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European Semester: above all, links with EU funding require structured civic involvement

The European Semester should be based on the principles of partnership and multilevel governance modelled on the partnership agreements existing in cohesion policy, as this bottom-up approach will contribute to more clarity, legitimacy and ownership at implementing level. This was one of the main messages of a hearing held by the European Economic and Social Committee (EESC) on 11 June.

Participants considered not only structured civil society involvement in policy-making, but also policy coherence of the utmost importance for the creation of stronger links between the European Semester and cohesion policy

Etele Baráth, EESC rapporteur for an own-initiative opinion on the relation between the European Semester and cohesion policy with a view to an EU strategy post 2020, said: A well-functioning European Semester must include cohesion policy goals. In this context, we need to map out a new long-term strategy for the EU, which links our goals and tools, to achieve policy coherence.

Petr Zahradník, co-rapporteur, added: The new strategic approach of linking both instruments provides huge potential to improve economic policy coordination and governance in the EU.

The EESC hearing analysed ways to tap into this potential. A starting point for participants was that any policy proposal to shape stronger links between the tools should contribute to sustainable growth performance within the new EU strategic framework post-2020.

Policymakers', academics' and civil society's views on the Commission proposal

Participants welcomed the European Commission's proposal for a stronger link between the European Semester and EU funding. The implementation of country specific recommendations (CSRs) put forward in the European Semester process could benefit from it. Stronger ties could contribute to more policy coherence, public support and an overall better understanding of EU economic governance.

The lack of a framework for the new approach, including a common line for policy-making, was nonetheless a matter of concern.

According to participants, the following aspects could contribute to stronger ties between the two instruments and more sustainable development:

  • aligning both instruments within a new EU strategy, with a closer focus on integrating the European Pillar of Social Rights (EPSR) and the UN Sustainable Development Goals (SDGs) in a coherent way, that addresses people's needs and concerns as reflected in EU elections;
  • establishing a common policy-making approach for both instruments, following the principles of partnership and multilevel governance;
  • addressing regional, national and European priorities on an equal footing;
  • creating incentives to comply with the European Semester investment guidelines and the CSRs' investment recommendations;
  • introducing a social imbalance procedure and a legal basis for new key objectives.

Stakeholder involvement: key for the success of the Commission proposal

The European Semester process should be driven by a bottom-up approach. A top-down approach would not contribute to more clarity, legitimacy and ownership, but create resistance. In this regard, all speakers highlighted the need for the structured involvement of social partners, civil society organisations and local and regional authorities.

While the 2019 CSRs clearly specify that territorial and regional factors should be considered by national governments when addressing regional investment needs, Olga Zrihen, member of the Committee of the Regions, believed that the Commission must do more to encourage Member States to manage the Semester in partnership with cities and regions.

Cities and regions can help understand the root causes of territorial imbalances and disparities, identify important investment priorities and thus achieve more efficient and sustainable reform results. This applies equally to civil society organisations.

Arturo Polese, European Commission, explained in this context that the Commission steers towards the maximum possible involvement of all levels of governance and partnerships, but that Member States decide on how to manage European Semester-related processes. Bilateral fact-finding missions in the Member States would however involve all stakeholders and shape the country reports.

EU policy-makers must address black holes in European Semester process

During the hearing, progress on stakeholder involvement at EU level was recognised, but it was pointed out that consultation at national level was still lagging behind. This was supported by the fact that statistical data shows that the implementation rate of the CSRs is not satisfactory.

Alison Hunter from the European Policy Centre said: The new annex D, on investment, of the country reports has provided an impetus to connect regional disparities to cohesion policy programming, but there is still a black hole in the European Semester process. It relates to the drafting of national reform programmes and then the subsequent country specific recommendations. We lose at these stages much of the link to local and regional challenges.

Counter-checking country reports and national reform programmes is, in her view, necessary to ensure that the latter provide sufficient reflection on, and visibility to, these challenges. A stronger territorial dimension could also have positive implications for the generation of EU evidence. The current deficit of data on territorial disparities hampered understanding and policy-making.

No agreement on mind-set around EU economic policies

In the course of the hearing, the mind-set of EU economic governance was highly debated. Conny Reuter, Secretary General of Solidar, called for a policy change. EU elections have shown that social and territorial inequalities need to be addressed. Markets alone could not correct disparities. He proposed that the new long-term Economic Strategy of the European Commission should be based on further alignment with the EPSR and the SDGs. Furthermore, he encouraged discussion on how to rethink the growth concept to facilitate sustainable economic development. 

James Watson, Director, BusinessEurope, questioned whether the redistribution of wealth through cohesion policy was the right mind-set to address the concerns of all voters. Investment in skills, job-creation and increased convergence would be more likely to achieve this.

Lastly, it was also argued that social investment could play an important role in sustainable development. Stronger ties between the European Semester and cohesion policy should foster it, together with investment in infrastructure.

Background

In its proposal for the Multiannual Financial Framework 2021-2027, the European Commission called for stronger links between the European Semester and EU funding in order to boost the effectiveness of actions financed under cohesion policy and produce more sustainable results. The European Semester will therefore focus more on investment needs in each country - as already flagged up in the 2019 country reports and CSRs - in order to guide future programming decisions.

The EESC opinion related to this proposal will be put to the vote at the EESC plenary session in July 2019. With the Europe 2020 Strategy coming to an end, it aims to contribute to the preparations for a new long-term European strategy.