Source: EURLEX
Language: en
Format: md

**EN**

# **EN EN**

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 2.7.2008
SEC(2008) 2170

**COMMISSION STAFF WORKING DOCUMENT**

_**accompanying the**_

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN**

**PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL**
**COMMITTEE AND THE COMMITTEE OF THE REGIONS**

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

## **_Summary of the Impact Assessment_**

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

# **EN EN**

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

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

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

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

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

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

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

# EN 2 EN

In order to assess the merit of a strengthened Social OMC and to identify the most effective
ways to achieve it, three policy options have been retained for in depth examination [1] .

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

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

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

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

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

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

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

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

# EN 3 EN

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

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

As regards **option 1:** 'status quo':

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

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

Concerning **option 2:** 'fundamental overhaul:

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

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

# EN 4 EN

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

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

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

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

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

# EN 5 EN