Social protection in the EU: State of play, challenges and options

Briefing 11-10-2018

Globalisation, technological change, an aging population and changes to the world of work have made securing social protection for all, i.e. economic and social security, a major challenge. When social protection systems work well, they can have a stabilising effect on the economy and promote socio-economic equality and stability. By contrast, inadequate or ineffective systems can exacerbate inequality. Indeed, improving the existing social protection systems is the priority of half of the principles of the European Pillar of Social Rights – the European Commission's overarching social field initiative designed to serve as a compass for policies updating current labour market and welfare systems. While implementation of the 'social pillar' remains primarily the responsibility of the Member States, in close cooperation with the social partners, the European Commission has put forward several legislative and non-legislative initiatives to support this process in the area of social protection. These include the proposal for a recommendation on social protection for all, including non-standard workers, responding to calls from the European Parliament and the social partners and stakeholders. This proposal had the difficult task of addressing all the disagreements that had arisen during the two-phase consultation in the preparatory phase. While all parties seem to agree on the importance of adjusting social protection to the new realities of life and work, there are differences of opinion concerning the technicalities, such as the financing of schemes. This is in part a reflection of the current evidence that raises many questions as to the optimal response to the new challenges in very diverse systems of social protection across the Member States. The main trends currently include a combination of social protection and social investment, individualisation of social protection schemes and a potential move towards universal social protection, whereby social protection would be removed from the employment relationship. However, financing these schemes poses a challenge.