Speech Van Rompuy bij jaarlijkse Europese conventie over armoede en sociale uitsluiting (en)

EUROPEAN COUNCIL THE PRESIDT

Brussels, 26 November 2013 EUCO

PRESSE 509 PR PCE 225

Address by President of the European Council

Herman Van Rompuy i

at the Annual Convention of the European platform

on poverty and social exclusion

Thank you very much for your invitation to speak again at your annual convention. It is a pleasure to be here today and to address the critical issue of poverty and social exclusion in Europe

Over the last three years, Europe has survived a deep financial crisis. With market turmoil, in the midst of an abrupt recession and a widespread banking panic, when governments one after the other were losing access to financing, the most fundamental priority was to restore financial stability. There is just no policy for the poor, no redistributive policy that can be developed or financed without repairing the very basic functioning of our financial system, repairing government's credit and re-establishing the foundation of our economies and restoring the stability of the euro area as such

This was not my programme when I became President of the European Council but it has been de facto the overarching priority of a large part of my mandate. However, it has always been clear to me that this has to happen with a fair distribution of the costs of the adjustment. The cost of this crisis is high, the loss of welfare is real but it cannot be that it weighs disproportionately on the weakest of our citizens. This is why social policies are essential to the European Union and its Member States and why social outcomes should remain on our compass

My experience is that social policy at the level of the European Union is nonetheless a hotly debated issue and is a delicate balancing act. There is indeed a contradiction between the clear social objectives set by the European Union in its Treaty and the limited instruments it has at hand to attain them. In addition, there is an inherent tension between those who complain that Europe is not “social enough” and those who do not want to give more powers to the European Union with respect to social policy so as not to endanger national choices and preferences – with the great paradox that all too often, the very same people are arguing both things at the same time!

This very fundamental tension is understandable but it is very hard to overcome. Over the last few years, some important steps have been taken to address this contradiction between European social ambitions and the principle of subsidiarity to which many are strongly attached

First, in the context of the Lisbon Treaty where the social chapter has been broadened, setting broad principles that remain the central compass for Europe’s ambitions in social matters. It is easily forgotten or minimized now, but the Union did set, in particular in its horizontal social clause, very important objectives and defining features of what constitutes the DNA of the European social models. Second, with the negotiation of the EU2020 strategy, the European Union agreed, after long debates, to set for itself common quantifiable objectives that included very clear social objectives: the reduction of early school drop outs which is a key contributor to inequalities. And reducing the number of people living in poverty or at risk of social exclusion. This was a landmark step in the construction of a more social Europe but we need to make sure we follow through on these ambitious targets and I will return to it in a moment

Finally and most recently, discussions surrounding the improvement of the governance and the rebuilding of the architecture of the monetary union have highlighted the importance of monitoring and taking more clearly into account social divergences within the economic and monetary union. The Commission has issued a communication in October and just released a first draft of a social and employment scoreboard in its Joint Employment Report that includes such indicators as the numbers of young people not in education, employment or training (so-called NEETs); household disposable income; the percentage of the working age population at-risk-of-poverty and finally income inequalities

The picture that this scoreboard draws is important because it allows to identify cross-cutting issues such as the level and the evolution of inequalities but it also allows to identify more targeted vulnerable groups that require more attention. The findings are not new but they are striking and show that divergences in income between countries and within countries are rising. The convergence between and within countries that European integration has been promoting so strongly over the years is at least on hold if not declining. These cross-cutting tendencies justify a strengthening of the monitoring and coordination of economic and social policies in the context of the so-called European semester. The last two European Council have discussed the social dimension of the Economic and Monetary Union and supported the Commission in the creation of this social and employment scoreboard. We will return to it again in December with the view of agreeing on the best way to use it concretely in coordinating our economic, social and employment policies

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Next year, the Commission will launch a review of our EU 2020 strategy and assess our progress towards our objectives. We will actually have a first discussion on this at the March European Council. In some areas, we are making clear progress that, I think, we can at least partly assign to the strategy itself, the focus it created and the sharing of best practices it promoted. The number of early school drop-outs for instance is declining across our Member States and we are most probably on track to reach our common objective with a bit more efforts in the countries that are still standing behind. The cynics may have been dismissive of this strategy, but I think it has showed that the European Union can provide guidance to Member States and help focus the minds of all national and European stakeholders to ensure accountability, ownership and commitment to the targets

But there is also a darker side. In other areas, progress is not so clear and even concerning. let me quote two:

The obvious one is employment where in recent years we have been moving away from our target of reaching an employment participation of 75% for the age group of 25-64 by 2020. We were at 68% in 2005, progressed to 70.3% in 2008 and will fall back to below 68% in 2013 although with very varying performances across Member States. As you see, our lack of employment is nothing new, we have had in the past a low participation rate of women and older people in many countries due a lack of activation policies for these groups. Compared to other advanced economies, we have also had high structural unemployment and low growth through out the first decade of the euro. Our average unemployment rate stood at some 9% in 2008 compared to 10,5% in the years 1994-1999 despite GDP growth rate of some 2% yearly, and still then large differences between Member States. The crisis has compounded these difficulties and augmented our need to address the underlying structural issues. Our strategy tries to address these issues by restoring our growth potential, improving the functioning of our labour markets and guaranteeing an employment, a training or an education to all our youth. The European Council has ensured that money available for the Youth Employment initiative is scaled up to 8bn euros and immediately available on the first of January 2014. These are essential steps that require the commitment of each and every member state and the support, monitoring and coordination capacity of the European Commission to be successful. The outlook for employment is improving slowly and will hopefully solidify in 2014-2015 with the European Commission forecasting a gradual return to growth

The second is our poverty and risk of exclusion target which is at the heart of your conference and where we are clearly behind. Here again, poverty and exclusion is not new, it has crippled our countries for decades. But when we take a step back from the emotion and look at the data in detail, what is striking is that between 2005 and 2008, we had managed to lift 10 million Europeans out of poverty and exclusion. This is half of what we are supposed to achieve by 2020. We were on our way. However, during that same period, the number of people at risk of poverty after social transfers had increased! In essence, against a relatively favourable economic situation, our welfare state was failing. This must say something maybe about the quantity but more importantly about the quality and effectiveness of our inclusion policies. And in my view, this confirms the old adage that: "A rising tide lifts all boats". Therefore, improving profoundly and broadening our inclusion policies in our Member States while restoring growth are two essential levers to meet our targets. These targets are ambitious but reachable. This should be a key area of focus for the next 7 years because we now have 10 million more Europeans at risk of poverty compared to 2005

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Our Union cannot be the most generous in the world in terms of social spending and yet miss its objectives in social outcomes. We cannot afford to leave so many on the side-lines, sit passively while inequalities and poverty grow. In the beginning of this winter and after the tragic events in the Mediterranean sea, I can't help but thinking of two groups in particular: those that are homeless and destitute and migrants, especially those who risk their lives to try to reach our shores. I know that these issues are part of your workshops today and I look forward to your conclusions and recommendations

Ladies and Gentlemen, I am convinced that the European Union, together with its Member States can and must deliver more than it is today. This involves deep economic and structural reforms "to lift our boats" as well as more efficient, more effective and more coordinated social policies to maximise our impact. Your conference and your platform is a driving force for thinking and promoting these changes… We count on you

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