Committee on Employment and Social Affairs. on employment and social policies of the euro area (2018/2034(INI))

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1 European Parliament Committee on Employment and Social Affairs 2018/2034(INI) DRAFT REPORT on employment and social policies of the euro area (2018/2034(INI)) Committee on Employment and Social Affairs Rapporteur: Krzysztof Hetman PR\ docx PE v01-00 United in diversity

2 PR_INI CONTTS Page MOTION FOR A EUROPEAN PARLIAMT RESOLUTION... 3 EXPLANATORY STATEMT... 9 PE v /9 PR\ docx

3 MOTION FOR A EUROPEAN PARLIAMT RESOLUTION on employment and social policies of the euro area (2018/2034(INI)) The European Parliament, having regard to Article 5 of the Treaty on European Union (TEU), having regard to Articles 9, 145, 148, 152, 153, 174 and 349 of the Treaty on the Functioning of the European Union (TFEU), having regard to the Interinstitutional Agreement of 13 April 2016 between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making 1, having regard to the Charter of Fundamental Rights of the European Union, and, in particular, to Title IV (Solidarity) thereof, having regard to the UN Convention on the Rights of Persons with Disabilities, having regard to the UN Sustainable Development Goals, in particular goals 1, 3, 4, 5, 8 and 10, having regard to the Five Presidents Report of 22 June 2015 on Completing Europe s Economic and Monetary Union, having regard to the Council recommendation of 14 May 2018 on the economic policy of the euro area 2, having regard to the Council conclusions of 7 December 2015 on the promotion of the social economy as a key driver of economic and social development in Europe, having regard to the Commission communication of 23 May 2018 on the 2018 European Semester - Country-specific recommendations (COM(2018)0400), having regard to the Commission communication of 22 November 2017 entitled Annual Growth Survey 2018 (COM(2017)0690), having regard to the draft Joint Employment Report from the Commission and the Council of 22 November 2017 accompanying the Commission communication of 22 November 2017 on the Annual Growth Survey 2018 (COM(2017)0674), having regard to the Commission proposal of 22 November 2017 for a Council decision on guidelines for the employment policies of the Member States (COM(2017)0677), and to Parliament s position thereon of 19 April , 1 OJ L 123, , p OJ C 179, , p Texts adopted, P8_TA(2018)0181. PR\ docx 3/9 PE v01-00

4 having regard to the Commission recommendation of 22 November 2017 for a Council recommendation on the economic policy of the euro area (COM(2017)0770), having regard to the Commission report of 22 November 2017 entitled Alert Mechanism Report 2018 (COM(2017)0771), having regard to the Commission communication of 22 November 2017 entitled 2018 Draft Budgetary Plans: Overall Assessment (COM(2017)0800), having regard to the Commission communication of 26 April 2017 entitled Establishing a European Pillar of Social Rights (COM(2017)0250), having regard to the Commission communication of 26 April 2017 entitled An initiative to support work-life balance for working parents and carers (COM(2017)0252), having regard to the Commission staff working document of 26 April 2017 entitled Taking stock of the 2013 Recommendation on Investing in children: breaking the cycle of disadvantage (SWD(2017)0258), having regard to the Commission communication of 4 October 2016 entitled The Youth Guarantee and Youth Employment Initiative three years on (COM(2016)0646), having regard to the Commission proposal of 14 September 2016 for a Council regulation amending Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years (COM(2016)0604), having regard to the Commission communication of 14 September 2016 entitled Strengthening European Investments for jobs and growth: Towards a second phase of the European Fund for Strategic Investments and a new European External Investment Plan (COM(2016)0581), having regard to the Commission communication of 10 June 2016 entitled A new skills agenda for Europe Working together to strengthen human capital, employability and competitiveness (COM(2016)0381), having regard to the Commission communication of 2 June 2016 entitled A European agenda for the collaborative economy (COM(2016)0356), having regard to the Commission communication of 1 June 2016 entitled Europe investing again Taking stock of the Investment Plan for Europe and next steps (COM(2016)0359), having regard to the Commission communication of 8 March 2016 on launching a consultation on a European Pillar of Social Rights (COM(2016)0127) and its annexes, having regard to the report of 12 June 2018 of the Committee on Employment and Social Affairs on pathways for the reintegration of workers recovering from injury and illness into quality employment, having regard to its resolution of 14 March 2018 on the European Semester for PE v /9 PR\ docx

5 economic policy coordination: employment and social aspects in the Annual Growth Survey , having regard to its resolution of 16 November 2017 on combating inequalities as a lever to boost job creation and growth 2, having regard to its resolution of 26 October 2017 on the economic policies of the euro area 3, having regard to its resolution of 24 October 2017 on minimum income policies as a tool for fighting poverty 4, having regard to its resolution of 14 September 2017 on a new skills agenda for Europe 5, having regard to its resolution of 19 January 2017 on a European Pillar of Social Rights 6, having regard to its legislative resolution of 2 February 2016 on the proposal for a decision of the European Parliament and of the Council on establishing a European Platform to enhance cooperation in the prevention and deterrence of undeclared work 7, having regard to the concluding observations of the UN Committee on the Rights of Persons with Disabilities on the initial report of the European Union (September 2015), having regard to the European Court of Auditors Special report No 5/2017 of March 2017 entitled: Youth unemployment have EU policies made a difference? An assessment of the Youth Guarantee and the Youth Employment Initiative, having regard to Rule 52 of its Rules of Procedure, having regard to the report of the Committee on Employment and Social Affairs and the opinion of the Committee on Culture and Education (A8-0000/2018), A. whereas in January 2018 the seasonally adjusted unemployment rate in the euro area was 8.6 %, which was down from 9.6 % in January 2017 and constituted the lowest rate recorded in the euro area since December 2008; B. whereas among the euro area Member States the lowest unemployment rates in January 2018 were recorded in Malta (3.5 %) and Germany (3.6 %), while the highest unemployment rates were observed in Greece (20.9 % in November 2017) and Spain (16.3 %); C. whereas in January 2018 the youth unemployment rate in the euro area was 17.7 % 1 Texts adopted, P8_TA(2018) Texts adopted, P8_TA(2017) Texts adopted, P8_TA(2017) Texts adopted, P8_TA(2017) Texts adopted, P8_TA(2017) Texts adopted, P8_TA(2017) Texts adopted, P8_TA(2016)0033 PR\ docx 5/9 PE v01-00

6 compared with 19.9 % in January 2017; D. whereas in January 2018 the lowest youth unemployment rates in the euro area were observed in Estonia (6.5 % in December 2017) and Germany (6.6 %) while the highest were recorded in Greece (43.7 % in November 2017), Spain (36.0 %) and Italy (31.5 %); E. whereas the total employment rate for the euro area in 2017 was 71.0⁰ %, while the employment rate for women was 65.4 %; F. whereas labour market segmentation persists and affects in particular women, lowskilled, young and older people, people with disabilities and people with a migrant background; G. whereas universal access to quality and affordable healthcare is a basic societal need; H. whereas in 2016 the percentage of people at risk of poverty or social exclusion in the euro area was 23.1 %, and the in-work poverty rate in the EU-28 was 9.6 %; I. whereas in the euro area the long-term unemployment rate is decreasing (from 5 % in 2016 to 4.4 % in 2017), but whereas it still accounts for 48.5 % of total unemployment, which is unacceptably high; J. whereas the part-time employment rate in the euro area has remained stable since 2013, and whereas in 2017 part-time work accounted for 21.2 % of all contracts; 1. Notes that while the economic conditions in the EU are currently favourable and overall employment is steadily growing, there is still much room for improvement in terms of youth unemployment, labour market segmentation and inequalities, in-work poverty, productivity and wage growth; 2. Underlines that well-functioning social protection systems are an important precondition for inclusive national labour markets and the resilience of the euro area economy as a whole; 3. Welcomes the increased financial support, via the Structural Reform Support Programme (SRSP), for Member States to pursue their reforms; welcomes the Commission proposal to enlarge the scope of the SRSP to cover countries whose currency is not the euro, with the aim of fostering economic and social convergence throughout the EU; 4. Takes note of the Commission s 2018 country-specific recommendations (CSR) as an important part of the European Semester process and welcomes the special attention given in them to social challenges; notes with concern that only 50 % of the recommendations for 2017 were implemented fully or partially and therefore encourages the Member States to step up their efforts to implement the recommendations, in particular in the fields of education, sustainability of pension systems, and healthcare, including long-term care; 5. Underlines that job creation and wage growth have a significant impact on reducing PE v /9 PR\ docx

7 inequalities, improving standard of living and supporting economic recovery, and that Member States reforms should therefore focus in particular on policies that increase productivity and growth potential, support the creation of quality jobs and reduce inequality; 6. Welcomes the Commission communication of 13 March 2018 on monitoring the implementation of the European Pillar of Social Rights (EPSR) (COM(2018)0130), which aligns the Pillar with the European Semester cycle by reflecting the priorities of the EPSR in the analysis of measures taken and progress made at national level; 7. Notes that the labour markets of euro area countries differ significantly, which constitutes a challenge to their proper functioning; calls therefore for well-designed labour market policies that reduce labour market segmentation, promote equal opportunities, facilitate access to the labour market, increase labour mobility and reintegrate the unemployed; 8. Underlines the need to increase employment rates, in particular among low-skilled, young and older workers, women, migrants and people with disabilities, in order to achieve the Europe 2020 goal of an employment rate of at least 75 % and to mitigate the social and financial risks they face; 9. Calls on the Member States to take full advantage of the positive economic outlook and pursue labour market reforms fostering reliable labour contracts and tackling bogus selfemployment and promoting adequate social protection for all types of contracts; 10. Calls on the Member States to ensure the long-term sustainability of pension systems that do not overburden the younger generation, and to reduce the risk of poverty in old age; notes with concern that in some Member States the gender pension gap, as well as the rate of early retirement, remains high; 11. Underlines that adequate skills can be acquired and the skills mismatch tackled by improving the quality and accessibility of education and training, including targeted quality training and reinforcing upskilling and reskilling measures, which require appropriate support, including funding at EU, national and regional level; points to the need to increase the relevance of vocational training to the labour market; 12. Underlines the need to pursue reforms that prepare the labour market and its workforce for the digital transformation; highlights the need to modernise national social protection systems to provide adequate protection for employees in new forms of work and with new kinds of contracts; 13. Calls on the Member States to undertake the necessary reforms to increase the accessibility, quality and cost-effectiveness of their healthcare systems; 14. Points out the need for well-designed policies for a better work-life balance, including flexible working arrangements, take-up of advantageous family leave and adequate investment in affordable, quality childcare; sees, in this regard, the swift adoption of the directive on work-life balance for parents and carers as a necessary step towards improved work-life balance; PR\ docx 7/9 PE v01-00

8 15. Underlines the importance of enhancing structured dialogue and the participation of employers organisations and trade unions in implementing employment and social policies and reforms; 16. Instructs its President to forward this resolution to the Council and the Commission. PE v /9 PR\ docx

9 EXPLANATORY STATEMT This year for the first time, the Committee on Employment and Social Affairs prepared a separate report, and not as previously an opinion for Committee on Economic and Monetary Affairs, about the employment and social policies of the euro area. The rapporteur welcomes this development as he firmly believes the employment and social aspects constitute vital and immanent part of the overall economic policy and social cohesion and therefore require adequate attention. Jobs creation contribute to the economic development by supporting demand, reducing inequalities and improving the standard of living. The European economy is growing and the positive outlook is visible in public finances, investment and employment. The GDP of the EU is already higher than before the crisis and the unemployment rate in euro area in January 2018 was 8.6%, which was the lowest rate recorded since the end of Thanks to the reforms already undertaken in the Member States and the contributions from the Investment Plan for Europe the investments started to recover. It is important to take full advantage of these advancements and, as president Juncker stressed in the State of the Union address, fix our roof over Europe as the sun is still shining. While the overall economic conditions in Europe are positive, the situation particularly to what regards the youth unemployment, labour market segmentation and inequalities, in-work poverty, productivity, wage growth, pensions, social protection and healthcare systems leaves the room for improvement. The Commission s Communications on Country-Specific Recommendations (CSR) provide a good analysis of the needs of reforms and are an important part of the European Semester cycle. The rapporteur welcomes the fact that the European Pillar of Social Rights is from this year integrated into the Semester. However, at the same time the rapporteur is concerned by the insufficient level of implementation of CSRs by Member States, as according to the Commission s data since the beginning of the European Semester only 9% of the recommendations were implemented fully and as much as 30% of the recommendations were implemented in a limited way or not implemented at all. What is even more worrying is that this situation has a negative tendency as in 2017 only 1% of recommendations were implemented fully and as much as 50% of recommendations were implemented with limited or no progress. This situation constitutes a serious obstacle to the EU s reforms progress and needs to be urgently addressed. The rapporteur wishes to underline the fact that the simple decrease in unemployment rates is insufficient. Europe needs to create truly inclusive labour markets which provide a quality employment for all, including the disadvantaged groups such as women, young people, and persons with disabilities and with migrant background. The Member States reforms need to promote reliable labour contracts, tackle bogus self-employment and promote adequate social protection for all types of contracts. They should also allow for easy entry and re-entry to the labour market by promoting labour mobility, providing reintegration measures and proper training for unemployed and promoting equal opportunities. The challenges imposed by fast changing working patterns and digital transformation should also be addressed. Employees need to be equipped with adequate skills and therefore the opportunities for life-long learning and upskilling and reskilling opportunities must be created. The rapporteur perceives also a need for a better work-life balance policies which would allow for flexible working arrangements, advantageous family leave take up and for enhanced investment in affordable, quality childcare. PR\ docx 9/9 PE v01-00