EU ministers call for social investment, amid budget cuts
EU finance ministers met with social affairs ministers in Brussels to discuss novel ways to measure and track the impact of government investment in the workforce.
Social investment, for lifelong learning, education, and government support for job transitions and schemes to improve job accessibility for the (partially) disabled or those recovering from a long-term illness, are expected to boost European growth.
"Social investment is not just a cost factor; it also has a return," Belgian social affairs minister Frank Vandenbroucke, whose country holds the EU’s rotating presidency, told the press upon his arrival in Brussels on Tuesday (12 March).
The EU Commission and most of its member states do not have systematically coherent ways of measuring financial or social gains of those investments, with the result that those investments are usually exclusively registered as costs.
An analysis of 17 wealthy OECD countries found that long-term investments in climate, research or social programmes are therefore often the first victim of government spending cuts.
However, faced with foreign competition, an ageing workforce, and lacklustre growth, EU social affairs ministers and the Belgian presidency have worked to re-centre social reforms in the broader scope of economic policy making.
In part, this is done by pointing to the financial gains of social investments.
Vandenbroucke, for example, said that improving worker skills and industrial competitiveness could help EU member states reduce deficits in the "longer term."
Indeed, under the EU’s revamped debt and spending rules, which kicked back into force on 1 January, governments and the EU Commission are expected to produce longer-term growth plans, which include detailed investment programmes.
These plans will have a "strong social investment dimension", said EU trade commissioner Valdis Dombrovkis. However, tools to reliably measure gains from public investments are still under development.
Therefore, countries need to improve at "measuring the return on social investments and improving our capacity to monitor and evaluate, and for that, we need better data," said Vandenbroucke.
"EU competitiveness will not be restored by having the lowest wages but by having the best products [and workers]," said German labour minister Hubertus Heil.
Vandenbroucke described Tuesday’s summit as "historic" because it brought together ministers of finance and economy and social affairs ministers in one "jumbo meeting."
This apparently has not happened since 1998, as pointed out by Austrian council spokesperson Stefanie Evita Wehlend on social media.
No concrete plans for a follow-up ‘jumbo meeting’ were announced. For now, social affairs ministers will continue spearheading the file’s development.
But Vandenbroucke said he hoped social affairs ministers and finance ministers would work together more often "to put social investment at the heart of an integrated economic approach."
Austerity
Belgian finance minister Vincent Van Peteghem said the support for such integration was "broad" among those attending Tuesday’s council meeting.
However, on Monday, Eurozone finance ministers cautioned that the EU’s new debt and spending limits will lead to budget cuts throughout Europe.
"This is necessary to prevent a scenario where fiscal policy conflicts with monetary policy," stated Commissioner Dombrovskis, alluding to the European Central Bank’s anti-inflation strategies.
But the announcement will likely spark renewed debate about the EU’s capacity to fund the green transition and safeguard investments in the bloc’s economy.