BETTER EUROPE ALLIANCE

SEPTEMBER 2014

BRIEFING ON EUROPE 2020 & THE EUROPEAN SEMESTER

IRISH CIVIL SOCIETY ORGANISATIONS FOR A SOCIAL AND SUSTAINABLE EUROPE

The European Semester is the term used for the coordi-nated annual monitoring by the European Commission of two separate processes:

- Europe 2020 Strategy for smart, sustainable and inclusive growth1 - The Stability and Growth Pact2

The Europe 2020 strategy covers the period 2010-2020 and contains economic, social and environmental com-mitments. The Stability and Growth Pact came into force in 1998 and contains binding commitments on how EU Governments manage their deficits and debt. It was integrated into the European Semester process and has taken on a stronger role in the last number of years due to the economic crisis.

WHAT IS THE EUROPEAN

SEMESTER?

EUROPEAN SEMESTER

EUROPE 2020 STRATEGY

STABILITY & GROWTH PACT

The Europe 2020 Strategy is the main way in which EU member states, including Ireland, coordinate policies on the economy, society and environment. This includes specific commitments on poverty and social exclusion, education, employment and climate change. In Ireland, we are particularly aware of the importance of the Stability and Growth Pact and the associated processes which have a direct effect on our Governments budget plans.

The European Semester process provides a way of following all of these policies and of debating them ‘in the round’ with Government. It allows us to learn from counterparts and other countries across Europe. Europe 2020 objectives are also linked to the priorities for EU funding for 2014-2020, including the Structural Funds.

In the view of the members of the Alliance, what is supposed to be a balanced process has been undermined

by the priority given to negative economic policies, dominated by austerity, to the detriment of policies needed for a just and sustainable future. This needs to be countered by pressure for a stronger commitment to the social, equality, and environmental goals.

We must insist that the clear commitments to structured dialogue with stakeholders, including civil society as key partners, are delivered on, to strengthen the democracy and legitimacy of the process.

We need to fill the gaps in the commitments. For example, gender equality is not an explicit objective in Europe 2020 despite the fact that the Lisbon Treaty enshrines the objective to achieve gender equality and gender mainstreaming across all policies.

This brief explains the Semester with the aim of supporting a wider engagement.

WHY IS IT IMPORTANT

FOR IRISH CIVIL SOCIETY TO INFLUENCE

THE EUROPEAN SEMESTER?

The Stability and Growth Pact (SGP) is the framework for coordinating national fiscal policies in the EU. Fiscal policy is a Government’s spending and tax policies which are used to influence the county’s economy. The Growth and Stability Pact was established to safeguard sound public finances, based on the principle that economic policies are a matter of shared concern for all Member States. The Stability and Growth Pact contains two arms – the preventive arm and the corrective arm. The preventive arm tries to ensure that fiscal policy is sustainable over the year. The corrective arm sets out how countries take corrective action in the case of an over-spend or excessive deficit.

Objectives:

The general government deficit must not exceed 3% of GDP; and

Public debt must not exceed 60% of GDP or must move towards the 60% target.

These targets are included in the European Union treaties and strengthened through an intergovernmental agreement in the Fiscal Treaty which Ireland voted in favour of in a referendum on the 31st May 2012. More detailed rules were agreed by EU Member States in what are known as the ‘six-pack’ in 2011 and the ‘two-pack’ in 2013.3

STABILITY & GROWTH PACT

21

Included in the ‘six-pack’ are the financial penalties countries could face for failing to take proper action while the ‘two-pack’ reinforced the preventive arm by requiring Euro area Member States to submit their draft annual budgets to the European Commission for approval by the 15th October.

Countries failing to meet the two objectives enter into the corrective arm of the SGP called Excessive Deficit Procedure. This allows the European Commission to enforce the deficit or debt levels to be corrected. If a country does not comply, this can result in sanctions for Eurozone countries, or possible suspension of Structural Funds for all EU Member States.

Macro-economic Imbalance Procedure: This operates alongside the Stability and Growth Pact. It is an early warning system with a Scoreboard containing a range of indicators. The indicators are mainly economic but in 2013 the Commission integrated social indicators including long-term unemployment; poverty and social exclusion; young people not in employment, education or training and inequality. It still remains to be seen what impact the inclusion of social indicators will have. The scoreboard is published in the Alert Mechanism Report in November each year.

In June 2010 the Europe 2020 Strategy replaced the Lisbon Strategy for Growth and Jobs (also known as Lisbon Agenda 2000-2010). The Europe 2020 Strategy aims to be a key means of progressing an integrated approach to economic, employment, environmental and social goals of the EU. It contains five targets with each EU Member State adopting their own national targets to support the achievement of the EU targets (Table 1).

As part of the European 2020 process, all EU Member States must submit their National Reform Programmes, outlining progress towards the five targets to the European Commission in April each year.

THE EUROPE2020 STRATEGY

Note:- The Europe 2020 targets are currently implemented through a ‘soft law’ coordination process by the EU and Member States.

- The Stability and Growth Pact targets are legally enforceable with penalties for failing to do so.

TABL

E 1:

EURO

PE 20

20 A

ND

IRIS

H TA

RGET

S AN

D PR

OGRE

SS TO

WARD

S TH

EM(P

ROGR

ESS

RELA

TES

TO

2012

OR

2013

WHE

RE S

TATE

D)

EMPL

OYME

NTCL

IMAT

E CHA

NGE

RESE

ARCH

& D

EVEL

OPME

NTED

UCAT

ION

POVE

RTY &

SOC

IAL E

XCLU

SION

Rai

se t

o 75

% t

he e

mpl

oym

ent

rate

of

wom

en a

nd m

en a

ged

20-6

4, i

nclu

ding

th

e gr

eate

r pa

rtic

ipat

ion

of

youn

g pe

ople

, ol

der

wor

kers

and

low

-ski

lled

wor

kers

and

bet

ter

inte

grat

ion

of l

egal

m

igra

nts.

Pro

mot

ing

soci

al in

clus

ion,

in p

artic

ular

th

roug

h th

e re

duct

ion

of

pove

rty,

by

aim

ing

to li

ft a

t lea

st 2

0 m

illio

n pe

ople

ou

t of

ri

sk

of

pove

rty

and

excl

usio

n by

202

0.

To

redu

ce

the

num

ber

expe

rien

cing

co

nsis

tent

pov

erty

to 4

% b

y 20

16 (i

nter

im

targ

et)

and

to 2

% o

r le

ss b

y 20

20,

from

th

e 20

10 b

asel

ine

rate

of

6.3%

, w

hich

w

ill li

ft a

t lea

st 2

00,0

00 p

eopl

e ou

t of t

he

risk

of

pov

erty

and

exc

lusi

on b

etw

een

2012

and

202

0.

Impr

ovin

g ed

ucat

ion

leve

ls, i

n pa

rtic

ular

by

Spen

ding

3%

of

GD

P o

n re

sear

ch a

nd

deve

lopm

ent.

Red

ucin

g gr

eenh

ouse

gas

em

issi

ons

by 2

0% b

y 20

20 (f

rom

199

0),

incr

easi

ng t

he s

hare

of

rene

wab

les

in e

nerg

y co

nsum

ptio

n by

20%

(fr

om

2005

) and

Mov

ing

tow

ards

a 2

0% i

ncre

ase

in

ener

gy e

ffici

ency

(fro

m 2

005)

.

aim

ing

to

redu

ce

scho

ol

drop

-ou

t ra

tes

to

less

th

an

10%

an

d by

in

crea

sing

th

e sh

are

of

30-3

4 ye

ars

old

havi

ng c

ompl

eted

ter

tiary

or

equi

vale

nt e

duca

tion

to a

t lea

st 4

0%.

Red

uce

gree

nhou

se g

as e

mis

sion

s in

th

e no

n-tr

aded

se

ctor

by

20

%

com

pare

d to

200

5 le

vels

; in

crea

se

the

shar

e of

re

new

able

s in

fina

l en

ergy

con

sum

ptio

n to

16%

by

202

0 (f

rom

5.2

% in

200

5);

to m

ove

tow

ards

a 2

0% i

ncre

ase

in

ener

gy e

ffici

ency

.

To

redu

ce

the

perc

enta

ge

of

18-

24

year

ol

ds

with

at

m

ost

low

er

seco

ndar

y ed

ucat

ion

and

not

in

furt

her

educ

atio

n an

d tr

aini

ng to

8%

; to

inc

reas

e th

e sh

are

of 3

0-34

yea

r ol

ds w

ho h

ave

com

plet

ed t

ertia

ry o

r eq

uiva

lent

edu

catio

n to

at l

east

60%

.

i. ii. iii.

i. ii.

i. ii. iii.

i. ii.

i. ii. iii.

i. ii.

i. ii. iii.

i. ii.

To

rais

e to

69

-71%

th

e em

ploy

men

t ra

te

for

wom

en

and

men

ag

ed

20-

64,

incl

udin

g th

roug

h th

e gr

eate

r pa

rtic

ipat

ion

of

youn

g pe

ople

, ol

der

wor

kers

and

low

-ski

lled

wor

kers

, an

d th

e be

tter

inte

grat

ion

of le

gal

mig

rant

s,

and

to r

evie

w th

e ta

rget

leve

l of a

mbi

tion

in 2

014,

in th

e co

ntex

t of a

pro

pose

d m

id-

term

rev

iew

of t

he E

urop

e 20

20 S

trat

egy.

Impr

ovin

g th

e co

nditi

ons

for

rese

arch

an

d de

velo

pmen

t, in

pa

rtic

ular

w

ith

the

aim

of

ra

isin

g co

mbi

ned

publ

ic

and

priv

ate

inve

stm

ent

leve

ls i

n th

is

sect

or t

o 2.

5% o

f G

NP

(ap

prox

imat

ely

equi

vale

nt to

2.0

% o

f GD

P).

68.3%

(E

U 2

8 in

201

3)2.0

7%

2.13%

(1

.72%

of G

DP

from

1.6

9% in

201

0)

65.5%

(in

201

3 fr

om 6

4.6

in 2

010)

EU T

arge

tEU

Tar

get

Iris

h Ta

rget

EU T

arge

tEU

Tar

get

EU T

arge

t

Iris

h Ta

rget

Iris

h Ta

rget

Iris

h Ta

rget

Iris

h Ta

rget

Pro

gres

sP

rogr

ess

Pro

gres

sP

rogr

ess

Pro

gres

s

Pro

gres

s

Pro

gres

sP

rogr

ess

Pro

gres

sP

rogr

ess

17.8

6%

14.1

%12

.1%

Num

ber

of p

eopl

e in

Con

sist

ent p

over

ty

incr

ease

d by

10

mill

ion

peop

le.

Num

ber

of p

eopl

e in

Con

sist

ent p

over

ty

incr

ease

d to

7.7

%

(incr

ease

of 6

6,00

0 pe

ople

)

12%

(in

2013

from

14.

2% in

200

9)36

.9%

(in

2013

from

32.

3% in

200

9)

12%

7.2%

15.2

%

8.4%

(in

2013

from

11.

7% in

200

9)52

.6%

(in

2013

from

48.

9% in

200

9)

TABL

E 2:

THE A

NNUA

LEU

ROPE

AN S

EMES

TER

TIMET

ABLE

NOVE

MBER

MAY/

JUNE

APRI

L

This

Com

mis

sion

docu

men

t set

s out

the b

road

EU

econ

omic

prio

ritie

s fo

r th

e ye

ar a

nd fo

r Eu

rope

202

0. T

hese

are

to b

e ta

ken

into

acc

ount

in

eac

h EU

cou

ntry

whe

n th

ey a

re p

repa

ring

thei

r na

tiona

l rep

orts

.

It is

acc

ompa

nied

by

a St

aff W

orki

ng D

ocum

ent.

This

out

lines

how

ea

ch c

ount

ry h

as b

een

impl

emen

ting

the

Cou

ntry

Spe

cific

Rec

om-

men

datio

ns (s

ee b

elow

) fro

m th

e ye

ar b

efor

e an

d by

the

draf

t Joi

nt

Empl

oym

ent

Rep

ort

whi

ch a

sses

ses

the

soci

al a

nd e

mpl

oym

ent

situ

atio

n in

the

EU.

This

is p

art

of t

he M

acro

-eco

nom

ic Im

bala

nces

Pro

cedu

re a

nd is

pu

blis

hed

by

the

Com

mis

sion

in N

ovem

ber

each

yea

r w

ith th

e A

n-nu

al G

row

th S

urve

y. W

hen

diffi

cult

ies

are

high

light

ed th

roug

h th

is

repo

rt, i

t tri

gger

s a

resp

onse

from

the

Com

mis

sion

and

is in

clud

ed

in th

e C

ount

ry S

peci

fic R

ecom

men

datio

ns

Dra

ft C

ount

ry S

peci

fic R

ecom

men

datio

ns a

re m

ade

by th

e Eu

rope

-an

Com

mis

sion

to a

ll EU

cou

ntri

es. T

hey

are

base

d on

an

asse

ss-

men

t of e

ach

coun

try’

s ec

onom

ic a

nd s

ocia

l per

form

ance

incl

udin

g a

deta

iled

anal

ysis

of t

heir

NR

Ps

and

Stab

ility

or

Con

verg

ence

Pro

-gr

amm

es a

nd h

ow fa

r th

ey a

re d

eliv

erin

g on

the

prio

ritie

s la

id o

ut

in t

he A

nnua

l G

row

th S

urve

y. T

he R

ecom

men

datio

ns c

an b

e ve

ry

spec

ific

and

cove

r a

broa

d ra

nge

of is

sues

. The

dra

ft R

ecom

men

-da

tion

are

deba

ted

befo

re a

fina

l ver

sion

is e

ndor

sed

by th

e H

eads

of

Sta

te o

f Gov

ernm

ents

(Eur

opea

n C

ounc

il) in

Jul

y co

nclu

ding

the

Euro

pean

Sem

este

r. Th

e R

ecom

men

datio

ns a

re t

hen

to b

e ta

ken

into

acc

ount

in t

he p

olic

ies

of e

ach

coun

try,

in p

artic

ular

in t

heir

an

nual

bud

gets

, and

the

ir im

plem

enta

tion

need

s to

be

deta

iled

in

the

follo

win

g ye

ar’s

Nat

iona

l Ref

orm

Pro

gram

me.

Nat

iona

l Ref

orm

Pro

gram

mes

(NR

Ps)

are

ann

ual r

epor

ts s

ubm

it-te

d by

eac

h EU

cou

ntry

to th

e Eu

rope

an C

omm

issi

on in

Apr

il ea

ch

year

. N

RP

s ou

tlin

e pr

ogre

ss to

war

ds th

e fiv

e Eu

rope

202

0 ta

rget

s,

how

the

Cou

ntry

Spe

cific

Rec

omm

enda

tions

are

bei

ng im

plem

ent-

ed a

nd a

lso

at t

he E

U l

evel

pri

oriti

es w

hich

wer

e in

the

Ann

ual

Gro

wth

Sur

vey.

Cou

ntri

es in

a T

roik

a pr

ogra

mm

e ar

e no

t re

quir

ed

to s

ubm

it a

full

NR

P b

ut in

stea

d an

upd

ate

lett

er. I

rela

nd e

xite

d its

Tr

oika

pro

gram

me

in l

ate

2013

and

now

hav

e to

sub

mit

an N

RP

, st

artin

g in

201

4.

Stab

ility

Pro

gram

mes

are

pre

pare

d by

EU

cou

ntri

es i

n th

e Eu

ro

area

and

Con

verg

ence

Pro

gram

mes

by

EU c

ount

ries

not

in

the

Euro

are

a. T

hey

are

subm

itted

to th

e C

omm

issi

on a

t the

sam

e tim

e as

the

NR

Ps.

The

aim

of t

he r

epor

ts is

to e

nabl

e th

e C

omm

issi

on

to a

sses

s if

the

coun

trie

s ar

e ke

epin

g to

the

budg

et r

ules

set

by

the

EU a

s pa

rt o

f the

Gro

wth

and

Sta

bilit

y P

act.

The

Ann

ual G

row

th S

urve

y

The

Ale

rt M

echa

nism

Rep

ort

Cou

ntry

Spe

cific

Rec

omm

enda

tion

sN

atio

nal R

efor

m P

rogr

amm

es

STAB

ILIT

Y AN

D G

RO

WTH

PA

CT

& M

ACR

OEC

ON

OM

IC

IMB

ALAN

CES

PR

OC

EDU

RE

(mac

roec

onom

ic &

fisc

al

surv

eilla

nce)

EUR

OP

E 20

20(t

hem

atic

sur

veill

ance

)

Annu

al G

row

th S

urve

y(E

urop

ean

Com

mis

sion

)

Cou

ntry

Spe

cific

R

ecom

men

datio

ns(E

urop

ean

Com

mis

sion

an

d Eu

rope

an C

ounc

il)

Aler

t Mec

hani

sm R

epor

t(E

urop

ean

Com

mis

sion

)

Euro

zone

bud

get

appr

aisa

l(E

urop

ean

Com

mis

sion

)

Stab

ility

/ C

onve

rgen

ce

Rep

ort

(Mem

ber

Stat

es)

Nat

iona

l Ref

orm

P

rogr

amm

es(M

embe

r St

ates

)

NO

VEM

BER

APR

IL

MAY

/JU

NE

MAY

/JU

NE

Stab

ility

or

Con

verg

ence

Pro

gram

me

Better Europe AllianceAge and Opportunity; Disability Federation of Ireland; Environmental Pillar; EAPN Ireland; Irish National Organisation of the Unemployed; National Adult Literacy Agency; National Association of Building Cooperatives; National Women’s Council of Ireland; SIPTU; Social Justice Ireland.

For further information contact: Paul Ginnell, EAPN Ireland, Equity House, 16 Upper Ormond Quay, Dublin 7. Tel: 01-8745737; email: paul@eapn.ie

1. European Commission website: http://ec.europa.eu/europe2020/ europe-2020-in-a-nutshell/index_en.htm 2. European Commission website: http://ec.europa.eu/economy_finance/ economic_governance/sgp/index_en.htm 3. European Commission 2013. European Economic Governance Explained: http://europa.eu/rapid/press-release_MEMO-13-318_en.htm

Environmental PillarWorking for sustainable development

The Alliance is supported by the European Commission

In conjunction with the EU level Semester Alliance