Debate: Employment and social policies of the euro area
Date: MONDAY, 18 OCTOBER 2021
Speaker: Nicolas Schmit
Language: EN

It is timely to have a discussion on the appropriate employment and social policies for the euro area in a future-oriented perspective as our economies are on the recovery path, but as they also face a certain number of uncertainties, like energy prices going up and the lack of certain inputs. After the COVID-19 shock and its initial impact, the labour markets are currently showing more positive developments. The unemployment rate in the euro area was 7.6% in July 2021, down by one full percentage point compared with the peak of September 2020.  Remaining slack and mismatches in the labour market go together with increasing labour shortages. These are driven both by long-lasting difficulties to find workers with the necessary skills in some sectors and by shortages that have emerged in other sectors and occupations as a result of the pandemic. So far, the impact of the crisis has been uneven. You’ve also noted this in your report. The crisis impacted strongly on young people and other vulnerable groups, like the low-skilled and people with migrant backgrounds. Also, women have been more often exposed to a double burden of work and increasing care responsibilities, in particular those with children.  Although exceptional policies have cushioned the impact in the short term, the COVID-19 crisis risks increasing inequalities and social exclusion in the euro area following years of steady improvements. It is therefore important that the recovery is fair and inclusive. The European pillar of social rights needs to be a fundamental element of it and your report upholds this view.  This was also the focus of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) meeting of last Friday. The policy debate on the future of the European Semester confirmed the objective of strengthening the implementation of the social-pillar action plan to achieve the EU’s social headline targets as core elements of the future semester cycles.  Swift and decisive policy action and adequate funding are necessary to avoid longer-term scarring effects, with particular attention to our youth and children. Already in 2020, the Commission put together the youth—employment support package, which included a proposal for a reinforced youth guarantee adopted by the Council in October. Furthermore, the Council recommendation establishing a European child guarantee calls upon the Member States to guarantee for children at risk of poverty or social exclusion access to a set of key services. Member States are appointing national coordinators and defining their action plan.  In this context, the President, in her State of the Union address, announced that 2022 will be the year of the European youth. It will be about young generations’ access to the labour market, as well as fair working conditions for them, not to forget their educational opportunities and their wellbeing, as many young have lost their income, and face mental-health issues due to the pandemic. All this has been discussed with hundreds of young people here in Strasbourg at the European Youth Event less than two weeks ago.  Next to the dedicated investment in Europe’s youth, measures that support job creation, effective active labour market policy and reskilling and upskilling and ease job transitions will be vital to create opportunities for all in the context of the fair, green and digital transitions. We will deploy ALMA (Aim, Learn, Master, Achieve), announced by the President of the Commission, a new initiative helping disadvantaged young Europeans who are not in any kind of employment, education or training, to help these young people to gain professional experience abroad, accompanied by social services. The ultimate objective is to integrate them into education, vocational training or quality employment. But it is also to give them the feeling that they are equal Europeans, that they are considered to be at the same level as all the other young students or apprentices.  The European pillar of social rights action plan, including the three EU headline targets on employment, skills and poverty reduction by 2030 welcomed by the EU leaders in Porto and by the European Council in June, will be instrumental in providing renewed policy impetus to make social Europe a reality. To monitor the progress of our efforts, the European Semester will rely on a revised social scoreboard to allow for a more comprehensive following-up on pillar principles, as well as to identify social challenges and imbalances. The joint employment report 2022 will have a stronger focus on pillar implementation. As regards EU funding, on top of the cohesion policy funding, the national recovery and resilience plans covering important and ambitious reforms and investments in the employment skills and social policy areas relate to a number of challenges identified in the country-specific recommendations and will therefore play a key role in the implementation of the pillar. We are pleased that, for the 25 plans that have already been submitted, 30% of investments and reforms are dedicated to employment skills and social policies. These, together with the actions supported by the European Social Fund Plus (ESF+), will play a key role in driving a fair and inclusive recovery.  To maximise the positive impact and ownership of these policies, the Commission believes in the importance of social dialogue and encourages Member States to strengthen the involvement of social partners and other stakeholders, in both policy design and implementation, just as you have noted in your report. We acknowledge the importance of Parliament’s role in the semester process, also with a view to its review, as well as for the scrutiny of the implementation of the recovery and resilience plans. The Commission will therefore keep engaging very closely with Parliament on both counts.