2023 European Semester: What priorities frame EU economic and social policies?

Throughout the Great Financial Crisis and the 2010s, the European Semester gave impulses for structural reforms to EU Member States. The European Semester is the European Union’s framework for the coordination and surveillance of economic and social policies. All too often used to enact austerity, this coordination process gradually became more pointed on important social policies such as life-long learning or minimum income. This development responded to the adoption of the European Pillar of Social Rights in 2017 and its Action Plan in 2020.

After a two-year eclipse due to the COVID-19 pandemic and the implementation of Recovery and Resilience Funds, no recommendations emerged from the EU Semester until this year, when things are getting back to the (new) “normal”. 

How do this year’s EU recommendations respond to the needs of older persons?

Together with our Members, we have looked at the country-specific recommendations and country reports, documents issued by the European Commission in Spring that should guide Member States in responding to their fiscal, economic and social challenges. We paid particular attention to the promise of the Semester enacting the European Pillar of Social Rights and policies to mainstream ageing, in view of detailed assessment. We will publish this assessment later this year, we can already point to the large tendencies.

• Social priorities come after investment and energy policies

To be clear, the hot topics of this year’s European Semester are energy independence and support to the economy, faced with high inflation and the impact of Russia’s war against Ukraine. The implementation of the Recovery and Resilience Plans is still a strong topic, and investments into energy supply and energy efficiency should have a mitigating impact on populations, including older persons – however, only in the long run. Social considerations only come second. It should also be noted that ageing is outlined several times as a challenge, rather than an opportunity or achievement, throughout the various documents of the EU Semester.  

• Fiscal policy: call for monitoring, but not for tightening

The European Semester does not recommend the reduction of public deficits or debts. The EU’s framework in this area is indeed  still suspended since the COVID-19 crisis, to make way for investments to cushion the shock. Proposals for a new framework are on the table but are still far from being agreed. Meanwhile, the European Commission is broadly supportive of the expansive policies to support industry and citizens during the energy crisis.  

• Energy subsidies: call for better targeting on vulnerable persons

The large and blanket measures of governments to support citizens and industry in the context of very high energy prices last year are seen favourable by the European Semester. Yet the European Commission warned Member States that support did not prioritise the most vulnerable. It calls, during the phase-out of these policies, to better pay attention to having them targeted where they are most needed.

We have assessed these policies and found that, in many Member States, these policies left out older persons or were only later adapted to their reality and needs.  

• Health and long-term care: very cautious language

The adoption of the EU Care Strategy and the related Council recommendation on Long-Term Care earlier this year would have warranted an increased focus on this sector. This would have also responded to the severe needs for investment, improved working conditions, better access and quality revealed by the tragic and systematic failures during the COVID-19 pandemic. However, this has not been the case. The European Semester mentions here and there that long-term care systems have to improve, but recommendations remain vague and unspecific in this sector. We had expected a much higher ambition in this context.  

• Employment: useful hints on life-long learning, but no explicit policy to support older workers

Regarding employment policies, there is a focus on strengthening skills provision overall, but in particular – and helpfully – in the sector of health and long-term care. One could mention that the European Commission focusses on care workers generally, without spelling out the diversity of employment profiles for which staff is lacking: nurses, specialised geriatric nurses, geriatricians, medical doctors in general; but also persons qualified to support activities of daily living.

It is however striking that while the group of older workers, after young people, are the age group with the second lowest employment rate, and with the lowest participation in training, it is never mentioned explicitly. This is all the more puzzling given the 2030 objective of reaching 78% employment rates will be difficult to achieve without a significant increase of employment rates of older persons. Next month, we will publish the findings of our AGE Barometer on empowering older workers to support this.  

• Pension adequacy: still the poor child of the EU Semester

Despite growing old-age poverty and social exclusion since 2015, decoupling older persons’ poverty developments from the development of the rest of society, strong gender gaps in both poverty and median pension income, there is no or little mention of pension adequacy. It is true that the poverty and social exclusion figures on EU level do not yet take into account the impact of the record inflation of 2022, as the latest statistics are only available for 2021. Also, an in-depth Pension Adequacy Report is planned for 2024.

Still, the issue of pension adequacy is real and has important social implications. In the context of high inflation, this can have political consequences ahead of the EU electoral year of 2024. Therefore, this years’ Semester exercise is a failed occasion to highlight and fight the growing inadequacy of pensions in many Member States.

Urgent to get things right!

AGE will soon release a detailed assessment of the documents relating to a number of EU Member States and share these with the European Commission and Member States’ officials. As the next cycle of the European Semester is in preparation, the shortcomings underlined in our analysis should be taken on urgently, if we want to avoid a social crisis. This would also help to reduce political tensions ahead of next years’ elections, when citizens will cast a vote also based on their experiences throughout the two major crises of this legislature – COVID-19 and the high energy costs.