What changed

4.9.2024

5.9.2024

Mr Johan Van Overtveldt

BRUSSELS

Subject: Opinion on Generalthe general budget of the European Union for the financial year 2025 - all sections (2024/0176(BUD))

Dear Mr Chair,

Under the procedure referred to above, the Committee on BudgetaryEmployment Controland Social Affairs has been asked to submit an opinion to your committee. At its meeting ofon 2423 July 2024, the EMPL Committee decided to send the opinion in the form of a letter. The Committee on Employment and Social Affairs considered the matter at its meeting on 4 September 2024 and adopted its opinion in the form of a letter, drawn-up under the lead of the EMPL rapporteur for opinion Romana TOMC, at that meeting. It decided to call on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

The EP Reform 2024 emphasised, inter alia, that the budgetary and discharge procedures are linked, and that results of the discharge procedure should naturally feed back into the budgetary procedure, and vice-versa. In that context, the CONT Committee considers that the resolutions of the discharge procedure for 2022, adopted in Plenary in April 2024, contain a number of observations and recommendations that the discharge authority wishes to provide to the budgetary authority.

The Committee on Budgetary Control considered the matter at its meeting of 4 September 2024. At that meeting, it decided to call on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

This opinion should be read in conjunction with the Budgetary Amendment(s) tabled by the Committee on Budgetary Control.

Yours sincerely,

Niclas Herbst José Cepeda

Li Andersson

Chair of the CONT Committee Rapporteur

OPINION

SUGGESTIONS

1. The EMPL Committee stresses the existing challenges faced by people in Europe, notably increasing cost of livings, inflation in particular high energy, food and housing prices, resulting in growing vulnerabilities, widening social and economic inequalities, and escalating and aggravating poverty as well as the climate and biodiversity crisis and in particular the direct effect of extreme weather events, that are negatively affecting the EU's socio-economic landscape and the working and living conditions as well as the health and wellbeing of people living in Europe thereby threatening sustainable growth and employment. The Committee highlights that this context together with the green and digital transitions and the demographic change will require a robust and commensurate budgetary response in 2025, and therefore, expresses its concern about the very limited margins and remaining flexibilities available in the Draft Budget and calls for mobilising adequate resources for the EU employment and social policies ensuring that the implementation of the European Pillar of Social Rights (EPSR) Action Plan and achievement of the Porto Declaration targets is prioritised.

1. Underlines that the Union’s financial interests are to be protected in accordance with the general principles embedded in the Union Treaties, in particular the values in Article 2 of the Treaty on European Union (TEU), and with the principle of sound financial management enshrined in Article 317 of the Treaty on the Functioning of the European Union (TFEU) and in Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union (the Financial Regulation);

2. The EMPL Committee believes that in order to overcome these challenges it is essential to increase salaries and promote fair and decent wages and combat poverty at work.

2. Notes that as the necessary digitalisation of the management, control and audit of the EU Budget unfolds, cybersecurity threats increasingly pose new and significant risks, such as cyberattacks on EU Institutions, and fraud and other financial crimes affecting the financial interests of the Union; recalls the tasks assigned to the European Union Agency for Cybersecurity (ENISA) in relation to the Cybersecurity Act, aiming to promote a high common level of cybersecurity across the Union; calls on the Commission to allocate EU Budget funds efficiently to strengthen cybersecurity infrastructure, research and development while ensuring that cybersecurity investments are impactful and contribute to the overall protection of the Union’s financial interests;

3. The EMPL Committee recalls the EPSR, the EPSR Action Plan of 4 March 2021, including the EU 2030 headline targets for jobs, skills and poverty reduction, the Porto Declaration of 8 May 2021 on social affairs adopted by the Members of the European Council, the Tripartite Declaration for a Thriving European Social Dialogue, and the La Hulpe Declaration on the Future of the European Pillar of Social Rights.

3. Emphasises the major importance of the Rule of Law Conditionality Mechanism for the protection of the Union budget; calls on the Commission to make full use of the tools available to address the clear risk of a serious breach of Union values and to promptly invoke the Conditionality Regulation when breaches of the Rule of Law risk impacting the Union's financial interests; supports the blocking of Union funds as long as the conditions are not entirely fulfilled and not giving in to blackmail; urges the Commission to guarantee a unitary, comprehensive and integrated approach across different funds and legislative instruments;

4. Furthermore, the EMPL committee recalls that the EPSR Action Plan aims for the EU to achieve specific targets by 2030, including having at least 78% of individuals aged 20 to 64 in employment, ensuring at least 60% of all adults participate in training annually, and reducing the number of people at risk of poverty or social exclusion by at least 15 million, including 5 million children. However, even achieving these targets is becoming increasingly challenging in the context of projected increases in poverty and unemployment unless specific efforts and support are dedicated to alleviating the current pressure on social protection systems and mitigating the social impact of the crisis, as well as to giving support to refugees and ensuring decent living conditions for all, with access to quality essential services such as health, education and housing.

4. Notes with concern that the total outstanding commitments, which represent future debts if not decommitted, reached an all-time high; calls on the Commission to provide sufficient measures to protect the Union budget from the different risks identified, in particular the RAL and the increasing debt;

5. The EMPL Committee points out that the European Social Fund + (ESF+) is one of the key drivers for strengthening the social dimension of the Union and thus, expresses a particular concern with the reduction of the directly managed part of the ESF+ as a result of the Multiannual Financial Framework (MFF) revision, reducing the availabilities and opportunities for further action in line with a sufficiently funded ESF+ in light of the steep increase in cost of living and its impacts on workers and their families. The Committee highlights also the essential role of the European Globalisation Adjustment Fund for Displaced Workers (EGF), and calls for Member States to make better use of the reduced funding available, as well as the Recovery and Resilience Facility (RRF) and Repower EU chapters, the Just Transition Fund (JTF), chapter 5 of the NZIA, the ERDF and the InvestEU programme.

5. Notes that as a result of the mid-term MFF Review the budget for technical assistance has been touched by redeployments, recalls that the risk scoring tool ARACHNE, that plays a central role in detection of risks for the protection of the financial interests of the Union, is funded through the Cohesion policy’s budget for technical assistance; further notes that development of ARACHNE Corporate is funded through budget for information systems made available under heading 7; calls on the budget authority to make sure that neither the redeployments under technical assistance, nor the changes in funding the development and future operation of ARACHNE Corporate affect the availability of this essential risk scoring tool for authorities in the various management modes the system is deployed in;

6. The EMPL Committee stresses the importance of the Employment and Social Innovation strand (EaSI) of the ESF+ for investment in social innovation and for stimulating labour mobility and regrets the significant cut to this budget line by the Council. The Committee insists that this budget line is restored to the figure proposed by the Commission in its draft budget.

6. Underlines the importance to make the use of IT tools such as EDES and ARACHNE mandatory and systematic for all Union funds including shared management and ensure better use of new technology in order to increase controls and protect the Union budget against fraud and misuse of funds in the context of the concluded revision of the Financial Regulation; and calls on the Commission to grant the Court, OLAF and the EPPO access to a single integrated IT system for data-mining and risk-scoring provided by the Commission, in the terms agreed in the recast of the Financial Regulation;

7. The EMPL Committee expresses concern about unemployment rates in the EU, while we see labour shortages in several sectors, and it urges Member States and the Commission to prioritise combating youth and people with disabilities’ unemployment as well as providing training to combat skills shortages in the labour market, leveraging existing EU initiatives. The Committee recognises the pivotal role of vocational education and training (VET) and paid traineeships in young people’s transition to employment, and stresses the importance of investing in their quality including decent working conditions and attractiveness through the ESF+ and in a reinforced Youth Guarantee.

7. Considers that the European Public Prosecutor’s Office, in its short existence, has become an indispensable part of the EU anti-fraud architecture; considers that the activities of the EPPO do in itself not only contribute to the protection of the EU’s financial interests, but also have the potential to recover amounts of the EU budget that were not used for its intended purpose due to criminal activities; considers that amounts resulting from seizing and confiscating measures adopted by the European Delegated Prosecutors in the Member States could, after deduction of costs incurred by the Member States’ authorities to implement these measures, flow back into the EU Budget, in line with Article 38 of Regulation (EU) 2017/1939; considers that the potential revenue resulting from seizing and confiscating measures (estimated to be EUR 100 million based on the 2023 EPPO Annual Report) should be accounted for in the EU Budget as non-assigned revenue; calls on the Commission to make the necessary arrangements with the relevant national authorities to allow these amounts to enter into the EU Budget;

8. The EMPL Committee stresses the importance of policies and measures to support the labour market transition and the need to strengthen the competitiveness of our economies in the context of the green and digital transitions. It highlights the role of the Just Transition Fund in supporting workers, the RRF and cohesion policy and their importance for addressing the social aspects of the transition, in particular creation of national social infrastructure and support to jobseekers, including up- and reskilling while ensuring a safety net for those left behind and calls to accelerate their implementation.

8. Notes the amount assigned to the EPPO in the 2025 draft budget of EUR 77.368.186 in commitment and payment appropriations; further notes the EPPO’s estimate that a minimum of EUR 86 million is needed to meet its mandatory competence; notes that in addition, the EPPO’s IT autonomy programme, estimated to cost could cost EUR 2,98 million, is not covered in the budgeted amount for 2025; considers therefore that an increase in the EPPOs budget of EUR 12 million is justified, as reflected in budgetary amendment 1; considers that this amount can be covered by future inflows to the EU Budget resulting from the seizing and confiscating measures adopted by the European Public Delegated Prosecutors.

9. The EMPL Committee considers mental health at work as another major issue of social policy. The pandemic has accelerated new realities and new forms of work brought by digitalisation, including artificial intelligence (AI), job precariousness and insecurity, algorithmic management and an ‘always on’ culture, that bring both opportunities and challenges to the labour market and work-life balance. In this perspective, the Committee welcomes the Commission’s initiative to launch a comprehensive approach to mental health, as well as, the Council Conclusions on mental health and precarious work and the commitment to regulate the right to disconnect.

10. The EMPL Committee considers crucial to combat workforce exclusion as a consequence of longer periods of sick leave caused by serious non-communicable diseases like cancer, cardiovascular diseases, diabetes, chronic respiratory diseases, mental health and neurological disorders, as well as, rheumatic and musculoskeletal diseases. It calls therefore for initiatives focusing on the adaptation of workplace, flexible working conditions and strategies to support workers’ return after longer absence.

11. The EMPL Committee underlines that the right to work and employment is a fundamental right enshrined in Article 27 of the United Nations Convention on the Rights of Persons with Disabilities (UN CRPD). It notes, however, that at EU level, only 50.6 % of persons with disabilities are employed, compared to 74.8 % of persons without disabilities. The Committee calls, therefore, for the establishment of a Disability Employment and Skills Guarantee in order to boost the participation of persons with disabilities in the open labour market.

12. The EMPL Committee considers that investment in lifelong learning, vocational education and training, reskilling and upskilling is essential to support workers through the green and digital transition and to enhance the Union's sustainable competitiveness and resilience including against external shocks. The committee also considers that the Strategic Technologies for Europe Platform (STEP) and the launch of the Net-Zero Industry Academies under the NZIA are important components of the European strategy to bolster investments in critical and emerging technologies and to address labour shortages and skills needs.

13. The EMPL Committee highlights the key role that the Academies will play in disseminating knowledge and skills on net-zero technologies that can enhance the Union’s competitiveness and its global position in net-zero industries.

14. The EMPL Committee recalls the commitment of the Union to promote the role of social partners and to facilitate social dialogue, in line with Article 152 of the Treaty on the Functioning of the European Union and emphasises the need to ensure adequate support for social dialogue and for the capacity of social partners, as well as, the need to guarantee adequate support for information and training measures for trade unions, including in accession countries. It therefore opposes the reduction compared to the previous years for these budget lines in the 2025 budget.

15. The EMPL Committee stands for family-policies and social policies and enhanced funding to help children to get a better life and ensure work-life balance to all workers. The Committee acknowledges the critical role of family and child benefits, in particular for vulnerable households, as part of fair and inclusive social protection systems, which need to be adapted to the variety of family arrangements and provide timely access to social protection and adequate support for all according to Member States’ practices. Therefore, given the rising child poverty rates, the Committee reiterates its calls to urgently increase the funding of the European Child Guarantee and the need to create a dedicated budget. The Committee further recalls its position that all Member States should use at least 5 % of the ESF+ resources under shared-management to targeted actions to combat child poverty and support the implementation of the Child Guarantee, as well as, make full use of other existing funding possibilities under the EU budget, such as ReactEU and the RRF to eradicate child poverty. It emphasises the importance of the European Child Guarantee for the safeguard of essential rights and key services.

16. The EMPL Committee underlines that the EU faces demographic challenges with an ageing population due to low fertility rates and extended life expectancies. In addition, it welcomes the European Care Strategy and calls for its adequate funding in budget 2025. The Committee calls for further initiatives to support formal and informal carers, their working conditions as well as their work-life balance. However, the Committee calls for strong policy responses to address the societal impacts of demographic change.

17. The EMPL Committee stresses that women face heightened under- and unemployment and social risks. Achieving the employment target from the Porto Declaration requires ambitious national goals to include women in the workforce. The Committee calls for the mainstreaming of a gender responsive budget to better align policies and activities that promote the equal participation, as well as equal pay, equal pension and equal treatment of women in the labour market.

18. The EMPL Committee welcomes that the Commission has further developed a methodology to track gender equality-related spending in the 2021-2027 MFF, which looks at policy design and resource allocation and in particular the presentation of an ex-post gender impact assessment on a more granular level and reporting on volumes. The Committee regrets that the first results of this tracking show the inadequacy of the EU spending in this regard, with only EUR 19 million of the EU budget having a direct positive impact for women and calls on the Commission to assess holistically gender impact and facilitate that all the relevant data is available for the tracking.

19. The EMPL Committee calls on the Commission to provide a more detailed tracking methodology for expenditure on Sustainable Development Goals (SDGs) within the EU’s social budget based on the principles of the European Pillar of Social Rights and to present a Social Scoreboard and well-being indicators to measure the overall impact of different EU instruments.

20. The EMPL Committee stresses that the European Instrument for Temporary Support to Mitigate Unemployment Risks in an Emergency (SURE) has proved to be successful in fighting unemployment as a consequence of the COVID-19 pandemic and further calls on the Commission to build on the SURE instrument to support national schemes to protect employment and preserve workers’ incomes that can be activated temporarily when a part of the EU experiences an economic shock.

21. The EMPL Committee insists on the importance of investing in social inclusion and in measures, in particular for people in vulnerable situations, as well as deprived and disadvantaged groups. It repeats its call for an overarching anti-poverty strategy. It stresses that this strategy should include new and additional initiatives to tackle poverty and achieve the 2030 poverty target. It also reminds the EU of its commitment to eradicate homelessness by 2030 and stresses the importance of improving the standard of living of all people living in the EU, as well as addressing social gaps in living and working conditions through social investment, including adequate social services and essential services, quality healthcare and well-functioning public health systems with sufficient healthcare personnel. In this respect, the Committee insists that the rules governing the use of Union spending and funds must ensure and enhance compliance with the highest social rights and democratic principles, be aligned with EU social commitments and objectives, and the fundamental rights of workers. It recalls the obligation of compliance with the Charter of Fundamental Rights of the EU as per the ESF+ Regulation and Common Provision Regulation and calls for provisions allowing public money only for those employers respecting workers’ rights and applicable working conditions.

22. The EMPL Committee expresses concern about the deteriorating situation of access to affordable housing across the EU. In this regard, it welcomes the commitment of the Commission’s President to present a European Affordable Housing Plan, which will include support for and investments in the creation of additional affordable housing. It urges the Commission to proceed with housing as one of its foremost priorities. It also urges Member States to fully utilise the cohesion policy funds available for investments in affordable housing.

23. The EMPL Committee recalls the essential work carried out by the five EU agencies active in the social and employment policy areas, namely the European Labour Authority (ELA), the European Foundation for Living and Working Conditions (Eurofound), the European Agency for Safety and Health at Work (EU-OSHA), the European Centre for the Development of Vocational Training (CEDEFOP) and the European Training Foundation (ETF). It considers that these agencies must be properly staffed and adequately resourced, while taking into account inflation, so that they can fulfil their mandate, achieve their objectives and perform their evolving tasks. The Committee calls on the Commission to ensure the expertise of the agencies is used where EU funds can be spent more efficiently compared to alternative solutions. This includes access to programmes such as Horizon Europe for the agencies that have a clear research profile while strictly avoiding double financing of their regular activities.

24. The EMPL Committee reiterates its previous call to support ELA’s call for transforming 15 seconded national expert posts into temporary agent posts and for two additional contractual agent posts - without budget impact, with a view to be able to attract and retain the necessary staff resources to fulfil its tasks and to bring the share of SNEs on ELA’s staff closer to the standard situation of other EU agencies.

25. The EMPL Committee recalls that pilot projects (PPs) and preparatory actions (PAs) are essential to test new policy initiatives in the fields of employment and social inclusion. It recalls however that their assessment is anchored in the interinstitutional agreement and repeats its call on the Commission to evaluate PP/PA proposals impartially on the basis of a legal and financial assessment in a way that reflects the merit of the proposals. It expresses its repeated disappointment over the quality of assessments of the proposals in the recent years and urges the Commission to intensify the dialogue with the Parliament on how innovative ideas could become eligible and to provide detailed, clearer and more transparent feedback and explanations of its assessments. It also recalls that the implementation of an adopted PP/PA must remain faithful to the adopted proposal.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur for the opinion declares under hisher exclusive responsibility that heshe did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.