Celebrating ESDE in 2020

I had the pleasure to attend the launch event of the 10th ESDE report (full name: Employment and Social Developments in Europe). Since this publication deserves more attention than what it normally receives, let me reflect on the origins and the early experience of ESDE.

It was created through a merger of two earlier publications: Employment in Europe and Social Situation Report. Five years later another publication, the Industrial Relations Report was abolished, and relevant topics also found their place inside the ESDE. This was not the only publication series launched in 2011; I also created the Social Europe Guide, which in every semester (linked to the sequence of EU Council presidencies) introduced to our audience various chapters of EU employment and social policy, and the ongoing work in the given field (presenting the voice of my portfolio but also important stakeholders, including leading MEPs).

The objectives of the 2010 merger were threefold:

• to strengthen autonomous analysis in DG EMPL (directorate general for employment, social affairs and inclusion), which was an aim underpinned by further measures: appointing (first time) a director whose main job was to deliver analysis (being responsible also for impact assessment and international relations); strengthening the profile of Eurofound, where a new director was appointed as well. The persuit of more robust in-house analysis was also fueled by the need to stand up to the hegemonic attitudes of DG ECFIN, which at that time still published a different periodical under the title „Labour Market Developments in Europe”, with a different philosophy, which also was expressed by the different title. A more comprehensive document can better serve the battle of paradigms, as compared to several smaller ones.
• to bring employment and social policies to parity. Definitely previously, but to some extent continuously, there had been an unhealthy rivalry between employment policy and social policy. Neither has been exclusively EU competence, but most people would say that employment has significantly more tasks at EU level than social policy (since welfare states are national institutions). The Europe 2020 Strategy, introduced in 2010, included employment and social policies on equal footing: each had one flagship initiative attached to and one numerical target set to be achieved by the end of the decade (endorsed by the European Council). We had to ensure that both policy fields would be underpinned by adequate and high quality analysis as well as visibility.
• to ensure that sound analysis contributes to evidence based policy in the European Union. During the great financial crisis and the subsequent euro area recession, the EU was navigating in fog. Macroeconomic decisions were often derived from superstition rather than science. Our president, Jose Manuel Barroso often complained about a cacophony, due to the regular clashes of contradictory ideologies and policy proposals. The European Commission only had one way: to strengthen its capacity to underpin its initiatives and interventions with evidence. This endeavor was particularly timely because under the newly introduced European Semester (the implementation mechanism of the Europe 2020 Strategy) the EU opened a space for itself for policy guidance on issues which were not counted among (explicit) EU competences, but to overcome the crisis and emerge stronger had to be coordinated at EU level (pension is a good example).

The ESDE report was born in a very turbulent period of the European Union, when the financial crisis almost resulted in disintegration, due to not only the lack of agreements on the interpretation of the crisis but also the lack of sufficient instruments that could generate a quick recovery. In those circumstances, ESDE was a tool for us to demonstrate that even if the EU did not have all the necessary tools in their hands to overcome the crisis, the Commission was not brain dead.

Of course, it is a question whether the ESDE really managed to perfom according to expectations, and contribute effectively to policy making. And how exactly this happened during the first decade of its existence. Let’s see some examples.

The very first ESDE report (2011) outlined the methodology of measuring poverty and social exclusion in Europe, which was newly introduced in 2010 as a result of a heavy professional and political compromise. Even if the poverty reducing commitment of the EU has faded afterwards, together with the entire Europe 2020 Strategy, this methodology, though somewhat complex, is still being used and found useful in the diverse social reality of the European Union. The first ESDE also expanded the analysis to inequality, which only much later became part of high level political discourse, and also put in-work poverty in the focus.

To design instruments against youth unemployment (most importantly the Youth Guarantee, adopted in 2013), first there had to be an analysis of the drivers and consequences of youth unemployment and inactivity. To have a proposal (in the 2012 Employment Package) for all countries to have a minimum wage set and maintained, we had to introduce and explain the concept of in-work poverty. To build a Labour Mobility Package (drafted in Spring 2014, but first postponed and then shelved in order to save the issue for the next Commission), a thorough analysis of intra-EU mobility had to be carried out. To develop a social dimension of the EMU (see our Communication in 2013 October), first in the form of a scoreboard but then leading to instruments like unemployment re-insurance, one had to introduce the audience to the problem of social divergence (especially in the circumstances of a malfunctioning monetary union).

In other words, since the Commission „only” has the right of the initiative, to help the process of adoption and appropriate implementation, an epistemic community has to be created. This can also function as a support for demanding change that otherwise would be very difficult due to entrenched political positions and legal rigidities. It is another matter that the policy making cycle is sometimes very long. If we take the case of wages: the first ESDE already elaborated on in-work poverty, helping not only the Employment Package to come forward with the (then controversial) proposal, but also to stage the first EU tripartite exchange of views on wage developments (including national social partners) which took place at a special meeting of the Employment Committee on 1 February 2012. The 2017 European Pillar of Social Rights confirmed the importance of adequate minimum wages (6th principle), and after another three years, Commissioner Schmit is coming forward with a legislative initiative. But this length of the policy making cycle should not mean that analyis in a preparatory, explanatory or supportive role is powerless or unnecessary. Quite the contrary: at various stages of such a long road, it can indeed help to make another small step, and another small step (inside the Brussels bubble but also in national capitals).

Finally, about a mistery. Since divergence was one of the key issues ESDE had to report about (ever since the euro area crisis), much of the analysis focused on this in the 2013-4 period, but also after. (Reflection papers on the EMU and the social dimension of the EU from 2017 are recommended readings.) Divergence means that certain trends, especially in times of crises, push the core and the periphery of the EU apart (within the euro area in particular). To demonstrate this, Spain’s data is often used to represent the periphery and Germany’s data is used to represent the core. Since Spain is symbolised by ES and Germany by DE, ESDE represents the two together. While this might be seen as a coincidence, there is a concrete message here. As long as employment and social trends of Spain and Germany converge, the EU is likely to be on a good path from the point of view of cohesion and resilience. Diverging social trends between Spain and Germany should be alarming for EU leaders, like the canary in the coal mine.

ESDE 2020 is available online, see https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1635