The impact of social investment on employment and public budgets

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EESC opinion: The impact of social investment on employment and public budgets

Key points

The EESC takes the view that, particularly in times of crisis, there is an enormous need for social investment in order to counter the increasing risk of poverty. This also has significant Europe-wide employment potential, which must be mobilised by private and public investment.

The better social investment is embedded within a credible macroeconomic and institutional framework, the higher the social, economic, fiscal and social benefits, i.e. the "multiple dividends" of those investments will be.

The EESC believes that a consistent and successful implementation of a broad-based social investment package is associated with the following key requirements:

  • The need for a European stimulus and investment programme to the tune of 2% of GDP;
  • In addition to increasing the efficiency and effectiveness of public spending, it is imperative that new sources of revenue be identified;
  • Social investments must be fixtures in the Europe 2020 Strategy and the European Semester. They should be explicitly taken into account in the Annual Growth Surveys and country-specific recommendations;
  • The proposal to exclude social investments from the calculation of net government deficits under the EMU's fiscal rules should be further examined in order to be considered;
  • Efforts should be made to ensure methodical progress and the development of suitable tools to measure the (positive) effects of increased social investment and refinement of social indicators in the institutional framework of the EMU.

Moreover, the Commission should provide for a more ambitious and longer-term policy roadmap to implement the social investment package by at least 2020.