COMMISSION STAFF WORKING PAPER Ex-ante Evaluation
Date: 2011-10-06
Institutions: European Commission
Subjects: EURES, anti-discriminatory measure, cost-benefit analysis, employment aid, fight against unemployment, job creation, job preservation, labour mobility, marginalisation, microloan, poverty, social integration, social security, social well-being, working conditions

EUROPEAN COMMISSION 

Brussels, 6.10.2011 
SEC(2011) 1134 final 

COMMISSION STAFF WORKING PAPER 

Ex-ante Evaluation 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a European Union Programme for Social Change and Innovation 

{COM(2011) 609 final} 

 
 
 
 
  
 
 
Table of content 

1. 

2. 

2.1. 

2.2. 

Introduction ................................................................................................................ 3 

Problem analysis and needs assessment................................................................... 4 

Global policy challenges .............................................................................................. 4 

Specific problems – rationale for EU intervention ...................................................... 5 

2.2.1.  The Progress programme ............................................................................................. 5 

2.2.2.  EURES ....................................................................................................................... 10 

2.2.3.  Microfinance and Social Entrepreneurship................................................................ 11 

2.3.  Who are the target groups and what are their needs?................................................. 15 

3. 

3.1. 

3.2. 

Lessons from the past............................................................................................... 18 

The current system of funding ................................................................................... 18 

Achievements of the current instruments and delivery issues ................................... 19 

3.2.1.  The Progress programme ........................................................................................... 19 

3.2.2.  EURES ....................................................................................................................... 22 

3.2.3.  The European Progress Microfinance Facility........................................................... 23 

4. 

4.1. 

4.2. 

4.3. 

5. 

6. 

6.1. 

6.2. 

Stakeholder consultations........................................................................................ 26 

The Progress programme ........................................................................................... 26 

EURES ....................................................................................................................... 28 

The European Progress Microfinance Facility and support to social enterprises ...... 28 

Baseline scenario ...................................................................................................... 30 

Objectives, expected results and indicators for the programme ......................... 32 

The objectives of the programme............................................................................... 32 

Definition of indicators .............................................................................................. 33 

6.2.1. 

Indicators for general objectives ................................................................................ 34 

6.2.2. 

Indicators for specific objectives ............................................................................... 37 

7. 

Alternative approaches............................................................................................ 44 

7.1. 

Alternative delivery options....................................................................................... 44 

7.1.1.  The Progress programme ........................................................................................... 44 

7.1.2.  EURES ....................................................................................................................... 44 

7.1.3.  Microfinance and Social Entrepreneurship................................................................ 45 

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7.2. 

Detailed assessment of options .................................................................................. 46 

7.2.1.  PROGRESS................................................................................................................ 46 

7.2.2.  EURES ....................................................................................................................... 48 

7.2.3.  Microfinance and Social Entrepreneurship................................................................ 49 

7.3. 

7.4. 

7.5. 

8. 

9. 

Consideration of "no action" ...................................................................................... 52 

The favoured delivery option ..................................................................................... 53 

Risk assessment of the favoured delivery option....................................................... 54 

EU added value of the intervention ........................................................................ 56 

Cost-effectiveness of the proposed option .............................................................. 58 

10. 

Monitoring and evaluation ...................................................................................... 62 

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1. 

INTRODUCTION 

The  Directorate  General  for  Employment,  Social  Affairs  and  Inclusion  is  designing  the 
proposal  of  the  Commission  for  a  new  European  Union  Programme  for  Social  Change  and 
Innovation for the period 2014-2020. The new programme provides for the continuation and 
development  of  activities  currently  carried  out  under  the  PROGRESS  programme  (2007-
2013), EURES network and the European Microfinance Facility (established in 2010). 

The  proposal  for  the  new  programme  has  budgetary  and  resource  implications,  therefore  an 
ex- ante evaluation is required in accordance with Article 22 of the Financial Regulation.  

The  overall  aim  of  the  new  programme  will  be  to  contribute  to  the  implementation  of  the 
Europe 2020 Strategy, its mutually reinforcing headline targets and Integrated Guidelines by 
providing financial support for the European Union’s objectives in terms of promoting a high 
level  of  employment,  guaranteeing  adequate  social  protection,  fighting  against  social 
exclusion and poverty and improving working conditions.   

With  a  proposed  budget  of  €  958.19  million,  the  programme  will  seek  to  achieve  the 
following objectives:  

(a) 

 Strengthen  ownership  of  the  Union  objectives  in  the  employment,  social  and 
working  conditions  fields  among  key  Union  and  national  policy-makers,  as 
well as other interested parties in order to bring about concrete and coordinated 
actions at both Union and Member State level;  

(b)  Support the development of adequate, accessible and efficient social protection 
systems  and  labour  markets  and  facilitate  policy  reform,  by  promoting  good 
governance, mutual learning and social innovation; 

(c)  Modernise Union law in line with the Smart Regulation principles and ensure 
that Union law on matters relating to working conditions is effectively applied; 

(d)  Promote  workers’  geographical  mobility  and  boost  employment  opportunities 
by developing Union labour markets that are open and accessible to all; 

(e)  Promote  employment  and  social  inclusion  by  increasing  the  availability  and 
accessibility of microfinance for vulnerable groups and micro-enterprises, and 
by increasing access to finance for social enterprises. 

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2. 

PROBLEM ANALYSIS AND NEEDS ASSESSMENT 

This  section  demonstrates  the  need  for  a  public  programme,  and  forms  the  basis  for  the 
programme design and delivery. 

2.1. 

Global policy challenges 

In  the  area  of  social  and  employment  policy,  the  EU  continues  to  face  complex  socio-
economic problems, such as  

•  high unemployment rates, especially among the low-skilled, older workers, migrants and 

people with disabilities; 

•  an increasingly fragmented labour market, featuring the emergence of more flexible work 
patterns and other challenges that have an impact on job security and working conditions, 
including gender pay gap and other inequalities in employment; 

•  a shrinking workforce and increasing pressure on social protection systems as a result of 

demographic change (ageing population); 

•  an  unacceptable  high  number  of  people  living  below  the  poverty  line  and  in  social 

exclusion. 

These challenges have been compounded by the recent economic and financial crisis, which 
has hit all Member States and regions in the EU, leading to  record unemployment levels in 
some Member States, especially among low skilled and young people.  

The crisis also highlighted close links and spill-over between EU-27 economies, especially in 
the  euro  area,  which  means  reforms  or  the  lack  of  them,  in  one  country,  affect  the 
performance  of  the  others.  Common  action  taken  by  the  EU  as  a  response  to  the  crisis, 
particularly  through  the  adoption  of  the  European  Economic  Recovery  Plan  and  common 
action to stabilise the banking system, proved to be effective, which means that coordinated 
actions  at  the  EU  level  are  more  effective  in  addressing  these  challenges  than  individual 
actions of single Member States.  

To  be  cost-effective,  reforms  also  need  to  be  as  far  as  possible  based  on  evidence.  By 
involving  policy-makers  and  other  stakeholders  in  a  collective  learning  process  and  by 
participating in developing and testing new approaches greater acceptance, ownership of, and 
commitment to, the Europe 2020 agenda can be achieved.  In this context, social innovation 
and social experimentation can be powerful tools to guide the reforms and policy adaptations 
needed to implement Europe 2020. 

However, the development and dissemination of a social innovation approach on a larger scale 
in the European Union is hampered by: 

- 

- 

insufficient knowledge of the needs and capabilities of civil society  organisations, social 
enterprises and social entrepreneurs and  public sector organisations;  

fragmentation  of  efforts  and  resources,  lack  of  transparency  and  visibility,  limited 
financial support and insufficient technical skills that can support organisations to develop 
and deliver social innovations; 

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- 

low levels of involvements of citizens and business1; 

-  poor diffusion, and little scale-up of good practices; 

-  poor methods of impact evaluation of actions and policies2. 

While actions to tackle socio-economic problem areas are primarily the responsibility of the 
Member  States  and  regions  and  have  to  be  taken  closest  to  the  citizen  at  national  and  sub-
national  levels,  the  EU  has  a  role  to  play  in  putting  the  need  for  specific  reforms  on  the 
agenda,  informing  about  barriers  to  change  and  opportunities’  how  to  overcome  these, 
ensuring  that  existing  European  level  rules  are  complied  with,  stimulating  sharing  of  good 
practice and mutual learning, and supporting social innovation and Europe-wide approaches, 
where there is clear value added for European solutions.  

2.2. 

Specific problems – rationale for EU intervention 

2.2.1.  The Progress programme  

The  key  issue  for  the  EU  social  and  employment  policy,  within  the  EU's  limits  of 
competence, is that of ensuring collective action and effective policy co-ordination among the 
EU Member States. The fundamental framework for addressing this issue is provided within 
the  Treaty  (TEU)  itself,  which  clearly  sets  out  two  principal  types  of  action  by  the  Union, 
namely: a) co-ordination (adoption of measures designed to encourage co-operation between 
Member States); and b) legislation (adoption, by means of directives, minimum requirements 
for gradual implementation).  

The  determination  to  ensure  greater  policy  co-ordination  across  the  EU  was  recently  re-
affirmed  at  the  most  strategic  level  by  the  Europe  2020  Strategy.  Previous  experience  in 
fostering  the  co-operation  of  the  Member  States  in  the  employment  and  social  affairs  area 
points  to  a  number  of  factors  that  influence  the  success  of  co-ordinated  policy  response  to 
common socio-economic challenges. These include  

- 

- 

- 

- 

consistent and sufficient conceptualisation of key factors and their interdependencies 
behind the socio-economic problems (e.g., how to explain in-work poverty); 

consistent terminology and measurements to allow for monitoring and benchmarking  
(e.g., how to define and measure poverty); as  

comparable  data  to  evaluate  the  relative  importance  of  variables  identified  as 
influential  on  outcomes  of  interest  (e.g.,  systematic  monitoring  of  the  situation  of 
young people not in employment education or training, NEETs); 

convergence  or  synergies  between  goals,  values  and  interests  of  a  variety  of 
stakeholders3. 

A  lack  of  adequate  evidence  complicates  policy  co-ordination  despite  the  presence  and 
acknowledgement of common goals.  

1 Study on Social Innovation, prepared by the Social Innovation eXchange (SIX) and the Young Foundation for the Bureau 
of European Policy Advisors, 2010. 
2  See  BEPA,  'Empowering  people,  driving  change:  Social  innovation  in  the  European  Union',  2010;  OECD, 
'Fostering innovation to address social challenges', 2011.  
3 Where multiple solutions exist to a socio-economic problem but have different distributional consequences to 
involved stakeholders, competition over distributional issues may result in failures to cooperate. 

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Importantly, ensuring adequacy requires not only the generation of new information (such as 
comparable statistics, sufficient analytical knowledge), but also  effective sharing of existing 
sources  (such  as  available  good  practices)  through  mutual  learning  processes  such  as 
periodic  monitoring,  evaluation  and  peer  review.  Also,  an  evidence  base  always  comprises 
stakeholder opinion on an issue or set of issues. Therefore, elaboration of consensual policy 
solutions requires active involvement of all stakeholders throughout the policy process.  

Some  examples  to  illustrate  the  importance  and  the  effectiveness  of  co-ordinated  policy 
responses in the area of PROGRESS: 

In  response  to  the  socio-economic  challenges,  in  2007  the  European  Commission  together 
with the Member States and the social partners elaborated a set of common principles known 
under  the  heading  of  flexicurity,  which  address  policies  and  measures  as  well  as  the 
involvement of stakeholders.  

At the same time it was noted that to reach a consensus on joint principles of flexicurity one 
needs both the information (such as a reference definition of the concept of flexicurity, as well 
as meaningful, high-quality and up-to-date information on the current situation in each of the 
27 Member States with regard to both external and internal forms of flexibility and security 
for all forms of standard and non-standard forms of employment), and a continuous process of 
social dialogue at the European level, as well as the involvement of all stakeholders (including 
civil society) in search of negotiated solutions4.  

The way in which work is organised, alongside health and safety in the workplace, can play 
a  major  role  in  helping  to  achieve  higher  employment  rates  by  ensuring  wellbeing  at  work, 
maximising the ability of individuals to work and preventing early withdrawal from the labour 
market5. A large body of EU law in the field of health and safety at work has been developed 
with the aim of improving working conditions in the EU and reducing the incidence of work-
related accidents and illnesses; however, the degree to which the EU legislation has actually 
been implemented differs considerably from one Member State to another6.  

At the same time, the global economic downturn may have led organisations to concentrate on 
short-term economic survival strategies, overlooking the long-term importance of workplace 
safety and health7. Therefore, in order to ensure equal protection of European citizens in the 
workplace, particularly in sectors considered to be at risk and for categories of workers who 
are  most  vulnerable  (young  people,  workers  on  fixed-term  contracts,  low-skilled  workers, 
migrants,  etc.),  the  implementation  of  EU  legislation  has  to  be  strengthened.  The 
Commission,  as  the  guardian  of  the  Treaties,  has  to  ensure  that  the  EU  directives  are 
transposed and implemented correctly, and assist Member States in doing this.  

4 Trio Presidency Discussion Paper on Flexicurity, May 2007. 
5 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  Committee  of  the  Regions.  Improving  quality  and  productivity  at  work:  Community 
strategy 2007-2012 on health and safety at work, COM(2007) 62 final, 2007. 
6 Ibid. 
7  European  Agency  for  Safety  and  Health  at  Work.  Annual  Report  2008  –  Health  and  Safety  in  Hard  Times, 
Annual Report, 2008. 

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A package of instruments guarantees a high level of compliance with the legislation, and this 
should  include  dissemination  of  good  practice  at  the  local  level,  distribution  of  information 
and  guidelines,  involvement  of  labour  inspectors  as  intermediaries  to  promote  better 
compliance with the legislation in SMEs, etc8. 

The current EU strategy aims to achieve a 25% reduction in accidents at work by 2012. This 
requires ensuring gender and age equality at the workplace as well as tackling other new 
and  emerging  risks  in  occupational  safety  and  health,  including  chemical  risks  in  SMEs, 
exposure  to  noise  and  hearing  impairment,  ultraviolet  radiation,  occupational  diseases  and 
various other hazards9. The acceleration of innovation, the emergence of new risk factors and 
the transformation of work patterns are changing the nature of occupational hazards. Certain 
types  of  occupational  illnesses  are  becoming  more  common  (musculoskeletal  disorders, 
infections  and  illnesses  associated  with  psychological  stress).  These  changes  mean  that  a 
better understanding of the problems must be acquired by conducting specialised research in 
order to identify effective prevention measures, and therefore possible legislative responses. 

This  better  law-making,  and  the  previously  mentioned  need  to  ensure  implementation  and 
enforcement,  are  closely  linked:  a  good  law  is  an  enforceable  and  enforced  law.  Only  a 
limited number of Member States experience delays in the timely transposition of directives 
in the area of working conditions, while application problems for the Member States are more 
common and arise primarily as a result of political will of national administrations to invest 
themselves  in  the  EU’s  decisions.  This  implies  changes  in  specific  approaches,  such  as 
guaranteeing  administrative  capacity,  screening  domestic  rules  and  procedures,  a  systematic 
discussion between relevant authorities across the EU, ex-post evaluations and accountability 
of  national  administrations  towards  their  counterpart  authorities  in  other  Member  States, 
involvement  of  sub-national  authorities  with  autonomous  legislative  powers,  supporting 
networks  of  public  authorities,  systematic  assessment  of  their  performance  and  the 
identification  and  spread  of  best  practices,  as  well  as  extension  of  training  programmes  for 
judges and public administrations. To address these challenges, a cultural change is required, 
which includes a shift from increasing new EU law to an emphasis on effective application10. 

The combination of rising longevity and lower fertility leads to a steep aggravation of the old 
age  dependency  ratio  and  far-reaching  consequences  for  economic,  budgetary  and  social 
developments. Faced by these challenges, most Member States are reforming their pension 
systems to retain sustainability as well as adequacy and to ensure fairness between and within 
generations and between men and women. Still, the sustainability and adequacy concerns for 
all  types  of  pension  schemes  have  been  aggravated  by  the  crisis,  while  lower  economic 
growth will make it harder and more urgent for policy-makers to find a good balance between 
sustainability and adequacy of national pension systems, especially when the transition costs, 
pension  adequacy,  and  distributional  impacts  of  the  reformed  pension  systems  are 
considered11.  

8 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  the Committee  of  the  Regions Improving  quality  and  productivity  at  work:  Community 
strategy 2007-2012 on health and safety at work, COM (2007) 62 final, 2007. 
9 European Agency for Safety and Health at Work . Outlook 1 – New and emerging risks in occupational safety 
and health. Outlook, 2009. 
10 European Economic and Social Committee. Opinion of the European Economic and Social Committee on How 
to improve the implementation and enforcement of EU legislation, 28 September 2005. 
11 Centre for policy studies Praxis, Transition costs of reformed pension systems. Final report, 2008. 

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Therefore,  it  is  vital  to  strengthen  the  awareness  of  available  routes  to  adequate  income  in 
retirement, share information and ensure better coordination at the EU level on measurements 
and data12, but the lack of consistent data complicates quantitative analysis of pensions needs 
in  EU  Member  States13.  A  number  of  countries  rely  on  poor  quality  data  with  no  obvious 
common characteristics. Barriers with regard to the availability of statistical data were found 
to  be  closely  connected  to  the  absence  of  efficient  and  comprehensive  statistical 
infrastructures.  

The same demographic developments also lead to a number of challenges facing health and 
long-term  care  systems  across  the  EU.  Total  spending  on  health  absorbs  a  significant  and 
growing share of resources (EU average of 9.6% of GDP in 2008, up from 8.5% of GDP in 
1998),  while  public  spending  on  health  constitutes  a  significant  share  of  total  government 
expenditure (14.7% in 2008, up from 12% in 1998) and GDP (EU average of 7.4% of GDP in 
2008,  up  from  6.6%  of  GDP  in  1998)14.  All  EU  Member  States  face  strong  and  growing 
pressures on their health systems, while rising demand and constrained resources exacerbated 
by the recent economic crisis make cost-effectiveness one of the most important goals in this 
area.  

Ensuring  equal  access  to  healthcare  according  to  socioeconomic  status,  place  of  residence, 
ethnic  group  and  gender  will  therefore  be  one  of  the  key  challenges  facing  health  systems 
across the EU in the future15. Each Member State needs to assess the way its health system 
functions  and  find  areas  for  improvement,  possibly  using  peer  reviews  and  other  mutual 
learning to find solutions that can be adapted to each national context. For this, it is crucial to 
have  comparable  and  accessible  evidence  in  order  to  understand  the  incentives  associated 
with  different  payment  mechanisms  and  ensure  they  are  used  to  achieve  policy  objectives. 
However,  data  is  still  not  always  routinely  available  and  comparable  within  and  across 
countries16.  Reinforcing  an  integrated  approach  on  reduction  of  health  inequalities  therefore 
requires not only improving common knowledge and data collection (including definition of a 
restricted number of relevant EU indicators), but also greater visibility on this subject as well 
as  building  commitment  across  society.  This  necessitates  more  active  stakeholder 
involvement  and  could  benefit  from  peer  reviews  and  exchange  of  best  practices  in 
cooperation  with  the  Committee  of  Regions  and  Member  States  based  on  the  experience  of 
the most advanced countries, while considering actual transferability of practices with care17.  

More generally for the area of social protection and social inclusion, the SPC report on the 
mutual  interaction  between  the  common  social  objectives  and  the  strategies  for  growth  and 
jobs18  made  reference  to  the  importance  of  mutual  learning  and  the  peer  review  process  in 
particular,  as  did  the  SPC  report  on  a  voluntary  European  quality  framework  for  social 
services19 and the Eurostat report on the social situation in the European Union (2009)20.  

12 Ibid. 
13 Tarki Social Research Institute. Monitoring pension developments through micro socioeconomic instruments 
based on individual data sources: feasibility study. Final Report, 2009. 
14 Joint Economic Policy Committee, European Commission. Report on Health Systems, 2010 
15  Group  of  experts  on  Gender  Equality,  Social  Inclusion,  Health,  and  Long  Term  Care  (EGGSI),  Access  to 
healthcare and long-term care: equal for women and men? Final Synthesis Report, 2009. 
16 Ibid. 
17 SPC Opinion "Solidarity in Health: Reducing health inequalities in the EU" , 2010. 
18 SPC Report from the SPC working group on the mutual interaction between the common social objectives and 
the strategies for growth and jobs. 
19 SPC Voluntary European Quality Framework for Social Services. SPC/2010/10/8 final, 2010. 
20 European Commission - Directorate-General for Employment, Social Affairs and Equal Opportunities – Unit 
E.1, Eurostat – Unit F.4, February 2010. The Social Situation in the European Union 2009. 

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The analysis performed as a part of the on-going evaluation of the peer review process in this 
policy  area21  signals  the  importance  of  the  mechanism.  It  reveals  that  in  2004-2010,  there 
were  around  10-20  cases  every  year  when  Member  States  rather  clearly  expressed  their 
intention to use/ transfer the ideas discussed, and 15-25 cases when Member States indicated 
that  they  find  the  ideas  interesting.  Very  frequently  the  Member  States  also  mentioned 
important  constraints  that  make  transferability  difficult  (especially  differences  in  terms  of 
division  of  responsibility  between  national  and  regional/  local  institutions,  budgetary 
constraints, strength of the NGO sector, etc.).  

Indeed in many cases the peer review participants both expressed their interest in the practices 
presented and also discussed the potential difficulties of transferring the ideas to other societal 
and policy contexts.  

There is a broader agreement among academic commentators, NGOs, and the SPC itself that 
despite the Social OMC’s undeniable contributions to promoting mutual learning among EU 
Member States, its full potential in this area has not yet been fully exploited22. 

Some population groups are especially underrepresented in employment and fare much worse 
in  various  areas  of  life,  such  as  women  with  disabilities23  and  people  with  mental 
disabilities24.  There  is  a  very  significant  absence  of  disability  mainstreaming  in  the 
presentation  of  labour  market  statistics  and  indicators.  Statistical  data  on  the  situation  of 
persons with disabilities on the labour market is not fully comparable across countries due to 
the fact that definitions of disability vary largely across and even within countries depending 
on the legislative context25. Similar legislative issues apply to the transposition of EU rules on 
Gender Equality into national law: EU-wide analysis shows that the Member States still do 
not  unanimously  transpose  EU  law  and  definitions  with  regard  to  direct  and  indirect 
discrimination,  positive  actions,  harassment,  access  to  work  and  working  conditions, 
pregnancy and maternity, parental leave and other issues26. 

Mainstreaming of non-discrimination is not limited to legislative action. For example, Roma 
are  disadvantaged  in  several  respects  and  are  particularly  vulnerable  to  social  exclusion, 
poverty  and  discrimination.  Access  to  fundamental  rights  and  level  of  social  inclusion  are 
deeply influenced by a number of factors including racism and discrimination against Roma, 
civil  status  and  access  to  personal  documents,  the  general  economic  and  political  climate, 
political participation and representation.  

21  The  analysis  was  based  on  the  detailed  desk  research  of  the  relevant  peer  review  documents  such  as  the 
comments  of  Member  States’  representatives  in  the  minutes,  synthesis  reports,  comments’  papers,  to  assess 
whether  these  representatives  signal  clearly  their  intention  to  use  or  transfer  at  least  some  elements  of  the 
practice discussed or they rather choose to underline the institutional and other differences between the countries 
that make the transfer unlikely. 
22  For  example,  Armstrong,  K.A.,  Governing  Social  Inclusion:  Europeanization  through  Policy  Coordination, 
Oxford: Oxford University Press, 2010; FEANTSA, Untapped Potential: Using the Full Potential of the OMC to 
Address Poverty in Europe, Brussels, 2007. 
23 ECOTEC. Study on the situation of women with disabilities in light of the UN Convention for the Rights of 
Persons with Disabilities. Final Report, 2009. 
24 The Academic Network of European Disability experts (ANED). Targeting and mainstreaming disability in 
the 2008-2010 National Reform Programmes for Growth and Jobs, Report, 2009. 
25 KMU Forschung Austria. Providing reasonable accommodation for persons with disabilities in the workplace 
in the EU – good practices and financing schemes. Final Report, 2008. 
26  European  Network  of  legal experts  in  the field  of gender  equality.  EU Rules  on Gender  Equality: How  are 
they transposed into national law? Report, 2009. 

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Widespread  negative  attitudes  towards  Roma  and  stigmatisation  are  important  barriers  to 
successful implementation of measures to improve Roma inclusion27. While several important 
legislative  developments  at  the  EU  level  during  the  last  10  years  have  established  a 
framework  for  greater  protection  against  racism  and  racial  discrimination  for  EU  citizens, 
including  Roma,  successful  policy  conditions  for  further  Roma  inclusion  still  require  multi-
sector  approaches  to  social  inclusion,  effective  coordination  of  policy  implementation, 
sustainable  social  inclusion  policies,  targeting  and  mainstreaming,  positive  action,  Roma 
participation and adequate data collection. 

A  strengthened  policy  framework  under  Europe  2020  implies  an  even  stronger  need  for 
evidence  for  decision  making  than  it  was  before.  With  regard  to  the  successor  programme, 
this means that it will have to strengthen its assistance to the Commission in implementing its 
tasks: 

a)  Fact finding and evidence gathering about relevant developments in the EU Member 
States, candidate countries, EEA and EFTA states and in the international context; 

b)  Regular  supervision  and  reporting  on  the  progress  of  the  Member  States’  towards 

common priorities and objectives laid down at the EU level; 

c)  Monitoring and strengthening gender mainstreaming; 
d)  Safeguarding  the  Treaties  (ensuring  and,  if  necessary,  reinforcing  the  effectiveness 

and uniform application of EU law); 

e)  Reporting  regularly  on  the  transposition  of  provisions  of  individual  Directives  into 

national law; 

f)  Modernising EU legislation in line with the Smart Regulation principles. 

Next  to  assisting  the  Commission  in  accomplishing  its  tasks,  the  successor  to  PROGRESS 
should  also  feature  a  process  of  discussion  and  search  for  consensus  between  the  various 
actors, including - next to the public authorities on the different levels - also social partners 
and civil society.  

2.2.2.  EURES  

The  free  movement  of  workers  is  one  of  the  four  freedoms  in  the  TFEU.  One  of  the  ideas 
behind  Articles  45  and  46  is  to  enable  workers  from  Member  States  with  high  level  of 
unemployment  to  move  to  other  states  where  there  is  a  demand  for  jobs.    Economic 
development  and  European  social  cohesion  can  be  improved  if  workers  can  move  freely 
between EU member states from regions with low career prospects to those where they have 
better  perspectives.  The  June  2010  Special  Eurobarometer  on  "Geographical  and  labour 
market  mobility"  showed  that  34%  of  Europeans  think  that  their  chances  of  finding  a  job 
abroad  are  better  than  in  their  own  countries;  However,  only  2.3%  of  the  working  age 
population lives and works in a Member State different from the one of their nationality.  

Geographic  mobility  in  Europe  is  limited  due  to  a  number  of  obstacles.  Aside  from  an 
uncertainty over the advantages of being mobile, individuals face a number of hurdles to free 
movement.  These  can  range  from  legal  and  administrative  obstacles,  housing  costs  and 
availability, employment of spouses and partners, portability of pensions to linguistic barriers 
and issues on transparency of job vacancies and missing support for matching CVs with job 
offers.  

27 The European Commission, Improving the tools for the social inclusion and non-discrimination of Roma in 
the EU, Summary and selected projects, 2010. 

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EURES addresses transparency issues by making available job vacancies from Member States 
on  the  EURES  Job  Mobility  Portal  and  provides  support  for  activities  in  the  areas  of 
recruitment and related information, advice and guidance services at national and cross-border 
level. 

Increasing  intra-EU-mobility  by  giving  access  to  more  employment  opportunities  may 
contribute to economic growth. Evidence from Commission research suggests that countries 
not  applying  transitional  rules  on  free  movement  and  therefore  allowing  incoming  mobility 
have benefited from a higher GDP growth.  

"Positive externalities from mobility clearly outweigh the negative externalities. Geographic mobility 
may indeed be a win-win situation in economic terms for both the sending and the receiving country. 
Positive  externalities  mainly  stem  from  positive  growth  effects  associated  with  free  movement  of 
human  capital  reducing  labour  market  imbalances,  improved  skill  matches  in  an  integrated  market, 
higher  investment  into  education,  and  a  higher  level  of  innovation  and  entrepreneurship.  Negative 
externalities are primarily pecuniary or fiscal, and these negative effects in the destination country are 
at least partially offset by corresponding positive effects in the sending region. The efficiency gains, 
however, are unambiguously beneficial for Europe."28 

Further down in the policy implementation cycle, the European Public Employment Services 
(PES)  play  a  vital  role  in  better  matching  demand  and  supply  on  national  and  EU  labour 
markets; and preventing the risks of structural and long-term unemployment. With the recent 
recession  and  the  starting  war  for  talents  the  expectations  towards  PES  have  become  even 
stronger.  The role of PES has changed; more and more they act as transitions agencies and 
therefore  need  to  by  strengthen  their  service  delivery.  While  their  main  role  currently  is  to 
address the needs of the unemployed, employment  services  can play a more comprehensive 
role as lifelong service providers, delivering services in skills assessment, profiling, training 
delivery,  individual  career  guidance  and  client  counselling  (workers  and  employers), 
matching people to job profiles, and offering services to employers, as well as catering for the 
challenges of those furthest away from the labour market. Employment services should also 
promote  partnerships  between  and  among  services  (public,  private  and  third  sector 
employment services), education and training providers, NGOs and welfare institutions.  

Following  the  Court  judgement29,  the  current  limitation  to  Public  Employment  Services  of 
EURES  is  no  longer  possible,  and  new  methods  of  cooperation  with  the  private  sector  are 
being explored (see Section 5). 

2.2.3.  Microfinance and Social Entrepreneurship  

Entrepreneurship refers to the process of creating or expanding economic activity, primarily 
by  establishing  new  businesses  or  new  ways  of  doing  business:  entrepreneurs  that  take  the 
risk of doing things differently.  

Becoming self-employed is one avenue for unemployed people to get into a job and make a 
living,  and  an  important  pathway  out  of  social  exclusion.  Entrepreneurship  is  also  easing 
transition from the informal to the formal sector.  

28 Geographic Mobility in the European Union: Optimising its Economic and Social Benefits, IZA Research 
Report No. 19, 2008 http://www.iza.org/en/webcontent/publications/reports/report_pdfs/iza_report_19.pdf 
29 Case C-55/96, last sentence of the conclusions. 

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Job creation through the establishment and consolidation of new businesses therefore plays a 
significant  role  in  achieving  the  employment  and  inclusion  targets  of  the  Europe  2020 
Strategy: a significant share of new jobs in the EU is created by newly established firms and 
almost  85%  of  these  jobs  are  created  by  micro-firms.  In  the  EU,  these  firms  generate  on 
average nearly 2 jobs, in some Member States up to 3.  

However, Europe is far from exploiting its full potential in this respect: the rate of business 
creation30 on average is estimated at around 4.5 % in the EU, compared to 8% in the USA31. 
According  to  a  2009  survey,  on  average  45%  of  Europeans  wish  to  become  self-employed 
against 60% in the USA. As a result of the crisis, even fewer think it is feasible to become 
self-employed32. 

Microfinance 

One of the major obstacles to business creation is lack of access to finance, especially micro-
credit (i.e. loans of less than EUR 25 000)33. 

In  2007,  i.e.  before  the  economic  crisis,  the  Commission  estimated  the  demand  for 
microcredit at around 700 000 loans worth EUR 6.2 billion in the short term34.  Taking into 
account research done at national level, this seems to be a careful assessment: for instance a 
2009 French study estimated the unsatisfied demand for microloans only for France in 2008 at 
187 000  microloans35  (of  which  113  000  in  the  bankable  segment,  74  000  on  the  non-
bankable segment)36. 

The  crisis  seems  to  have  exacerbated  the  problem:  a  2010  study  commissioned  by  the 
European  Parliament  shows  that  55%  of  the  responding  microcredit  providers  expected  a 
"strong growth" of demand over the coming three years. According to a sample of microcredit 
providers in ten EU Member States37, the potential demand could reach as much as 2 935 000 
microloans  (in  these  ten  countries).  Most  demand  was  expected  from  people  made 
unemployed/hit by the crisis and wishing to start a business (20% of responses). This group is 
followed  by  people  who  are  long-term  unemployed  or  living  on  social  benefits  (12%  of 
responses), or who are excluded  both  from welfare  and  the  market  (4%)  or  who  are  part  of 
typically fragile groups such as single parents, the young, migrants (4%). The study interprets 
these  findings  as  that  the  crisis  has  doubled  the  demand  potential  for  microfinance  in 
Europe38. 

30 The Total Early-Stage Entrepreneurial Activity (TEA) rate encompasses activities related to business creation, 
throughout all stages of the business cycle, from conception through firm birth to the first 3.5 years of being in 
business. 
31 Global Entrepreneurship Monitor, 2009 Global Report. 
32  European  Commission,  Entrepreneurship  in  the  EU  and  beyond.  A  survey  in  the  EU,  EFTA  countries, 
Croatia, Turkey, the US, Japan, South Korea and China Flash, Eurobarometer 283, June 2010. 
33 defined as loans of less than EUR 25 000. 
34  European  Commission,  A European  initiative  for  the development of  micro-credit  in support  of growth  and 
employment, COM(2007) 708 final. 
35 The definition of microcredit in this part of the study is loans of less than EUR 30 000. 
36  République  française,  Ministère  de  l'Economie,  de  l'industrie  et  de  l'emploi  et  Ministère  du  budget,  des 
comptes publics, de la fonction publique et de la réforme de l'Etat, Le Microcrédit, Rapport N° 2009-M-085-03, 
December 2009. The estimation is based on a study carried out by ADIE.  
37 PL, BG, LV, ES, RO, IT, F, UK, DE and NL. 
38  European  Parliament,  Directorate-General  for  internal  policies,  Microcredit  networks  and  existing  national 
legislations with a view to the implementation of the microfinance instrument, November 2010. 

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The  mismatch  between  the  low  level  of  microcredit  supply  and  the  high  demand  can  be 
explained by several factors: One is the difficulty for microcredit providers to assess the risk 
of providing a microloan to a new business: young companies or start-ups have by definition 
no  track  record  and  mostly  only  limited  collateral  to  mitigate  the  risk.  But  even  well 
established  micro-enterprises  are  often  unable  to  provide  the  necessary  information  and 
collateral for obtaining a bank loan39. With the financial and economic crisis40 banks tend to 
be even more risk averse and hence demand more collateral and security41. Because of these 
(perceived)  higher risks  of young  companies or start-ups,  financial institutions, in particular 
banks,  do  not  see  micro-finance  as  a  profitable  product.  In  addition,  small  loans  entail 
comparatively high administration expenditure and transaction costs per loan42, which further 
reduces profitability if these costs cannot be fully charged to the client.  

Cost for micro-lending is even higher for loans to people from disadvantaged groups such as 
unemployed, young or older people or migrants, as this type of clients represents a higher risk 
of default and would often need costly personalised business support services. By and large, 
micro-loans for these target groups cannot be provided on a commercial basis. 

Hence, by far the majority of micro-credit to disadvantaged persons in the EU is provided by 
non-commercial micro-finance institutions (NGOs, foundations, government bodies, Member 
States'  promotional  banks,  non-bank  financial  institutions).  The  European  micro-finance 
sector  has  clearly  not  reached  maturity  yet:  in  2009,  57%  of  the  European  microfinance 
institutions disbursed less than 50 loans while only 13% of the organisations disbursed more 
than 400 loans43. 
In  order  to  grow,  European  micro-finance  institutions  would  need  to  build  and  maintain 
adequate  funding  models.  This  is  a  weak  point,  especially  of  non-bank  microfinance 
institutions,  as  a  market  study  for  the  EIF  revealed.  The  latter  identified  a  clear  need  for 
institutional capacity-building through sustained funding to cover start-up and operative costs 
and  funding  for  on-lending  to  high  risk  target  groups.  Other  difficulties  found  were 
underdeveloped  systems  for  performance  measurement  and  analysis,  only  average  capacity 
levels regarding human resource management and a lack of capacity by non-bank microcredit 
providers for networking and co-operation44. In a 2010 survey carried out by EMN, European 
microfinance  institutions  counted  the  lack  of  institutional  capacity  and  lack  of  access  to 
funding  to  cover  operational  costs  or  for  lending  among  the  most  significant  obstacles  to 
growth45.  EMN  considers  the  lack  of  access  to  long-term  funding  as  the  most  important 
problem  driver  as  it  restricts  microcredit  providers'  ability  to  grow,  to  broaden  and  deepen 
outreach across the sector, their ability to build institutional capacity and their ability to reach 
sustainability, especially during the financial and economic crisis. 

39 Per-Erik Erikkson, Helmut Kraemer-Eis and Alessio Conforti, "Microfinance in Europe", in: Delia, E.P. (ed.), 
Microcredit as a Tool of Ethical Financing of Sustainable Development, Occasional papers APS Bank, 2011. 
40  OECD,  The  Impact  of  the  Global  Crisis  on  SME  and  Entrepreneurship  Financing  and  Policy  Responses, 
2009. 
41 UEAPME, European SME Finance Survey, 2009.  
42 European Commission, Gaining scale in microcredit. Can banks make it happen?, Report on two workshops 
organised by the Directorate-General for Enterprise and Industry, 2010. 
43 Jayo Bárbara, González Ana and Conzett Casey, Overview of the Microcredit Sector in the European Union, 
EMN Working Paper n° 6 2008-2009, June 2010.  
44 Evers and Jung / EMN, EIF Market studies on micro lending in the European Union: capacity building and 
policy  recommendations,  March  2009.  According  to  the  study,  institutional  capacity  encompasses  vision  and 
strategy, funding, human resources, operational management and systems and infrastructure. 
45 Jayo Bárbara, González Ana and Conzett Casey, Overview of the Microcredit Sector in the European Union, 
EMN Working Paper n° 6 2008-2009, June 2010. 

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A  study  commissioned  by  the  European  Parliament46  seems  to  confirm  this  analysis:  asked 
about the form of support which would have the greatest impact on the development of their 
microfinance activity, the respondents of a survey47 identified grants for institution building, 
capital and grants for client support as the three highest priorities48. 

Social entrepreneurship 

Social enterprises show a great variety in terms of legal status, products and services produced 
or  distributed,  markets  served,  and  growth  potential49.  They  also  differ  largely  in  terms  of 
composition  of  revenue  (sales,  service  contracts  with  public  bodies,  donations,  voluntary 
work  etc),  which  in  addition  tends  to  change  during  the  development  of  a  social  enterprise 
towards  financial  self-sufficiency.  The  common  pattern  in  their  financial  needs  is  that  the 
more  revenue  is  generated  through  trading  on  the  market,  the  more  they  depend  external 
financing for consolidation and growth. Their specific financing requirements (long-term; mix 
of grants, equity and loans for new services or new markets) makes it difficult for traditional 
financial institutions to serve their financing needs.  

This  has  led  to  the  emergence  of  (infant)  social  investment  markets  in  some  countries  (in 
particular  UK  and  France),  whereas  these  are  less  advanced  in  most  other  Member  States, 
definitely in the new Member States. The main actors50 offering social investments are: 

-  Value banks; 
-  Venture philanthropy funds; 
-  Social investment funds; 
-  Funding consultancies, and; 
-  Social stock exchanges. 

Each of those serving a specific market segment, offering (a range of) financial instruments 
(grants, debt, equity, mezzanine capital, and a combination of these: “hybrid capital”. 
The main imperfections of, and barriers to social investment markets on the supply side are51 
EU and national financial market regulation: 

-  Lack  of  understanding  the  specificities  of  social  enterprises  by  traditional  financial  

sector; 

-  Uncertainty that market or close to market returns can be achieved, and insufficient 

protection of downside risks; 

-  Insufficient liquidity to reduce perceived risk; 
-  Missing or weak measurement of the social returns generated by the investment; 

46  European  Parliament,  Directorate-General  for  internal  policies,  Microcredit  networks  and  existing  national 
legislations with a view to the implementation of the microfinance instrument, November 2010. 
47 The results of the survey are based on 81 fully completed questionnaires from microcredit providers in 16 EU 
Member States.  
48  European  Parliament,  Directorate-General  for  internal  policies,  Microcredit  networks  and  existing  national 
legislations with a view to the implementation of the microfinance instrument, November 2010. 
49  Social  enterprises  often  serve  local  markets,  and  therefore  often  have  limits  for  organizational  growth: 
However, successful business models often be scaled through through replication, franchising, networking etc. 
50  For  details,  see  Social  Investment  Manual.  A  Guide  for  Social  Entrepreneurs,  developed  by  the  Social 
Investment Task Force (Technical University Munich; Schwab Foundation Community of Social Entrepreneurs, 
Schwab Foundation for Social Entrepreneurship), 2011. 
51  Investor  Perspectives  on  Social  Enterprise  Financing.  Report  prepared  for  the  City  of  London  Corporation, 
City Bridge Trust, and the Big Lottery Fund by ClearlySo (author: Katie Hill , July 2011 

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-  Few products and managers with a track record in social impact investment; 
-  Weak investment propositions, notably few large scale investment opportunities; 
-  Insufficient numbers of social business angels.  

In addition, there are also demand side barriers to social investment, in particular: 

-  Insufficient orientation on capital markets, but on the grant economy; 
-  Legal structure prevents taking (quasi-)equity; 
-  Market for social impact investment not  transparent;  
-  Insufficient  experience  in  making  proposals  for  external  financing,  and  for 

combining different sources and types of finance ( e.g. grants/loans); 

-  Insufficient infrastructures /business development services/ incubators etc. 

Furthermore,  there  are  market  structure  barriers  to  social  investment  resulting  from  lack  of 
qualified intermediaries and market places. 

The  concept  of  social  entrepreneurship  (which  draws  on  the  well-established  European 
tradition of the social enterprises such as social co-operatives) reflects the need to restructure 
business  towards  inclusive,  socially  fairer,  and  environmentally  sustainable  growth,  to 
generate jobs by meeting the needs of a diversity of work, lifestyles and social values, and to 
link  entrepreneurial  activity  with  social  innovation.  This  business  model  seems  to  meet 
growing  acceptance  and  application  by  young  people  and  women,  whose  business  creation 
rates are higher for social enterprises than for traditional businesses. 

2.3.  Who are the target groups and what are their needs?  

The main players affected by the Progress programme are public authorities, social partners 
and civil society organisations at EU and national level as well as the European Commission 
itself.  A  needs  analysis52  looked  into  the  situation,  motivations  and  interests  of  EU-level, 
national  and  regional  stakeholders  in  relation  to  the  broad  thematic  areas  addressed  by  the 
programme  and  identified  a  number  of  implications  for  the  successor  instrument.  National 
authorities  emphasised  a  need  for  simple,  but  effective  implementation  mechanisms, 
reduction  of  red  tape  and  administrative  burden  in  access  to  EU  programmes.  They  also 
underscore  that  the  EU  needs  to  respect  the  unique  situation  of  each  country  and  not  try  to 
find  a  “one  size  fits  all”  approach,  but  rather  facilitate  exchange  of  information  about 
solutions which proved to be effective. EU-wide definitions and indicators, comparable data 
and monitoring are seen as useful tools for informed policymaking. Pooling, comparing and 
disseminating 
facilitating  policy 
implementation.  

initiatives  would  also  help 

the  Member  States’ 

Most  social  and  economic  partners  focused  on  such  interests  as  recognition  of  their 
contribution to public policies, networking, exchange of information and good practices, and 
balanced  policy  dialogue.  The  study  found  that  the  merely  formal  nature  of  stakeholder 
involvement  and  fragmentation  of  policies  (separation  of  employment  and  social  policies) 
impede more effective participation of social and economic partners.  

The  key  interests  of  NGOs  and  networks  appeared  to  be  rather  similar,  yet  often  in  tension 
with interests of other stakeholders. Inclusive policy dialogue with extensive mainstreaming 
of the needs of various target groups and sub-groups, consultation and partnership at multiple 
levels and stable public funding were often mentioned among the interests of this group.  

52 Public Policy and Management Institute , PROGRESS stakeholder needs analysis, 2011. 

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While  national  authorities  emphasised  subsidiarity,  NGOs  and networks encouraged the  EU 
to be more proactive. Such potential tensions should be solved on a case-to-case basis, and the 
successor instrument can be used to identify such tensions and engage various actors to solve 
them. 

The  needs  analysis  has  also  revealed  a  strong  emphasis  on  visibility  and  dissemination. 
Therefore focusing on visibility, dissemination and exploitation, as well as exchange of good 
practices within the framework of the successor instrument would create a win-win situation 
for all. As emphasised in the recent guidelines for EU’s policies for social innovation53, there 
will be an increasing need to scale up innovative approaches and support transfer of evidence-
based social experimentation. The analysis of stakeholder needs supports this approach: most 
stakeholders  are  in  favour  of  EU  support  for  social  experimentation  and  dissemination  of 
good practices and innovative approaches. 

The  main  target  group  of  EURES  are  employers,  jobseekers  and  job  changers.  Among 
jobseekers and  job changers younger cohorts and graduates can be identified as main target 
group  as  they  are  strongly  affected  by  the  current  economic  crisis  and  at  risk  of  long-term 
unemployment. Moreover, young people are typically more mobile than middle-aged or older 
people.  

According to an external evaluation of the functioning of the EURES network in 2006-200854, 
the  majority  of  people  who  use  EURES  as  a  job  search  tool  are  men  (64.1%).  Men  and 
women searching for job are typically aged 26-35 (43.8%) or 36-50 (34.5%). The majority are 
educated at Bachelors (31.1%) or at Masters (27.9%) levels. The analysis of the database for 
requests to EURES advisers revealed that the majority of contacts took place with jobseekers 
and job changers rather than with employers. Since the second quarter of 2007, 86.0% of all 
contacts have taken place with jobseekers or job changers. Job search has constantly been the 
most common topic discussed through the adviser contacts: on average 41.2% of the contacts 
focussed on this issue between 2006 and 2008. The second most common topic was general 
information on EURES discussed in some 17.3% of the contacts during the same time period. 
Other  main  topics  were  social  security  and  taxation,  education  and  training,  living  and 
working conditions and other general information and advice 

The  final  target  group  of  EU-level  microfinance  support  is  people  who  want  to  become 
self-employed  or  set  up  or  develop  their  own  business  and  face  difficulties  in  securing  a 
traditional bank loan, i.e. unemployed people, people at a risk of losing their jobs and people 
from  disadvantaged  groups,  for  instance  young  or  older  people  or  migrants.  These  people 
need better access to microcredit, i.e. loans of less than EUR 25 000.  

In order to reach out to this target group, EU support is provided directly through microcredit 
providers,, i.e. public and private bodies at national, regional and local levels which provide 
microloans  to  persons  and  micro-enterprises  in  the  EU  Member  States  and  in  the  EEA  and 
candidate  countries.  If  they  are  to  reach  out  to  the  final  beneficiaries  mentioned,  they  need 
instruments  to  mitigate  the  risks  they  incur  and  funding  to  refinance  their  loan  capital.  In 
order  for  the  microfinance  market  to  grow  and  increase  its  absorption  capacity,  long-term 
financial support for institutional capacity building is also needed.  

53  Conference  Report:  Social  Innovation  Europe  Launches  in  Brussels:  the  Innovation  Union  moves  forward. 
Available online at: 
http://ec.europa.eu/enterprise/policies/innovation/files/sie-conference/conference-report_en.pdf. 
54 Ex-post evaluation of the EURES programme covering the period 2006-2008, EPEC 2010.  

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The final beneficiaries of EU level social entrepreneurship support are social enterprises55 
which can be characterised as follows:  

−  Their  mission  is  to  generate  a  societal  value  in  the  general  interest,  notably  by 
contributing  to  smart,  sustainable  and  inclusive  development  (thus  their  purpose  and 
impact are social). This often translates in a high degree of social innovation. 

−  They establish business governance and ownership structures that reflect the mission of 
their social enterprise, promoting empowerment and involvement in decision-making and 
increasing  participation  in  social  and  working  life,  of  employees,  partners  and  clients 
(thus their process of working is social). 

−  They  mainly  use  the  surplus  generated  from  their  economic  activity  to  realise  their 
societal  objective,  by  reinvesting  and  furthering  their  societal  purpose  (thus  using  the 
economic benefits for a social purpose). 

These enterprises can achieve their social impact either through the goods and services they 
produce  (e.g.  services  to  disadvantaged  groups  like  access  to  housing,  health  care  etc.)  or 
through  the  way  the  produce  them  (integration  of  disadvantaged  groups  into  the  labour 
market). 

Social  enterprises  have  difficulties  in  access  to  funding  for  development,  consolidation  and 
scaling  of  operations56.  To  channel  funding 
to  social  enterprises,  EU-level  social 
entrepreneurship  support  targets  social  investment  funds.  Typically  these  funds  have  a  size 
ranging between EUR 10 million and EUR 50 million. According to the EIF, investments by 
an EU level financial instrument in such funds should range between EUR 5 million and EUR 
15 million, depending on the fund size.  

55  UNDP/EMES:  Social  Enterprise:  A  new  model  for  poverty  reduction  and  employment  generation.  An 
Examination of the Concept and Practice in Europe and the Commonwealth of Independent States, 2008 OECD; 
The Changing Boundaries of Social Enterprises Edited by Antonella Noya, 2009. 
56 Marguerite Mendell, Rocio Nogales: What are the Financial Streams?, in : OECD , The Changing Boundaries 
of Social Enterprises Edited by Antonella Noya, 2009;  
Social  Investment  Manual. A  Guide for Social  Entrepreneurs, developed by  the Social  Investment  Task  Force 
(Technical University Munich; Schwab Foundation Community of Social Entrepreneurs, Schwab Foundation for 
Social Entrepreneurship), 2011 
Investor Perspectives on Social Enterprise Financing. Report prepared for the City of London Corporation, City 
Bridge Trust, and the Big Lottery Fund by ClearlySo (author: Katie Hill , July 2011. 

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3. 

LESSONS FROM THE PAST  

3.1. 

The current system of funding  

The EU Programme for Employment and Social Solidarity - PROGRESS57 supports the 
development  and  coordination  of  EU  employment  and  social  policy.  The  programme  helps 
the Commission to fulfil its tasks both in the fields of (a) law-making, to ensure that evidence-
based  legislation  meets  all  the  principles  of  Smart  Regulation;  and  (b)  policy-coordination 
among the Member States.  

The total budget of the programme amounts to 683.25 million € for the programming period 
2007-2013. It is spread over five broad policy sections in the following manner58:  

1.  Employment – 23%;  
2.  Social protection and social inclusion – 30%; 
3.  Working conditions, including restructuring – 10%; 
4.  Anti-discrimination and diversity  – 23%59; 
5.  Gender equality – 12%. 

PROGRESS  finances  three  main  types  of  actions:  analytical  activities;  mutual  learning, 
awareness and dissemination activities; support for main actors. 

The  programme  is  directly  managed  by  the  Commission  mainly  through  calls  for  tenders, 
calls  for  proposals  and  joint  management.  In  the  case  of  grants,  the  programme  provides  a 
maximum of 80% co-financing.  

Set up in 199360, EURES is a co-operation network between the European Commission and 
the Public Employment Services of the EEA Member States (the EU countries plus Norway, 
Iceland  and  Liechtenstein)  and  other  partner  organisations.  Switzerland  also  takes  part  in 
EURES  co-operation.  The  annual  financial  appropriations  of  EURES  amount  to  €  21.3 
million. 

EURES provides information, advice and recruitment/placement (job-matching) services for 
the benefit of workers and employers as well as for any citizen wishing to  benefit from the 
principle of the free movement of persons. 

The combined resources of EURES members and partner organisations (Public employment 
services) have made it possible to develop EURES trough a network of more than 5000 local 
employment  offices  with  more  than  5000  staff  offering  EURES  specialist  services  to 
jobseekers, job changers and employers. EURES network also fosters European mobility via 
the internet platform http://eures.europa.eu. 

EURES has demonstrated its European added value during the economic crisis by increasing 
access to more employment opportunities and unfilled vacancy. The number of visits on the 
EURES portal has almost doubled from 2008 to 2009 (from 17 500 000 to 33 750 000).  

57  OJ  L  315,  15.112006,  p.  1.  Decision  No  1672/2006/EC  of  the  European  Parliament  and  of  the  Council  of 
24 October  2006  establishing  a  Community  Programme  for  Employment  and  Social  Solidarity  —  Progress. 
Decision as amended by Decision No 284/2010/EU (OJ L 87, 7.4.2010, p.6). 
58 Two percent of the budget is used for support measures to the implementation of the whole programme 
59 As from January 2011, anti-discrimination and gender equality sections are managed by Directorate-General 
for Justice.  
60 COM 2003/8/EC of 22 December 2002 based on regulation 1612 from 1968 codified 492/2011 from 5 April 
20011 

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The  EURES  network  has  organised  705  events  attended  by  864.371  participants  between 
2006 and 2008.  

The  aims  of  the  European  Progress  Microfinance  Facility  (Progress  Microfinance)61, 
which was set up in 2010 as a response to the economic crisis, are twofold: on the one hand, it 
makes microfinance within the EU more readily available and accessible to persons who wish 
to  become  self-employed  or  start  up  or  develop  micro-enterprises  in  that  it  enables 
microcredit  providers  in  the  EU  to  increase  their  lending  to  them.  On  the  other  hand,  it 
improves access to microfinance by reducing the risk borne by microfinance institutions. This 
allows  providers  to  reach  out  to  groups  who  could  not  normally  be  served,  for  instance 
because they could not put up sufficient collateral or because the interest rates would have to 
be very high if they were to reflect the real risk.  

Progress Microfinance is jointly managed with the European Investment Fund. It is a demand-
driven  instrument.  The  Union’s  contribution  is  EUR  100  million,  of  which  EUR  25  million 
are  used  for  guarantees  to  microcredit  providers,  while  the  remaining  EUR  75  million  are 
earmarked for funded instruments, i.e. debt, equity and funded risk-sharing instruments. For 
the latter, a specialised investment fund has been set up. The Commission estimates that the 
Union contribution, which is matched by the European Investment Bank, will leverage a total 
volume of microloans of more than EUR 500 million over eight years62. 

End of July 2011, seven institutions (in Belgium, the Netherlands, Poland, Bulgaria, Romania, 
Lithuania and Cyprus) had already signed transactions under Progress Microfinance. By the 
end of 2011, 14 operations are expected to be concluded.  

Up to now, there is no EU level financial instrument for supporting the development and up-
scaling of social enterprises. 

3.2. 

Achievements of the current instruments and delivery issues 

3.2.1.  The Progress programme 

Achievements  

The  interim  results  of  the  mid-term  evaluation63  and  those  of  the  annual  performance 
monitoring64 provide evidence of PROGRESS outcomes and offer insights about its delivery 
processes. 

PROGRESS allowed for Europe-wide comparison of evidence, and for developing statistical 
tools, methods and common indicators to ensure that EU employment and social policy and 
legislation  are  relevant  to  the  needs  of  Member  States.  Although  the  primary  user  of  such 
outputs is the Commission itself, there is evidence65 that these outputs are used in the EU and 
national policy- and law-making as well as in the wider policy debate.  

61 OJ L 87, 7.4.2010, p. 1. Decision No 283/2010/EU of the European Parliament and of the Council of 25 March 
2010 establishing a European Progress Microfinance Facility for employment and social inclusion. 
62  For  more  details  see  also:  European  Commission,  Implementation  of  the  European  Progress  Microfinance 
Facility — 2010, COM(2011) 195 final. 
63 The mid-term evaluation is carried out by Ecorys Netherlands. The final report is expected to be completed in 
December 2011. 
64  The 
are  presented 
http://ec.europa.eu/social/main.jsp?catId=659&langId=en  
65 PROGRESS Annual Performance Monitoring Report 2009.  

annual  performance  monitoring 

available 

reports 

results 

the 

at: 

in 

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Specific  examples  of  policy  evidence  which  was  evaluated  by  the  respondents  to  the  2010 
Annual Survey as being most helpful in different PROGRESS policy areas include: 

•  Employment section: Monthly Labour Market Monitor and Quarterly Labour Market 

Review, 

•  Social  protection  and  social  inclusion  section:  Collection  of  statistics  on  income  and 
living conditions, reports of the group of independent experts on social inclusion and 
MISSOC database: Comparative Tables on Social Protection, 

•  Working  conditions  section:  Non-binding  guide  to  good  practice  for  implementing 

Directive 2003/10/EC, 

PROGRESS is the main financial instrument of the EU to mutual learning and the exchange 
of  good  practices  in  employment  and  social  solidarity  through  the  European  Employment 
Strategy  (EES)  and  the  Open  Method  of  Coordination  on  Social  Inclusion  and  Social 
Protection  (Social  OMC).  These  processes  have  proven  to  provide  factual  information, 
influence  agenda-setting,  enhance  cooperation  among  national  authorities  and  constitute  a 
basis for decision-making for participating Member States66. For instance, 22 Member States 
plus Norway and Serbia were actively involved in the Mutual Learning Programme in 2010. 
Main  issues  covered  included  self-employment,  labour  market  integration  of  the  Roma 
community, support for the jobseekers and the unemployed, short time working arrangements, 
ageing  population  and  education  choices,  activation  of  the  elderly,  and  labour  market 
integration of lone parents.  

PROGRESS  strengthened  partnership  among  policy  makers  and  stakeholders  especially  by 
contributing to the capacity building of key non-governmental actors (EU-level networks and 
national NGOs).  

In  particular,  the  outputs  of  key  EU  networks  were  seen  by  a  majority  of  stakeholders  as 
beneficial for advocacy and partnerships67. For instance, in 2010, PROGRESS-supported key 
EU networks and NGOs produced 295 reports aimed at providing policy advice, research and 
analysis,  179  reports  aimed  at  identifying  good  practices,  and  235  reports  aimed  at 
monitoring/assessment in the policy areas of anti-discrimination, social protection and social 
inclusion,  and  gender  equality.  They  also  organised  316  training,  peer  review  and  other 
mutual learning events, as well as 462 information and communication events. The number of 
participants  in  those  events  increased  by  more  than  50%  from  21  901  in  2009  to  34  501  in 
2010.  

Through PROGRESS, the Commission seeks to bring about effective application of EU law 
on  matters  related  to  health  and  safety  at  work,  labour  law,  working  conditions,  non-
discrimination and gender equality in all Member States.  

66  89%  of  the  2010  Annual  Survey  respondents  claim  to  have  gained  better  understanding  of  EU  policy 
objectives  by  participating  in  PROGRESS-funded  events.  See  PROGRESS  Annual  Performance  Monitoring 
Report 2010. 
67 Over 4/5 of the respondents to the 2010 Annual Survey agree that EU-level NGOs/networks are successful in 
increasing awareness and exerting pressure on policy makers in the relevant policy area, and a source of useful 
and  appropriate  information  on  the  implementation  of  EU  law  and/or  conditions,  needs  and  expectations  of 
relevant target groups. 

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First of all, PROGRESS contributed to improving the quality of the Commission’s legislative 
initiatives by ensuring that they are built on strong evidence68 as well as making its decision-
making  processes  more  accessible  and  involving  a  broad  range  of  stakeholders  in  policy 
development.  For  instance,  in  2009,  PROGRESS  contributed  to  several  policy  initiatives, 
including  the  agreement  in  Council  on  the  revision  of  Directive  86/613/EEC  on  equal 
treatment of self-employed and assisting spouses and the Council decision for the European 
Union to sign the UN Convention on the Rights of Persons with Disabilities. Second, it helped 
to ensure correct and effective application of EU law in the Member States by monitoring the 
implementation of EU law in the Member States (by supporting networks of legal experts and 
external studies) and providing assistance to the Member States (through trainings and mutual 
learning events for legal practitioners) in transposing and applying EU law effectively. 

Delivery issues 

The  mid-term  evaluation  finds  that  the  PROGRESS  programme's  annual  cycle  of  planning, 
implementation,  monitoring  and  evaluation  of  activities  is  considered  generally  fitting, 
however  it  is  recommended  that  a  multi-annual  programming  be  developed  to  set  more 
strategic long-term policy objectives combined with annual funding priorities69.  

The  evaluation  confirms  that  the  main  types  of  activities  (analytical,  mutual  learning  and 
support  to  main  actors)  are  very  relevant  to  the  programme  objectives  across  its  policy 
sections. The analytical outputs analysed by evaluators are generally of good quality in terms 
of content and usefulness. However, timeliness of delivery of studies should be improved by 
greater  use  of  framework  contracts.  In  this  context,  the  networks  of  experts  established  in 
different  PROGRESS  policy  sections  proved  to  be  effective  in  providing  the  Commission 
with advice and research within shorter time periods70. 

Mutual  learning  and  peer  reviews  seminars  are  highly  attended  and  generate  considerable 
learning  effects.  However,  the  results  of  both  the  mid-term  evaluation  and  the  annual 
performance monitoring confirm that despite continued efforts in the last years, visibility and 
dissemination  of  PROGRESS  results  deserve  further  improvement  to  ensure  sustainability 
and the long-term exploitation of funded projects.   

Another weakness of the current programme is the rigid allocation of its budget to the policy 
sections.  This  rigidity  made  it  harder  to  effectively  respond  to  political  imperatives  and 
changing  circumstances,  in  particular  in  the  wake  of  the  crisis.  The  successor  instrument 
should drawn lessons from this experience in order to strike a balance between predictability 
and flexibility in its budget. Results-based management and regular performance monitoring 
proved  to  be  successful  in  demonstrating  the  programme’s  achievements  as  well  as  in 
enhancing the EU’s accountability. As confirmed by the findings of the mid-term evaluation, 
the annual monitoring reports help in keeping a constant focus on results by all stakeholders. 
The  evaluators  recommend  maintaining  this  approach;  however,  the  administrative  burden 
linked to the annual reporting should be reduced. This could be done by reducing the number 
of  quantitative  indicators  at  the  output  level  and  measuring  the  progress  achieved  towards 
longer-term goals every three years instead of annually.   

68 This evidence is also reported to be used for developing national legal acts implementing EU law. Namely, 
25%  of  the  respondents of  the  2010  Annual  Survey  indicated  that  studies,  analyses,  thematic  assessments  and 
monitoring  reports  produced  under  the  programme  have  contributed  to  adopting/amending  national  legal  acts 
implementing EU law.  
69 Interim report of PROGRESS mid-term evaluation.  
70 Public Policy and Management Institute, Measuring effectiveness and efficiency of the studies produced under 
Progress, 2011. 

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Synergies  between  the  programme  and  the  European  Social  Fund  should  be  more  fully 
exploited. For example, at EU level, coordination and knowledge transfer should be improved 
between  PROGRESS  and  the  ESF  in  particular  in  the  framework  of  the  Open  Method  of 
Coordination.  Furthermore,  the  ESF  could  help  mainstreaming  results  of  the  PROGRESS 
projects, for example, by drawing lessons from social experimentation projects and supporting 
replication of this approach in the Member States. 

Lastly,  despite  some  positive  examples  of  integration  of  the  gender  dimension  into  the 
programme  activities,  the  mid-term  evaluation  recommends  putting  more  emphasis  on  the 
concrete implementation of this principle, and ensuring that gender equality is mainstreamed 
in a meaningful way across all PROGRESS-supported activities.  

3.2.2.  EURES 

Achievements 

An  external  evaluation  of  the  functioning  of  the  EURES  network71  revealed  that  in 
comparison to other EU networks, EURES has a significantly stronger focus on employment 
opportunities and it is also the only one that aims at providing specific job-matching services. 
The  EURES  Job  Mobility  Portal  is  appreciated  by  jobseekers,  job  changers  and  employers 
who clearly see the benefit in being able to access – or post – information on vacancies across 
Europe.  The  surveys  with  jobseekers  and  job  changers  and  employers  show  that  the  job 
vacancies database has facilitated job matching and intra-EU job mobility. More than 20% of 
jobseekers  and  job  changers  that  applied  for  vacancies  of  interest  or  posted  their  CV  on 
EURES reported having received a job via EURES, and just under half of these identified that 
the  resulting  job  corresponded  to  their  skill  level.  The  CV  set  up  function  is  viewed  very 
positively by jobseekers and job changers.  

This being said, one of the findings of the evaluation was that the links between EURES aims 
and objectives, its achieved outputs and the wider employment aims and objectives of the EU 
are not prominent enough.  

The  EURES  objectives  were  broadly  defined  in  1993  and  stopped  at  the  provision  of 
information and virtual transparency72 of labour markets through clearance of vacancies and 
CVs. The EURES objectives do not make full use of the exclusive competence provided by 
the  TFEU  in  the  field  of  free  movement  of  workers.  The  translation  of  strategic  objectives 
into  operational  objectives  and  its  capacity  to  achieve  and  present  results  needs  to  be 
improved. EURES needs to focus more on tangible outcomes and results in terms of outgoing 
and  incoming  placements  and  recruitment  for  example  by  helping  young  people  and 
employers to fill open bottleneck vacancies, i.e. vacancies for which recruitment difficulties 
or  market  failure  have  been  identified.  These  new  targeted  labour  mobility  schemes  are 
indeed  much  needed  given  the  current  imbalances  of  EU  labour  markets  which  affect 
dramatically  young  people.  "Your  first  EURES  job"  scheme,  currently  implemented  as  a 
preparatory action, is intended to foster youth job mobility across the EU-27 countries. 

71 Ex-post evaluation of the EURES programme covering the period 2006-2008, EPEC 2010.  
72  Commission  decision  of  23  December  2002  implementing  Council  Regulation  1612/1968  as  regards  the 
clearance of vacancies and applications for employment, Article 2 on EURES objectives:  
(a) the development of European labour markets open and accessible for all; 
(b) the transnational, interregional and cross-border exchange of vacancies and job applications; 
(c) transparency and information exchange on the European labour markets, including on living conditions and 
on the opportunities for acquisition of skills; 
(d) the development of methodologies and indicators for this purpose. 

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Delivery issues 

There is a need to simplify and streamline EURES. Its founding documents are composed of a 
Regulation,  a  Commission  decision,  a  "Charter"  and  three-year  guidelines.  Funding  is 
distributed  to  the  network  with  a  three  year  partnership  agreement  following  a  call  for 
proposals  (the  last  one  was  published  in  2010).  Moreover,  four  different  committees  and 
bodies  supervise  its  functioning:  the  two  committees  created  by  Regulation  1612/68,  a 
EURES working party and the High Level Strategy Group, created by Commission decision 
2003/8/EC.  As  a  result  of  this  complex  legal  basis,  the  current  management  of  the  network 
has  become  rather  ineffective.  The  largest  part  of  the  EURES  budget  (14  million  €)  is 
currently  spent  in  direct  management  mode  on  over  49  grants  of  the  EURES  network, 
following  annual  calls  for  proposals.  Management  of  the  grants  is  cumbersome  both  on  the 
side  of  the  Commission  and  of  the  beneficiaries,  and  is  disproportionate  compared  to  the 
budget available. 

Furthermore, the external evaluation revealed that with regard to issues such as information 
on employment conditions and  social security, there were  overlaps  with other networks and 
programmes, notably with Your Europe, Euraxess, SOLVIT and the European Social Fund73. 
There are also some overlaps with the PROGRESS programme, in particular with its activities 
relating  to  the  Public  Employment  Services  and  labour  market  statistics.  Moreover,  as  a 
consequence of the ongoing liberalisation in the market for labour services the market share 
of non-public employment services is constantly growing74. 

Finally,  EURES  must  provide  itself  with  a  monitoring  and  assessment  tool;  to  provide 
additional solid indicators about its performance and its impact on the labour markets. On this 
point,  a  study  has  been  commissioned,  and  its  results  should  be  known  in  late  September 
2011. 

3.2.3.  The European Progress Microfinance Facility  

Achievements 

Progress Microfinance was designed to address the lack of access to finance, which is one of 
the main obstacles preventing people to start their own business.  

Especially disadvantaged groups such as unemployed, young or older people or migrants have 
difficulties  securing  traditional  bank  loans  (see  problem  definition  under  point  2.2.3).  The 
European  Progress  Microfinance  Facility  for  employment  and  social  inclusion  extends  the 
outreach of microfinance to particular at-risk groups and to further support the development 
of  entrepreneurship,  the  social  economy  and  micro-enterprises.  Progress  Microfinance 
departed  from  the  traditional  grant-based  approach  and  has  allowed  pooling  expertise  and 
resources at European level and putting it at the service of employment creation and poverty 
reduction in the Member States.  

73  The European  Social  Fund  include within its  scope  of  assistance  (article  3f)  "specific  action  to  increase  the 
participation  of  migrants  in  employment  and  thereby  strengthen  their  social  integration  and  to  facilitate 
geographic  and  occupational  mobility  of  workers  and  integration  of  cross-border  labour  markets,  including 
through guidance, language training and validation of competences and acquired skills. 
74 PES market share in job vacancies varies between 10 and 80% throughout EU-MS, with an estimated average 
of less than 40%, DTI, ÖSB, IER.  Anticipating Skill Needs for the Labour Force and Equipping People for New 
Jobs, Which role for Public Employment Services in early identification of skill needs and labour up-skilling? 
Final report, 2010. 

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Ministries  of  labour  and  social  affairs  are  often  less  experienced  in  the  field  of  financial 
engineering.  As  a  result  only  a  small  number  of  managing  authorities  have  used  ESF 
resources for establishing financial engineering instruments in the programming period 2007-
2013. Given that the establishment of such funds is time-consuming and complex and that a 
critical mass is needed, a fund at EU level bears a strong added value: within less than one 
year of the entry into force of the founding decision, the guarantees window and the funded 
instruments window have become operational, by July 2011 microfinance support is provided 
in  seven  Member  States  and  the  forecast  for  transactions  suggests  that  towards  the  end  of 
2011 Progress Microfinance will increase accessibility and availability of microfinance in half 
of the Member States.  

However, some weaknesses of the current setup have been identified: 

In  spite  of  the  strong  forecast  for  transactions,  which  demonstrates  the  attractiveness  of 
Progress  Microfinance,  up  until  now  microcredit  providers  have  showed  relatively  little 
interest in the guarantees. This was anticipated and hence reflected in the distribution of funds 
(1:3)  between  the  guarantees  and  the  funded  instruments  from  the  outset,  but  nevertheless 
absorption might be lower than anticipated.  

In addition, some  microcredit providers lack the scale to benefit from  the support  provided. 
For instance relatively small institutions that had shown interest in the guarantees could not be 
served because their loan volume was too small. They would have needed technical assistance 
and  they  lacked  the  necessary  funding  to  be  eligible.  The  European  Microfinance  Network 
(EMN)  has  also  underlined  this  need  for  capacity  building,  especially  for  non-bank 
microfinance institutions.  

Another area for improvement is related to the fact that in some instances, especially in the 
Eastern European Member States, microcredit providers offer only few or no business support 
services. This can be explained by the fact that the provision of these services is particularly 
time-intensive  and  hence  costly.  Especially  commercially  oriented  microcredit  institutions 
therefore  have  difficulties  providing  these  services,  even  though  they  are  obliged  to  at  least 
cooperate with other organisations providing such services under Progress Microfinance. 

A social innovation approach to microfinance would strengthen the role of partnerships and 
strong linkages of microfinance institutions with providers of business development services, 
facilitate their integration in employment and social inclusion initiatives. 

Lastly, one of the target groups of Progress Microfinance are social businesses in their start-
op phase. However, it has become clear that their specific nature (often a spin-off of a team 
from a traditional business, or a civic society organisation, or a public service) requires a mix 
of funding sources to get started, and that they face particular needs regarding development, 
consolidation  and  growth  (mezzanine  and  hybrid  capital)75.  The  limitation  of  microloans  to 
amounts  of  up  to  EUR  25000  is  in  this  regard  problematic.  To  further  develop  and 
consolidate. There is a clear need to exploit the social and societal value generated by social 
enterprises. Given the low development of national or regional sources of funding for social 
enterprise across Europe, there is a clear role for the EU to pave the way through a suitable 
EU level instrument that has the capacity to leverage public sources of funding (notably ESF) 
as well as mobilising private social impact investors.  

75 Social Investment Manual. A Guide for Social Entrepreneurs, developed by the Social Investment Task Force 
(Technical University Munich; Schwab Foundation Community of Social Entrepreneurs, Schwab Foundation for 
Social Entrepreneurship), 2011. 

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Delivery issues 

Several  microcredit  providers  (e.g.  MicroStart  in  Belgium  or  Qredits  in  the  Netherlands) 
supported  by  Progress  Microfinance  have  also  benefitted  from  support  for  institutional 
capacity building provided as part of a preparatory action of the European Parliament as well 
as from training under JASMINE. However, while the combination of funding and capacity 
building  is  addressing  the  needs  of  the  sector,  the  current  setup  is  complex  because  the 
microcredit  providers  have  to  apply  for  different  programmes.  It  does  not  achieve  the 
maximum  value  for  money  because  the  funding  and  the  capacity  building  are  not  linked. 
EMN  indeed  pleads  for  a  streamlined  and  combined  support  to  financing  and  capacity 
building. 

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4. 

STAKEHOLDER CONSULTATIONS 

In the context of the review of the current Progress programme, the Commission organised a 
two-steps consultation: 

1. 

2. 

A working group gathering the programme's key stakeholders representatives76 was set 
up  to  provide  the  Commission  with  a  set  of  recommendations  on  the  future 
instrument's  design,  objectives, 
(the  main 
recommendations are presented below).  

implementation 

funding 

and 

A  public  online  consultation  on  a  possible  successor  instrument  to  the  Progress 
programme  was  carried  out  between  4  April  and  27  May  201177.  The  key  issues 
addressed  were:  designing  the  successor  instrument  to  fit  the  Europe  2020  Strategy, 
targeting  the  actions  to  maximise  added  value,  improving  delivery  mechanisms,  and 
ensuring  complementarity  and  coordination  with  other  policies  and  instruments.  The 
consultation  covered  all  Progress  participating  countries  (EU  27  Members  States, 
EFTA/EEA countries, candidate and potential candidate countries).  

Furthermore,  given  that  Progress  is  implemented  through  a  results-based  management 
approach, the Commission regularly monitors the progress achieved towards expected results 
against clearly defined performance indicators. In this context, an annual survey, targeted at 
policy  and  decision-makers,  social  partners,  NGOs  and  networks  at  both  EU  and  Member 
State levels is carried out to measure satisfaction with PROGRESS outputs and the extent to 
which  they  contribute  to  meeting  the  programme's  objectives.  The  results  are  taken  into 
account for designing the successor instrument.   

The  2011  meetings  of  EURES  Working  Party  and  Heads  of  Public  Employment  Services 
(PES) held specific discussions on the future on EURES. 

With regard to microfinance support, the Commission has collected the views of the European 
Microfinance Network (EMN), which represents the European microfinance sector, managing 
authorities of the ESF in the context of the learning network on inclusive finance (Community 
of Practice on inclusive entrepreneurship, CoPIE and specifically its working group on access 
to finance) and of the European Investment Fund, which implements Progress Microfinance 
on  behalf  of  the  Commission  and  the  European  Investment  Bank.  Moreover  the  findings  of 
two workshops organised by DG MARKT which provided input into the Commission's Social 
Business Initiative and which covered both microfinance and social entrepreneurship support 
have been taken into account.  

4.1. 

The Progress programme 

Feedback from both the Progress Key Stakeholder Working Group and the above-mentioned 
public consultation revealed a high level of satisfaction with the programme.  

Key  stakeholders,  who  include  next  to  the  Member  State  representatives  also  social  partner 
organisations and civil society organisations, suggested continuing the programme as a stand-
alone  instrument,  and  its  main  activities  (analytical,  mutual  learning  and  support  to  main 
actors) with few improvements relating to:  

76  National  authorities,  social  partners  and  EU-level  networks  of  civil  society  organisations.  The  Group  met 
twice in January and February 2011. 
77 The results of the public consultation (a summary report and individual responses) can be found at:  
http://ec.europa.eu/social/main.jsp?catId=699&langId=en&consultId=6&visib=0&furtherConsult=yes 

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-  The dissemination of the PROGRESS outputs and results;  
-  Reporting requirements placed on beneficiaries;  
-  A better mainstreaming of gender equality and anti-discrimination objectives; 
-  Further synergies with other EU financial instruments supporting the Inclusive Growth 

priority, in particular the European Social Fund.  

None of 171 respondents to the public online consultation challenged the need for a successor 
instrument  to  Progress.  Respondents  gave  a  number  of  reasons  why  they  believe  there  is  a 
need for such a new EU financial instrument: 

-  The  financial  crisis  and  its  impact  on  social  protection  and  equality  perspectives 
underscore  the  need  for  enhanced  coordination  of  employment  and  social  policies 
across  Europe.  The  successor  to  Progress  should  help  to  establish  consensus  on  the 
right  policy  approach  on  social  problems  through  it  support  to  the  Open  Method  of 
Coordination.   

-  An EU financial instrument is an indispensible tool to enable transnational initiatives 
involving stakeholders on all levels. Activities such as mutual learning and collecting 
and  comparing  data  from  various  Member  States  are  seen  to  be  vital  to  continue 
improving  the  formulation  and  implementation  of  policies  at  EU  and  national  level. 
They  are  also  seen  as  essential  for  improving  understanding  and  ownership  of  EU 
objectives.  

-  The  future  EU  financial  instrument  should  have  a  clear  focus  on  international 
cooperation  and  European  level  actions  and  thus  bringing  about  stronger  EU 
dimension and complementarity to the ESF.  

-  Many  respondents  (in  particular  public  authorities)  emphasise  the  importance  of 
monitoring the application of EU legislation in the Member States and stress that this 
objective should remain a key priority for the successor programme.    

Several  respondents  call  for  an  integrated  approach  to  combat  unemployment,  social 
exclusion and poverty. In particular, 79% consider that it is very relevant or relevant for the 
future 
intra-EU  mobility  as  well  as  self-employment  and 
entrepreneurship as means to job creation.  

to  support 

instrument 

A  number  of  respondents  praised  activities  under  the  current  Progress  programme  that 
contributed  to  innovations  in  social  policies  and  confirmed  that  there  was  a  need  for  social 
innovations to combat the negative impacts of the financial crisis. They confirmed that very 
often  government  programs  in  the  field  of  social  policy  suffered  from  a  lack  of  robust 
evidence of what does and does not work. They suggested that the future instrument should 
support social innovation through transnational projects. Yet, identification and promotion of 
innovative  approaches  should  be  accompanied  by  a  sustainable  implementation  strategy.  In 
this  context,  several  respondents  indicated  that  where  the  successor  instrument  to  Progress 
could identify best practices, the implementation should be a matter for the ESF.   

Regarding  the  geographical  coverage,  respondents  from  non-EU  countries  suggested  that 
greater  synergy  between  the  new  programme  and  the  ESF  could  limit  the  possibility  to 
participate for EEA/EFTA countries and candidate countries.  

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4.2. 

EURES 

The  stakeholders'  survey  within  the  EURES  evaluation78  showed  that  the  EURES  Job 
Mobility Portal is appreciated by jobseekers, job changers and employers who clearly see the 
benefit  in  being  able  to  access  or  post  information  on  vacancies  across  Europe.  The 
opportunity to upload their CV onto the Portal was considered the most useful service on the 
Job Mobility Portal. The EURES adviser network adds value to the services provided on the 
Job Mobility Portal. These two mechanisms complement and reinforce each other. Evidence 
from the jobseekers and job changers survey indicated that those jobseekers and job changers 
who  applied  for  jobs  and  who  received  support  from  a  EURES  adviser  were  slightly  more 
likely to get a job than those who simply used the Job Mobility Portal.  

It was also indicated that EURES plays a role in individuals’ job search activities; hence can 
be considered as having a role in minimising the costs of transitions between and into jobs. 
Evidence from the jobseekers and job changers survey indicated that those jobseekers and job 
changers who applied for jobs and who received support from a EURES adviser were slightly 
more likely to get a job than those who simply used the Job Mobility Portal. In addition, the 
longer a person had used the EURES services increased the likelihood of them securing a job. 

The  adequacy  and  appropriateness  of  the  data  provided  on  the  Job  Mobility  Portal  were 
however found questionable. While the views from managers and advisers vary and tended to 
be negative; employers, jobseekers and job changers were generally more positive about the 
available information.  

Responsibility  for  the  labour  market  information  and  information  on  living  and  working 
conditions rests with the EURES members; hence concerns about the quality and periodicity 
of data should be discussed by the network.  

4.3. 

The European Progress Microfinance Facility and support to social enterprises  

The  European  Microfinance  Network  has  pronounced  itself  in  favour  of  a  continuation  of 
support to microcredit providers like Progress Microfinance.  

However,  according  to  EMN,  Progress  Microfinance  alone  as  an  investment  tool  will  have 
limited  impact  on  employment  and  enterprise  creation  without  efficient  and  sufficient 
intermediaries. Therefore a parallel investment in capacity building is required to support the 
development  of  existing  microfinance  institutions  with  growth  potential  and  to  support  the 
emergence of new ones. JASMINE in its current form has limited ability to change the state 
of  play  (in  terms  of  funding  and  scope  of  intervention).  A  long  term  capacity  building 
instrument  for  microfinance  institutions  is  missing  in  connection  to  Progress  Microfinance. 
EMN  pleads  for  the  introduction  of  a  new  capacity  building  component  into  Progress 
Microfinance that uses grants to finance innovation, institution building and tools to develop 
the Microcredit sector as a whole.   

As far as the setup is concerned, EMN calls for an improved coordination and simplification 
of procedures, and in particular a better link between capacity building and funding. Funding 
could  then  be  made  conditional  on  achievements  in  terms  of  capacity  building  including 
aspects  like  covering  governance  and  management,  institutional  funding,  technological 
development, portfolio development, client outreach and risk management.  

78 Ex-post evaluation of the EURES programme covering the period 2006-2008, EPEC 2010. 

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On May 25-26 2011 the Commission  services  (DG  MARKT)  organised  a  Workshop  on  "A 
than  60 
European  Ecosystem  for  Social  Business"  which  brought 
representatives of stakeholders and social impact inventors, social entrepreneurs, and experts, 
to  discuss  key  issues  in  overcoming  issue  barriers  to  the  development  and  growth  of  social 
enterprise, and in particular to make recommendations for EU level action. Participants in the 
workshop on microfinance highlighted that EU level action should: 

together  more 

- Maintain/enhance the industry's reputation; 
- Cater for diversity; 
- Ensure sustainability of MFIs esp. funding/expertise; 
- Base policy on accurate data/solid evidence. 

Specific  action  should  include  strategic  guidance  on  how  best  to  establish  efficient  national 
frameworks for micro-finance and by enabling the swapping of good practices; putting on the 
EU  and  national  agendas  the  key  message  that  MFIs  play  a  big  role  in  helping 
marginalised/unemployed especially in the context of spending cuts; all should have access, 
and the establishment of open EU social business funds which could finance MFIs as defined 
earlier, as well as other social businesses, and into which  retail as well as wholesale investors 
can invest in. 

Participants  in  the  workshop  on  access  to  finance  for  social  business  stressed  the 
underdevelopment of the market for social investment, characterised by a mismatch between 
supply and demand sides. Some of the key factors mentioned were an insufficient investment 
readiness of social enterprises, the need for patient capital, and a lack of market infrastructure. 
In addition, social investors miss clear measurements for social impact. 

The  Commission  was  asked  to  support  communication  about  what  social  business  is  and 
where the successes of social business lie; to help increasing the trust and confidence in the 
social  business  and  social  investments  and  transparency  in  the  market  by  supporting 
developments  towards  standardised  reporting  or  accounting,  to  strengthen  the  role  of 
intermediaries and facilitators between social business and capital, and the use EU funding for 
developing  the  market  for  social  investments,  which  again  would  be  a  strong  signal  to  the 
markets that this type of business deserves trust and would therefore help to attract investors. 

EN 

29 

   EN 

 
 
 
 
 
 
 
 
5. 

BASELINE SCENARIO 

In  the  case  of  the  Progress  programme,  the  baseline  scenario  assumes  that  the  current 
scheme is prolonged, with the same thematic scope, but without the gender equality and anti-
discrimination sections (to be part of DG Justice Programmes79). The budget reduced by 35% 
and  the  programme's  deficiencies  (in  particular,  rigid  financial  allocation,  administrative 
burden  linked  to  annual  monitoring)  would  mean  that  the  potential  of  the  programme  was 
significantly reduced. Policy coherence between Progress activities, microfinance and social 
entrepreneurship  support  and  intra-EU  mobility  of  workers  (through  EURES)  would  not  be 
ensured  in  a  systematic  way.  In  addition,  social  experimentation  would  not  be  given  a 
prominent place in the new programme through lack of a dedicated budget. As a consequence, 
the  development  and  dissemination  of  social  innovation  approach  on  a  larger  scale  in  the 
European Union would continue to be hampered by a number of obstacles (see section 2.1).  

In the case of EURES, the baseline scenario assumes the continuation of the activities in the 
current  form.  EURES  predates  the  European  Employment  Strategy  (1997)  as  well  as  the 
Lisbon strategy for Growth and Jobs (2000). So the EURES objectives were broadly defined 
in 1968. They covered for matching and placement; but did not attempt making full use of the 
European  exclusive  competence  provided  by  the  Treaty  in  the  field  of  free  movement  of 
workers  to  improve  labour  market  performance  (matching  and  placement  when  there  is  a 
market need e.g. bottleneck vacancies, niche vacancies, skills mismatches) and consequently 
to advance the overall European employment situation.  

-  EURES  would  not  be  modernised,  which  means  it  could  neither  provide  targeted 
mobility  schemes  (including  the  preparatory  action  'Your  first  EURES  Job'),  nor 
pursue a strategy of simplification of its administrative structure. 

-  EURES  would  not  comply  with  the  obligation  to  specify  in  which  form  private 
Employment Services will be part of EURES 202080, thereby translating the rulings of 
the  European  Court  of  Justice81,  which  has  called  for  the  opening  of  all  placement 
services to competition. 

79  COM(2011)500  final.  A  Budget  for  Europe  2020  -  Part  II  -  Policy  Fiches  -  Communication  from  the 
Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions. 
80  Currently  the  DG  EMPL  is  considering  the  practical  arrangements  for  opening  up  EURES  to  private 
employment services (PRES): Three main option have been brought forward until now: a) cooperation with non 
public employment services at EU level is limited to certain kind of programmes, like Your First EURES Job, 
legal constraint (Case C-55/96, par.21)as this clearly a placement activities  b) non public employment services 
are  fully  included  in  the  EURES  network  at  national  and  EU  level  on  a  completely  equal  foot  as  the  public 
employment  services  (this  option  is  the  least  preferred);  c)  non  public  employment  services  included  in  the 
EURES network, but activities at national level are coordinated by the Public Employment Service in line with 
delivery of other PES services. The legal aspects of the opening to PRES need to be further analysed. According 
to regulation 1612/68 and codified 492/2011 EURES members are designated by the Member States. This aspect 
needs further analysis in connection with case ruling (Case C-55/96, par.21) where placements are considered as 
an economic activity. 
81 The Court specified that "…the placement of employees is an economic activity" (Case C-55/96, par.21) and 
furthermore  indicated  that  when  "the  placement  activities  in  question  could  extend  to  the  nationals  or  the 
territory  of  other  Member  States"  (Case  C-55/96,  last  sentence  of  the  conclusions),  they  cannot  be  done 
exclusively by the public service 

EN 

30 

   EN 

 
 
                                                 
The  baseline  scenario  anticipates  a  prolongation  of  the  current  set-up:  the  European 
Progress Microfinance Facility would continue to provide funded instruments to microcredit 
institutions  as  a  stand-alone  instrument  under  joint  management  with  the  European 
Investment Fund. No new resources would be made available, which would mean that the last 
investment  by  the  European  Investment  Fund  would  be  made  in  2016  as  stipulated  by  the 
Decision establishing Progress Microfinance.  

However,  the  baseline  scenario  would  only  be  partially  satisfactory  because  support  to 
microcredit  would  stop  in  2016  (guarantees  until  2013)  and  no  funding  for  institutional 
capacity  building  would  be  available.  According  to  EMN,  there  is  a  risk  that  Progress 
Microfinance  does  not  reach  entrepreneurs  and  potential  self  employed  people  due  a  lack 
capacity of microcredit providers in Europe and low ability of traditional financial actors to 
deliver microfinance. The lack of capacity building would hence jeopardise the objective of 
bringing the microcredit sector to maturity as quickly as possible to improve access to finance 
especially for people in a vulnerable position.  

As outlined above, restricting funding to social enterprises to the sole provision of microcredit 
would not be effective for developing the sector and fully benefit from its contribution to the 
achievement of the Europe 2020 targets. 

EN 

31 

   EN 

 
6. 

OBJECTIVES, EXPECTED RESULTS AND INDICATORS FOR THE PROGRAMME 

6.1. 

The objectives of the programme 

The  new  programme  will  contribute  to  the  implementation  of  the  Europe  2020  Strategy,  its 
mutually reinforcing headline targets and Integrated Guidelines by providing financial support 
for  the  European  Union’s  objectives  in  terms  of  promoting  a  high  level  of  employment, 
guaranteeing  adequate  social  protection,  fighting  against  social  exclusion  and  poverty  and 
improving working conditions.   

The Programme will seek to achieve the following general objectives: 

(a)  Strengthen  ownership  of  the  Union  objectives  in  the  employment,  social  and 
working  conditions  fields  among  key  Union  and  national  policy-makers,  as 
well as other interested parties in order to bring about concrete and coordinated 
actions at both Union and Member State level;  

(b)  Support the development of adequate, accessible and efficient social protection 
systems  and  labour  markets  and  facilitate  policy  reform,  by  promoting  good 
governance, mutual learning and social innovation; 

(c)  Modernise Union law in line with the Smart Regulation principles and ensure 
that Union law on matters relating to working conditions is effectively applied; 

(d)  Promote  workers’  geographical  mobility  and  boost  employment  opportunities 
by developing Union labour markets that are open and accessible to all; 

(e)  Promote  employment  and  social  inclusion  by  increasing  the  availability  and 
accessibility of microfinance for vulnerable groups and micro-enterprises, and 
by increasing access to finance for social enterprises. 

In  pursuing  its  objectives,  the  programme  shall  aim  to  promote  equality  between  men  and 
women and combating discrimination based on sex, racial or ethnic origin, religion or belief, 
disability,  age  or  sexual  orientation.  The  programme  shall  also ensure  that  the  requirements 
linked  to  the  promotion  of  a  high-level  of  employment,  the  guarantee  of  adequate  social 
protection and the fight against social exclusion are taken into account in the definition and 
implementation of the Union's policies and activities. 

The  results  of  the  actions  shall  be  suitably  communicated  and  disseminated  in  order  to 
maximise their impact, sustainability and EU added value.   

The  following  specific  objectives  will  need  to  be  met  in  the  future  across  the  programme 
sections: 

EN 

32 

   EN 

 
PROGRESS section: 

1. 

2. 

3. 

4. 

Develop and disseminate high-quality comparative analytical knowledge in order to 
ensure that Union employment and social policy and working conditions legislation 
are based on sound evidence and are relevant to needs, challenges and conditions in 
the individual Member States and other participating countries; 

Facilitate effective and inclusive information-sharing, mutual learning and dialogue 
on Union employment and social policy and working conditions legislation at Union, 
national  and  international  level  in  order  to  assist  the  Member  States  and  the  other 
participating countries in developing their policies and in implementing Union law; 

Provide policy-makers with financial support to test social and labour market policy 
reforms,  build  up  the  main  actors’  capacity  to  design  and  implement  social 
experimentation, and make the relevant knowledge and expertise accessible; 

Provide  Union  and  national  organisations  with  financial  support  to  step  up  their 
capacity to develop, promote and support the implementation of Union employment 
and social policy and working conditions legislation. 

EURES section: 

5. 

6. 

Ensure  that  job  vacancies,  job  applications  and  any  related  information  are 
transparent  for  the  potential  applicants  and  the  employers;  this  shall  be  achieved 
through  their  exchange  and  dissemination  at  transnational,  interregional  and  cross-
border level using standard interoperability forms;  

Develop services for the recruitment and placing of workers in employment through 
the clearance of vacancies and job applications at European level; this shall cover all 
phases  of  placement,  ranging  from  pre-recruitment  preparation  to  post-placement 
assistance  with  a  view  to  the  applicant’s  successful  integration  into  the  labour 
market; such services shall include targeted mobility schemes to fill vacancies where 
labour  market  shortcomings  have  been  identified  and/or  help  particular  groups  of 
workers such as young people. 

Microfinance and Social Entrepreneurship section:  

1. 

Increase access to, and the availability of, microfinance for: 

(a)  persons who have lost or are at risk of losing their jobs, or who have difficulty 
in entering or re-entering the labour market, persons at risk of social exclusion 
and  vulnerable  persons  who  are  in  a  disadvantaged  position  with  regard  to 
access  to the conventional credit  market  and  who  wish to  start up  or  develop 
their own micro-enterprises; 

(b)  micro-enterprises,  especially  those  which  employ  persons  as  referred  to  in 

point (a); 

Build up the institutional capacity of microcredit providers; 

Support  the  development  of  social  enterprises,  in  particular  by  facilitating  access  to 
finance. 

33 

   EN 

2. 

3. 

EN 

 
6.2. 

Definition of indicators 

It is not always possible to find indicators which adequately measure the intended objectives 
and benefits/effects of the programme. In those cases the following types of indicators could 
be used: 

-  a leading indicator: a well-designed programme will not be limited to performance targets 
at  the  end  of  its  implementation,  but  will  also  specify  intermediate  targets  to  monitor 
progress.  These  so-called  leading  or  process  indicators  enable  to  determine  whether  the 
chosen implementation strategy, reflected in the selected outputs, is effective and progress 
is being made toward meeting the desired outcome.  

-  a proxy indicator: direct indicators are not always practical and can require extensive and 
expensive  data  gathering;  in  such  cases  proxy  indicators  may  be  used.  Generally,  proxy 
indicators may be used if (i) the result is not directly observable, e.g., quality of policy or 
organisation  development;  (ii)  the  cost  of  direct  measurement  is  too  high;  and  (iii)  the 
result  is  achieved  after  a  long  time.  For  these  reasons  a  number  of  suggested  indicators 
presented below are indeed proxy indicators. 

The  indicators  designed  for  the  general  and  specific  objectives  are  grouped  into  two 
categories: 

-  primary  (core)  indicators,  which  are  aimed  to  convey  the  key  direction  of  the  expected 

change under a given objective (i.e., results, impact); 

- 

secondary (facultative) indicators, which supplement the first group indicators by adding 
additional dimensions for their interpretation (i.e., efficiency, scope, other process-related 
characteristics).  

There  are  also  indicators  intended  to  measure  the  extent  to  which  gender  equality  and  anti-
discrimination issues are addressed across the programme's activities. 

6.2.1. 

Indicators for general objectives 

Considering the time lag between the delivery of outputs and their impact on the longer term 
(general) objectives, progress towards meeting these objectives should be measured as a rule 
at three-yearly intervals. 

EN 

34 

   EN 

 
Indicators 

Current situation  

Long-term targets 

Strengthen ownership of the Union objectives in the employment, social and working 
conditions fields among key Union and national policy-makers, as well as other interested 
parties in order to bring about concrete and coordinated actions at both Union and Member 
State level 

Active participation of 
stakeholders at the EU 
and Member State 
levels in debating 
common challenges 
and taking concrete 
action to tackle them 

Acceptance of the 
relevant country-
specific 
recommendations 

Equally active participation of 
all relevant stakeholders at the 
EU level and across all the 
Member States  

All Member States accept the 
Country-specific 
Recommendations in the 
employment, social and working 
conditions fields (as attested by 
the strategies and policies 
reported in the subsequent 
National Reform Programmes) 

There is no uniform method to measure 
the level of involvement of stakeholders 
in policy debate. Recent evaluations82 
have revealed that stakeholders' 
participation varies depending on policy 
issue and across the Member States. 
Latest Annual PROGRESS Performance 
Report suggests a tendency for 
authorities (EU, national, regional or 
local) to have closer ties with each other 
than with social partners and NGOs.  

The indicator is based on the Country-
specific Recommendations which have 
been issued in June 2011 for the first 
time. The previous proxy measurement 
could be an assessment of how well did 
the Member States align their 
employment and social policies with the 
EU objectives (based on the 
Commission assessment of the previous 
NSRs and content of the previous 
Country-Specific Integrated 
Recommendations), which suggests that 
up to three quarters of the Member 
States have policy or strategies 
consistent with EU objectives. 

Support the development of adequate, accessible and efficient social protection systems and 
labour markets and facilitate policy reform, by promoting good governance, mutual learning 
and social innovation 

Incidence of up-take of 
social innovation 
results in the design 
and implementation of 
active labour market 
and social protection 
policies  

Supporting social innovation is a new 
area of intervention. There is a lack of 
more systematic approach to full use of 
the social innovation results in active 
labour market and social protection 
policies. 

Every Member State in its 
National Reform Programme 
reports at least one example of 
planned or actual up-take of 
available social innovation 
results in the design and 
implementation of its active 
labour market and social 
protection policies 

Awareness of social 

As above. 

As above. 

82 Evaluation of the Social OMC, 2011; Study on Stakeholders’ Involvement in the Implementation of the Social 
OMC, 2010. 

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35 

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innovation 

Modernise Union law in line with the Smart Regulation principles and ensure that Union law 
on matters relating to working conditions is effectively applied 

Share of: 

(a) the legislative 
acquis (directives) 
comprehensively 
reviewed 

(a) One directive (the Working Time 
Directive) is currently under review. 

(b) n/a. 

(b) resulting number of 
substantive proposals 
to revise (abandon, 
merge) existing or to 
initiate new legislation 

Compliance in the 
Member States with 
EU legislation 
(transposition rate and 
fragmentation factor) 

In 2010, the transposition rate was 
98.3% for labour law directives and 
100% for health and safety at work 
directives; the corresponding 
fragmentation factors were 5% and 0%. 
Historical analysis indicates that these 
rates tend to get worse after introduction 
of new legislation. In the light of 
possible Commission’s action to amend, 
clarify or simplify the existing or initiate 
the new legislation, it is important to 
maintain the high transposition factor 
and low fragmentation rate. 

(a) 100 % of directives on 
matters relating to working 
conditions are comprehensively 
reviewed by the end of the 
programme. 

(b) Wherever appropriate, the 
Commission would have 
initiated action to amend, clarify 
or simplify existing legislation 
or initiate the new one, if 
justified by an impact 
assessment, and, where relevant, 
after consulting EU social 
partners. 

100% transposition rate, and 
correspondingly low, 0% 
fragmentation factor  

Active implementation 
and enforcement  

Currently, the presence of active 
implementation and enforcement is 
assessed qualitatively (through 
evaluations and networks of independent 
experts) and varies by directive and by 
country. 

100% of working conditions-
related directives are actively 
implemented and enforced in 
almost all Member States 
(qualitative assessment) 

Promote workers’ geographical mobility and boost employment opportunities by developing 
Union labour markets that are open and accessible to all 

Impact of geographic 
mobility on MS' GDP  

There are preliminary attempts to model 
and assess the impact for specific 
countries (i.e. UK ad Ireland) yet, they 
do not cover the entire Union. The 
Employment in Europe report 2008 
estimated that mobility flows from the 
EU-8 have added an extra 0.4% to the 
Irish GDP and 0.3% to the UK’s GDP 

Impact of geographical mobility 
on MS's GDP is assessed for the 
entire Union and is positive. The 
long-run estimate forecasts an 
extra 1.7% to GDP in Ireland 
and 0.6% in the UK by 2015 
compared with the pre-
enlargement situation.  

EN 

36 

   EN 

 
 
 
 
 
 
 
 
 
 
 
by 2007. 

Impact of geographical 
mobility on the 
reduction of 
unfilled/bottlenecks 
job vacancies, 

There are preliminary attempts to model 
and assess the impact for specific 
countries, yet they do not cover the 
entire Union. 

Impact of geographical mobility 
on the reduction of 
unfilled/bottleneck job vacancies 
is assessed for the entire Union 
and is positive.  

Difference in labour 
market participation 
and employment rates 
of mobile workers 
between the host 
country and the 
country of origin 

Mobile workers in the sense of intra-EU 
mobility tend to have higher 
employment rates than non mobile 
workers.  

Information will be made 
available from Eurostat's Labour 
Force Survey and other statistics. 

Promote employment and social inclusion by increasing the availability and accessibility of 
microfinance for vulnerable groups and micro-enterprises, and by increasing access to finance 
for social enterprises 

Number of businesses 
created or consolidated 
that have benefitted 
from EU support 

0 

51000 (of which 1000 social 
enterprises) 

According to an evaluation of the CIP 
programme, per microloan provided, 1.2 
jobs were created. 

Not available 

50% of beneficiaries are 
unemployed people or from 
disadvantaged groups 

Number of jobs created 
or maintained through 
the establishment or 
development of a 
business 

Profile of persons (age, 
gender, minority, 
employment status…) 
that have created or 
further developed a 
business with EU 
microfinance support  

6.2.2. 

Indicators for specific objectives 

Progress towards meeting specific objectives should be measured on an annual basis. 

Progress section 

For  the  Progress  section,  it  is  impossible  to  make  its  four  specific  objectives  genuinely 
measurable  while  they  are  specific,  accepted,  realistic  and  time-dependent.  For  instance, 
mutual  learning  events  cannot  be  quantified  because  their  number  and  topics  depend  on 
Member States interests and will to host such events and participate in them. The volume of 
knowledge produced depends on the needs of policy development.  

EN 

37 

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These  objectives  by  their  very  nature  are  therefore  assessable  only  by  means  of  subjective 
variables, like satisfaction of and knowledge among stakeholders, surveys investigating on the 
perception of EU role in social and employment policy debates as well as intended and actual 
use  of  outputs  for  policy-making.  For  the  similar  reasons,  it  is  not  possible  to  provide 
medium-term  targets.  Nevertheless,  this  approach  remains  in  line  with  result  based 
management which foresees setting effective targets at a level close to the activity as such. 

Indicators 

Latest known results 

Medium term target 

Develop and disseminate high-quality comparative analytical knowledge in order to ensure 
that Union employment and social policy and working conditions legislation are based on 
sound evidence and are relevant to needs, challenges and conditions in the individual Member 
States and other participating countries 

Stakeholders satisfaction 
with and declared use of 
knowledge generated by 
the programme  

Various stakeholders (Commission, EP, 
national administrations, implementing 
bodies, social partners, NGO, etc.) use 
the knowledge generated by the current 
Progress programme. Its 2010 Annual 
Survey indicates that those aware of the 
generated knowledge (about 50%) find 
it helpful (around 85% of responding 
stakeholders) and (plan to) use it.  

Extend the scope of 
stakeholders who are aware of 
the knowledge generated by the 
programme (increased 
awareness of the key outputs: 
75% of the responding 
stakeholders), and keep the high 
satisfaction rate (85% or more 
of responding stakeholders) 

100% of EU employment and 
social policy initiatives and 
action on working conditions 
legislation are informed by the 
knowledge generated by the 
Programme 

At least 25% off the budget is 
dedicated to development of 
new (previously inexistent) 
knowledge (ideas, concepts, 
approaches, models, forward-
looking analysis) 

Share of policy 
initiatives launched by 
DG EMPL which are 
informed by the 
knowledge generated by 
the Programme 

Share of effort83 
dedicated to 
development of new 
(previously inexistent) 
knowledge (ideas, 
concepts, approaches, 
models, forward-looking 
analysis) 

Not available.  

There is no exact estimate, but the share 
of budget allocated to generation of the 
said type of knowledge is around 10-
20% (the overall share of budget going 
to evidence-based policy is around 
19%, with other parts of the programme 
focusing on dissemination, learning, 
capacity building and networking, 
which are primarily based on sharing 
the existing knowledge; also, not all 
support to evidence-based policy is 
targeted at development of new 
knowledge). This share is expected to 
grow, especially in the light of the 
emphasis on social innovation.  

83 To be measured as the estimated share of budget allocated to generation of the said type of knowledge. 

EN 

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Facilitate effective and inclusive information-sharing, mutual learning and dialogue on Union 
employment and social policy and working conditions legislation at Union, national and 
international level in order to assist the Member States and the other participating countries in 
developing their policies and in implementing Union law 

The declared gain of 
better understanding of 
EU policies and 
objectives (including 
relevant gender and non-
discrimination 
mainstreaming) 

The extent to which 
mutual 
learning/information 
sharing events are 
inclusive and meet 
minimum standards for 
consultation 

The declared 
(intended/actual) use of 
acquired information for 
policy-making/advocacy 
by the involved 
participants but also 
other decision-makers 
and stakeholders 

Around 89% of the respondents to 2010 
Annual Survey claim to have gained 
better understanding of EU policy 
objectives by participating in Progress-
funded events. 

9 out of 10 stakeholders claim 
to have gained better 
understanding of EU policies 
and objectives by participating 
in programme-funded events. 

The 2010 follow-up survey  reveal that 
the Progress-funded mutual learning 
events are highly appreciated for the 
clarity of discussed issues and 
involvement of the relevant decision 
makers (4 out of 5 responding 
stakeholders express positive opinion), 
yet slightly less positive what concerns 
involvement of other stakeholders 
(social partners, NGOs, etc.). 

Ex-post survey of Progress-funded 
events in 2010 revealed that around 2/3 
of participants intended or actually used 
the acquired information for policy 
making or advocacy. The essential 
challenge (especially in the case of 
mutual learning events) however is to 
promote the sharing of acquired 
information with other relevant 
decision makers and stakeholders (i.e., 
those, who did not participate). 

4 out of 5 stakeholders claim 
that mutual learning/information 
sharing events are inclusive and 
fully meet all the standards for 
consultation. 

- 3 out of 4 involved 
participants declare 
(intended/actual) use of 
acquired information. 

- Improved sharing of 
information with other decision 
makers and stakeholders (non-
participants)  

Provide policy-makers with financial support to test social and labour market policy reforms, 
build up the main actors’ capacity to design and implement social experimentation, and make 
the relevant knowledge and expertise accessible 

The declared 
(intended/actual) use of 
acquired information for 
policy-making/advocacy 
and or further social 
experiments by involved 
participants but also 
other decision-makers 
and stakeholders 

The presence of 
adequate conditions 
(financial resources, 

Supporting social innovation is a new 
area of intervention, so there is no 
baseline.  

Supporting social innovation is a new 
area of intervention, so there is no 

Due to novelty of this type of 
activity it could be expected that 
up to 2/3 of involved 
participants declared intended or 
actual use of information 
acquired through social 
experimentation for policy 
making/advocacy and or further 
social experiments. 

All the key preconditions 
(financial resources, 
accessibility to relevant know 

EN 

39 

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baseline. 

accessibility to relevant 
know-how and 
expertise) to design and 
implement social 
experiments in the field 
of EU employment and 
social policy: adequate 
capacity of the main 
actors 

how and expertise, capacity of 
the main actors) to design and 
implement social experiments in 
the field of EU employment and 
social policy are assessed (e.g., 
by evaluation) as sufficient  

Provide Union and national organisations with financial support to step up their capacity to 
develop, promote and support the implementation of Union employment and social policy and 
working conditions legislation 

Strengthened 
organisations and 
networks being 
acknowledged as a 
useful source of 
information for the EU 
and MS policy and 
decision-makers and 
other stakeholders 

The declared change in 
capacity84 to further 
develop, promote and 
support the 
implementation of EU 
employment and social 
policy and legislation by 
the participants 
(individuals or 
organisations, as 
relevant) involved in the 
supported capacity 
strengthening measures 

There is no comprehensive baseline for 
all types of organisations and networks 
which are planned to be supported under 
the new programme. Currently (2011), 
there is only data that up to 9 in 10 of 
responding stakeholders in general, and 
some 3 out of 4 responding decision 
makers and officials in particular assess 
the best performing key EU networks 
and NGOs as a useful source of 
information.  

There is no comprehensive baseline for 
this type of self-assessment by the 
participants (individuals or 
organisations, as relevant) involved in 
the supported capacity strengthening 
measures. The first results of similar 
performance measurements introduced 
by the Progress-funded key EU 
networks and NGOs indicate positive 
change, especially what concerns 
acquiring specific knowledge relevant to 
policy making and advocacy, with 
somewhat less success in improving 
internal organisation. 

The most assisted organisations 
and networks are acknowledged 
by 3 out of 4 surveyed decision-
makers and other stakeholders 
as a useful source of 
information to on the EU and 
Member States' policy 

A uniform performance 
measurement system to monitor 
change in policy advocacy 
capacity introduced for all types 
of assisted organisations and 
networks  

3 out of 4 participants involved 
in the supported capacity 
strengthening measures declare 
improved capacity to further 
develop, promote and support 
the implementation of EU 
employment and social policy 
and legislation  

84  Capacity  is  understood  here  as:  knowledge  relevant  to  policy  making  and  advocacy;  skills  and  ability  to 
actively and effectively advocate them; (in case of organisation) improved internal organisation (incl. improved 
strategic planning and performance management). 

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EURES section 

Ensure that job vacancies and applications, and any related information are transparent for the 
potential applicants and the employers 

Total number of job 
vacancies and CVs on 
EURES Job Mobility 
Portal, currently the 
EURES portal hosts 
more than 1,000,000 
job vacancies, and 
600,000 CVs  

Number of recruitment/ 
placements and job 
offers made through the 
EURES Job Mobility 
Portal  

Currently EURES portal hosts more 
than 1,000,000 job vacancies, and 
600,000 CVs 

The number of vacancies is 
expected to grow at a rate of 3% 
per year. 

Currently estimated at 150.000 
placements per year 

The services responsible for 
EURES launched a study on 
"Evaluating Public Employment 
Services' performance 
measurement systems and 
recommendations on 
geographical mobility 
indicators" to indentify 
indicators for EURES 2020. 

Develop services for the recruitment and placing of workers in employment through the 
clearance of job vacancies and applications at European level 

Number of transnational 
placements facilitated 
by EURES. Increase the 
number of placements 
by 3% per year 
(currently estimated at 
150.000 placements per 
year) 

See above 

The Commission has only recently 
launched the preparatory action for the 
first targeted mobility scheme "Your first 
EURES job". According to estimates, it 
will contribute to the placement of 2000 
to 3000 young workers.  

EN 

41 

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Microfinance and social entrepreneurship section 

Increase access to, and the availability of, microfinance 

0 

50000 microloans provided by 
the end of the total investment 
period 

Not available 

Not available 

A total volume of 500 million, 
(corresponding to a leverage of 
5 x the EU contribution.  

50% of beneficiaries are 
unemployed people or from 
disadvantaged groups 

Number of microloans 
provided by 
intermediaries to final 
beneficiaries with EU 
support. (50000 
microloans provided by 
the end of the total 
investment period)  

Volume of microloans 
provided in € (a total 
volume of 500 million, 
(corresponding to a 
leverage of 5 times the 
EU contribution)  

Profile of final 
beneficiaries (age, 
gender, minority, 
employment status…) 
that have received a 
microloan with EU 
support. (50% of 
beneficiaries are 
unemployed people or 
from disadvantaged 
groups) 

Build up the institutional capacity of microcredit providers 

Number  of  micro-credit 
supported 
providers 
for 
funding 
through 
capacity  building 
(50 
microcredit 
providers 
supported by  the  end  of 
the support period) 

50  microcredit 
providers 
supported  by  the  end  of  the 
total investment period 

Level of institutional 
capacity in terms of 
funding, human 
resources, operational 
management as well as 
systems and 
infrastructure (Higher 

In 2009, weaknesses in capacity building 
identified were difficulties to cover start-
up and operative costs, underdeveloped 
systems for performance measurement 
and analysis, only average capacity 
levels regarding human resource 
management and a lack of capacity by 

Higher capacity of the sector 
compared to level identified in 
2009 

EN 

42 

   EN 

 
 
capacity of the sector 
compared to level 
identified in 2009) 

non-bank microcredit providers for 
networking and co-operation85 

Support the development of social enterprises 

0 

0 

Number of social 
enterprises that have 
been supported through 
the initiative (1000 
social enterprises 
supported ) 

to 

Volume  of  investment 
provided 
social 
enterprises (270 million, 
leading  to  a  leverage  of 
3 times ) 

900 social enterprises supported 
by the end of the total 
investment period 

270 million, corresponding to a 
leverage of 3 times the EU 
contribution 

85 Evers and Jung / EMN, EIF Market studies on micro lending in the European Union: capacity building and 
policy  recommendations,  March  2009.  According  to  the  study,  institutional  capacity  encompasses  vision  and 
strategy, funding, human resources, operational management and systems and infrastructure. 

EN 

43 

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7. 

ALTERNATIVE APPROACHES  

7.1. 

Alternative delivery options 

7.1.1.  The Progress programme 

In the case of the Progress programme two options can be envisaged: 1) Status quo with some 
changes, and 2) merging Progress with other EMPL instruments implemented through direct 
management.  

Option  1: The differences between this option and the baseline scenario (= status quo) are: 
alignment of the programme objectives with Europe 2020 priorities; a strong emphasis on the 
promotion  of  gender  and  anti-discrimination  mainstreaming;  more  flexible  financial 
allocation, focus on funding of larger projects. Option 2: Integration into a new programme 
which  provides  for  continuation  and  development  of  activities  currently  carried  out  under 
Progress, EURES and the European Microfinance Facility.  

The new programme is made up of three sections: 

1.  PROGRESS,  
2.  EURES and 
3.  Microfinance/Social Entrepreneurship.  

The  new  programme  promotes  innovative  ways  of  responding  to  long-standing  social 
challenges linked to unemployment, poverty, ageing and climate change. Namely, it creates a 
sound knowledge base for the development of modern and effective policy and legislation in 
the  employment  and  social  fields.  Financial  support  is  provided  for  identifying,  evaluating 
and  scaling  up  of  innovative  solutions  and  practices  to  better  assist  the  Member  States  in 
reforming  their  labour  market  and  social  protection  policies.  It  catalyses  innovative 
partnerships between public, private and third sector actors and supports their involvement in 
the  definition  and  implementation  of  new  approaches  to  tackling  social  needs  and  societal 
challenges.  The  programme  also  promotes  access  to  finance  for  social  enterprises  and  their 
full participation in  society, thereby strengthening the  involvement  of the business sector in 
social innovation processes.  

7.1.2.  EURES 

Option 1: Status quo  

Option 2: Reform EURES i.e.  

•  Simplify  and  rationalise  its  intervention  logic  by  developing  EURES  services  in 
relation with both outgoing/incoming placements and recruitment services where there 
is  an  economic  need  and  will  to  fill  open  job  vacancies,  and  by  including  targeting 
mobility schemes.   

•  Reform  its  administrative  management,  via  the  restructuring  of  its  activities  into  a) 
vertical i.e. national and cross border activities under "shared management" (ESF) ; b) 
horizontal i.e. EU level activities under the new integrated direct management tool for 
PROGRESS.   

•  Ensure  the  consistency  of  its  financial  instruments  in  light  of  its  new  organisational 

structure 

EN 

44 

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Option 3: No action at EU level 

7.1.3.  Microfinance and Social Entrepreneurship 

For  the  microfinance  and  the  social  entrepreneurship  section,  a  distinction  can  be  made 
between options related to the content and those focused on delivery.  

Content options 

The content options distinguish themselves by the scope of the action. 

Option 1: Continuation on the basis of the current setup (microfinance support alone) 

This option would imply a new instrument along the lines of the current European Progress 
Microfinance Facility. The geographical scope would remain the same, i.e. it would be limited 
to microfinance institutions operating in the Member States of the European Union.  

The  range  of  products  would  be  the  same  as  under  Progress  Microfinance,  i.e.  including 
guarantees  (as  well  as  counter-guarantees)  implemented  through  a  cascade  of  financial 
institutions  by  the  European  Investment  Fund  under  a  fiduciary  management  agreement 
concluded with the European Commission and funded instruments (direct and indirect equity, 
senior loans, subordinated loans, funded risk-sharing instruments) delivered by a specialised 
investment  fund,  with  the  EIF  as  management  company  and  the  Commission  and  the 
European Investment Bank as investors (with the possibility of other third investors). 

Option  2:  Widened  scope  to  include  capacity  building  and  with  extended  geographical 
coverage (microfinance support) 

This  option  foresees  an  extension  of  the  scope  both  in  terms  of  geographical  coverage  and 
content compared to the current setup. The new instrument would support microfinance  not 
only  within  the  EU,  but  also  in  the  EFTA/EEA  countries,  the  accession  and  candidate 
countries..  

In terms of content, funding for capacity building would be added. This could be done in two 
ways: 

Funding would be provided in the form of equity and loans. This would be very similar to the 
funding  provided  as  part  of  a  current  preparatory  action  of  the  European  Parliament  under 
JASMINE86.  In  addition  to  the  equity  investments  and  loans,  grants  could  be  provided  to 
microcredit providers. This could be done in the form a certain amount per loan provided (as 
currently done under CIP).  

Option  3:  Widened  scope  for  microfinance  support  to  include  capacity  building,  with 
extended  geographical  coverage,  complemented  by  dedicated  support  for  developing 
social enterprise 

As  option  2,  this  scenario  foresees  and  extension  of  the  geographical  coverage  to  the 
EFTA/EEA countries, the accession and candidate countries. In terms of content, funding for 
capacity  building  including  through  grants  would  be  provided  (like  under  option  2).  In 
addition,  support  in  the  form  of  investments  into  social  funds  would  be  made  available  to 
support the development of social enterprises.  

86 Based on a European Parliament Preparatory Action. 

EN 

45 

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Delivery options 

The delivery options distinguish themselves by the degree of flexibility / standardisation. 

Option A: Continuation on the basis of the current setup 

This  option  would  imply  joint  management  of  the  new  instrument  with  the  European 
Investment  Fund  on  the  basis  of  a  new/renegotiated  Fiduciary  and  Management  Agreement 
for the guarantees and the current specialised investment fund for the funded instruments. The 
new facility would continue to be a stand-alone instrument. 

Option  B:  Direct  management  by  the  Commission  within  an  integrated  programme  of 
DG EMPL 

Under this option, the new instrument would be directly managed by the Commission as part 
of the integrated programme for employment and social inclusion instead of being managed 
jointly with the EIF. The Commission would have to find partners through a call for tenders. 
No standardisation of the process through equity and debt platforms would take place.  

Option C: Joint management and establishment of a dedicated investment vehicle within 
an integrated programme of DG EMPL 

This option foresees that the new instrument is jointly managed with the European Investment 
Fund. In addition to the guarantee window, a dedicated investment vehicle will be established 
for the delivery of the funded instruments. The new instrument would be part of the integrated 
programme for employment and social inclusion. The dedicated investment vehicle would be 
put  in  place  on  the  basis  of  the  Commission's  equity  and  debt  platforms  and  open  to  ring-
fenced compartments from Member States and regions under the European Social Fund. 

7.2. 

Detailed assessment of options 

7.2.1.  PROGRESS 

Option  1  would  on  the  one  hand  provide  for  the  continuation  of  Progress  as  stand-alone 
instrument supporting the development, coordination and monitoring of EU employment and 
social policy and legislation, and, on the other hand, for a number of improvements. Namely, 
the  objectives  of  the  renewed  instrument  would  be  optimally  aligned  on  Europe  2020 
priorities. Its thematic scope would be limited to the employment, working conditions, social 
protection  and  social  inclusion  areas;  however,  in  pursuing  its  objectives,  the  programme 
would  promote  gender  equality  and  anti-discrimination  dimensions.  The  programme  would 
carry  on  with  funding  of  its  traditional  types  of  actions  (analytical  and  mutual  learning 
activities,  and  support  to  main  actors)  which  are  considered  as  effective  in  meeting  the 
programme’s  objectives87.  Without  the  gender  equality  and  anti-discrimination  sections,  the 
new  programme  would  also  be  much  smaller  and  as  such  would  not  have  the  critical  mass 
needed to achieve its policy objectives.  

However,  some  improvements  at  management  level  would  increase  the  programme’s 
efficiency  and  effectiveness.  In  particular,  the  rigid  allocation  of  the  Progress  budget  to  its 
different policy sections would be suppressed.  

87  See  Interim  report  of  PROGRESS  mid-term  evaluation  and  annual  performance  monitoring  reports  (2007-
2010).  Respondents  to  the  public  consultation,  including  national  authorities,  made  also  a  strong  case  for  the 
continuation of the analytical and mutual learning activities which are considered are highly relevant to the EU 
objectives in the employment and social policy field.  

EN 

46 

   EN 

 
                                                 
The Commission would thus be able to better respond to political imperatives and changing 
circumstances.  As  recommended  by  the  mid-term  evaluation,  a  multi-annual  programming 
would be developed to set more strategic long-term policy objectives combined with annual 
funding priorities. Results-based management approach with its focus on regularly measuring 
progress  towards  the  programme  objectives  would  be  maintained;  however,  reporting 
requirements placed on beneficiaries would be reduced. This measure would be in line with 
the  results  of  stakeholder  consultation.  Lastly,  the  dissemination  of  the  programme  results 
would  be  significantly  improved  in  order  to  ensure  better  sharing  of  knowledge  and 
sustainability of EU action.  

The main advantage of Option 2 is a high degree of rationalisation of EMPL financial tools. 
This  option  would  enable  the  Commission  to  increase  policy  coherence  and  impact  of  its 
instruments which pursue common objectives in the employment, social affairs and inclusion 
fields,  i.e.  Progress,  EURES  and  the  European  Microfinance  Facility  contribute  to  the 
implementation  of  the  European  Employment  Strategy.  In  addition,  the  current  Progress 
programme  (2007-2014)  already  promotes  a  number  of  activities  linked  to  labour  mobility 
and  relevant  for  EURES  activities  (such  as  cooperation  between  the  Heads  of  Public 
Employment  Services,  funding  of  the  European  employment  observatory,  ESCO88,  several 
studies and statistics on matching skills and jobs, etc.). It also finances the operating costs of 
the  European  Microfinance  Network  which  promotes  the  use  of  the  Microfinance  Facility. 
Further complementarity between these three instruments is therefore essential. In particular, 
the  aim  of  improving  self-employment  cannot  be  achieved  in  isolation  from  other  policies, 
supported  through  the  Progress  programme.  Namely,  it  requires  a  more  stable  economic 
environment,  a  shift  from  subsidised  financing  to  capacity  development,  a  reduction  of  the 
administrative  burden  and  labour  costs,  an  increased  focus  on  flexicurity,  fostering  lifelong 
learning, and better research and evaluation. Harmonising the rights of self-employed workers 
with  those  of  employed  individuals,  including  social  protection,  provides  greater  legal 
security to both employed and self-employed workers.  

This  option  would  therefore  be  in  line  with  the  Budget  Review  Communication  calling  for 
both integrated instruments and a strong coordination to deliver the Europe 2020 objectives. 

Across its three sections (Progress, EURES and Microfinance and Social Entrepreneurship), 
the  new  programme  would  promote  innovative  ways  of  tackling  social  needs  and  societal 
challenges.  Actions  under  the  Progress  section  will  aim  at  speeding  up  mutual  learning, 
building  commitment  to  EU  employment  and  social  objectives,  supporting  innovative 
partnerships  (between  public,  private  and  third  sector  actors)  and  establishing  a  sound 
knowledge and evidence base for policy-making. These types of activities are in accordance 
with  the  programme's  legal  basis89  and  the  EU's  role  in  the  employment  and  social  policy 
fields (mainly to act as a catalyst for change, facilitate co-operation between Member States 
and ensure correct implementation of EU law as Guardian of the Treaty).  

88  ESCO  stands  for  the  European  multilingual  taxonomy  of  Skills  &  Competences,  qualifications  and 
Occupations. 
89 Article 149 states that the European Parliament and the Council may "adopt incentive measures designed to 
encourage cooperation between Member States and to support their action in the field of employment through 
initiatives aimed at developing exchanges of information and best practices, providing comparative analysis and 
advice as well as promoting innovative approaches and evaluating experiences". 
Article 153 stipulates that the European Union supports and complements the activities of the Member States to 
combat  poverty  and  social  exclusion  and  to  reform  their  social  protection  systems  on  the  basis  of  policy 
exchanges, mutual learning and promotion of innovative approaches. 

EN 

47 

   EN 

 
                                                 
In  addition,  the  Progress  section  would  provide  for  increased  funding  for  social 
experimentation  in  particular  through  awareness  raising  and  mutual  learning  activities, 
capacity building and grants for projects designed by public authorities to test reforms of their 
social  protection  and  active  labour  market  policies  and  social  services  delivery  systems90. 
Gender  and  anti-discrimination  mainstreaming  would  be  promoted  in  all  sections91.  This 
thematic scope would be in line with both the recommendations of PROGRESS stakeholder 
working group and the view of the respondents to the public consultation92. 

Regarding  possible  improvements  at  management  level,  they  would  be  the  same  as  under 
Option 1. In addition, the new programme will focus on large projects with clear EU added 
value  in  order  to  reach  critical  mass  and  reduce  administrative  burden.  Harmonised  and 
simplified rules and procedures will be put in place to facilitate access to the programme, in 
particular for small organisations. 

7.2.2.  EURES 

Option 1: Under this option, EURES continues and no action is taken to address in particular 
the issue relating to EURES administrative structure which is complex and needs revision and 
streamlining. Notably, there is a need to harmonise and update the implementation provisions 
regarding  the  clearance  of  vacancies  and  application  for  employment,  the  definition  of  the 
operational  objectives  of  EURES  services,  the  composition  and  governance  of  the  EURES 
network, the quality standards and exchange of information/best practices. These reforms will 
ensure  consistency  between  the  different  parts  of  EURES  in  line  with  the  new  MFF 
instruments.  

Option 2 is the preferred option as it would allow for advancing the reform of EURES. Under 
this option, EU-level and horizontal actions of EURES would be carried out as part of a new 
programme  for  direct  management,  bringing  together  Progress,  EURES  network  and  the 
Microfinance Facility. In addition, the new Regulation for the European Social  Fund  would 
incorporate  EURES  national  (vertical)  and  cross-border  activities  as  a  specific  shared 
management component so as to ensure  that the Member States develop EURES at national 
level according to the priorities of the European Employment Strategy. 

Both  new  legislative  acts  would  thus  provide  for  legal  bases  for  EURES  expenditures, 
including the financial incentives provided for under 'Your First EURES Job' while coupling 
the  financing  of  EURES  with  the  definition  of its  modern  activities  as  spelled  out  in  a  new 
Commission  Decision  thereby  making  full  use  of  Article  44  of  the  Council  Regulation 
1612/68:  "The  Commission  shall  adopt  measures  pursuant  to  this  Regulation  for  its 
implementation.  To  this  end,  it  shall  act  in  close  cooperation  with  the  central  public 
authorities of the Member States". 

In this context, the new focus of EURES would be to: 

-  Develop EU-level EURES services related to both outgoing and incoming placements 
(when  there  is  an  economic  need  to  fill  job  vacancies  and  where  EURES  has  the 
capacity of handling such market activities);  

90  In  addition  to  the  direct  management  funding,  a  share  of  the  budget  managed  by  the  Member  States  in  the 
context  of  the  ESF  mainstream  should  be  ring-fenced  for  financing  social  innovation  and  experimentation 
projects. 
91  This  is  in  line  with  the  results  of  consultation  calling  for  better  mainstreaming  gender  equality  and  anti-
discrimination issues in the new instrument. See section 1.4.3.  
92 See Section 1.4.6. 

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-  Expand  EURES  scope  to  support  targeted  mobility  schemes93  at  EU  level  to  a)  fill 
bottleneck and niches vacancies (where market failure have been identified), b) to help 
specific  groups  of  workers  (such  as  young  people)  and  countries  which  are  or  will 
become recipients of mobile workers;  

-  Get  Public  Employment  Services  (PES)94  and  Private  Employment  services  to 

systematically cooperate when delivering EURES actions;  

-  Specify  in  which  form  private  Employment  Services  will  be  part  of  EURES  2020, 
hence translating the rulings of the European Court of Justice which has called for the 
opening  of  all  placement  services  to  competition.  However,  PES  should  remain  the 
main actors of EURES so as to ensure that Member States fulfil all their legal EURES 
transparency obligations as stipulated under Council Regulation 1612/68.  

This  option  would  allow  EURES  to  become  a  genuine  result  oriented  matching  tool  going 
well beyond its original role as a transparency device. 

Under option 3 EURES-related national and cross-border activities would be carried out only 
by the Member States; no action would be undertaken at EU level. This option would lead to 
savings  in  EU  budget  but  at  the  same  time  it  would  mean  that  Member  States  would  act 
individually. As a result, some Member States would invest more to attract talents in order to 
fill in their bottleneck vacancies. Lack of coordination between employment services would 
cause  unnecessary  costs  and  could  lead  to  mobility  being  perceived  mainly  as  a  matter  of 
competition  for  talents/skills,  potentially  leading  to  frictions  between  the  Member  States  or 
cuts in skill investments.  

The  potential  cost  of  discontinuing  such  transparency  tools  as  the  EURES  portal,  on  which 
1 000 000  job  vacancies  and  more  than  500 000  CVs  are  currently  posted,  would  be  higher 
than  the  cost  of  maintaining  it,  particularly  given  its  results  to  date  (see  Section  3.2.2.). 
Limited information  and uninformed choices by both companies and jobseekers,  and higher 
job-search/recruitment costs could have negative economic consequences.  

Mobility  in  the  EU  would  be  more  difficult,  transparency  of  labour  markets  would  not  be 
anymore  ensured.  It  should  be  noted  that  research  has  shown  that  greater  geographical  and 
labour  mobility  is  associated  with  higher  GDP,  higher  employment  and  lower  long-term 
unemployment. 

7.2.3.  Microfinance and Social Entrepreneurship 

Content options 

Option 1: Continuation of the basis of the current setup 

Based  upon  the  experience  so  far  with  Progress  Microfinance,  the  range  of  funded 
instruments  offered  under  this  instrument  is  attractive  for  the  European  microcredit  sector. 
Under Progress Microfinance, it has allowed to reach out to a great variety of intermediaries, 
non-bank microcredit providers, banks, and small banks, which, in turn, makes an outreach to 
different  groups  of  final  beneficiaries  likely:  senior  loans  are  typically  interesting  for  small 
institutions that need loan capital for on-lending as microcredit.  

93 See proposal "Your first EURES job" from the Youth on the Move 2020 flagship initiative. 
94 PES market share in job vacancies varies between 10 and 80% throughout EU-MS, with an estimated average 
of less than 40%, Danish Technological Institute, PES skills study, 2010. 

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Subordinated loans can be especially helpful for small banks with an intention to further scale 
down  into  the  microfinance  segment,  in  particular  in  Central  European  countries.  While 
senior  financing  does  not  fit  their  needs,  because  they  rely  on  intra-group  lending  from  the 
parent company, subordinated loans can address the scarcity of capital resources which often 
limits their growth aspirations. A small allocation to direct equity allows for funding of some 
greenfield initiatives. Indirect equity, i.e. equity which is channelled through a central body to 
a network of local or regional intermediaries, increases the outreach because it allows a group 
of small intermediaries to pool their resources together and reach the necessary critical mass. 
This intermediary/sub-intermediary model has also proved attractive for the other products.  

The guarantees had been included in Progress Microfinance to serve the needs of commercial 
banks,  savings  banks,  cooperative  banks  and  larger  non-bank  microfinance  institutions. 
Considering  the  transactions  under  Progress  Microfinance  and  the  forecast  for  transactions, 
the  guarantees  seem  to  be  truly  complementary  to  the  funded  instruments  in  the  sense  that 
they  increase  the  geographical  coverage:  in  the  countries  in  which  guarantee  operations  are 
planned  or  have  already  been  concluded  (mostly  Western  Europe),  intermediaries  have  not 
shown interest in funded instruments so far. The guarantees therefore contribute to achieving 
a regional balance between Eastern and Western Europe.  

Option 1 would not improve the situation with regard to developing the microfinance market, 
nor provide a real support to social enterprises.  

For microfinance support, this could jeopardise the aim of making more microcredit available, 
especially to people from disadvantaged groups because the absorption capacity of the market 
may not be sufficient: microcredit providers would continue facing difficulties with  making 
investments to improve outreach, management, performance and infrastructure. The situation 
would be worse than in the current programming period in which at least a small amount of 
funds made available in the framework of the European Parliament Preparatory Action have 
been used to support capacity building of a number of microcredit providers.  

Option  1  would  also  not  adequately  address  the  lack  of  access  to  finance  that  social 
enterprises  face  for  development  and  consolidation:  even  though  social  enterprises  could 
remain  part  of  the  final  beneficiaries  targeted  by  Progress  Microfinance,  it  has  become 
obvious that microloans alone will not be sufficient to influence significantly the start-up of 
social enterprises and the development of the sector.  

As far as the geographical scope is concerned, maintaining the status quo, i.e. covering only 
the  27  Member  States  would  leave  a  gap  in  support  to  microcredit  in  the  EFTA/EEA,  the 
candidate  and  accession  countries. Under the current programming period, the microfinance 
support  (in  the  form  of  guarantees)  of  the  Commission's  Competitiveness  and  Innovation 
Programme (CIP) is open to all these countries. With a view to simplification and avoidance 
of  overlaps  between  EU  initiatives,  the  successor  programme  of  CIP  will  focus  on  SME 
finance, leaving the microfinance segment to the successor of Progress Microfinance. Without 
an extension of the scope, these countries could in the future not benefit from EU support to 
microfinance anymore.  

Option  2:  Widened  scope  to  include  capacity  building  and  with  extended  geographical 
coverage 

While  option  2  enjoys  the  same  benefits  as  option  1,  but  also  addresses  some  of  its 
weaknesses:  

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Firstly,  it  would  tackle  the  problems  of  complementarity  with  the  CIP  programme:  an 
extension  of  the  geographical  scope  would  also  allow  businesses,  especially  micro-
enterprises,  in  the  EFTA/EEA  countries,  the  accession  and  candidate  countries,  to  benefit 
from EU support to microfinance95.  

In  terms  of  content,  funding  for  capacity  building  would  be  added.  The  latter  would  be 
provided  in  the  form  of  equity  and/or  loans,  as  had  been  successfully  done  under  the 
preparatory action of the European Parliament under JASMINE96. This would enable building 
stronger  microcredit  providers  in  Europe  that can  serve  more  clients  and  cover  the  growing 
unmet demand by micro-enterprises, unemployed and excluded persons in Europe. 

In  addition  to  the  equity  investments  and  loans,  grants  could  be  provided  to  microcredit 
providers.  This  could  be  done  in  the  form  a  certain  amount  per  loan  given  out  and  made 
conditional on the provision of training and mentoring and/or serving particularly vulnerable 
groups.  This  would  provide  an  incentive  to  make  microcredit  available  also  to  risky  groups 
and address the problem of costly support services, which cannot become sustainable, as even 
fervent advocators of self-sustainability of microcredit providers admit97. 

Option  3:  Widened  scope  for  microfinance  support  to  include  capacity  building  with 
extended  geographical  coverage,  complemented  by  dedicated  support  for  developing 
and expanding social enterprises  

This option has the same scope as option 2. Funding for capacity building including through 
grants would be provided (like option 2b). The advantages would therefore be the same.  

The  main  advantage  of  this  option  in  comparison  to  option  2  would  be  the  introduction  of 
specific and targeted support for social enterprises going beyond the current, insufficient set-
up, where the funding is limited to the start-up phase and amounts for microcredit (loans of up 
to € 25000). The dedicated support would address th e specific needs of the social enterprises 
and make more substantial funding available allowing social enterprises to develop and grow. 

The  Programme  will  thus  also  address  market  imperfections  and  externalities  in  the  social 
investment  markets.  Currently,  these  are  highly  fragmented,  diversified  and  underdeveloped 
due to specific supply and demand side barriers. The dedicated support at EU level will serve 
as catalyst for public private partnerships in member states and regions in establishing suitable 
social investment funds, and embed these in a broader strategy for supporting social enterprise 
through measures financed from the Structural Funds. Overcoming the key barrier of access 
to  finance  will  strengthen  the  role  of  social  enterprises  as  drivers  of  social  innovation 
processes,  and  it  enhance  their    innovative  capability  as  these  are  experimenting  with 
alternative  ways  of  responding  to  societal  needs  and  meeting  social  values,  by  producing 
innovative of products and services, introducing innovative production processes and means 
of  service  delivery,  changing  value  chains,  introducing  new  standards  and  norms,  and 
developing new interfaces and linkages between sectors.  

95 Microfinance in the Western Balkans is covered by the European Fund for Southeast Europe and the future 
Western Balkans SME Platform. 
96  In  addition  to  guarantees  received  from  the  Progress  Microfinance  guarantee  window,  two  of  the 
intermediaries,  microStart  and  Qredits,  could  also  benefit  from  a  EUR  750 000  equity  investment  and  EUR 
750 000 loan respectively for capacity building under EPPA, the funding part of JASMINE.  
97 European Microfinance Network, "Sustainability of Microfinance in Europe", in: Microfinance in Europe, n°5 
June 2009. 

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Delivery options 

Option A: Continuation on the basis of the current setup 

This option would have the advantage of being easy and relatively quick to establish because 
the new instruments could be negotiated with the EIF on the basis of the existing mandates. 
The  know-how  built  up  by  the  EIF  under  the  current  instrument  could  be  used,  including 
work on the pipeline (which would also speed up delivery). The centralised management by 
the EIF would also respond to the requests of the sector and the European Parliament to create 
a  one-stop-shop  for  microfinance  support  in  the  EU.  However,  for  implementing  the  social 
entrepreneurship support, a new set-up would have to be created.  

Option  B:  Direct  management  by  the  Commission  within  an  integrated  programme  of 
DG EMPL 

Under this option, the new instrument would be directly managed by the Commission instead 
of  being  managed  jointly  with  the  EIF.  However,  the  Commission  would  not  have  the 
expertise nor be given the resources to manage a fund on a day-to-day basis. This option can 
therefore not be considered realistic. 

Option C: Joint management and establishment of a dedicated investment vehicle within 
an integrated programme of DG EMPL 

This option foresees that the new instrument is jointly managed with the European Investment 
Fund  as  under  option  A.  Instead  of  being  a  stand  alone  instrument,  as  under  option  A,  it 
would be part of the integrated programme for employment and social inclusion. Besides the 
advantages  already  described  under  option  A,  the  inclusion  of  this  specific  initiative  in  the 
integrated programme will facilitate complementarity between the activities the Commission 
carries out under the PROGRESS section (such raising awareness, exchange of good practice, 
social  experimentation,  establishing  a  sound  knowledge  and  evidence  base  and  developing 
robust tools, notably for experimentation and measuring impact ) and the support provided by 
the  EIF  on  behalf  of  the  Commission.  Opening  the  dedicated  investment  vehicle  to 
contributions from Member States and regions with ESF resources (in the form of ring-fenced 
compartments  in  the  investment  vehicle)  would  also  make  the  benefits  of  a  centralised  EU 
level  instrument,  established  with  the  know-how  of  the  EIF  and  the  experience  gained  with 
Progress  Microfinance,  available  for  the  Member  States.  The  exact  delivery  mode  of  the 
funding for capacity building through grants will need further exploration.  

The  financial  instruments  facilitating  access  to  finance  for  social  enterprises  will  be 
implemented  through  structures  and  procedures  similar  to  the  ones  for  the  Microfinance 
facility (i.e. guarantees, counter-guarantees and risk-sharing instruments; equity instruments; 
debt  instruments;  and  grants),  taking  into  account  the  diversity,  fragmentation  and  different 
degrees  of  development  of  the  social  investment  markets.  It  will  therefore  be  highly 
experimental,  and  will  require  an  accompanying  learning  evaluation  to  have  sound  data  for 
adjusting  implementation  parameters  to  the  needs  and  requirements  of  the  financial 
intermediaries using the EU level financial instruments.  

7.3. 

Consideration of "no action" 

Without EU funding available through the Progress programme, which proved working as a 
an effective tool supporting the development of EU employment and social policy, EU ability 
to promote and facilitate reforms, as well as to empower stakeholders who have a crucial role 
to play in the delivery of reform would be severely reduced.  

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In EURES case, no support to intra-EU-mobility would be in contradiction with Article 46 of 
the TFEU which imposes an obligation to act ("shall… issue directives or make regulations to 
bring  about  freedom  of  movement")  and  would  contradict  the  economic  rationale  that 
increased mobility flows can add an extra to GDP and that geographic mobility can serve as 
an adjustment mechanism between labour market out of balance.   

For the microfinance and social entrepreneurship, the "no action" option would be equal to 
the baseline scenario. 

7.4. 

The favoured delivery option 

Option  2  is  the  preferred  option  for  the  Progress  programme  as  it  would  bring  about  the 
following benefits: 

-  Efficiency gains, compared to option 1 (current situation with some improvements), 
in terms of a considerable rationalisation of EMPL direct management instruments, 
streamlining  of  their  management  rules  and  procedures  and  ensuring  flexibility  in 
allocating resources to  changing policy priorities.  

-  Critical  mass:  the  integrated  programme  would  be  a  medium-sized  EU  instrument 

able to reach the critical mass needed to achieve its policy objectives.  

-  Coherence  and  effectiveness:  bringing  together  all  three  direct  management 
instruments which pursue common objectives in the employment, social policy and 
inclusion  fields,  would  enable  the  Commission  to  increase  policy  coherence  and 
impact of its actions.   

For EURES, the favoured option is option 2.  

The  favoured  option  for  microfinance  and  entrepreneurship  support  is  option  3C 
combining the benefits of the experience with the current Progress Microfinance instrument 
with the enlarged scope and dedicated, customised, support for social enterprises.  

As a result, the Commission proposes to establish an integrated programme bringing together 
these three financial instruments. It will be made up of three sections:  

1.  The  Progress  section,  which  shall  support  the  development,  implementation  and 
monitoring  of  EU  employment  and  social  policy  and  legislation  on  working 
conditions and promote evidence-based policy-making and innovation, in partnership 
with the social partners, civil society organisations and other interested parties; 

2.  The  EURES  section,  which  shall  support  activities  carried  out  by  the  EURES 
network, i.e. the specialist services designated by the Member States, together with 
other  interested  parties,  to  develop  information  exchanges  and  dissemination  and 
other  forms  of  cooperation  to  promote  workers’  geographical  and  occupational 
mobility;  

3.  The Microfinance and Social Entrepreneurship section, which shall facilitate access 
to  finance  for  entrepreneurs,  especially  those  furthest  from  the  labour  market,  and 
social enterprises. 

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7.5. 

Risk assessment of the favoured delivery option 

Risks relating to the financial management 

Under  the  Progress,  centralised  direct  management  will  involve  (a)  the  attribution  of 
numerous  contracts  and  grants  for  specific  activities  (relevant  also  for  the  EURES  section), 
and  (b)  the  payment  of  numerous  operating  grants  to  non-governmental  organisations;  (c) 
cooperation  with  international  organisations  (relevant  also  for  the  Microfinance  and  Social 
Entrepreneurship  section  implemented  in  accordance  with  Joint  management  mode).  The 
main  risk  will  be  relating  to  the  capacity  of  (especially)  smaller  organisations  to  effectively 
control expenditure as well as to ensure the transparency of operations carried out. 

DG EMPL concludes grant agreements directly with beneficiaries who co-finance the project 
costs.  The  period  of  execution  of  the  subsidised  projects  is  usually  between  one  and  two 
years.  Budgets  allocated  at  the  award  stage  are  indicative  only,  and  the  amounts  paid  are 
always provisional and subject to recovery if they are not in line with actual costs. Finalised 
granted projects will be subject to ex post controls. The strategy of ex-post audit will be: (a) to 
combine the risk assessment and ad random selection in order to avoid a too rigid selection 
process, and (b) to pay attention to operational aspects whenever possible during the on-the-
spot audit. As far as the international organisations are concerned, they will be obliged to, in 
their  accounting,  audit,  internal  control  and  procurement  procedures,  apply  standards  which 
offer  guarantees  equivalent  to  internationally  accepted  standards.  In  addition,  individual 
agreements  concluded  with  the  international  organisations  for  the  award  of  financing  shall 
contain detailed provisions for the implementation of the tasks entrusted to such international 
organisations.  They  will  also  ensure  adequate  annual  ex  post  publication  of  beneficiaries  of 
funds deriving from the budget.  

Risks relating to the operational management 

As  every  financial  instrument  involving  calls  for  proposals,  a  European  programme 
promoting and financing social experiments relies for a large part on the initiatives taken by 
the potential project leaders. The main risks that could thus be identified are the following: 

- 

Insufficient  demand  for  a  programme  with  this  scope,  reflected  in  no  or  a  very  low 
number of applications. This could be because the concept of "social experimentation" 
for  some  constituencies  carries  negative  connotations,  thereby  stifling  interest.  Or, 
when the intended scope is well understood, it can be felt among potential promoters 
to be too costly, or simply not a relevant approach; 

-  On the content: the projects submitted are not very innovative, lack rationale in their 
focus, or are not well-suited for the methodology and/or for an envisaged up-scaling; 
-  The methodology applied is not what is generally defined as a social experimentation 

(evaluation is not robust enough, etc.). 

To  avoid  the  first  and  the  third  risks,  it  is  indispensable  to  promote  and  develop  social 
experimentation at EU level through awareness raising and capacity building actions. Member 
States,  civil  society  organisations  and  other  actors  may  also  need  to  be  reassured  on  the 
concept, and on the objective behind, i.e. that it is not a way to dismantle social services but a 
useful  tool  to  build  more  effective,  better  targeted  policies  in  partnership  with  all  relevant 
actors.  

On  the  second  risk,  exchanges  in  established  processes  for  policy  coordination  and  mutual 
learning will help ensure that the measure tested is relevant in terms of policy options. 

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The main element of the risk assessment is to examine if the funding provided for under the 
EURES  section  of  the  new  programme  can  deliver  the  expected  results  in  terms  of 
placements  and  information  provision  and  how  further  synergies  with  other  PROGRESS 
sections  can  be  developed  in  order  facilitate  the  implementation  of  the  employment 
guidelines. 

On the basis of historic records and EURES results so far (see section 4.2.), the risk should be 
assessed as medium-to-low. It can be further minimised by taking the corrective action with 
regard  to  the  suggested  revision  and  update  of  the  COM  decision  (2003/8/EC)  and  further 
mainstreaming of geographical mobility in the European Social fund.   

One  of  the  main  risks  for  microfinance  and  entrepreneurship  support  through  the 
programme  would  be  a  low  quality  of  the  interface  with  the  parallel  and  connected 
development of funding and capacity building of the microcredit sector. In case the capacity 
building is not effective enough, there will be insufficient funding absorption capacity of the 
microcredit market. This could jeopardise reaching the targets of  the  instrument in  terms of 
number of loans and total loan volume.     

Regarding the financial instrument to support the development of social enterprise, a potential 
risks  would  be  the  slow  establishment  of  social  investment  funds  that  could  absorb  the  EU 
level funding opportunities. 

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8. 

EU ADDED VALUE OF THE INTERVENTION 

The new programme will enable the Commission to increase policy coherence and impact of 
its  instruments  which  pursue  common  objectives  in  the  employment,  inclusion,  and  social 
affairs fields, i.e. Progress, EURES as well as the Microfinance and Social Entrepreneurship 
contribute  to  the  implementation  of  the  Europe  2020  Strategy,  its  relevant  headline  targets 
(for employment, fight against poverty and education) and the Integrated Guidelines 7, 8 and 
10, while supporting the implementation of the flagship initiatives, with special regard to the 
European Platform against Poverty and Social Exclusion, An agenda for New Skills and Jobs 
and Youth on the Move.  

In particular, the new instrument would bring about EU added value in the following ways: 

The EU is uniquely  placed  to  provide  a  European  platform  for  policy  exchange  and  mutual 
learning  processes  between  the  Member  States  (also  including  the  EEA  and  candidate 
countries) in the employment and social area. Knowledge of the policies carried out in other 
countries  broadens  the  range  of  options  available  to  policy  makers,  triggers  new  policy 
developments  and  encourages  national  reforms98.  Finally,  it  brings  benefits  in  terms  of 
improving the governance of the EU employment and social policy. 

The  EU  action  adds  value  to  national  interventions  by  providing  a  European  reference 
gathering  and  comparing  evidence,  developing  statistical  tools  and  methods  and  common 
indicators to allow for a complete picture of the situation prevailing in the employment and 
social  fields  at  European  level.  This  is  a  prerequisite  for  a  sound  analysis  of  the  key 
employment  and  social  challenges  facing  each  Member  State.  The  monitoring  of  progress 
towards the Europe 2020 targets, including relevant country-specific recommendations in the 
framework of the European Semester should be based on that analysis.  

The  need  for  better  application  of  EU  law  has  been  recognised  as  a  key  priority  under  the 
Smart  Regulation  agenda.  The  EU  level  is  the  most  appropriate  for  modernising  a  legal 
framework,  aiming  to  create  a  level  playing-field  and  to  guarantee  a  common  level  of  EU 
legal protection for all in the fields of health and safety at work and labour law. The EU is 
also  uniquely  placed  to  finance  measures  aimed  at  improving  compliance  with  EU  rules  as 
well  as  providing  systematic  review  of  the  EU  legislation  application  across  the  Member 
States.  

Developing the capacity of key European level civil-society networks to support and further 
develop the Union social policy goals can best be achieved at EU level. 

An improved EURES would facilitate labour market mobility. Member States would benefit 
as  bottleneck  or  hard-to-fill  vacancies  could  be  filled  by  intra-EU-mobility,  leading  to 
increased  economic  activity  and  thus  contributing  to  economic  growth.  Furthermore  more 
European labour market mobility could also foster a European citizenship which goes beyond 
national interests.  

The Member States would benefit from greater intra-EU labour market mobility, which could 
help fill bottleneck or hard-to-fill vacancies and thus bolster economic activity and contribute 
to economic growth.  

98  National  and  regional  authorities  consider  monitoring,  research  and  exchange  of  information  (through  the 
OMC and mutual learning) as areas where EU added value is the highest. See PPMI, PROGRESS stakeholder 
needs analysis, 2011. 

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Greater European labour market mobility is also essential for the completion of an area without 
internal frontiers and for the strengthening of economic and social cohesion and active European 
citizenship.  The  EU  institutions,  and  in  particular  the  Commission,  which  has  the 
administrative resources, expertise and capability to coordinate a transnational network such 
as  EURES,  should  therefore  support  and  facilitate  action  to  bolster  geographical  labour 
mobility. The Commission can also add value to the EURES network by developing policies 
to  overcome  remaining  obstacles  to  free  movement,  facilitating  exchanges  of  good  practice 
and ensure mutual learning between EURES network members.  

An increase  in the availability  of microcredit is best  achieved at the European level: firstly, 
the  European  Commission  in  cooperation  with  the  European  Investment  Fund  has  already 
gathered experience with the current microfinance facility, the JASMINE pilot project and the 
EPPA  initiative  requested  by  the  European  Parliament.  Microfinance  institutions  in  all 
Member  States  can  now  benefit  from  this  expertise  without  their  national,  regional  or  local 
authorities having to use resources to put in place similar systems.  

The  EU  level  instrument  facilitating  access  to  finance  for  social  enterprise  will  have  a 
multiplier effect as it will pave the way for enhanced public and private action at national and 
regional levels in the years to come. It is expected that the EU level instrument will contribute 
to  increasing  the  scale  of  social  business  operations  through  removing  barriers  to  finance, 
which would both stimulate the creation of more social enterprises, and allow existing ones to 
exploit  opportunities  for  growth;  to  increase  the  geographical  scope  of  social  investment 
funds and social finance intermediaries currently operating only in a few member states and at 
low levels; to stimulate the development and use of innovative financial instruments, facilitate 
mutual  learning  across  national  borders,  and  to  contribute  to  building  sustainable  and 
professional capacities for social impact investments. 

In addition, the financial resources  pooled together at the European level are more likely to 
attract additional funding from third investors like the European Investment Bank who, in the 
case of Progress Microfinance, matched the EU contribution of 100 million. The same is true 
for an EU level equity fund for investments in social enterprises: it can be expected that it will 
attract more resources from other investors.  

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9. 

COST-EFFECTIVENESS OF THE PROPOSED OPTION  

The  new  programme  bringing  together  Progress,  EURES  and  the  European  microfinance 
activities  will  allow  for  continuation  of  a  number  of  activities  proved  being  efficient  and 
effective  in  meeting  the  objectives  of  these  three  financial  instruments.  In  addition,  it  will 
provide  for  the  development  of  new  actions,  such  as  social  experimentation  under  the 
Progress  section,  recruitment/placement  under  the  EURES  targeted  mobility  scheme  and 
support to social enterprises under the microfinance and social entrepreneurship section. The 
cost-effectiveness analysis will therefore focus on these new activities.  

Social experimentation refers to small scale projects designed to test policy innovations (or 
reforms)  before  adopting  them  more  widely.  The  impact  of  the  innovation  on  the  sample 
population is assessed against the situation of a ‘control group’ with similar socio-economic 
characteristics that remains under the dominant policy regimes99. The problem is establishing 
a credible basis of comparison between the two groups, which can be done most efficiently by 
using randomization methods which characterize social experiments.  

Social  experimentations  have  been  conducted  in  the  United  States  since  the  late  1960's  to 
evaluate  proposed  changes  in  programme  or  policy  and,  more  recently,  in  Europe,  Latin 
America,  Asia  and  Africa.  They  have  become  an  accepted  part  of  policy  evaluation  in 
particular  in  the  United  States.  The  essential  reason  is  that  policymakers  and  many  social 
scientists find experimental results easier to understand – and  ultimately more convincing – 
than results from most other kinds of policy evaluation. Social experiments have contributed 
to important advances in basic knowledge, improved understanding of program effectiveness, 
and, in rarer cases, significant policy reform. 

There are three perspectives on the costs of a social experiment: 

1.  The first compares the situation where a policy is tested before being implemented with a 
situation  where  no  ex-ante  evaluation  occurs  at  all.  An  ex-post  evaluation  will  still  be 
possible, but if results are negative, it will be impossible to compensate the costs unduly 
generated  by  the  programme  for  years,  so  that  experimentation  can  be  considered  most 
effective in this regard100. 

A  social  experiment  benefits  society  by  providing  better  information  on  which  to  base 
public  policy.  Of  course,  one  cannot  know  before  the  fact  whether  any  particular 
experiment  will  lead  to  a  change  in  policy  –  this  depends  on  the  experimental  findings 
and  whether  policy  makers  act  on  the  findings.  In  deciding  whether  to  conduct  the 
experiment,  one  must  act  on  the  expected  value  of  the  experiment,  which  can  be 
expressed as: 

Expected value = value of change in policy  
x probability of change in policy  
- cost of experiment 

99 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  the  Committee  of  the  Regions  on  the  European  Platform  against  Poverty  and  Social 
Exclusion: A European Framework for social and territorial cohesion, COM(2010) 758 final. 
100  See  the  National  Job  Training  Partnership  Act  Study:  this  evaluation  found  that  the  out-of-school  youth 
component of JTPA had essentially no impact on the earnings of youths who participated in it. As a direct result 
of this finding, funding for the out-of-school youth component of JTPA was reduced by more than $500 million 
per  year.  In  just  a  few  years,  this  saving  of  resources  that  would  otherwise  have  been  wasted  on  ineffective 
training services easily surpassed the cost of all the social experiments that have been conducted in the in the 30 
years before 1997 

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However,  even  experiments  that  do  not  result  in  the  adoption  of  any  specific  policy 
measure  are  used  extensively most of  the time  in  the  analysis  of  a  number  of  proposed 
programmes and policies in the same area101. 

More  generally,  if  an  experiment  funded  by  the  new  Programme  addresses  a  relatively 
fundamental European policy issue, its results will be still relevant to the various policy 
processes  at  EU  and  Member  State  levels  long  after  the  experiment  has  been 
implemented.  The  existence  of  27  policy  makers, additionally to the European decision 
maker, multiplies the possible impact of a social experiment in the EU. 

2.   The second compares costs of a social experiment with benefits: will the experiment be 
likely to generate information sufficiently valuable to the political or institutional process 
to  justify  the  costs?  This  question  has  to  be  answered  positively  by  decision  makers 
before the experiment can take place. 

3.   A somehow different perspective looks at the experiment's opportunity cost, weighing the 
net benefits of the experiment against the net benefits of alternative methods of ex-ante 
evaluation. 

Social  experiments  generate  highly  robust  information  (2)  and  therefore  more  benefits  to 
society than other methods (3). 

The  advantages  of  controlled  experimentation  over  other  methods  of  analysis  are  easy  to 
describe. Because experimental subjects are randomly assigned to alternative treatments, the 
effects of the treatments on behaviour can be measured with high reliability. The assignment 
procedure assures us of the direction of causality between treatment and outcome: differences 
in  average  outcomes  among  the  several  treatment  groups  are  caused  by  differences  in 
treatment.  Random  assignment  also  removes  any  systematic  correlation  between  treatment 
status  and  both  observed  and  unobserved  participant  characteristics.  Estimated  treatment 
effects are therefore free from the selection bias that potentially taints all estimates based on 
non-experimental sources of information. 

Another advantage of experiments is that they permit analysts to measure and policymakers to 
observe the effects of new kinds of treatment that have not previously been observed. 

Finally, the simplicity of experiments offers notable advantages in making results convincing 
to other social scientists and understandable to policymakers. 

A  carefully  conducted  experiment  permits  analysts  to  describe  findings  in  extremely 
straightforward language: "Relative to employers in the control group, employers eligible for 
government-provided  wage  subsidies  hired  X  percent  more  disadvantaged  adults  and  Y 
percent fewer workers who were not economically disadvantaged." This kind of simplicity in 
describing results is seldom possible in non-experimental research, where analytical findings 
are necessarily subject to a variety of complicated qualifications. 

In recent years the last advantage of experiments has turned out to be particularly important. 
Because policymakers can easily grasp the findings and significance of a simple experiment, 
they  concentrate  on  the  implications  of  the  results  for  changing  public  policy.  They  do  not 
become entangled in a protracted and often inconclusive scientific debate about whether the 
findings of a particular study are statistically valid. Politicians are more likely to act on results 
they find convincing. 

101 See for instance the US income maintenance experiments and the Health Insurance Experiment. 

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In the absence of information from social experiments, economists and other social scientists 
rely on four main alternatives to experiments to learn about crucial behavioural parameters or 
the effectiveness of particular programs: 

-  One  source  of  information  is  data  on  the  relationship  between  economy-wide 
aggregates, such as interest rates and consumption, either over time or across regions. 
However,  aggregate  statistics  are  inappropriate  for  analyzing  many  kinds  of 
microeconomic behaviour.  

-  A  second  source  is  management  data  collected  in  the  administration  of  existing 
programs,  but  data  from  an  existing  program  seldom  provide  any  information  about 
what  the  participants'  experiences  would  have  been  if  they  had  been  enrolled  in  a 
different program or in no program at all.  

-  A  third  source  is  new  survey  data,  which  are  usually  more  costly  to  obtain  than 
programmatic  data  but  which  provide  information  about  the  experiences  of 
nonparticipants  as  well  as  participants  in  a  program,  and  thus  offer  some  evidence 
about likely behaviour in the absence of treatment.  

-  A  fourth  source  is  data  generated  by  special  demonstration  programs.  Like 
experiments, demonstrations involve the special provision of a treatment, collection of 
information  about  outcomes,  and  analysis  of  treatment  effects.  Unlike  experiments, 
demonstrations do not involve random assignment. 

Against the potential value of an experiment must be weight its expected costs. The costs of 
social experimentation fall into three categories: 

- 

Implementing the innovative treatment; 

-  Collecting data on the different groups; 

-  Analyzing the data. 

It  is  worth  noting  that  most  of  these  costs  are  typically  incurred  regardless  of  whether  a 
programme is evaluated through random assignment or using non experimental methods. The 
major  difference  in  costs  is  that  the  random  assignment  process  must  be  carefully 
implemented  and  monitored,  but  this  is  usually  not  very  costly  and  it  is  what  makes  most 
robust results possible.  

The extent to which the costs of the experimental programme represent a net cost to society 
depends  on  whether  it  generates  social  benefits,  which  is  difficult  to  assess  before  the 
programme has been conducted. 

The costs of experiments can vary a lot, depending on the sample sizes required, the method, 
frequency and duration of the data collection. In the US, a typical social experiment costs $2 
or 3 million102, although it is possible to conduct one for substantially less and some for a lot 
more103. Fortunately, once a design has been specified, it is possible to predict the costs of an 
experiment fairly accurately. 

102  Social  Experiments:  evaluating  public  programs  with  experimental  methods,  Larry  L.  Orr,  1999,  SAGE 
Publications Inc. 
103 See the Seattle-Denver Income Maintenance Experiment and the Health Insurance Experiment. 

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With  the  new  Programme  (direct  management)  a  budget  of  some  €  20  million  per  year  is 
planned  for  'Your  First  EURES  Job"  and  the  horizontal  activities  of  EURES  (including  the 
management of the portal) while all national EURES activities would be financed under the 
ESF through the shared management mode.  

On  the  basis  of  the  results  extrapolated  from  the  survey  carried  out  as  part  of  the  external 
evaluation of EURES between 2006 and 2008, one can envisage that suggests that around 100 
000 jobseekers per year get a job or a job offer via the EURES Job Mobility Portal. Although 
the evidence cannot be considered as robust, the activities of the EURES members might lead 
to approximately 50000 placements per year.  

It  can  be  argued  that  the  transparency  function  and  the  matching  possibilities  provided 
through the EURES Job Mobility Portal brings about better information and better informed 
choices for both employers and jobseekers. Taking into accounts these positive effects as well 
as the extrapolated results of EURES Job Mobility Portal and putting them into relation with 
the  investments  done  into  the  Portal,  the  cost-effectiveness  ratio  can  be  considered  as 
favourable.  This  is  also  confirmed  by  looking  at  the  costs  per  placement  through  tendering 
done by Member States and Public Employment Service in a recently published study under 
the Commission's new mutual learning programme PES-to-PËS dialogue104 

The  anticipated costs  per  placement  under the targeted  mobility  scheme – for young people 
filling bottleneck vacancies in other Member States – corresponds to the price level of similar 
tendering processes currently carried out in the EU. If a budget of € 10 000 000 is used for 
this purposes the expected outcome amounts to approximately 5500 placements/recruitments 
of young people in bottleneck occupations.  

For  microfinance  and  social  enterprise  support  the  preferred  option  is  particularly  cost-
effective, given the expected leverage of between 3 and 5 times of the EU contribution for the 
support to microfinance and social enterprises. Moreover, the joint management with the EIF 
allows for a polling of expertise and resources, limiting the Commission's investment in terms 
of day-to-day management. 

104 Sub-contracting in Public Employment  Services, Review of research findings and literature on recent trends 
and business models, by Dan Finn, Centre for Economic and Social Inclusion, May 2011. 

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10. 

MONITORING AND EVALUATION  

Following the positive experience with the results-based management approach of the current 
Progress  programme  and  in  line  with  the  recommendations  of  its  mid-term  evaluation  (see 
Section 3.2.1.), the EU programme for Social Change and Innovation will remain committed 
to a strong focus on results and achievements rather than resources and activities. To this end, 
the programme will be monitored on an annual basis in order to both assess headway towards 
the  achievement  of  its  general  and  specific  objectives  against  clear  indicators  (see  Section 
6.2.)  and  allow  for  any  necessary  adjustments  of  the  policy  and  funding  priorities.  The 
monitoring  will  also  allow  for  assessing  the  way  in  which  gender  equality  and  anti-
discrimination  issues  have  been  addressed  across  the  programme's  activities.  Further  to  the 
recommendations  of  both  the  mid-term  evaluation  and  Progress  key  stakeholder  working 
group,  reporting  requirements,  in  particular  those  placed  upon  grant  beneficiaries  will  be 
reduced. This could be done by reducing the number of quantitative indicators at the output 
level  and  measuring  the  progress  achieved  towards  longer-term  goals  every  three  years 
instead of annually.   

The  Programme  will  also  be  subject  to  mid-term  term  and  ex-post  evaluation.  A  mid-term 
evaluation  will  aim  at  measuring  progress  made  in  meeting  the  Programme  objectives, 
determining  whether  its  resources  have  been  used  efficiently  and  assessing  its  European 
added value. Mid-term evaluation report should be delivered by the end of 2017 to feed into 
the  preparation  of  a  successor  instrument  to  the  Programme.  The  final  evaluation  shall,  in 
addition, examine the impact of the Programme. Ex post-evaluation report hall be delivered 
by the end of 2022 at the latest.  

The opportunity to bring together three instruments will enable the Commission to streamline 
evaluation arrangements and reduce their costs.  

As  recommended  in  the  external  EURES  evaluation  a  new  monitoring  system  for  EURES 
and  a  regular  customer  satisfaction  survey  for  both  employers  and  jobseekers  will  be 
developed  and  installed.  The  currently  on-going  study  'Evaluation  of  Public  Employment 
Services  performance  measurement  systems  and  corresponding  recommendations  on 
geographical  labour  mobility  indicators'    will  suggest  synergies  with  the  performance 
measurement system of the Public Employment Services and suitable indicators for EURES 
and geographic mobility.   

Given  the  longer  lifetime  of  the  microfinance  and  social  enterprise  support  section 
(investments  will  take  place  until  ten  years  after  the  start  of  the  instrument)  a  specific  final 
evaluation will take place for this section at the latest one year after the end of the mandate 
provided to the European Investment Fund. 

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ANNEX 1:   GLOSSARY AND ABBREVIATIONS 

EES  -  European  Employment  Strategy:  The  European  employment  strategy  provides  a 
framework  (the  "Open  Method  of  Coordination")  for  EU  countries  to  share  information, 
discuss and coordinate their employment policies. 

Effectiveness:  The  principle  of  effectiveness  is  concerned  with  attaining  the  specific 
objectives set and achieving the intended results. 

Efficiency:  The  principle  of  efficiency  is  concerned  with  the  best  relationship  between 
resources employed and results achieved. 

Geographic  mobility  or  "intra-EU–mobility"  is  used  to  refer  to  the  movement  of  EU 
residents from one country to another within the European Union.  

Job  changers:  According  to  the  flexicurity  and  labour  market  transition  terminology,  the 
term  job  changers  is  used  to  identify  a  person  who  is  currently  employed  but  nonetheless 
looking for another job. 

Labour  mobility  is  about  the  willingness  and  ability  of  workers  to  change  employment  or 
areas. Vertical mobility changes the workers grading or status. Horizontal mobility does not. 
Low labour mobility is a cause of structural unemployment. 

Microcredit:  Micro-credit  in  the  EU  means  loans  under  EUR€  25  000.  It  is  tailored  for 
micro-enterprises  and  unemployed  or  inactive  people  who  want  to  go  into  self-employment 
but do not have access to traditional banking services. 

Microenterprise is an enterprise employing less than 10 people, including self-employment, 
and whose annual turnover and/or annual balance sheet total does not exceed EUR€ 2 million. 
91% if all European enterprises are microenterprises. 

OMC  -  Open  Method  of  Coordination:  The  OMC  provides  a  framework  for  cooperation 
between  the  Member  States,  whose  national  policies  can  thus  be  directed  towards  certain 
common objectives. Under this intergovernmental method, the Member States are evaluated 
by one another (peer pressure), with the Commission's role being limited to surveillance. The 
European Parliament and the Court of Justice play virtually no part in the OMC process. The 
open  method  of  coordination  takes  place  in  areas  which  fall  within  the  competence  of  the 
Member States, such as employment, social protection, social inclusion, education, youth and 
training.  

It  is  based  principally  on:  (1)  jointly  identifying  and  defining  objectives  to  be  achieved 
(adopted by the Council); (2) jointly established measuring instruments (statistics, indicators, 
guidelines);  and  (3)  benchmarking,  i.e.  comparison  of  the  Member  States'  performance  and 
exchange of best practices (monitored by the Commission). 

Performance monitoring: A continuous process of collecting and analyzing data to compare 
how well a project, program, or policy is being implemented against expected results. 

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Personalised  services:  services  provided  by  public  employment  services  or  other  bodies  to 
individuals with the aim to facilitate the integration of unemployed and other job seekers in 
the labour market. 

Private Employment Services deliver employment services to jobseekers, job changers and 
employers, on commercial and non-commercial basis. 

Professional mobility includes job-to-job mobility, which requires a change of employer, and 
occupational mobility, which is indicated by a change in job role and functions but may occur 
with the same employer.  

Public  Employment  Services  as  public  services  have  a  specific  role  in  the  labour  market: 
they deliver services free of charge to jobseekers (both unemployed and job changers) as well 
as to employers, which aim to bring jobseekers and vacancies together, and also contribute to 
improved transparency in the labour market.  

Results-based  management:  A  management  strategy  focusing  on  performance  and 
achievement of outputs, outcomes and impacts. 

Social enterprises produce goods and services (often of general interest), are in many cases 
highly  entrepreneurial  and  innovative,  have  primarily  social  as  opposed  to  profit-making 
goals,  produce  social  added-value  that  benefits  the  general  public,  use  surpluses  mainly  to 
achieve  their  social  goals,  and  reflect  their  mission  in  the  way  they  operate  (often  with  a 
strong  element  of  participation  and  co-decision  involving  those  affected  by  the  business 
activity).  Many  of  these  enterprises  are  pioneering  in  developing  scalable  or  replicable 
business  models  that  strive  to  make  a  significant  impact  on  society,  economy  and  the 
environment.  

Social  experimentation:  the  concept  refers  to  small  scale  projects  designed  to  test  policy 
innovations (or reforms) before adopting them more widely. The impact of the innovation on 
the sample population is assessed against the situation of a ‘control group’ with similar socio-
economic characteristics that remains under the dominant policy regimes. Social experiments 
can  be  applied  to  a  large  spectrum  of  social  interventions,  such  as  welfare-to-work 
programmes,  provision  of  health  services,  technologies  to  facilitate  independent  living, 
addressing  homelessness,  education,  early  child  development,  access  public  utilities,  active 
retirement, etc.  

Social  experimentation  requires  a  thorough  preparation  and  selection.  The  programmes 
should be of sufficient size to make them politically relevant and should focus on fields where 
evidence  suggests  that  a  policy  change  is  needed.  To  be  conclusive,  the  program  must  be 
subject  to  well-defined  evaluation  standards,  to  ensure  that  its  results  are  transferable  to 
another context.  

SPC:  The  Social  Protection  Committee  is  a  Treaty-based.  The  SPC  serves  as  a  vehicle  for 
cooperative  exchange  between  Member  States  and  the  European  Commission  in  the 
framework  of  the  Open  Method  of  Co-ordination  on  social  inclusion,  health  care  and  long-
term  care  as  well  as  pensions  ("Social"  OMC).  In  particular,  the  Committee  plays  a  central 
role in preparing the discussion in the Council on the annual Joint Report on Social Protection 
and Social Inclusion.  

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The Committee also prepares reports, formulates opinions or undertakes other work within its 
fields  of  competence,  at  the  request  of  either  the  Council  or  the  Commission  or  on  its  own 
initiative.  

Your  first  EURES  job  is  a  new  preparatory  action  to  foster  youth  job  mobility  across  the 
EU-27  countries.  It  is  aimed  at  helping  young  people  and  employers  to  fill  open  bottleneck 
vacancies. "Your first EURES job" is one of the actions pinpointed in the EU 2020 strategy 
(flagship initiative "Youth on the Move" and corresponding Communication).  

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