Will European recovery ever be co-determined by social actors?

The EU’s plan for recovery offered an opportunity for meaningful involvement of social actors. The outcome? Patchy.

In response to the pandemic, the European Union pledged major financial support to member states. Via the multiannual financial framework and ‘NextGenerationEU’ (NGEU), with its temporary ‘Recovery and Resilience Facility’ (RRF), the EU earmarked €800 billion, for which member states were required to submit national recovery and resilience plans (RRPs). While some reporting templates were invented, others drew on the established procedures of the European Semester, which served as a ‘Goldilocks’ governance option.

To what extent has the new set-up changed the power balance among EU actors in the monitoring of economic and social policies? When the semester was launched in 2011, for instance, there was a bias in favour of financial and economic players. But over time social-institutional actors managed to become involved in its day-to-day operation, ‘socialising’ the semester.

The answers we give to that question are based on EU documents, semi-structured elite interviews and discussions with representatives of the European social partners and civil-society organisations (CSOs), as well as of member states.

Stakeholder consultation

The RRF regulation stipulated that national reforms and investments had to relate to the country-specific recommendations (CSRs) of the semester, the strengthening of growth potential, job creation and economic, social and institutional resilience, and implementation of the European Pillar of Social Rights. Effective contribution to the green and digital transitions was also required: expenditure related to climate had to comprise at least 37 per cent of each RRP, digital initiatives 20 per cent. No explicit ‘social’ targets were however included—although the European Commission would be mandated to develop (through delegated regulation) a methodology for reporting social expenditure, including on measures focused on children and young people as well as gender equality.

The final version of the regulation was a big step forward, at least on paper, regarding stakeholder consultation—so far stipulated only in general terms under the semester as formally set out. As a result of the European Parliament’s first reading, the adopted regulation requires member states not only to provide ‘a summary of the consultation process’ but also to report on ‘how the input of the stakeholders is reflected in the recovery and resilience plan’. In addition to the social partners, the regulation widens stakeholders to include local and regional authorities and CSOs including youth organisations.

In practice, however, the involvement of social actors in the RRF has proved highly problematic: the motto was to act first and consult later.

Crisis mode

The pandemic erupted in March 2020. The EU responded in steps but rapidly, breaking some old taboos. By the summer the European Council had agreed to a massive package. During the autumn policy-makers were still in crisis mode. Many established procedures associated with the semester, such as the country reports and CSRs, were altered or put on hold.

Within the commission, decision-making was centralised in a Recovery and Resilience Task Force (RECOVER) of the Secretariat-General, in close co-operation with the Directorate General for Economic and Financial Affairs (DG ECFIN). The role of DG Employment, Social Affairs and Inclusion (EMPL), previously in the semester’s ‘core group’, was significantly pruned.

As for the Council of the EU, the Employment, Social Policy, Health and Consumer Affairs (EPSCO) formation had no say in the recovery being rolled out. Nor did its advisory bodies: the employment (EMCO) and social-protection (SPC) committees.

Drastically reduced

What is more, the usual consultation of a variety of social players was drastically reduced. The social actors, in turn, were very concerned they might be sidelined for a longer period. While the social partners and CSOs were typically included at the outset of the drafting of the RRPs, this engagement was not sustained. Meetings discussed draft plans, sometimes shared in advance, but stakeholders usually did not receive feedback on how their contributions factored into the final plan.

Recent analysis of the involvement of stakeholders in the drafting process by the European Parliament confirms that at least 17 member states engaged in extensive, formal, public consultation when preparing their RRPs, even if this varied greatly. Fewer, however, point to specific proposals from stakeholders reflected in the RRPs. Some countries also reported in their RRP that they had given the public the opportunity to engage in the debate, without revealing anything about the quality of the consultation.

Research forthcoming from Eurofound has assessed the quality of involvement of social partners in these consultations. Fewer than ten member states were given a positive assessment: the Nordic countries, Belgium, Czechia and Spain and (to a lesser extent) Bulgaria, Cyprus and France. All other countries recorded only low-quality social-partner involvement, with deficiencies in the timeliness of, and feedback from, the consultation.

Different set-up

At national level, ministers—premiers and ministers responsible for finance and cohesion—have mainly steered RRP decision-making. This stands in stark contrast with previous reform programmes driven largely by officialdom. Because the set-up was different, social partners and CSOs had to develop new national and EU networks—which takes more time than was available.

The lack of detailed requirements for quality consultation on the RRP—its extent and the time allotted, the transparency of the contributions by social actors—combined with the change of national ‘drivers’ severely to limit effective engagement, even in countries with established avenues for consultation under the semester. It remains to be seen whether the ‘social recalibration’ of the RRF objectives obtained by the European Parliament during the negotiations on the regulation has ultimately affected the social quality of the plans. In the absence of quantitative social targets—it seems these were more difficult to agree than green or digital ones—member states appear largely free to choose how much to stake on social reform and investment in their RRP.

When the RRF was launched, due to the desire for quick action, there was a serious risk of the EU’s institutional social actors losing the prominence they had acquired over the years in the context of the semester. DG EMPL, EPSCO and its advisory bodies however gradually reclaimed their position, as the immediacy of the crisis subsided. A longer-term focus emerged, the EU returned to previous semester practices and these players managed to get a foot in the door.

Officials also engaged with the social partners on both sides of industry, but it remains an open question whether this consultation was really meaningful. European CSOs, by contrast, have been sidelined in the RRF process. And in most member states consultation with domestic stakeholders—both social partners and CSOs—has remained insufficient.

Democratising the polity

The European Parliament was reasonably successful in its substantive impact on the RRF regulation. It has since failed, however, to insert itself in the approval and assessment procedures of the recovery programme.

Time will tell whether the EU is ready to seize this opportunity to democratise the polity further and to enhance the inclusion of social actors in these processes. Making ‘soft’ modes of governance harder, including strengthening the role of the European Parliament in oversight of the semester and the RRF, could reinforce democracy and enhance EU legitimacy.

This is part of a series on the National Recovery and Resilience Plans, supported by the Hans Böckler Stiftung