On the European Semester for economic policy coordination: employment and social priorities for 2024

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the European Semester for economic policy coordination: employment and social priorities for 2024

(2023/2116(INI))

– having regard to Article 3 of the Treaty on European Union,

– having regard to Articles 9 and 149 of the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Commission communication of 21 November 2023 entitled ‘Annual Sustainable Growth Survey 2024’ (COM(2023)0901),

– having regard to the Commission proposal of 21 November 2023 for a joint employment report from the Commission and the Council (COM(2023)0904),

– having regard to the Commission recommendation of 21 November 2023 for a Council recommendation on the economic policy of the euro area (COM(2023)0903),

– having regard to the Commission communication of 21 November 2023 entitled ‘Alert Mechanism Report 2024’ (COM(2023)0902),

– having regard to the Commission communication of 21 November 2023 on the 2024 Draft Budgetary Plans: Overall Assessment (COM(2023)0900),

– having regard to the European Pillar of Social Rights (EPSR), proclaimed by the Council, Parliament and the Commission in November 2017,

– having regard to the Commission communication of 9 November 2022 entitled ‘Communication on orientations for a reform of the EU economic governance framework’ (COM(2022)0583),

– having regard to the Commission proposal of 26 April 2023 for a regulation of the European Parliament and of the Council on the effective coordination of economic policies and multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (COM(2023)0240),

– having regard to Rule 54 of its Rules of Procedure,

– having regard to the report of the Committee on Employment and Social Affairs (A9-0000/2023),

A. whereas, according to the Commission’s 2023 autumn economic forecast, the EU labour market continued to perform strongly in the first half of 2023, despite the slowdown in economic growth; whereas employment growth in the EU is projected at 1.0 % this year, with a projected easing to 0.4 % in both 2024 and 2025; whereas the unemployment rate in the EU is expected to remain broadly stable at 6.0 % in 2023 and 2024 and to edge down to 5.9 % in 2025;

B. whereas the Annual Sustainable Growth Survey for 2024 highlights that despite marked wage increases in the EU in 2022 and the beginning of 2023, these remained below the high inflation rates and resulted in reduced purchasing power, affecting lower incomes the most; whereas real wages in the EU decreased by 3.7 % in 2022, increasing the risk of in-work poverty; whereas real wages are expected to increase as of next year as a result of continued nominal wage growth and declining inflation;

C. whereas the Commission’s 2023 autumn economic forecast stressed that uncertainty and downside risks to the economic outlook have increased in recent months and that the transmission of monetary tightening may weigh on economic activity for longer and to a larger degree than projected in this forecast, as adjusting the finances of firms, households and governments to the high interest rate environment could prove more challenging;

D. whereas the digital and green transitions could have a significant impact on the environment and the people affected, but also on the economy, including the labour market;

E. whereas with regard to the general escape clause under the Stability and Growth Pact, which expires at the end of 2023, fiscal policy needs to support monetary policy in reducing inflation and needs to safeguard fiscal sustainability, while providing sufficient space for additional investments, including investment in social infrastructure and services and support for long-term growth;

F. whereas the joint employment report for 2024 provides a first assessment of Member States’ state of play on the three headline targets for 2030 and shows: good progress towards the employment target with an employment level of 74.6 %, but with significant differences according to gender and age; progress by the majority of Member States towards their national poverty reduction targets, but changes in the opposite direction by others; a need for significant progress to reach the EU headline target of 60 % of adults in learning every year in the EU by 2030, from a low level of 37.4 % in 2016;

G. whereas the inclusion of a social convergence framework in the European Semester should foster upward social convergence and should improve the assessment and monitoring of employment and social developments in the Member States and the EU by identifying risks to upward convergence for Member States in the joint employment report based on the Social Scoreboard headline indicators and through the Commission’s publication of social convergence reports for those Member States identified as facing risks to upward social convergence;

H. whereas skilled workers that can respond to the demands of the labour market and education, training and lifelong learning are of key importance to ensure sustainable growth, increased innovation and competitiveness and the sustainable and just transition of the EU economy;

I. whereas, as a result of demographic ageing, the number of people over 65 is rising rapidly and, at the same time, a growing number of critical jobs cannot find suitable candidates to fill open positions, leading to a decrease in the number of employees financing the social welfare model in the EU;

J. whereas Parliament has repeatedly stressed the importance of its proper involvement in the European Semester process and dialogue in a regular and structured way in order to increase the transparency, democratic accountability and ownership of the decisions taken, in particular by means of an economic and social dialogue;

1. Stresses that some of the aims of sustainable economic growth must be to ensure an inclusive socio-ecological and digital transformation of our economies to prevent social, economic, digital and environmental imbalances by fighting poverty, reducing inequalities and creating decent jobs with adequate wages and working conditions, while ensuring alignment with the Sustainable Development Goals and the EPSR, as well as to strengthen economic, social and territorial cohesion;

2. Stresses the importance of up-to-date monitoring of the labour market and of supply and demand for skills at the occupational, sectoral and regional level to assist in the identification and forecasting of relevant occupational and transversal skills needs;

3. Stresses the need to invest significantly in people and to offer quality, inclusive and subsidised education and training in areas linked to skills and competences that are in demand in labour markets and future-oriented sectors according to local and regional needs; further stresses the need to address skills mismatches and labour market shortages; underlines the need to ensure that workers are ready for the green and digital transitions, that they can benefit from opportunities for new employment or career progression and that training and education programmes are aligned with the needs of the planet, the economy and society of the future;

4. Highlights the need to consider the distribution of quality employment in society due to the prevalence of poverty and social exclusion among certain groups in order to better design tailored activation and inclusion policies; stresses the importance of devoting particular attention to the younger generation, which still faces difficulties entering the labour market, and to children who are at a higher risk of falling into poverty and social exclusion; insists, in that respect, on the need to better assess the impact of current policies, with the aim of enhancing Member States’ capacity to foster upward social convergence;

5. Recalls that the creation of good-quality jobs and the implementation of retention strategies are the best ways to attract a skilled workforce and calls on employers to invest in their workers; highlights that recruitment difficulties and labour shortages are particularly prevalent in sectors with challenging working conditions and poor job quality; highlights that creating high-quality, well-paid jobs that improve quality of life is therefore crucial;

6. Supports the increase of EU funds dedicated to social objectives and the promotion of future-oriented investments focused on the just green and digital transitions, with a strong social dimension, including gender equality and equal access to essential services, such as education, health and digital infrastructure; stresses that financial instruments at all levels must become less fragmented and more blended and bundled;

7. Considers that EU fiscal rules should allow for the necessary public investment and financing of the just transition to a zero-carbon economy, as well as for the proper implementation of the principles of the EPSR and of social investments; stresses that, although there is a need to reduce public debt within a reasonable time frame, smaller or more indebted Member States need more flexible individual adjustment paths that allow them enough fiscal space to undertake the investments and reforms needed for socially fair green and digital transitions in a way that leaves no one behind;

8. Reminds the Member States of their commitment to undertake reforms and make investments that have a social impact and contribute to the EU’s economic, social and territorial cohesion and sustainable and inclusive growth, as well as contribute to the implementation of the EPSR through their national recovery and resilience plans; calls, in this sense, for a mainstreaming of the EPSR in all EU funds through the introduction of social conditionality in their allocation rules, as part of the Financial Regulation covering the EU general budget;

9. Takes note of the Commission’s proposals for new regulations within the revision of the economic governance framework of April 2023 to strengthen debt sustainability and enhance sustainable and inclusive growth through investment and reforms, including fiscal adjustment paths that allow for social investment; calls on the Commission to assess which expenditures and investments are necessary to achieve the long-term socioeconomic objectives required to comply with milestones in the national recovery and resilience plans; calls on the Commission to propose a new system for excessive deficit calculations based on this assessment in order to increase fairness during the green and digital transitions, social resilience and the implementation of the EPSR, while ensuring the sustainability of public finances in the Member States;

10. Calls on the Commission to develop an economic governance architecture in the EU based on transparency, accountability, solidarity, integration, social justice, convergence, gender equality, high-quality public services, including a quality public education system for all, quality employment and sustainable development;

11. Welcomes the fact that, in order to promote upward social convergence, the multilateral surveillance procedure set out in Article 148(4) TFEU has been, for the first time, complemented by an early warning system within the European Semester through a social convergence framework that could encourage the correction of risks to social convergence identified through the Social Scoreboard headline indicators and through social convergence reports published by the Commission; highlights the importance of including social divergence risks in the country-specific recommendations, especially those risks that concern people’s early development and that can have long-lasting consequences for individuals, such as equal access to quality education and healthcare, and highlights the importance of taking them into account when defining fiscal adjustment paths;

12. Calls for a more democratic European Semester process, with Parliament closely involved in setting macroeconomic and social policy priorities, in particular; considers that a revised European Semester process should follow the ordinary legislative procedure and so be agreed on between the Council and Parliament;

13. Reconfirms the role of social partners in strengthening social dialogue and considers that the revision of the European Semester process should promote further dialogue with the relevant stakeholders, in particular relevant social partners and civil society organisations, on the main policy issues where appropriate, in accordance with the provisions of the TFEU and national legal and political arrangements;

14. Instructs its President to forward this resolution to the Council and the Commission.