On November 28, the European Commission released its “Annual Growth Survey” with the aim of setting out the EU’s social and economic priorities for 2013. The Commission emphasized the importance of adopting measures to restore growth and competitiveness, as well as the critical imperative of dealing with the social consequences of the crisis.

In its communication, intended to chart a “smart, sustainable and inclusive” course for renewed growth and competitiveness, the Commission first describes the context of a European economic situation that “remained fragile in 2012,” admitting that “it will take time to move towards a sustainable recovery.” It praises the EU and Member States’ many efforts and recognizes social protection systems’ role as “social shock absorbers” during these early years of the crisis.

Although the communication considers budget consolidation essential in the long run – despite its negative short-term impact on growth – measures designed to fight against unemployment and address the social consequences of the crisis receive their share of consideration as well. To embark upon this course, the communication presents a number of recommendations tending towards “flexicurity”: extensive flexibility in the labor market complete with compliant dismissal rules; a generous system of benefits for unemployed workers; and active employment policies meant to prevent long-term unemployment.

Fighting unemployment with labor flexibility, training and social protection

The Commission first addresses the issue of labor market flexibility, expressing its approval of certain measures adopted by Member States to promote flexible employment arrangements in the workplace (partial unemployment, etc.). It recommends limiting the tax burden on labor, continuing to modernize labor markets by simplifying employment legislation and even monitoring the effects of wage-setting systems.

At the same time, the Commission wants to keep long-term unemployment in check by implementing processes to boost jobseeking assistance and facilitate access to the labor market. Well aware that certain countries are experiencing youth unemployment rates in excess of 50%, it recommends creating “youth guarantee” schemes to provide continued education, apprenticeships or traineeships, thereby enhancing the employability of young jobseekers. More generally, the Commission is looking to encourage lifelong learning and worker mobility.

Finally, the Commission wants to implement one last component of “flexicurity” intended to “ensure the effectiveness of social protection systems in countering the effects of the crisis.” It thus calls for exceptional measures to address the crisis, in the form of “active inclusion strategies” encompassing income support initiatives, measures to tackle poverty and “broad access to affordable and high-quality services, such as social and health services, childcare and housing.” The Commission also recommends implementing “more personalized services (‘one-stop shop’).” Strengthening safety nets stands out as an essential factor to “promote social inclusion and to prevent poverty”… provided that modernization of social protection systems continues.

In conclusion, the Commission calls to mind two elementary principles to drive these reforms: “solidarity and fairness” as “essential elements in ensuring that the efforts undertaken will be politically and socially acceptable and of benefit to all.”

These guidelines should allow the Commission and the March 2013 European Council to prepare recommendations to be conveyed to Member States in the coming months.