Commission publishes concerted strategy for modernising social protection

In July 1999, the European Commission published a Communication on "A concerted strategy for modernising social protection". This new document follows on from the 1997 Communication on modernising social protection and outlines key challenges to EU social protection systems and the Commission's proposals for how Member States should address these issues.

The European Commission believes that, in order for social protection to be sustainable and progress into the next century, a clear strategy needs to be implemented by Member States, with whom responsibility for their respective social protection systems ultimately lies. However, in a new Communication entitled A concerted strategy for modernising social protection(COM (1999) 347), issued on 14 July 1999, the Commission also recognises the importance of developing a close dialogue between Member States and EU institutions on the future of social protection systems. The Communication follows up the 1997 Communication

In its new Communication, the Commission highlights that the need to review social protection systems arises from demographic changes, changes in the labour market and changes in family structures. All these changes require a modernisation of social protection systems to ensure that economic and social progress sit comfortably together and reinforce each other. The key areas to be addressed, as identified by the Communication, are in the areas of employment, healthcare, pension reform and promoting social inclusion.

The Commission argues that the current European employment strategy facilitates Member States's efforts to address the reform of social protection systems through the annual process of drawing up Employment Guidelines at EU level and National Action Plans for each country. It is argued that this process helps to encourage a more active labour market, leading to fuller employment and therefore reducing the numbers of people dependent upon social protection systems. This is very important, given that demographic changes indicate a huge rise in the 65 population over the next 20 years (EU9909189N). Consequently, the Employment Guidelines address social protection systems, either directly or indirectly, promoting more "employment-friendly" strategies through increasing equal opportunities, encouraging family-friendly employment, encouraging long-term unemployed people to return to the labour market through tax and benefit incentives and strengthening the role of public employment systems. The Guidelines are also aimed at older workers, encouraging lifelong learning and improving measures to retain older workers in the labour market, rather than using early retirement options.

The Commission would like the Council of Ministers to endorse the following four objectives that it proposes for Member States, aimed at moving towards a concerted strategy for modernising social protection:

1. making work pay and providing a secure income. This is largely addressed through the European employment strategy, as mentioned above. This is to be achieved, it is hoped, by encouraging entrepreneurship, reviewing tax and benefit systems, increasing work flexibility (eg part-time and temporary work) and creating social protection systems that can adapt to this, reducing long-term unemployment, encouraging "family-friendly" working policies and reviewing fiscal policies. It is argued that these aims will address the changes occurring in the labour market, increasing labour market participation and providing "a new balance between security and flexibility and moving away from more traditional models of social protection";

2. making pensions safe and sustainable, guaranteeing a satisfactory replacement income for pensioners, discouraging early dependency upon pensions through early retirement, and reviewing how pensions can work effectively alongside other social protection systems. The introduction of the euro single currency is seen to have significant implications for social protection policies and it is argued that the monetary stability and economic growth offered by Economic and Monetary Union provide a more secure framework for pensions;

3. examining ways to promote social inclusion, reducing poverty and exclusion among individuals of all ages by strengthening the safety nets of social protection systems, and taking measures to encourage labour market participation when appropriate; and

4. seeking to ensure that healthcare is of a high quality and is sustainable and that demographic changes will not overstretch healthcare provision. Individuals will be encouraged to lead more healthy lifestyles, thereby taking steps to improve personal health. A review of care provision is also necessary, not only to support the increase in the older population, but also to ensure that care, whether formal or informal, is not "gendered". This should then facilitate equal participation of both men and women in the labour market.

Together with representatives from each of the Member States, the Commission will closely monitor developments taking place concerning the modernisation of social protection systems. Furthermore, the Social protection in Europe report, currently published every two years, will now be published annually to keep abreast of developments. It is hoped that all key actors across all Member States - including non-governmental organisations, social partners and Community institutions (including the European Parliament, Economic and Social Committee and Committee of the Regions) - can enjoy close cooperation on policy developments to ensure the modernisation of social protection systems in the next century.