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PE 485.948v02-00 A7-0263/2012

on Social Investment Pact – as a response to the crisis


Committee on Employment and Social Affairs

Rapporteur: Danuta Jazłowiecka



on the Social Investment Pact – as a response to the crisis


The European Parliament,

–   having regard to the Treaty on the Functioning of the European Union (TFEU), in particular Articles 5, 6, 9, 147, 149, 151 and 153 thereof,

–   having regard to the Commission communication of 3 March 2010 entitled ‘Europe 2020: A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

–   having regard to the Commission communication of 23 November 2010 entitled an Agenda for new skills and jobs: A European contribution towards full employment’ (COM(2010)0682) and its resolution of 26 October 2011 thereon(1),

–   having regard to the Commission Communication of 23 November 2011 on the Annual Growth Survey 2012 (AGS) (COM(2011)0815), the Draft Joint Employment Report annexed thereto and its resolution of 15 February 2012 on employment and social aspects in the Annual Growth Survey 2012(2),

–   having regard to the Commission communication of 18 April 2012 on Towards a job-rich recovery’ (COM(2012)0173),

–   having regard to the Commission Communication of 3 October 2008 on a Commission Recommendation on the active inclusion of people excluded from the labour market (COM(2008)0639) and its resolution of 6 May 2009(3) thereon,

–   having regard to the Eurostat survey of January 2012 and the Eurostat News Release of 8 February 2012(4),

–   having regard to the Commission communication entitled ‘The European Platform against Poverty and Social Exclusion: A European framework for social and territorial cohesion’ (COM(2010)0758), the opinion of the European Economic and Social Committee thereon(5) and its resolution of 15 November 2011 thereon(6),

–   having regard to the Decision of the European Parliament and of the Council of 22 October 2008 on the European Year for Combating Poverty and Social Exclusion (2010)(7),

–   having regard to the Commission communication of 2 July 2008 entitled ‘Renewed social agenda: Opportunities, access and solidarity in 21st century Europe’ (COM(2008)0412) and its resolution of 6 May 2009 thereon(8),

–   having regard to the Commission Communication on the long-term sustainability of public finances for a recovering economy (COM(2009)0545) and its resolution of 20 May 2010 thereon(9),

–   having regard to the Commission Communication of 9 June 2010 entitled ‘A new impetus for European cooperation in Vocational Education and Training to support the Europe 2020 strategy’ (COM(2010)0296) and its resolution of 8 June 2011 thereon(10),

–   having regard to its resolution of 25 October 2011 on mobility and inclusion of people with disabilities and the European Disability Strategy 2010-2020(11);

–   having regard to its resolution of 1 December 2011 on tackling early school leaving(12),

–   having regard to the Bruges Communiqué on enhanced European Cooperation in Vocational Education and Training for the period 2011-2020, which was adopted on 7 December 2010(13),

–   having regard to the Commission staff working document entitled ‘Progress Towards the Common European Objectives in the Education and Training’ (SEC(2011)0526),

–   having regard to its resolution of 6 July 2010 on promoting youth access to the labour market, strengthening trainee, internship and apprenticeship status(14),

–   having regard to the Commission Proposal for a regulation of the European Parliament and of the Council on a European Union Programme for Social Change and Innovation (COM(2011)0609),

–   having regard to the recently adopted set of five Regulations and one Directive on EU economic governance(15),

–   having regard to the Commission Communication of 20 December 2011 on the Youth Opportunities Initiative (COM(2011)0933),

–   having regard to the Commission Communication of 29 June 2011 on the Multiannual Financial Framework 2014-2020 (COM(2011)0398),

–   having regard to Rule 48 of its Rules of Procedure,

–   having regard to the report of the Committee on Employment and Social Affairs (A7-0263/2012),

A. whereas the current economic and financial crisis will have long-lasting effects not only on economic growth but also on employment rates, the level of poverty and social exclusion, public savings and the quantity and quality of social investments in Europe;

B.  whereas in recent years a great debt burden was taken on by the public sector and, to prevent excessive debts, the majority of recent responses to the crisis were based mainly on short-term goals aimed at restoring stability to public finances, being necessary efforts to defend our economy, and whereas such austerity measures and budgetary consolidation should be combined with a comprehensive and ambitious investment strategy for sustainable growth, employment, social cohesion and competitiveness as well as with social governance which would provide a strong surveillance and monitoring mechanism over employment and social targets of the Europe 2020 strategy;C.  whereas the Lisbon Strategy and the European Employment Strategy have failed to deliver, and whereas the success of the Europe 2020 strategy is uncertain and requires much stronger engagement from Member States and European Institutions in form of competitiveness-, growth- and employment-friendly measures;

D. whereas the recently published Annual Growth Survey as well as the Joint Employment Report showed that, due to the fact that fiscal consolidation has not yet progressed sufficiently and is still treated as the priority, social, employment and education targets of the Europe 2020 strategy are not sufficiently addressed by the majority of Member States;

E.  whereas the unemployment rate has increased from 7,1% in 2008 to more than 10 % in January 2012 in the EU 27, with clear regional disparities, affecting especially young persons, low-skilled workers and long-term unemployed, and whereas this, together with ageing population, creates a serious risk of losses of human capital in the longer term, and could have non-reversible repercussions on the labour market, especially on job creation, economic growth, competitiveness and social cohesion;

F.  whereas 80 million Europeans are currently at risk of poverty and the level of children and adults living in jobless households has increased to almost 10 % in 2010; whereas this, combined with child poverty, the rising number of working poor as well as high unemployment among young people will lead to an even higher risk and inheritance of poverty and social exclusion in the future;

G.  whereas in 2011 the rate of poverty among 16- to 24‑year olds in Europe was 21.6 % on average, and young people are more likely to be in precarious fixed-term or part-time employment, and are also at a higher risk of unemployment; whereas precarious employment has significantly increased in recent years and unemployment is rising dramatically in some countries;

H.  whereas, partly due to lacking investments, education and training outcomes in the European Union are still inadequate to meet labour market needs and fall short of the growing skill-intensity of available jobs, as well as skills needed for future job- rich sectors;

I.   whereas the pressure on social assistance schemes has increased due to higher spending, drops in revenues as well as pressure to cut costs; whereas weak economic growth, persistence of high rates of long-term unemployment, the increasing number of working poor, the level of undeclared work and growing youth unemployment are likely to aggravate this trend further;

J.   whereas well-targeted social investments are important to reassuring a proper employment level for both women and men in the future, stabilising the economy, enhancing the skills and knowledge of the labour force and raising the competitiveness of the European Union;

K. whereas SMEs have an important job creation potential and play a crucial role in the transition towards a new, sustainable economy;

Renewed approach to social investments in Europe

1.  Recalls that social investments, being the provision and use of finance to generate social as well as economic returns, aim at addressing emerging social risks and unmet needs, and focus on public policies and human capital investment strategies that help and prepare individuals, families and societies to adopt to various transformations, manage their transition towards changing labour markets and face other challenges, including for example the acquisition of new skills for future job rich sectors;

2.  Notes that all public social and health services, education services and related services sourced from private service providers, among others, can be considered social investments, and reiterates that these have been determined in agreements as falling under national competence;

3.  Stresses that one of the most important features of social investments is their ability to reconcile social and economic goals and that they should therefore be treated not only as spending but primarily as investments, with a double dividend that will give real returns in the future, provided that resources are correctly deployed;

4.  Notes, therefore, that targeted social investments should be an important part of EU and Member States’ economic and employment policies, and of their responses to the crisis, in order to achieve the employment, social and education objectives set out in the Europe 2020 strategy;

5    Believes that facilitating and focusing on social entrepreneurship and access to microfinance for vulnerable groups and those furthest away from the labour market are essential elements in the context of social investment, in that they allow the creation of new sustainable jobs, often persisting changes in the economic cycle;

6.  Notes that the crisis requires a modernisation of the European Social Model, a rethinking of national social policies and a transition from welfare states, that mainly respond to damages caused by market failure, to ‘activating welfare states’, that invest in people and provide instruments and incentives with a view to create sustainable jobs and growth as well as prevent social distortions; notes that the crisis has further increased the need for investing in social entrepreneurship;

Activating welfare states

7.  Calls, in this connection, on the Member States and the Commission to maintain a balance between action addressing the immediate challenges resulting from the crisis and action of a medium- and long-term nature, and to give special priority to activities that aim to:

a)  help the unemployed get back to work, by creating an innovative and dynamic environment as well as by providing tailor-made solutions and necessary training; help those entering the labour market to find work and to create preconditions for a smoother transition from education and training to professional life;

b)  fight youth unemployment and enable the permanent integration of young people into working life, including those young people who neither have a job nor education or professional training;

c)  boost economic growth with a view to create quality and sustainable jobs for both women and men, provided in particular by SMEs; improve work productivity as well as work distribution,

d)   improve well-being at work and reduce the causes of withdrawal from professional life, such as accidents at work, bullying in the workplace and other poor working conditions,

e)  invest in lifelong education and training for all age groups by putting special emphasise on early childhood education and access to tertiary education, cooperation between business and schools, on- the -job training and special training for sectors with labour shortages as well as vocational education;

f)  invest in innovation by supporting the manufacture of innovative goods and services, especially related to climate change, energy efficiency, health and ageing populations,

g) eliminate the causes of gender segregation in the labour market;

h) enhance the balance between the flexibility and security of employment contracts to promote employment and help in reconciling family and professional life,;

i)   adapt pension systems to changing economic and demographic conditions, introduce necessary reforms taking into consideration their sustainability as well as reliability and reduce the economic dependency ratio by e.g. creating conditions for working longer on a voluntary basis, such as better occupational health and safety, various incentives and flexible employment models as well as increasing employment in all age groups

j)  fight poverty and social and medical exclusion, with a particular focus on preventive and proactive work;

8.   Calls on Members States and the Commission to take steps to: develop growth and employment-friendly policies (e.g. more effective support to SMEs as well as more effective, better targeted and activating unemployment policies and social assistance schemes); to introduce lifelong learning, special training linked to sectors with labour shortages as well as needs of regional and local job markets and re-training in order to sustain employability of the long-term unemployed, and to promote lifelong up-skilling, vocational education, on-the-job training and paid traineeships with particular emphasis on unemployed young persons and on workers with low skills; aim at making full-time employees able to live from their work;

9. Insists that youth employment must be an important part of the social investment strategy; encourages Member States to invest and put forward ambitious strategies to avoid the loss of a generation and to improve the access of young persons to labour markets by:

a) developing partnerships between schools, training centres and local or regional businesses,

b) providing training and high- quality youth internship programmes, vocational schemes in cooperation with enterprises as well as senior employee sponsorship schemes to engage and train young persons on the job;

c) promoting entrepreneurship as well as a European youth guarantee and creating incentives for employers to engage graduates;

d) securing a better transition from education to work and promoting European and regional mobility;

10. Stresses personal responsibility, bearing in mind that individuals also need to think about what they can do to ensure they are on the winning side in the race for talent;

11. Calls on Member States and the Commission to take all possible measures to improve education systems at all levels by: putting strong emphasis on early childhood development strategy; creating an inclusive school climate; preventing early-school-leaving; improving secondary education and introducing guidance and counselling, providing better conditions for young people to successfully access tertiary education or to gain direct access to the job market; developing instruments aimed at better anticipating future skills needs and at strengthening cooperation between educational institutions, business and employment services; improving recognition of professional qualification as well as developing National Qualifications Frameworks;

12. Calls on the Commission and Member States to provide for a good balance between security and flexibility in the labour market through e.g. a comprehensive implementation of flexicurity principles, and to address labour market segmentation, by providing both adequate social protection coverage for people in periods of transition, or on temporary or part-time employment contracts, and access to training, career development and full-time work possibilities; encourages Member States to invest in services – such as affordable, fulltime and high- quality childcare, all-day school places and care for elderly – that help promote gender equality, foster a better work–life balance and create a framework which allows to enter or re-enter the labour market;

13. Encourages those Member States who have not done it yet to introduce necessary reforms in order to make their pension systems sustainable, secure and inclusive as well as to reduce economic dependency ratio to maintain a sufficiently large workforce, and to combine this with the constant improvement of working conditions and the implementation of lifelong training schemes enabling healthier and longer professional careers;

Better governance through the Social Investment Pact

14.      Encourages Member States to make better efforts to include social investments in their medium and long-term budgetary targets, as well as in their National Reform Programmes; calls on the European Council and the Commission to better monitor the implementation and achievement of employment and social targets of the Europe 2020 strategy;

15. Notes that, in order to secure proper implementation of employment and social targets, the recently developed system for macroeconomic and budgetary surveillance in the EU must be supplemented by improved monitoring of employment and social policies; calls, therefore, on the Commission to consider developing a scoreboard of common social investment indicators for monitoring the progress made in the Member States and at the Union level in this regard and to promote the corporate responsibility of companies, especially SMEs, by creating a European social label;

16. Calls on Member States to consider signing to a ‘Social Investment Pact’, which sets investment targets and creates a reinforced control mechanism for improving efforts to meet the employment, social and education targets of the Europe 2020 strategy; this ‘Social Investment Pact’, like e.g. the ‘Euro Plus Pact’, would contain a list of specific measures in form of social investments to be taken by Member States in a given timeframe in order to meet the employment, social and education targets in line with the Annual Growth Survey and National Reform Programmes; this should be subject to a regular surveillance framework with a strong role for the European Commission and the European Parliament and the involvement of all relevant formations of the Council;

17. Calls on the Commission to take all possible measures to encourage and assist Member States to sign the ‘Social Investment Pact’, and to introduce evaluation of employment, social and education goals in the European Semester 2013;

18. Calls on the Member States to ensure that the Multiannual Financial Framework 2014‑2020 contains appropriate budgetary resources to stimulate and support social investments in Europe, and that the available funding can be used in a rational and efficient way, and to make the Structural Funds, especially the European Social Fund, supportive of social investments, ensuring that the priorities of the latter reflect the specific needs of the Member States; calls on the Commission, when it so deems appropriate, to make other possible sources of financing available to the Member States for the purpose of social investments;

19. Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.


Texts adopted, P7_TA(2011)0466.


Texts adopted, P7_TA(2012)0047.


OJ C 212E, 5.8.2010, p. 23.


Eurostat News Release 21/2012, p. 1.


OJ C 238, 25.8.2011, p. 130.


Texts adopted, P7_TA(2011)0495.


OJ L 298, 7.11.2008, p. 20.


Texts adopted, P6_TA(2009)0370.


Texts adopted, P7_TA(2010)0190.


Texts adopted, P7_TA(2011)0263.


Texts adopted, P7_TA(2011)0453.


Texts adopted, P7_TA(2011)0531.




Texts adopted, P7_TA(2010)0262.


OJ L 306, 23.11.2011, p. 1.


The current economic and financial crisis will have undoubtedly long-term and intense effects not only on the European economy but also on employment rate, public savings and social investments in Europe. The majority of recent and current responses to the crisis are based on short-term goals aimed mainly at bringing back the sustainability of public finances, which is crucial to the EU economy. In this context we should however not neglect the negative effects that these austerity measures could have on employment and competitiveness in Europe and complete them with growth- and employment- friendly measures such as well targeted social investments.

Challenges arising from the future

As a consequence of the economic and social crisis the unemployment rate in January 2012 stood at more than 10 % in the EU 27. What is more Europe is facing extremely serious problems with youth unemployment, which together with ever more difficult school-to-work transition creates risks of detachment from the labour market and of losses of human capital in the longer term. Another pressing issue is the situation of low-skilled workers who face constantly decreasing labour demand due to the sectoral change towards higher technology and knowledge-intensive activities as well as increasing number of people living in poverty and being at risk of social exclusion.

The difficult situation on the labour market is even worsened by problems faced by education systems as well as ageing population. On one hand poor education outcomes in the European Union are inadequate to meet labour market needs and fall short of the growing skill-intensity of available jobs. It has to be noted with concern that in 2010 14.1 % of young persons aged between 18 and 24 were described as early school leavers and more than 20 % of all children did not fulfil basic standards of literacy and numeracy. On the other, due to ageing population, the number of people entering the labour market is declining and the working age population will start to shrink from 2012 leading to a situation in 2060 when there will be only two citizens working for one aged 65 or over. These demographic trends will have serious repercussions on the labour market, economic growth potential and public savings.

In addition, as a consequence of the crisis, the pressure on social assistance schemes has increased in many countries and the revenues for pension schemes, employment benefits or healthcare systems have dropped considerably. High rates of long-term unemployment are likely to aggravate this trend further.

Unfortunately the majority of recent responses to the crisis seem to lack a social and employment policy dimension. The recently published Annual Growth Survey as well as the Joint Employment Report showed that, due to the fact that fiscal consolidation needs still to be treated as a priority, social, employment and education targets of Europe 2020 Strategy were not sufficiently addressed by all Member States.

Importance of social investments

In order to bring back sustainable growth in Europe it is imperative to respond to the above challenges with well targeted social investments, that aim at preparing individuals, families and societies to adopt to changing economic conditions and labour market demands. While securing sustainability of public finances Member States should equally focus on helping the unemployed, especially those long-term unemployed, to get back to work; creating sustainable and quality jobs, improving work productivity as well as work distribution; investing in education and training, improving educational outcomes and matching better graduates’ and workers’ skills with labour market demands; enhancing the balance between flexibility and security and helping reconciling family and professional life; reforming pension systems and creating conditions for working longer; fighting poverty and social exclusion.

Covering a wide range of policies, social investments are important to reassure a proper employment level in the future and to improve Europe’s competitiveness. As they aim at reconciling social and economic goals, they should be treated by governments not only as spending but rather as investments that will give real return in the future. What is more, it seems that the crisis requires from Member States to rethink their social policies and make a transition from ‘active welfare state’ into ‘activating welfare state’, that invests in people and gives citizens instruments and incentives rather than only responds to emerging damages caused by market failure. Taking the above into consideration we should make sure that social investments are an important part of the European economic and employment policies and the EU’s responses to the crisis.

EU dimension and better governance

It seems that there is a pressing need to create a coordinated EU approach towards social investments. The first attempt to create a coordinated EU response towards employments and social policies in Europe, the Lisbon Strategy together with the European Employment Strategy, failed to deliver due to weak governance and unfortunately, from what we can observe, the success of the Europe 2020 strategy is uncertain and requires stronger engagement from Member States. This is why the Rapporteur believes that the recently developed economic governance and macroeconomic surveillance should be supplemented by monitoring of employment and social policies. In this context the Rapporteur invites Member State to sign to a ‘Social Investment Pact’ through which they could create better governance and control mechanism over implementation of the employment, social and education goals of Europe 2020. It also calls on the Commission to develop a scoreboard of common social investment indicators in order to monitor progress in EU countries. A true social investment strategy requires appropriate financing, therefore the Rapporteur calls on the Council to make sure that the currently debated Multiannual Financial Framework 2014-2020 contains appropriate budgetary resources necessary for social investments in Europe as well as to make structural funds, especially the European Social Fund, supportive of social investments.


Date adopted





Result of final vote







Members present for the final vote

Regina Bastos, Edit Bauer, Heinz K. Becker, Phil Bennion, Pervenche Berès, Vilija Blinkevičiūtė, Philippe Boulland, David Casa, Ole Christensen, Minodora Cliveti, Emer Costello, Frédéric Daerden, Karima Delli, Sari Essayah, Marian Harkin, Nadja Hirsch, Stephen Hughes, Danuta Jazłowiecka, Ádám Kósa, Jean Lambert, Veronica Lope Fontagné, Olle Ludvigsson, Thomas Mann, Csaba Őry, Siiri Oviir, Konstantinos Poupakis, Sylvana Rapti, Elisabeth Schroedter, Nicole Sinclaire, Joanna Katarzyna Skrzydlewska, Jutta Steinruck

Substitute(s) present for the final vote

Georges Bach, Kinga Göncz, Svetoslav Hristov Malinov, Anthea McIntyre, Antigoni Papadopoulou, Evelyn Regner

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