Commission staff working document accompanying the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - "A renewed commitment to social Europe: reinforcing the open method of coordination for social protection and social inclusion" - Summary of the impact assessment {COM(2008) 418 final} {SEC(2008) 2169}
Date: 2008-07-02
Institutions: European Commission
Subjects: European social policy, cooperation policy, economic and social cohesion, evaluation method, health care, impact study, pension scheme, poverty, social integration, social security

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.7.2008 
SEC(2008) 2170 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the  

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

"A renewed commitment to social Europe: Reinforcing the Open Method of 
Coordination for Social Protection and Social Inclusion" 

Summary of the Impact Assessment 

{COM(2008) 418 final} 
{SEC(2008) 2169} 

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The  impact  assessment  relates  to  the  Communication  on  'A  renewed  commitment  to  social 
Europe:  reinforcing  the  Open  Method  of  Coordination  for  Social  Protection  and  Social 
Inclusion'.  This  Communication,  included  as  a  priority  initiative  in  the  Commission  Work 
Programme  2008,  is  now  part  of  the  package  that  will  accompany  the  Renewed  Social 
Agenda. 

From 2000 the Open Method of Coordination (OMC) has successively been applied to social 
inclusion policy, to pension policy and to health and long-term care policy. In 2006 the three 
separate strands were streamlined into one integrated OMC for Social Protection and Social 
Inclusion (hereinafter “Social OMC”).  

This method of coordination comprises an agreement on EU common objectives, setting out 
high-level,  shared  goals  to  drive  the  entire  process,  the  definition  of  a  set  of  common 
indicators to  enable  monitoring of progress towards the common  objectives, the preparation 
by Member States of national strategic report translating these agreed objectives into concrete 
policies,  and  the  joint  assessment  of  progress  and  of  policy  efforts  by  the  European 
Commission and the Member States in the framework of the Social Protection Committee. 

The overall assessment of the results of the Social OMC by the different actors involved in 
the  process  has  been  largely  positive.  The  Social  OMC  has  supported  mutual  learning, 
promoted  wider  involvement  of  stakeholders,  increased  awareness  of  the  multi-dimensional 
nature  of  exclusion  and  poverty,  given  impulse  to  the  modernisation  of  social  protection 
systems,  forged  a  shared  approach  to  the  common  challenges  and  brought  to  the  fore 
emerging common issues.  

However,  delivery  on  the  common  objectives  has  been  too  slow  or  insufficient.  While  it 
would  be  unrealistic  to  expect  that  an  open  coordination  process,  based  on  voluntary 
cooperation between Member States, could produce large-scale results in a limited period of 
time,  there  is  a  widespread  consensus  that  the  potential  of  the  Social  OMC  remains  largely 
unexploited, that a number of weaknesses should be corrected and that strategic reinforcement 
of the method would go some way towards improving delivery on the common objectives.  

The  analysis  points  to  a  lack  of  political  commitment  and  visibility  and  a  need  for  better 
horizontal  policy  coordination  and  mainstreaming  of  social  protection  and  social  inclusion 
concerns  in  all  relevant  policy  areas.  Furthermore,  there  is  a  need  for  a  stronger  analytical 
underpinning of policy and more involvement of regional and local actors in the Social OMC 
process. Civil society representatives should also play a bigger part and the mutual learning 
process should be enhanced.  

The need for reinforcement of the Social OMC is supported by a number of institutional and 
policy developments. In addition to the Renewed Social Agenda, there is the prospect of the 
entry into force of the Lisbon Treaty (with its mainstreaming requirement),  the approach of 
the  European  Year  for  combating  poverty  and  social  exclusion  in  2010,  and  the  upcoming 
Commission initiative on active inclusion. 

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In order to assess the merit of a strengthened Social OMC and to identify the most effective 
ways to achieve it, three policy options have been retained for in depth examination1.  

The  first  option  is  described  as  the  “status  quo”.  This  takes  into  account  the  fact  that  the 
Social  OMC  is  by  nature  an  evolutionary  process  and  that,  even  in  the  absence  of  major 
changes, it will continue to evolve through incremental changes and gradual improvements in 
working methods.  

The  second  option  is  described  as  a  “fundamental  overhaul”  of  the  process,  whereby  the 
scope of the Social OMC is widened and the process is remodelled to embrace all dimensions 
of  EU  social  policies,  to  ensure  effective  mainstreaming  and  to  become  a  sort  of  Social 
Lisbon'.  

The third option is defined as “comprehensive and ambitious reinforcement within the present 
structure”. This option builds on the approach used so far in the Social OMC, of consensual 
and  incremental  progress,  but  is  at  the  same  time  “strategic”  and  “forward-looking”,  as  it 
introduces a new dynamic into the system. It provides scope to explore new tools and working 
methods that would be tested and introduced in close cooperation with Member States, with a 
view to reinvigorating the process and optimising its implementation.  

When  comparing  the  alternative  options  one  should  distinguish  between  the  procedural  and 
the substantive impacts of the changes proposed.  

The  impact  assessment  is  mainly  concerned  with  procedural  and  governance  aspects.  It  is 
assumed that more effective coordination and mutual learning will have a positive impact on 
the achievement of the common objectives: poverty reduction, more sustainable and adequate 
pension systems, equitable and effective health and long-term care systems. It is also assumed 
–  in  line  with  the  spirit  of  the  common  social  objectives  –  that  better  social  protection  and 
social  inclusion  will  contribute  to  the  Growth  and  Jobs  Strategy  and,  more  generally,  to 
sustainable  economic  development.  For  example,  active  inclusion  policies  can  not  only 
reduce  poverty  but  also  increase  labour  supply.  Pension  reforms  can  not  only  help 
intergenerational equity but also raise activity rates and ensure public finance sustainability. 
Similarly,  good  healthcare  systems  not  only  promote  individual  well-being  but  also  have 
positive effects on labour supply and on labour productivity.  

However,  it  is  clear  that  the  Social  OMC  can  only  facilitate  the  achievement  of  those 
objectives,  in  a  situation  where  the  main  responsibility  for  social  inclusion  and  social 
protection policy remains with Member States. Therefore, the questions to be answered are: 
"Will  the  proposed  measures  help  to  make  the  Social  OMC  an  adequate  and  viable 
mechanism  of  coordination  between  the  national  and  European  levels?  Will  they  make  it  a 
more suitable tool with which the common social objectives can be pursued?"  

In other words, the appraisal of the measures considered under the different options is more a 
qualitative evaluation of their potential effects on the Social OMC than of their consequences 
in terms of final policy outcomes. For this reason, a separate assessment of the overall social, 
economic  and  environmental  impact  of  the  options  identified  is  not  made.  However,  the 

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Two policy options – complete abandonment of the Social OMC and full integration of the Social OMC 
in the Growth and Jobs Strategy - have been considered but have not been retained for in depth analysis. 
The reasons for this are explained in the impact assessment. 

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microeconomic  aspects  (administrative  costs,  resources  implications)  are  duly  taken  into 
consideration in the impact analysis, while assessing the “feasibility” of the various options.  

In  the  impact  assessment  the  proposed  measures  are  clustered  on  the  basis  of  the  four 
objectives  of  the  Communication:  increase  the  political  commitment  and  visibility  of  the 
process,  strengthen  the  positive  interaction  with  other  EU  policies,  reinforce  the  analytical 
underpinnings  of  the  process  and  increase  ownership  in  the  Member  States.  They  are  then 
rated with reference to the magnitude of their impact on the problems addressed and to their 
feasibility. The concept of feasibility refers to political acceptance, availability of human and 
financial  resources,  administrative  burden  and  the  availability  of  basic  tools.  The  analysis 
points to the following results: 

As regards option 1: 'status quo':  

Incremental changes made by implementing a number of previously agreed improvements are 
likely  to  have  a  positive  but  in  general  slow  and  limited  impact  on  the  problems  identified. 
Moreover,  the  risk  attached  to  this  option  is  that  the  Social  OMC  falls  victim  to  “process 
fatigue” and progressively looses credibility and the confidence of its actors and supporters. 
In any case, it seems highly unlikely that these limited improvements will be sufficient to give 
the Social OMC the strength and effectiveness that are needed to ensure better delivery on the 
common social objectives and to reinforce the social dimension of European integration.  

Feasibility, on the other hand, seems high. In fact, most of these measures have already been 
accepted  by  the  Commission  and  the  Member  States  (see  Joint  Report  2008).  The  (limited) 
increase  in  the  human  and  financial  resources  that  is  needed  (increased  monitoring,  better 
dissemination  of  results,  reinforcement  of 
the  analytical  framework,  etc.)  can  be 
accommodated through efficiency gains and higher reliance on external expertise. There is no 
obvious impact on administrative burdens for the Member States. 

Concerning option 2: 'fundamental overhaul: 

The measures envisaged under this option are likely to go a long way towards addressing the 
weaknesses  identified  and  substantially  reinforcing  the  process.  In  most  cases,  they  are 
designed  to  ensure  almost  “ideal”  working  of  the  system  by  means  of  a  combination  of 
considerably  tighter  procedures  and  a  massive  investment  in  resources.  There  are,  however, 
downside risks. First of all, the Social OMC works on the basis of consensus and the principle 
of subsidiarity. A considerable tightening of the procedures proposed by the Commission may 
be rejected by Member States and fail to produce the expected impact in terms of ownership. 
A radical reform of the method, only a few years after the restructuring and "streamlining", 
may not be understood and may somewhat alienate the actors that have supported and helped 
design the Social OMC in its present configuration.  

The feasibility of this policy option in the short to medium term seems rather low. As stated 
above,  political  acceptance  by  Member  States  is  far  from  guaranteed.  Although  there  is  a 
strong  recognition  that  Europe  has  a  role  to  play  in  helping  Member  States  tackle  the 
important  social  challenges,  MS  are  very  attached  to  their  prerogatives  and  powers  in  the 
social  field,  and  would  probably  be  reluctant  to  accept  some  (or  most)  of  the  measures 
envisaged under this scenario. At present, there are no treaty provisions on the basis of which 
individual  recommendations  could  be  issued.  Moreover,  this  policy  option  presupposes  a 
strong  investment  in  human  and  financial  resources.  It  will  also  lead  to  an  increased 

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administrative  burden  on  governments  because  of  the  additional  reporting  that  will  be 
required,  the  internal  coordination  effort  and  the  requirements  as  far  as  participation  of 
stakeholders is concerned. 

As for option 3: 'comprehensive and ambitious reinforcement within the present structure':  

Although  remaining  within  the  current  structure,  this  option  has  the  potential  to  make  a 
significant  impact  on  the  objectives  identified,  thanks  to  a  mix  of  consolidation  of  ongoing 
improvements  and  a  gradual  “phasing  in”  of  innovative  elements.  The  gradual  definition  of 
EU  or  national  targets,  whenever  justified  on  the  basis  of  the  evolution  of  the  common 
analytical framework, would certainly lead to increased political visibility of the process. As 
illustrated by the example of countries that have adopted them, quantified targets can raise the 
accountability of governments and help clarify priorities across all relevant policy areas and 
all  levels  of  government,  provided  that  they  are  based  on  a  strong  analytical  underpinning. 
Reinforced  analytical  capacity  and  mutual  learning  would  improve  the  quality  of  policy 
making in the  social area. The development of  a  common  analytical  framework  would  help 
Member States identify the key challenges they face in common and allow them to learn from 
each other in the areas that concern them the most. It would also feed into other Community 
policies, and through this channel there would be more evidence-based policy making also in 
other  areas.  In  this  way,  the  positive  interaction  with  other  policies,  including  economic 
policy, would be strengthened.  

Most  of  the  measures  envisaged  under  this  policy  option  seem  feasible.  Again,  interaction 
with other policies largely depends on factors that are outside the Social OMC. Although the 
most  substantial  changes  will  be  “phased  in”  only  gradually,  some  investments  in  human 
resources will be necessary. As for financial resources, those allocated under the PROGRESS 
programme  should  be  broadly  sufficient.  In  general,  several  of  the  measures  proposed 
(targeting,  increased  monitoring  etc…)  will  require  political  support  and  commitment  from 
Member  States.  At  national  level,  better  coordination  across  policy  areas  (horizontal 
coordination  and  mainstreaming)  and  with  different  layers  of  government  (vertical 
coordination) will also entail some additional administrative burden, which, however, should 
produce consistent “returns” in terms of efficiency and effectiveness. 

The impact assessment concludes by highlighting the third option as the best choice. It is the 
option  nearest  to  addressing  the  problems  identified  without  excessively  disrupting  current 
ways of working in the Commission and the Member States. In fact, such an option should be 
implemented gradually, not only because of its resource implications, but also because of the 
need to properly discuss and “anchor” the envisaged improvements with Member States and 
with stakeholders. 

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