretofore been seen only as part of the process of putting together national plans. 
There could be more such seminars during "light" years, thereby bringing lessons learned in 
the OMC to bear on the national debate. 

The  European  Parliament  has  often  indicated  a  wish  to  engage  more  fully  with  OMC 
processes. The Commission and the Member States should explore with Parliament ways of 
doing so. 

4. 

CONCLUSION: A STRENGTHENED OMC 

Major  challenges  confront  Europe's  social  protection  systems  and  social  inclusion  policies. 
The work undertaken within the OMC on social inclusion and on pensions has already done 
much to highlight these. The responses to the evaluation show that those who have been close 
to the OMC value it. The question to be asked is not whether the OMC has been valuable but 
whether it has been  sufficient  to the challenge? The  mid-term review  of the  Lisbon process 
has  been  blunt  in  demanding  that  all  of  the  EU's  socio-economic  processes  should  be  more 
focused  on  implementation  and  more  visible.  And  the  current  debate  about  the  future  of 

10 

For full details of the Conference including the academic study, see 
http://www.ceps.lu/eu2005%5Flu/inclusion 

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Europe's social model has placed policies for social protection and social inclusion under an 
unprecedented political spotlight. 

The  proposals  made  here  for  a  new  framework  aim  to  make  the  OMC  a  stronger  and  more 
visible  process,  better  integrated  with  the  Lisbon  strategy  and  with  more  room  for  the 
learning, exchange  and  policy  dissemination which  participants  value.  But  meeting  some  of 
the  main  challenges  –  for  example,  bridging  the  gap  between  objective  setting  and  policy 
implementation – will require more than simply changing procedures. It is hoped that, coming 
as it does in the wake of the focus by Heads of State and Government on the social dimension 
of  the  European  Union,  this  proposed  streamlining  of  the  OMC  can  receive  the  strong 
political support which it needs to succeed. 

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