Discussing strategies for social Europe: The potential role of EU law in contributing to the Union’s policy objective of fighting poverty and social exclusion

1. Introduction

Over a decade ago, with the adoption of the Europe 2020 Strategy, Member States pledged to lift 20 million people out of poverty over the course of the next ten years. In spite of this commitment, the latest data from 2019 showed that over 113 million people were still living at risk of poverty and social exclusion, meaning that the headline target did not even live up to a quarter of its expectations. Even though this reduction still represents a considerable drop from its peak in 2012, when 123 million people were at risk of poverty and social exclusion, the underwhelming results of the Europe 2020 Strategy in terms of poverty reduction expose very clearly the inability of current social protection structures to absorb the social impact of an economic crisis as well as the poor management of the 2007 recession in terms of social costs.

Against this backdrop, in December 2019 we held an expert seminar where a series of questions surrounding the policy objective of combatting poverty and social exclusion at the EU level were posed. At this event, we specifically addressed the incongruence between a quite developed EU policy strategy and a well-embedded legal objective on the one hand, and the lack of direct legal action, on the other. As such, our main goal lay in discussing the potential role of EU law in contributing to the policy objective of combatting poverty and social exclusion and accordingly, pointing to a number of relevant areas that should or could be included in a future strategy. This Special Issue was conceived as a way of disseminating the outcomes of that expert seminar and, thus, producing a collection of a number of pertinent questions that should be considered in future EU strategies. In spite of the alarmingly high proportion of people living at risk of poverty and the disappointing results of the Europe 2020 Strategy in addressing this issue, the general tone of the conversation felt quite optimistic. This was probably because, at the time, many of us were starting to embrace the wind of change that accompanies a certain degree of economic recovery as the effects of the crisis started to fade and the institutions displayed signs of proactivity in respect of delivering on the European Pillar of Social Rights (EPSR).

Little did we know at the time that the tables would turn so swiftly, and that within a few months every shred of optimism would be put into question. In the face of what is quickly unfolding as the next great economic crisis, the discouraging results of what a decade ago was considered a major breakthrough for social Europe demonstrate the enormous challenge that effectively tackling poverty and social exclusion represents for a post-Covid-19 pandemic society. As a result, the questions that we posed a few months ago with the idea of discussing relevant challenges regarding the future role of EU law in the alleviation of poverty have promptly become more pertinent than ever. 2020 marks not only an opportunity to embark upon a new ten-year-strategy but, perhaps more importantly, it represents a second chance for Europe to learn from past mistakes and manage this current crisis with not only economic interest at heart, but also faithful to its commitment to become a ‘social market economy’, with the well-being of society as a leading priority. Accordingly, in the following Editorial we discuss the current role of EU law and whether more, and if so, what, can be done to improve the living standards of the EU population at a time of economic distress.

2. Poverty and social exclusion in a nutshell

Whether at risk of relative poverty, severely materially deprived, or living in a household with very low work intensity, almost one in four people in the EU are still at risk of poverty and social exclusion. This amounts to 113 million people. In particular, data show that 16.9% of the population, which totals over 85 million in the EU, were at risk of income poverty in 2017, meaning that their disposable income was below their national at-risk-of-poverty threshold. ¹ The amount of people living at risk of poverty is, moreover, underpinned by growing inequalities both within and between Member States and, as such, poverty and social exclusion are not equally distributed across the EU. ² Countries that were more severely affected by the 2008 financial and economic crisis, most notably the southern Member States (Cyprus, Italy, Greece and Spain), registered considerably higher rates of poverty, even though some northern States (Denmark, the Netherlands and Sweden) also recorded increases. In turn, the newer Member States in central and eastern Europe (and Portugal) showed strong improvements in their poverty reduction outcomes. ³ Beyond inequality between Member States, these numbers are also unequally distributed among different sectors in our societies, and as a result, some vulnerable groups are more likely to be at risk of poverty and social exclusion. These include, inter alia, single parents, women, young people, people with a migration background or with a lower level of education, those living in rural areas, and people with disabilities. ⁴

Ever since the launch of the Lisbon Strategy in 2000, combatting poverty and social exclusion has been fully reflected in the formulation of policy objectives and instruments. As such, combatting poverty and social exclusion is a central theme of the Open Method of Coordination (OMC) on social protection and social inclusion ⁵ and the Employment Guidelines. This objective was more specifically spelled out in the Europe 2020 Strategy, ⁶ which incorporated, for the first time, a quantifiable objective in the form of a headline target to lift at least 20 million people out of poverty by 2020. ⁷ It was also reflected in the Integrated Guidelines, more specifically in Guideline 8 (former Guideline 10) on promoting social inclusion and combating poverty, ⁸ which is monitored every six months in the European Semester. ⁹ The European Platform against Poverty and Social Exclusion further implemented the objective. ¹⁰ It was also included in the Commission’s Social Investment Package ¹¹ and it is a thematic objective of the European Structural and Investment (ESI) Funds (including the European Social Fund). ¹² In 2014, the EU launched the Fund of European Aid for the Most Deprived (FEAD), which aims to support Member States in their efforts to provide food for, and meet the basic needs of, the most disadvantaged. ¹³

There is no doubt about the fact that the fight against poverty and social exclusion is a policy objective that is high on the political agenda of the European institutions and, accordingly, it has been embedded in a considerable number of policy instruments. Beyond these instruments, the objective is further supported by a number of provisions in the Treaties as well as in the EU Charter of Fundamental Rights (CFREU). Article 9 TFEU declares that ‘in defining and implementing its policies and activities, the Union shall take into account requirements linked to […] the fight against social exclusion’. Furthermore, Article 3(3) TEU confirms that within the context of the ‘social market economy’ the EU ‘shall combat social exclusion’. Article 151(1) TFEU also refers to the combatting of social exclusion as an objective of the Union, and Article 34(3) CFREU recognises the right to social and housing assistance as a means of combatting poverty and social exclusion. However, neither these provisions nor the policy instruments have a direct impact on legal claims for financial or other support by persons faced with poverty or social exclusion.

As far as secondary legislation is concerned, the objective of fighting poverty and social exclusion and the general legal provisions aforementioned have not been implemented by secondary law instruments that are drafted for this purpose specifically. However, a significant corpus of social law has developed in other fields, ¹⁴ most notably, free movement and anti-discrimination law and, accordingly, they have an (indirect) impact on poverty and social exclusion. While this indirect impact is generally positive, it may at times be negative as a consequence of mismatches, gaps or opposing interests. ¹⁵  In any case, most of these rules remain neutral, as it is up to the Member States to define their social protection nets as they see fit, including essential aspects in the fight against poverty and social exclusion such as coverage and adequacy. In this vein, there seems to be an apparent discrepancy between the clear policy objective of combatting social exclusion and the lack of legal translation of the objective into implementing acts, regardless of the limited progress made towards eradicating poverty, both at substantive and governance levels.

The weak results of these policy instruments show that social investment strategies and employment policies are important but not sufficient. ¹⁶ Similarly, the substantive shift towards activation, more inclusive labour markets and social investment has not resulted in reduced poverty rates, indeed the converse may be true. The current social acquis, which is open and flexible, lacks the necessary bite to truly address growing incapacities of national welfare states. This, in turn, exposes a clear discrepancy between law and policy as this objective does not translate into possible individual legal claims.

On a more positive note, after a long period of stagnation in the field of social policy, the EPSR renewed the conversation on social Europe, not only from a political but also from a legal standpoint. In spite of not being a legally-binding instrument in itself, in its short life the 20 principles and rights enshrined therein have served as a compass to put forward a number of proposals, some of which are discussed in this Special Issue. ¹⁷ Even though the protection against poverty and social exclusion is not enshrined as a right per se, most principles, particularly those in the last chapter on social protection and social inclusion (principles 11-20) clearly capture some of the many different aspects of the multidimensional phenomena of poverty as well as the special position of a number of vulnerable groups. During its five-year mandate, the Juncker Commission made considerable progress on social policy matters. ¹⁸ The new von der Leyen Commission seems almost equally committed to delivering on the EPSR and, in spite of the current situation, has so far maintained its commitment to exploring potential instruments on fair minimum wages ¹⁹ and an unemployment reinsurance scheme. ²⁰

As regards the Covid-19 crisis measures, and notwithstanding some initial talks regarding the reactivation of the European Stability Mechanisms, ²¹ the Commission has opted to inject the considerable sum of EUR 750 billion, ²² the so-called Next Generation EU, ²³ and support Member States in their current efforts ²⁴ by easing fiscal and legal constraints for national governments so that they can adopt the necessary measures and additional funding can be allocated. ²⁵ At the heart of the Next Generation EU lies the Recovery and Resilience Facility that aims at assisting Member States to address the economic and social impact of the Covid-19 pandemic while ensuring that the economy makes a green and digital transition, thereby becoming more sustainable and resilient. ²⁶ Differently, in some recent Conclusions, the Council emphasised the importance of strengthening minimum income protection in the context of the Covid-19 pandemic to fight poverty and social exclusion. ²⁷ If this recovery is truly driven by solidarity, coherence and cohesion, ²⁸ then the EU should put the well-being of its population at the very heart of the discussion. It is in this context that our Special Issue aims at outlining the possible role of EU law in this future endeavour.

3. Outline of this Special Issue

This Special Issue looks at the challenge of poverty from a number of different standpoints. Firstly, it places the discussion of poverty and social exclusion in the greater context of fundamental rights law. It further focuses on the impact of some aspects of free movement on poverty and social exclusion, which will raise the question of whether free movement prevents or rather provokes poverty and social exclusion. It then continues with an overview of this renewed commitment to a social Europe by first analysing a number of initiatives that have come out of the EPSR to then focus on formulating a number of legal ‘solutions’ to the challenges posted by poverty at the EU level, which are also based on this new EPSR-geared momentum.

This Editorial is followed by a contribution that sets the issue of poverty and social exclusion at the EU in the broader context of human rights and social assistance. In their contribution, Eddie Bambrough and Gijsbert Vonk make an analysis of the substantive meaning of social assistance as a human right. Their article aims at critically studying the feasibility of a human rights approach to social assistance and to do so by examining a number of ground-breaking court cases heard by international, European and national (quasi-) judicial bodies. The main objective of their contribution is to study how normative human rights principles can (if at all) comply with system-specific idiosyncrasies that are inherent to the practical reality of social assistance law and administration. To this end, they present four case illustrations that show how the right to social assistance is operationalised at different levels. The analysis displays how the substantive meaning of the right to social assistance organically evolves in the process of confronting human rights principles with specific system characteristics of social assistance.

The following two contributions focus on the impact of existing EU law instruments on implementing the Union’s objective to combat poverty. In this vein, Herwig Verschueren first analyses the impact of EU free movement law, and particularly social security coordination, on the prevention of poverty. In his article, Verschueren explores how a significant corpus of social law has developed under the umbrella of social security coordination, which has made a significant contribution, over the years, towards preventing migration-induced poverty. He outlines the contours of social security coordination by discussing its general principles and their role in preventing poverty insofar as the determination of the applicable legislation, prohibition of discrimination on the grounds of nationality, aggregation of periods and export of benefits guarantee the access or retention of migrants’ social rights. Even though he reports that in most situations social security coordination has a positive impact in preventing migration-induced poverty, he also notes a number of flaws or mismatches in this coordination that might threaten not only the citizens’ right to move freely across the EU but their overall well-being. Ultimately, and in as much as social security coordination might contribute to preventing poverty, these EU rules remain neutral and, hence, their impact is relative as it remains up to each Member State to organise their internal social protection system, including essential aspects such as adequacy and coverage.

Also on the topic of free movement, Catherine Jacqueson examines how EU economic law creates risks of social dumping at the same time that it remedies them. She argues in favour of a rebalancing between, on the one hand, the liberal ethos of the principle of free movement and competition law and, on the other, the social objectives of the EU. Key to her contribution is the question of whether it is possible to redress the balance between the economic and the social from within the principle of free movement or if, on the contrary, the social push needs to be addressed from outside.

The subsequent contributions discuss the added legal value of what is, in all likelihood, the most salient social move of the EU in decades: the EPSR. In this vein, Bartłomiej Bednarowicz studies two legal initiatives that have emerged from the EPSR: Directive 2019/1152 on transparent and predictable working condition and Directive 2019/1158 on work/life balance. He argues that while the former attempts to address the question of an adequate response at the EU level to combat precarious employment and provide decent jobs with fair working conditions, the latter focuses on increasing social inclusion of all workers. According to him, both targets go hand-in-hand, as both Directives complement each other in the overarching goal of achieving social upward convergence and cover different gaps to ensure an adequate protection against social risks.

In the subsequent article, Paul Schoukens scrutinises another EPSR-led initiative, the recent Council Recommendation on access to social protection for workers and the self-employed, particularly through the lens of platform work. In his contribution, he argues that due to a number of fundamental features of this type of atypical work and how this differs greatly from more traditional forms of employment, the Recommendation is not fit to improve, at least significantly, the living conditions of this often-vulnerable part of the workforce. In doing so, he eloquently dissects these diverging features to outline the deficiencies of the Recommendation. In view of these, he advocates a gradual shift from work (labour) protection towards ‘income’ protection as the key transformation needed to achieve social protection.

The fourth and last block of contributions, discusses two potential future initiatives that could be adopted also in the context of the EPSR, and aim, in different ways, at establishing a minimum social floor in respect of adequate income as a way of addressing poverty and social exclusion. The first contribution focuses on yet another work-related social risk, namely, the issue of securing adequate minimum wages. Amidst the increasing discussions surrounding the adoption of an EU-wide minimum wage instrument, Sarah Marchal summarises the arguments in favour of taking a coordinated approach to minimum wages. She centres her assessment on the recent consultation process of the Commission, ²⁹ that also emanates from the will to deliver on the EPSR (principle 6). She examines matters related to the promotion of an EU target minimum wage in the form of a percentage of a national reference wage, which is crucial vis-à-vis ensuring the adequacy of minimum wages for the workers and their families. In doing so, she highlights two essential caveats that ought to be considered for such a coordinated approach to ensure adequate in-work incomes: a number of technical issues relating to the definition of the reference wage as well as the interaction between minimum wages and tax benefit systems. Considering these caveats, she launches a plea for incorporating a clear definition of the objectives into a potential initiative and to consider the need for additional accompanying measures to meet specific goals, inter alia, a monitoring system of net incomes of minimum wage earners.

While most of the contributions to this Special Issue focus one way or another on targeting work-related risks, the EU also has (limited) powers to help those out of work, even when these have only been used marginally. In this vein, Ane Aranguiz analyses the possibility of adopting a legally binding instrument on minimum income in the form of a framework Directive. When formulating the proposal for the Directive, Aranguiz refers to the right to a minimum income as enshrined in Principle 14 EPSR. The contribution first examines the context of this proposal and the importance of minimum income schemes in improving the living standards of the population to then explore the possibilities for legal action under the current Treaty framework. In her contribution, she emphasises the importance of choosing adequate methodologies that aim at securing adequate incomes to live a life in dignity in any given Member State, thus allowing for country specificities. In this vein, she argues that these methodologies are equally important to comply with the principles of subsidiarity and proportionality.

The Special Issue closes with a concluding contribution by Frank Vandenbroucke who skillfully creates bridges between a number of contributions and places them in the context of (unsuccessful) past strategies for addressing the challenge of poverty and social exclusion and the way forward in the near future. In doing so, he sheds some light on the bigger picture addressed in this Special Issue and the need for a more involved EU in buttressing the basic ‘nuts and bolts’ of European welfare states.