The EU needs a social investment pact

1. The EU needs a social investment pact Frank Vandenbroucke Brussels, ETUI, 30 June 2011

2. The social investment imperative • The fundamentalsocietal trends thatnecessitated a social investmentstrategy are as relevant and important today as theyweretenyearsago, perhapseven more sobecause of adverse demography • Investment agenda • Child-centred social investmentstrategy • Human capital investment push • Reconcilingwork and family life • Later and flexible retirement • Migration and integrationthrougheducation and participation • Minimum income support and capacitating service provision

3. The social investment imperative • The fundamentalsocietal trends thatnecessitated a social investmentstrategy are as relevant and important today as theyweretenyearsago, perhapseven more sobecause of adverse demography • Investment agenda • Child-centred social investmentstrategy • Human capital investment push • Reconcilingwork and family life • Later and flexible retirement • Migration and integrationthrougheducation and participation • Minimum income support and capacitating service provision

4. Whatcanbelearnedfrompast social investmentexperience? • Substantive policy issues • Governance issues

5. Increase in FTE employment rate since 2004 (ppt)

6. Recent trends in povertyrates and materialdeprivation(%)

7. A crucialfailure: joblesshouseholds in EU 15 (%)

8. Joblesshouseholds in NMS 10 (%)

9. Lessons from past experience: substantive issues • Can we create virtuous circles of social protection and (egalitarian) social investment? Yes, without denying difficulties and tensions. • Consistent social investment needed: social investment is a packaged long-term strategy • Policies must besufficientlyambitiousandmutually consistent • Social investment strategieswillrequireadditional resources • Quality of services & equality of background conditions • Investment strategyandprotectionstrategy as complementarypillars Vandenbroucke andVleminckx, Disappointing poverty trends: is the social investment state to blame? An exercise in soul-searching for policy-makers, CSB Working Paper, January 2011, forthcoming in Journal of European Social Policy. http://webhost.ua.ac.be/csb Morel, Palmeand Palier, Towards a SocialInvestment Welfare State?, Policy Press, 2011

10. Lessons from past experience: substantive issues • Can we create virtuous circles of social protection and (egalitarian) social investment? Yes, without denying difficulties and tensions. • Consistent social investment needed: social investment is a packaged long-term strategy • Embedded social investment needed Social investment must beembedded in macroeconomicandbudgetarygovernanceand financial regulationthat support durableandbalancedgrowth in the real economy. Social investment must beembedded in anattractiveconception of socialprogress.

11. Lessons from past experience: substantive issues • Can we create virtuous circles of social protection and (egalitarian) social investment? Yes, without denying difficulties and tensions. • Consistent social investment needed: social investment is a packaged long-term strategy • Embedded social investment needed Social investment must beembedded in macroeconomicandbudgetarygovernanceand financial regulationthat support durableandbalancedgrowth in the real economy. Social investment must beembedded in anattractiveconception of socialprogressand a narrative of “caring Europe”.

12. Lessonsfrom past experience: governance issues • Soft = weak • Yet, for steering the overall orientation of social policy at EU level, there is no alternative to “governance by objectives” • How can “governance by objectives” be made to deliver?

13. Taking Europe 2020 seriously • Whilecertainlynot perfect, the Europe 2020 objectives translate a social investment ambitionwhichmerits full support • Example: poverty, severe material deprivation, very low work intensity

14. The EU needs a Social Investment Pact • The long-termsocial investment imperative must not fall victim to short-term policy orientations, i.e. ill-guided austerity (short-term  long-term) • Fiscal discipline must be allowed to deliver, i.e. collective action & support needed, e.g. Eurobonds (supranational solutions  welfare chauvinism) • The objectives formulated under the EU2020 strategy can provide a framework for reconciling those short-term and long-term considerations, if the social investment strategy is embedded in budgetary & macroeconomic policy, i.e. if short-term budgetary & macroeconomic governance serves long-term social investment. • The political deal the EU needs is one wherein all governments pursue budgetary discipline and social investment, and are supported therein in a tangible way by the EU. Such a reform-oriented, forward-looking deal may contribute to creating a real sense of “reciprocity” in the EU. • Coming weeks will be crucial

15. The EU needs a Social Investment Pact • The long-termsocial investment imperative must not fall victim to short-term policy orientations, i.e. ill-guided austerity (short-term  long-term) • Fiscal discipline must be allowed to deliver, i.e. collective action & support needed, e.g. Eurobonds (supranational solutions  welfare chauvinism) • The objectives of Europe 2020 can provide a framework for reconciling those short-term and long-term considerations, if the social investment strategy is embedded in budgetary & macroeconomic policy, i.e. if short-term budgetary & macroeconomic governance serves long-term social investment. • The political deal the EU needs is one wherein all governments pursue budgetary discipline and social investment, and are supported therein in a tangible way by the EU. • Such a reform-oriented, forward-looking deal may contribute to creating a real sense of “reciprocity” in the EU.

16. Thankyou • Vandenbroucke, Hemerijck, Palier, The EU needs a social investment pact, www.ose.be/EN