EU social policy and the governance architecture of Europe 2020

Abstract

German

French

As the successor to the decade-long Lisbon agenda, Europe 2020 is the European Union’s 10-year strategy for ‘smart’, ‘sustainable’ and ‘inclusive’ growth. This article analyses the ‘governance architecture’ of this new agenda, and, more particularly, its social dimension. Insofar as Europe 2020 has a social dimension it is located within a suite of thematic ‘flagship initiatives’, as well as within a policy coordination framework that, while building upon the Lisbon agenda’s governance architecture, now forms part of the European Semester framework. Whereas the flagship initiatives continue a long tradition of the deployment of non-legislative instruments and EU funds towards the EU’s social goals, the role to be played by the ‘open method of coordination’ as a ‘new’ post-Lisbon form of EU social governance remains unclear. Indeed, the risk is that political energy will be concentrated on policy coordination as a means of strengthening EU economic governance rather than as a vehicle for articulating a progressive social policy vision.

Keywords

Lisbon agenda Europe 2020 Lisbon Treaty European Semester Community Method governance OMC cohesion funds

Introduction

In the spring of 2000, European Union (EU) leaders assembled in the Portuguese capital of Lisbon to commit themselves not only to make the EU ‘the most competitive and dynamic knowledge-based economy in the world’ by 2010, but also to create ‘more and better jobs and greater social cohesion’ (European Council, 2000). For the next 10 years, Member States cooperated in a range of economic, employment, environmental and social policy initiatives known as the ‘Lisbon agenda’. Yet, a decade on, the European economy was in recession, joblessness was on the rise and social cohesion strained as governments introduced austerity measures in the wake of a global banking crisis and ensuing European economic crisis.

Even without the economic crisis, the Lisbon agenda had produced mixed results. Indeed, after a critical interim evaluation, a revised Lisbon agenda saw its policy focus narrowed and its governance architecture reformed to drive political momentum towards ‘growth and jobs’ (Kok, 2004). This had a rather destabilizing effect for the social dimension of the Lisbon agenda in ways that resulted in calls for its successor strategy – ‘Europe 2020’ – to evidence stronger social commitments (Spring Alliance, 2010). It is the social dimension of Europe 2020 that forms the focus of this contribution.

Europe 2020 was launched at an important moment for the EU. The Lisbon Treaty had not long entered into force and the potential for its provisions to animate a new agenda – including its social dimension – were untested. Yet politically, the agenda was being pulled in different directions. On the one hand, the transition from the Lisbon to the Europe 2020 agenda acted as a focal point for demands by social NGOs for a more decisive break with the revised Lisbon agenda which they viewed as lacking the necessary balance between economic and social objectives. On the other hand, political energy was being directed to the strengthening of EU economic governance and for an acceleration of the sort of structural reforms that the Lisbon agenda had sought to pursue.

It is too early to evaluate Europe 2020’s potential to act as a vehicle for domestic policy change. Rather the analysis presented here adopts a governance perspective to reflect on the emerging institutions and policy instruments of Europe 2020 and the role assigned to social policy within its evolving ‘governance architecture’ (Borrás and Radaelli, 2011). The task of locating Europe 2020’s social dimension is itself question-begging as to what defines or delineates the Europe 2020 governance architecture. On the one hand, the substantive core of Europe 2020 – and a feature intended to mark an improvement on the original Lisbon agenda – is a suite of thematic ‘flagship initiatives’ with associated targets and indicators. In the absence of a more encompassing EU ‘social agenda’ these initiatives attempt to give a substantive focus to certain policy domains – initiatives on poverty, employment and youth will be of particular relevance to the discussion here – and to organize a range of governance instruments towards achievement of their aims. On the other hand, Europe 2020 forms part of a wider framework of policy coordination – the ‘European Semester’ – that, while building on the coordination structures of the revised Lisbon agenda, has been reformed with the aim of strengthening EU economic governance.

The article begins by exploring the concept of ‘governance architecture’ and narrates the development of Europe 2020’s governance architecture against the backdrop of the earlier Lisbon agenda and the more recent context of the European Semester as a framework for the coordination of governance. Attention is then paid to the impact of the Lisbon Treaty on the legal resources and instruments available to be deployed to give Europe 2020 a social dimension. Finally, the discussion turns to the manner in which both the flagship initiatives and the overarching governance framework exploit these resource and instruments – legislation, EU funds, non-legislative instruments, the open method of coordination (OMC) – to articulate Europe 2020’s social dimension.

The argument made here is that while the flagship initiatives articulate a social dimension through the deployment of a traditional non-legislative EU social policy toolkit, newer forms of social policy governance such as the OMC appear to be in a state of flux as a more encompassing policy coordination framework evolves. This presents a potential double risk for the social dimension of Europe 2020: the flagship initiatives may fail to express a sufficiently ambitious and realizable social policy agenda while the mechanisms of policy coordination may fail to articulate, or to voice sufficiently loudly, key social messages, not least when compared with the political momentum that is driving fundamental changes in economic policy-making.

Governance architectures: from Lisbon to Europe 2020

For Borrás and Radaelli (2011), projects like the Lisbon agenda and Europe 2020 can be considered to form ‘governance architectures’. They define governance architectures as institutional arrangements that ‘address complex problems in a strategic, holistic, long-term perspective; they set substantive output-oriented goals; and they are implemented through combinations of old and new organizational structures’ (Borrás and Radaelli, 2011: 464). Their point of intervention is to offer an analytical perspective that sits between a narrow focus on developments within a single policy area and a broad focus on generic features of EU governance. This kind of mid-range perspective has the potential to locate EU social policy in relation to the programmatic and bounded policy, institutional and instrumental architecture of Europe 2020. Nonetheless, the analysis presented here illustrates that demarcating the boundary of that architecture is not without its difficulties.

In analytical terms, Borrás and Radaelli suggest that governance architectures have two principal components: an ideational component that includes policy paradigms and discourses, and an organizational component that includes formal institutional structures and instruments (2011: 470–472). The ideational aspects of Europe 2020 – its substantive social policy paradigms and discourses – have been analysed by Daly (2012). As a complement to that analysis, this contribution, therefore, pays closer attention to the institutional and instrumental governance aspects of Europe 2020 and its social dimension.

In this part, the analysis contextualizes the launch of Europe 2020 against the background of the 2005 relaunch of the Lisbon agenda. It then highlights the emergence of a more thematic focus for Europe 2020 – exemplified in its flagship initiatives – as well as the evolution of the Lisbon policy coordination architecture into what has become known as the European Semester.

The legacy of the Lisbon agenda

The High-Level Group set up to provide a mid-term evaluation of the Lisbon agenda concluded that the agenda ‘is about everything and thus about nothing’ (Kok, 2004). As policy coordination processes and associated targets and indicators proliferated, the agenda became more crowded. The 2005 revision of the Lisbon agenda was intended to give a clearer strategic focus to promoting growth and jobs and to permit a streamlining of its policy coordination framework.

As Zeitlin notes, the ‘architectural core’ of the relaunched strategy was the integration of the treaty-based economic and employment policy coordination processes into a new partnership for growth and jobs (Zeitlin, 2008). A set of integrated guidelines set out policy orientations to guide domestic macro- and micro-economic policies and to promote labour and social welfare reforms intended to increase labour market participation. Domestic reporting obligations were streamlined with the production of National Reform Programmes (NRPs) on a three-yearly cycle. Under the guidance of the European Council, the European Commission and Council monitored and evaluated these programmes, with the capacity to issue collective and individual recommendations to Member States.

This refocusing of the agenda, however, had repercussions. First, while remaining apparently committed to a holistic policy agenda that included pursuing social policy goals, the resulting governance architecture saw the social OMC – which coordinated policies on social inclusion and social protection, pensions and long-term care – drift apart from the architectural core of the revised Lisbon agenda with a mere exhortation for these processes to ‘feed in’ and ‘feed out’: something which never quite happened. Secondly, the governance toolkit of the revised Lisbon agenda became synonymous with policy coordination, notwithstanding the intention of the architects of the original Lisbon agenda that the strategy should deploy the full range of governance tools and instruments (Rodrigues, 2009).

As will be discussed below, Europe 2020 seeks to address the legacies of the original and revised Lisbon agendas in two key ways. First, it seeks to reconcile the competing demands for policy inclusivity and policy focus through a set of thematic policy initiatives that relate to key aspects of economic, employment, social and environmental policy. Secondly, the governance architecture comprises the deployment of a range of policy instruments within the specific thematic initiatives, yet at the same time builds upon the policy coordination architecture of the revised Lisbon agenda.

Learning lessons? A more thematic Europe 2020

Europe 2020 attempts to square the circle between pursuing a balanced and interlinked set of policy initiatives, and the need to give strategic focus to an agenda. When launched in 2010, the Europe 2020 agenda presented itself as an integrated policy strategy based around the mutually reinforcing objectives of ‘smart’, ‘sustainable’ and ‘inclusive’ growth. Philosophically, it appeared closer to the original Lisbon agenda (with the inclusion of an environmental dimension) than the revised 2005 agenda. However, in learning some lessons from the past and to give thematic focus and political energy, the Commission proposed ‘flagship initiatives’ in seven thematic areas:

Digital agenda for Europe (European Commission, 2010b);

Innovation Union (European Commission, 2010e);

Youth on the Move (European Commission, 2010g);

Resource Efficient Europe (European Commission, 2011d);

An Industrial Policy for the Globalisation Era (European Commission, 2010f);

An Agenda for new skills and jobs (European Commission, 2010a);

European Platform against Poverty (European Commission, 2010d).

Each flagship initiative acts as an umbrella vehicle for more specific initiatives and, consistent with the intentions of the architects of the original Lisbon agenda, deploys a range of tools and instruments: e.g. legislation, non-binding recommendations, EU funds, policy coordination processes. The extent and means by which these initiatives give Europe 2020 a social dimension is discussed later.

Cutting across the individual flagship initiatives is a set of five high-level targets covering increases in employment rates, R&D expenditure, use of renewable fuels and energy efficiency, and decreases in greenhouse gas emissions, school drop-outs and the number of people living in poverty. Progress towards these targets is to be monitored by reference to a set of eight headline indicators:

Employment rate by age and gender (20–64);

GDP expenditure on R&D;

Greenhouse gas emissions (base year 1990);

Share of renewables in gross final energy consumption;

Energy intensity of the economy;

Early leavers from education and training by gender;

Tertiary education achievement by gender (30–34);

Population at risk of poverty (combined worklessness, low income and material deprivation indicator).

This strategy of having headline targets and a relatively small suite of indicators carries on a trend that developed throughout the Lisbon agenda of seeking to increase the political visibility of the strategy but arguably in ways that decreased its analytical capacity to measure and evaluate policy performance.

The adoption of a novel EU poverty target which aims to reduce the number of people at risk of poverty and social exclusion by 20 million has been particularly controversial with different constellations of political actors taking opposing views on the desirability and feasibility of including such a target within the Europe 2020 framework (for a detailed analysis see Copeland and Daly, 2012). Like the other targets in the strategy, Member States are to define national targets to achieve the aggregate EU-level target. However, the evidence of the first two years of the strategy is that even if Member States fulfil their own national poverty targets, the EU-level target will not be achieved (European Commission, 2011b; European Commission, 2011c).

Yet to focus solely on the thematic approach of the flagship initiatives and associated targets and indicators would be to miss the way in which the aims and goals of Europe 2020 are also articulated within a broader governance architecture of policy coordination known as the European Semester. Indeed, the extent to which Europe 2020 – and by implication, its social dimension – is to be found within its flagship initiatives and/or this emerging policy coordination architecture is an important research question.

Policy coordination under the European Semester

The European Commission has noted that ‘[T]he Europe 2020 strategy is part of the European semester’ (European Commission, 2011c). The European Semester acts as a synchronizing and coordinating framework that brings together the reporting and monitoring processes associated with the reformed Stability and Growth Pact (SGP), with the ‘country-reporting’ previously associated with the revised Lisbon economic and employment policy coordination processes and now oriented towards Europe 2020 goals. In this way, National Reform Programmes (NRPs) are drafted by Member States in implementation of a set of Europe 2020 integrated guidelines – six economic guidelines and four employment guidelines – which, together with stability and convergence reports under the SGP, are subject to a process of monitoring by EU institutions.

The European Commission initiates the annual European Semester through its Annual Growth Survey. This sets out priority actions to be taken by Member States. Annexed to this document is a progress report in which the European Commission evaluates the steps taken by Member States – in line with the Europe 2020 guidelines – to implement Europe 2020 initiatives and to make progress towards achievement of the Europe 2020 targets. The Spring European Council is formally the occasion for EU leaders to determine their collective stance on the challenges facing, and priorities for, the EU. In line with the Annual Growth Survey, the conclusions of the European Council and ongoing negotiations with the Commission, Member States then submit their finalized National Reform Programmes and Stability/Convergence programmes. The Commission assesses these reports and on the basis of Commission proposals, the Council then concludes the semester by the adoption of country-specific recommendations. The European Semester, therefore, emphasizes not merely ‘governance by co-ordination’ – a technique which is reinforced and extended on the economic side – but also the ‘co-ordination of governance’ (Armstrong, 2012).

The danger, of course, is that Europe 2020 as a distinctive organizing vehicle and ‘governance architecture’ ends up competing with, or being subsumed by, the European Semester. As for the social dimension of Europe 2020, this new coordination framework creates both opportunities and challenges/threats. On the one hand, the apparently enduring relevance of policy coordination as a tool of European governance might suggest a potential role for social policy coordination within the new structures of the European Semester. On the other hand, there are political and legal challenges inherent in seeking to fit Europe 2020’s social dimension within the treaty-based economic and employment coordination processes. Moreover, the focus of the European Semester on reinforcing economic governance could marginalize whatever social policy messages might emerge through the reporting and monitoring of Member States’ NRPs. Analysis of these issues will be developed more fully below. However, it is perhaps instructive that while initially emerging simply through changes in institutional practice, the European Semester has been given formal recognition in amendments to Regulation 1466/97: one of the two regulations forming part of the SGP.¹ This would seem to institutionalize a structural bias toward viewing the European Semester, and, in turn, Europe 2020, as dominated by concerns of economic rather than social governance.

Social governance after the Lisbon Treaty

Europe 2020 emerged against the background of the changes to the underlying treaties made by the Lisbon Treaty. The Lisbon Treaty inherited much of the substantive social policy provisions of the failed Constitutional Treaty. In respect of the values and objectives of the Union, the Lisbon Treaty gave renewed emphasis to the EU’s social identity not least as a means of seeking to give ‘political traction’ to the Union in its ongoing quest for constitutional legitimacy (Weiler, 2002). Nonetheless, to determine whether the rhetoric of a social Europe is matched by the reality of social governance within Europe 2020, we need to consider the impact of the Lisbon Treaty on the EU’s social governance toolkit.

At the outset, it is useful to distinguish between different forms of intervention. A distinction is sometimes drawn between the exercise of public power through imperium – the legislative power historically associated with the nation state – and through dominium – the power of money to achieve socially desirable ends (Daintith, 1982). While the concept of dominium points us in the direction of the use of EU funds to influence social outcomes, the exercise of power through imperium can be seen to be more difficult in an EU with a conferred and traditionally constrained social policy competence (Szyszczak, 2001).

The concept of dominium helpfully reminds us of the role that the EU budget and specific EU funds play in promoting social goals. In terms of the budget, the Lisbon Treaty simplified the budgetary process and put the European Parliament on an equal footing with the Council (Article 314 TFEU). As will be noted below, the EP and Council took rather different views on what a budget for Europe 2020 under conditions of fiscal discipline ought to look like. As for specific sources of funds, we find little that is new either in terms of the rules surrounding the European Social Fund (Article 164 TFEU) or the structural and cohesion funds more widely (Articles 174-178 TFEU). Here, the ordinary legislative procedure and qualified majority voting remains the norm. Aside from these large, encompassing aspects of dominium, it is important to recall that much of EU influence in the social domain has been achieved through EU-funded action programmes whether the ‘Poverty Programmes’ of the 1970s–1990s or more recent activities such as the PROGRESS programme. The Lisbon Treaty has no direct impact on this type of programme other than to maintain a legal basis for such activities in Article 153(2) TFEU.

Consideration of the exercise of power through imperium raises more complex issues. For one thing, the power to adopt binding rules in the social policy domain is not a monopoly of the EU institutions under the ‘Community Method’ but can yield to the role of the social partners in negotiating binding agreements. While the rule-making potential of social dialogue is unchanged by the Lisbon Treaty, the role and status of the social partners and social dialogue is given explicit recognition in the Treaty (Article 152 TFEU).

One of the innovations of the Lisbon Treaty is that it introduces into EU constitutional law explicit categories of competence and catalogues which policy fields belong to which category. Article 4(2)(b) TFEU assigns ‘social policy, for the aspects defined in this Treaty’ to the category of ‘shared competence’. Certainly when it comes to legislative competence, this is clearly shared with the Member States. Yet other non-legislative instruments that make up a substantial component of EU social policy interventions might be thought to be exercises of a ‘supporting, complementing, or supplementing’ competence: a new category identified by the Lisbon Treaty (Craig, 2010). Indeed, the evolution of EU social policy is often narrated in terms of the relationship between exercises of legislative competence through the Community Method, and the proliferation of non-legislative instruments. It is that relationship, rather than a simple focus on the EU’s legislative imperium, which will be explored in this and remaining sections.

In legislative terms, the Community Method has enduring relevance in those areas of social policy where the EU has, historically, had a legislative competence e.g. workplace health and safety, equality law, and certain aspects of labour law and industrial relations (Pochet, 2011). In terms of Title X dealing with ‘Social Policy’, the Lisbon Treaty neither extends EU substantive legislative competence – combating social exclusion and modernizing social protection schemes remaining outside the capacity of EU institutions to adopt directives – nor does it alter the applicable decision-making processes. In those fields where there is legislative competence, the ordinary legislative process applies except in areas such as social security where the consultation of the EP and unanimity remains the norm and where the Treaty explicitly preserves the rights of states to define the fundamental principles of their social security systems.

Nonetheless, it is evident that the centrality of the Community Method as a form of EU governance has been challenged by the pluralization in the forms and techniques by which the EU seeks to exert influence within and across a range of policy domains (Dehousse, 2011).This ‘governance turn’ (Kohler-Koch and Rittberger, 2006; Boussaguet et al., 2011) is particularly salient in the domain of social policy where, outside of the realm of legislative ‘social regulation’ (Majone, 1993), an evolving EU social policy has had to look to non-legislative governance resources. Characterizing these resources is challenging (Armstrong, 2011). The EU’s non-legislative social interventions have often been understood as heralding the arrival of ‘soft law’ (Cram, 1993; Trubek and Trubek, 2005). Yet, this is a rather undifferentiated category that includes older forms of departures from the traditional legislative Community Method as well as newer forms of governance (Borrás and Jacobsson, 2004; Scott and Trubek, 2002). Indeed, it is the extension of EU influence into the ‘missing’ areas of social policy (Daly, 2006) such as social welfare and social protection under the Lisbon agenda that is typically associated with the emergence of newer forms of governance like the open method of coordination. In this way, not only did the OMC ‘unleash the EU’s social dimension from the constraints of the Community Method’ (Borrás and Jacobsson, 2004), it expanded the repertoire of non-legislative instruments capable of being deployed in newer areas of EU policy influence.

The Lisbon Treaty has implications for both older and newer types of non-legislative act. Under the Lisbon Treaty there is a power for the Council to adopt ‘recommendations’ in areas such as employment policy, education and youth policy, culture and public health. Title X on Social Policy – as with the pre-Lisbon Treaty provision – contains no equivalent powers. Indeed, when a recommendation on ‘active inclusion’ was adopted in 2008, the Commission had to rely on its own general powers to adopt recommendations under what was then Article 211 EC Treaty. The Lisbon Treaty repeals that provision, leaving the Commission only with a non-specific power to take ‘initiatives’ to promote the ‘general interest’ of the Union under Article 17 TEU. Thus, even at the simple level of a power to adopt non-binding recommendations in the social sphere – something not unknown in the past – the Lisbon Treaty does not expressly confer such a power.

As for the fate of social policy coordination, the Lisbon Treaty inherited the ambivalent approach taken in the Constitutional Treaty. Despite various suggestions for the institutionalization of a generic OMC provision, the Lisbon Treaty settled instead on recognizing a discretionary power to coordinate social policies alongside the mandatory coordination competence in the economic and employment spheres (Article 5 TFEU). This reflected the apparent drift between the social OMC and the integrated economic and employment coordination processes under the revised Lisbon agenda.

If the Lisbon Treaty is relevant to understanding the specific social policy instruments which might be deployed within Europe 2020, it also has a wider resonance insofar as it requires the mainstreaming of certain social policy objectives within other policies. One of the innovations of the Lisbon Treaty is its requirement that Union policies take social objectives – high levels of employment, guarantees of social protection, the fight against social exclusion – into account (Article 9 TFEU). One way in which this is relevant to Europe 2020’s social dimension is that policy proposals associated with achieving the economic aims of growth and competitiveness must, nonetheless, take their social implications into account.² More generally, and thinking back to the treaty distinction between mandatory economic and employment policy coordination and discretionary social policy coordination, the spirit of social policy mainstreaming could also apply to the inclusion of social objectives within the mandatory coordination processes if discretionary social policy coordination were to falter.

With these aspects of the Lisbon Treaty in mind, attention now turns to the manner in which Europe 2020 organizes its legal and instrumental resources.

The governance toolkit of Europe 2020

This final section analyses the configuration of different policy instruments towards the social aims of Europe 2020. As intimated earlier, part of this task requires analysis of the thematic flagship initiatives associated with Europe 2020, in particular, the initiatives of employment, youth and poverty. It will be suggested that in instrumental terms, it is upon traditional forms of financial and non-legislative intervention that these initiatives rely to articulate their social dimension. Yet, inasmuch as Europe 2020 is associated with a wider framework of policy coordination, the analysis also addresses the role to be played by newer forms of governance as expressions of Europe 2020’s social dimension. It will be argued that while policy coordination as a technique of EU governance appears to be resilient, the discrete social OMC process has apparently been held in abeyance. What remains at issue is whether policy coordination through the Europe 2020 guidelines and the National Reform Programmes can act as a vehicle through which to mainstream policy responses to the sorts of challenges previously addressed by the social OMC.

The dominium of Europe 2020

The use of EU funds to achieve social aims is a powerful expression of solidarity in the EU as well as a lever to support economic reform. Yet, at times of austerity when domestic budgets are being curtailed, the deployment of EU funds is hardly uncontroversial. Thus, when presenting its proposals for the EU budget 2014–20 – self-styled as ‘budget for Europe 2020’ – the European Commission sought to balance the competing positions of a European Parliament that was seeking an increase in the budget particularly to support Europe 2020 initiatives, and those Member States seeking to curtail EU spending (European Commission, 2011a). It will be for European leaders to decide on the final sums to be allocated to the multi-annual financial framework at their summit in June 2012. For the moment it is simply worth highlighting that the budget is intended to support a results-oriented 2020 agenda but that there is a tension between, on the one hand, achieving the policy objectives of growth and social cohesion, and on the other hand, fiscal contraction.

The difficulties associated with using EU funds towards social goals in an era of austerity are dramatically illustrated by the Commission’s proposal to extend the operation of the European Globalisation Adjustment Fund (EGAF). In 2006, EGAF was established to help European industries restructure. Initially focused on the impact of globalization on European companies, the Fund also became more directly important as a tool to deal with the social and economic consequences of the economic crisis. An amendment to the Regulation establishing the Fund created a temporary derogation to allow specific support to deal with the consequences of the financial crisis and to increase the level of EU co-financing. The derogation was set to expire in December 2011 and in June 2011 the Commission proposed extending the derogation relying in part on the forecasting data on growth and employment arising from the Annual Growth Survey which forms part of the European Semester described above. However, the proposal to extend the temporary derogation for another two years was blocked by a minority group of Member States at the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) in December 2011.³ Not only may this be an illustration of increasing fiscal prudence on the part of Member States, it may point to a deeper philosophical tension between whether it is better to deploy resources in large-scale funds such as the European Social Fund with a view to achieving long-term structural reforms in a manner consistent with Europe 2020 goals, or to continue to give one-off funds to manage the more immediate social consequences of the economic crisis.

In terms of large-scale funds, of particular importance is the relationship between EU cohesion policy and Europe 2020. In October 2011, the European Commission launched proposals to reform EU cohesion policy with the explicit goal of targeting resources on a smaller range of priorities directly linked to the Europe 2020 targets. The proposals included increasing the European Social Fund’s share of the total cohesion budget to 25 percent with the aim of directly investing in people. Within the ESF, 20 percent of its budget was proposed to be allocated to social inclusion measures. Both the European Platform against Poverty and the Agenda for new skills and jobs flagship initiatives highlight the use of the ESF towards their goals.

The increasing linkages between cohesion policy and Europe 2020, nonetheless, gives rise to a concern that Member States’ flexibility in the use of EU funds will be reduced and centralized control increased. That control is to be exercised not only directly through the governance processes associated with cohesion policy itself, but also indirectly through the broader governance architecture of Europe 2020 in that Member States are to report in their NRPs on their use of EU funds towards their achievement of Europe 2020 targets.

The imperium of Europe 2020

The flagship initiative on an Agenda for new skills and jobs explicitly identifies the role to be played by EU legislation together with ‘soft’ instruments (European Commission, 2010a). As for legislative activities, the emphasis lies less on adding to the existing ‘solid legislative “acquis”’ and more on evaluating and reviewing the legal framework including such controversial areas as working time and the posting of workers. Attempts to revise the Working Time Directive have been unsuccessful due to a lack of political consensus. It is noteworthy, therefore, that following their consultation, the social partners indicated to the Commission in November 2011 their desire to seek to negotiate an agreement on working time. The social partners have nine months within which to seek an agreement. As for the posting of workers, in July 2011 the Commission indicated its intention to propose a directive that would ‘clarify’ the implementation and enforcement of the Posting of Workers Directive and a new regulation (the so-called ‘Monti II’ Regulation) on collective action in the context of the economic freedoms. Scheduled for publication by the end of 2011, then rescheduled for February 2012 and finally appearing in late March 2012, the delays in releasing these proposals highlights the controversial nature not just of legislative action in the social domain but also the difficulty of reconciling social objectives with economic freedoms. Even with an emphasis on the revision rather than the extension of the legislative framework and on the clarification rather than renegotiation of controversial legislation, the political as well as the legal limits to the use of the Community Method in the employment field are evident.

Once we move outside the sphere of labour law, the limits on EU legislative competence become more apparent. The European Platform against Poverty flagship initiative has little by way of legislative activity associated with it. One initiative initially listed as a legislative proposal was in respect of access to basic banking services: an aspect of financial inclusion. Yet by the summer of 2011, this legislative proposal had been dropped and instead the Commission notified its intention to adopt a non-legislative recommendation. As for the initiative on Youth on the Move, while the desire to promote student mobility can look to a corpus of legislation and, more significantly, court rulings seeking to remove barriers to access to education, it is to recommendations, the open method of coordination and the use of EU funds to which this initiative primarily looks to achieve its ends.

In short, aspects of Europe 2020 build on past legislative interventions in the social domain. Yet for the most part, it is on non-legislative forms of action that its social dimension will be built. In part this is due to the limits of EU legislative competence, but it is also a function of the difficulties in securing the necessary political agreement to invoke the Community Method.

The continuing scope of non-legislative influence

If the Lisbon agenda was associated with the rise of new forms of governance, Europe 2020 might be considered as the return of an older style of non-legislative influence in EU social policy. Looking across the flagship initiatives on youth, employment and poverty, there are numerous initiatives to be pursued through ‘Communications’ – on active inclusion, early school leavers and early childhood education and care – and ‘Recommendations’ – child poverty, early school leavers, promotion and validation of non-formal learning. As noted above in the context of the proposal for a directive on basic banking services, even some proposals that began life as legislative proposals have ended up as proposals for non-binding recommendations.

There is much in Europe 2020 that is continuous with the history of EU social policy interventions, namely, the use by the Commission of a range of forms of principally non-legislative instruments to achieve social aims (Cram, 2011). Although governance architectures like the Lisbon agenda and Europe 2020 offer the potential to bring a certain coherence to the deployment of such instruments, there is equally the risk that the agenda is nothing more than the sum of its individual parts with as much or as little coherence as that implies

The open method of coordination

As noted above, under the revised Lisbon agenda to which Europe 2020 succeeds, the social OMC had drifted away from the core governance architecture of the growth and jobs strategy. While for a period this may have helped give a clearer thematic focus and critical orientation to the social OMC, by the end of the Lisbon agenda, the fate of the social OMC was in doubt. Member States last submitted National Strategy Reports on Social Protection and Social Inclusion in 2008; the same year that the European Commission set out proposals to strengthen the social OMC (European Commission, 2008). The last Commission and Council Joint Report on Social Protection and Social Inclusion adopted in 2010 repeated the call to reinforce the social OMC by increasing its effectiveness and visibility. The Belgian Presidency of the Council in the second half of 2010 organized a conference with the clear intent of seeking to rally support around a governance tool which previous Belgian presidencies had done much to sustain (the contributions to the conference are published in Marlier and Natali, 2010). However, the social OMC was effectively left in abeyance at least in the sense of there being no further iterations of its reporting and monitoring processes.

The launch of Europe 2020 has highlighted the European Commission’s ambivalence towards the social OMC. On the one hand, the Communication launching the Platform against Poverty (European Commission, 2010d) referred to the ‘integration of the social OMC into the Europe 2020 strategy’, suggesting that, as with employment policy coordination before, this would now form part of an overarching governance architecture. Certainly, if we look at the governance architecture of Europe 2020 as described above, and, in particular, the role of the integrated guidelines, Guideline 10 refers to the objective of promoting social inclusion and combating poverty. Member States are to use their NRPs to report domestic activities in support of this guideline as their contribution to meeting the overarching poverty-reduction target. This would then suggest that while the social OMC as a discrete process might disappear, at least some of its policy preoccupations would be mainstreamed within the integrated economic and employment policy coordination framework. Recalling that reform of pensions was one of the three areas addressed in the social OMC, it is, therefore, salient that in its January 2012 White Paper on Pensions (European Commission, 2012), in discussing the policy instruments to be used, the Commission noted that:

‘Europe 2020 entails a stronger coordination of national policies in the context of the European Semester, using in particular the instrument of Country Specific Recommendations.’

This highlights the apparent absorption of one strand of the social OMC – pensions – into this new governance architecture and suggests that aspects of the social OMC may be cannibalized and integrated into the framework for economic and employment policy coordination. Particularly if associated with country-specific recommendations, this may consequently give rise to political disputes and legal challenges as to the legitimate use of such recommendations to achieve wider social ends.

On the other hand, the European Commission signalled that it would report by the end of 2011 on how to adapt the working methods of the social OMC to the new governance arrangements for Europe 2020, leaving open the potential for a distinct social policy coordination process interacting with what was emerging for the Europe 2020 strategy (European Commission, 2010d). Certainly, in the May 2011 impact assessment ‘roadmap’ that would pave the way for any future Recommendation on Child Poverty as envisaged under the Platform against Poverty, the Commission clearly signalled that this instrument would be supported by a revised social OMC. In June 2011, the EPSCO Council endorsed an Opinion of the Social Protection Committee (SPC) – the body responsible for facilitating policy coordination between Member States under the social OMC – proposing a reinvigorated social OMC with a leaner reporting structure (Social Protection Committee, 2011). However, by the Spring of 2012 – and much like its position on the posting of workers proposal – there was silence from the Commission as to the future of the social OMC. The SPC, nonetheless, has initiated its own revised OMC process with Member States submitting National Social Reports at the same time as their National Reform Programmes with the SPC acting as the focal point for monitoring the social situation.

In this way, while policy coordination as a technique of governance remains of importance, particularly in the framework of the European Semester, discrete thematic policy coordination under the social OMC is in a state of flux. In considering the fragile status of the social OMC, it is useful to recall that ‘the OMC’ has always been a shorthand for the deployment of a range of methodologies – objective-setting, reporting, monitoring, peer review, benchmarking – with these methodologies more or less present in different policy fields (Laffan and Shaw, 2005). The Youth on the Move initiative, for example, highlights the use which will be made of some of those methodologies like benchmarking and peer review. The issue for policy-makers, therefore, is whether there is real added-value in organizing these methodologies in the context of a distinct social OMC or whether to absorb some or all of its elements into the Europe 2020/European Semester framework. Certainly, for proponents of a distinct social OMC like the SPC and the EPSCO Council, the value of a social OMC may lie more in ensuring their institutional capacity to monitor the social dimension of Europe 2020 and to prevent EU policy discourse being dominated by the demands of economic reform and fiscal prudence than with the effectiveness of the OMC as a governance tool.

It is one thing to consider the role of policy coordination in isolation. However, one of the more intriguing evolutions in EU governance has been the emergence of ‘hybrid’ forms of governance that yoke together different types of instruments towards their policy ends. The essence of hybridity is the idea of a mutual interaction between instruments albeit that this is usually understood as an interaction between ‘law’ and ‘governance’ instruments (De Búrca and Scott, 2006; Kilpatrick, 2006; Pochet, 2011; Trubek and Trubek, 2007). When it comes to potential hybridity within Europe 2020, this may instead lie in the relationship between older and newer forms of non-legislative governance (for a discussion in respect of EU youth policy, see ter Haar and Copeland, 2011). For example, under the Lisbon agenda, there was an interesting relationship between the 2008 Recommendation on Active Inclusion⁴ – which was itself self-styled as a means to further fundamental social rights, including the right to human dignity – and the use of the social OMC as a monitoring tool. As noted above, in the context of the potential Recommendation on Child Poverty to be developed as part of the Platform against Poverty, the Commission certainly initially envisaged using the social OMC to monitor its implementation. Indeed, it has been suggested elsewhere that one way to reinforce the social OMC would be to connect it more closely to a suite of thematic recommendations thereby facilitating ongoing and substantively focused monitoring of implementation (Armstrong, 2010). A hybrid yoking of recommendations in areas like active inclusion, financial inclusion and child poverty to a broader coordination framework might bridge the gap between older and newer forms of governance, thereby giving greater coherence to Europe 2020’s social dimension.

Conclusions

The task this article set for itself was to explore the social dimension of Europe 2020’s ‘governance architecture’. The first conclusion to be drawn is that locating the governance architecture of Europe 2020 let alone its social dimension is not without its problems. While it may be desirable to seek to give explanatory value to projects like the Lisbon agenda and Europe 2020 focusing on their combined substantive, institutional and instrumental features, it becomes apparent that these features can change in ways that make it difficult to demarcate the boundaries and core elements of the architecture. The slippage between Europe 2020 and the European Semester as the architectural frame of reference illustrates this point. This insight leads to the second conclusion, namely, that if we are to find Europe 2020’s social dimension we need to look not just at the agenda’s thematic flagship priorities but also to the wider framework of policy coordination which, while building on the architecture features of the revised Lisbon agenda, now forms part of the European Semester of policy coordination.

In instrumental terms, the third conclusion to be drawn is that while rhetorically attempting to enhance its social identity, the Lisbon Treaty has done little to bolster the EU’s social policy toolkit. Although the continuing limits on the EU’s legislative social policy competence is certainly one explanation for the dominance of non-legislative instruments as the means towards the ends of Europe 2020’s flagship initiatives, it is also clear that even where there is legislative competence, resort to the Community Method in the social sphere is not unproblematic. The examples of failed attempts to revise the Working Time Directive and the delays in the Commission’s promulgation of proposals on the posting of workers illustrate this point. The final conclusion is that if the emergence of new forms of governance like the OMC was an important part of the Lisbon agenda – especially as a means of seeking EU influence beyond the realm of ‘social regulation’ – the role of policy coordination as a means of forwarding Europe 2020’s social dimension is much more ambiguous. It is not yet clear how much or how little of the social OMC will be absorbed into the economic and employment policy coordination framework that now forms part of the European Semester. Whether or not the social OMC will itself continue as a discrete process is even more uncertain. For some, the integration of social policy concerns into a wider coordination framework was the appropriate direction of travel for EU social policy. Nonetheless, the obvious risk – and one heightened by the economic and political environment in which Europe 2020 was launched – is that Europe 2020’s social dimension will lose out in the competition for political time and attention. However, for advocates of a continuing social OMC, the challenge remains to articulate the mechanisms and means by which to strengthen its capacities to give Europe 2020’s governance architecture a meaningful and substantive social dimension.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Notes

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