Social protection facing the twin transition: no time to waste

Ladies and gentlemen

Let me thank the Director, Ilka Wölfle, for her kind invitation to intervene in this high-level event to celebrate the 30^th anniversary of the European Representation of the German Social Insurance. I am pleased to be here today at Representation of the State of Hessen.

I think the title of the conference Bismarck on the move: Get digital. Go green could not be best conceived to grasp the challenges faced by our social security systems, at the same time they underscore both the deep roots and the transformative nature of contemporary welfare states.

Let me start with a quick flashback to Covid-19. I think there are two lessons that we have learned from the pandemic.

First, it is easier to fight a pandemic with an inclusive welfare state that provides broad and well-organised access to sickness and unemployment benefits and to short-time working arrangements for all its citizens—regardless of their employment contract or status, the type of job they do or the sector in which they work. How can one tell people they should stay home when infected, if there is no universal system of sickness benefits? How can one curtail – as we did - social and economic activities without support for those whose jobs and businesses are affected? So we really needed social security to fight Covid.

Secondly, even well-organised national welfare states reach limits in the face of such a global challenge. European solidarity was key to reinforce national response capacities, with the SURE programme to sustain employment, the Recovery and Resilience Facility and the joint procurement of vaccines. I also think that the pandemic also exposed structural weaknesses in existing welfare states—gaps in outdated social-protection arrangements which make them less inclusive than they should be in such a time. If Europe is to become a true ‘social union’—a supportive environment for its welfare states, well-prepared for the cross-border health threats and emergencies to come—there is still a long way to go.

Now, having in mind these two positive conclusions from the Covid experience, we believe there is still a long list of to-do’s to valorise the added value. 

The Belgian Presidency: time for responsibility

Let me start then with the current agenda.

I read with great interest the discussion paper you have prepared for the first panel discussion on ‘Mobile working in the digital transformation’ and – to be very short - I can say that you can count on the Belgian expertise and support for the implementation of all files mentioned.

You rightly stress that the digitalization of social security is a key step to make our social protection systems more citizen-friendly but also a key tool to improve cross-border cooperation and fight undeclared work and benefits fraud. As you well know, Belgium is a convinced supporter of a strong role for  the digitalization of social security systems (e.g. Crossroads Bank for Social Security, LIMOSA).  

In our opinion, the EU should create an easy-to-understand, modern, interoperable, cross-border infrastructure for data exchange: all Member States should be able to easily but securely exchange information relevant to social protection amongst each other.

Our priority is that in 2024 the Electronic Exchange of Social Security Information (EESSI) is fully implemented and operational. In line with the conclusions drawn by the Czech Presidency on the subject, proper attention should be given to the quality of the exchanges in EESSI. For this, some synergies with the European Labour Authority could also be envisaged.

We also think that it would be good to put some order in the current fragmentation of EU digitalization of social security systems’ projects. There are EESSI, ESSPASS, eIDAS, OOTS, EBSI, etc.[1] This is a lot. It is difficult to keep the oversight ^. And this is why I look forward to the announced Communication by the Commission on that subject.

There is also a clear link between the digitalization of social security agenda and the Revision of Regulation on social security coordination, which is per se a very important topic. We still hope a final compromise for the whole package can be found. Although we must admit  the proposed shift of paradigm (lex loci laboris for entitlement of unemployment benefits ) raises administrative (and political) concerns in terms of feasibility and sufficient shared responsibilities between member states concerned with regard to activation policies and fulfilment of benefits conditions, we are open to support the current text on the prior notification and how this would be verified.

Let me say a final word on the Platform Work Directive.  Our position is clear: we want to protect as many workers as possible through a clear and easy-to-apply presumption, without derogation, which should be applicable in all relevant procedures. Belgium also pushed for regulating those situations where platforms act with the help of intermediaries. Now a general approach is found in the Council, the joint Spanish-Belgian commitment is to reach the soonest a provisional agreement with the Parliament.

The Belgian Presidency: time for vision

Now let me move to the general ambition of the Belgian presidency.

Indeed we come at a critical juncture. We have to wrap up a number of files at the end of the legislature. Simultaneously we must be ambitious because we can contribute to set the strategic agenda in social affairs for the next five years. That we simply must do.

Given the time I will not elaborate on everything but keeping the Pillar of Social Rights very high on the agenda as an overarching concept, a set of comprehensive and integrated guideline to steer policies and instruments that the EU has at its disposal. This is to us very important. So the European Pillar of Social Rights will be a key point in our Presidency. And it should be further implemented. It is an unfinished business.

Let me touch on access to social protection. There is a dimension of access to social protection that is linked to labour mobility. But access to social protection is also an issue for non-mobile citizens

Let’s be a bit self-critical.

Despite the substantial progress and the innovations introduced during the pandemic, social-security systems still rely too much on traditional schemes, designed for workers with a full-time contract of indefinite duration. They are ill-equipped to protect vulnerable groups. Low- or unskilled employees typically in poor weaker sectors, the bogus self-employed, ‘flexible’ workers and casuals and platform workers often do not enjoy access to a vast number of social transfers or do so only partially.

Social-protection systems that no longer accommodate a significant part of the workforce have bad consequences—not only for the individuals but also for the functioning of labour markets, for the stabilisation capacity of welfare systems and their funding. The 2019 council recommendation, an important spin-off of the Social Pillar, which calls on member states to ensure formal and effective coverage through adequate and transparent social-protection systems was an essential positive step. Yet, despite some progress, its implementation has been poor and most member states still fail to address some of the gaps in social protection.

Faced with these challenges, I believe, the next Commission should place the implementation of principle 12 of the Social Pillar on social protection, again, at centre of the social agenda.

And we believe as a very first very step, the next agenda should give new life to the 2019 Recommendation on Access to Social Protection. As I have stressed in other occasions, as of today there is no reporting foreseen by the Commission after the report published in January, while the current monitoring framework remains still at its Version 0 with all the limits that have been largely highlighted in the work of the Joint Research Centre.

Therefore, so we should give longer life to the Recommendation. And so, the first option that we think should be pursued consists in what follows:

• An update of the current monitoring framework, with a specific attention to the indicators on adequacy and transparency of social security benefits
• The development of a triannual report – prepared by the Social Protection Committee – on the main trends at national level with respect to access to social protection.
• This report can be accompanied by a specific analysis on financing of social protection, including both financial and social protection whereby you combine aspects of design and delivery. There is a challenge in terms of financing of our social protection systems, which is linked to the sustainability of our welfare systems and the interplay between social security contributions and taxation as the two main sources of funding. It might be interesting to integrate an analysis of such trends with analysis on access to social protection.
• To further strengthen the cooperation and bench-learning on social protection-related developments among the Member States, the creation of a European network of national social security institutions could be envisaged. I know more about the European network of Public Employment Services because I have been Minister of Employment. SO why not creating the same also for socials security institutions?

I think this is a kind of obvious agenda if we do not want to forget about principle 12. But maybe we should think about other spinoff, potentially legislative initiatives. I have  mentioned very briefly SURE, the importance of sort-time work arrangements, that were key as stabilizers when the pandemic hit. Access to short-time work arrangements should be inclusive independent of the type of employment contract duration etc. SO you might think about short-time work arrangement as a domain where access is something that has to be specified.

I just launched this idea. We are not completely decided on this. But I believe the Pillar is too important to just let one of the principles simply dye. We should move forward with that principle. And we should mobilize different instruments we have: soft coordination, reporting, mutual learning but why not thinking also about legally binding initiative that can be seen as spinoff of that principle.

But let me conclude. It is clear that the road towards a fully-fledged implementation of principle 12 of the European social union is still long and winding and a lot remains to do. And the same holds for other principles and other initiatives linked to the Pillar, like the European Labour Authority. This is also part of our agenda. We should have an evaluation of this excellent initiative and see how we can make it stronger in the future.

My time is over. But I think our Presidency should have the ambition to set the strategic agenda for the future, together with you. You will today talk about very crucial challenges, about what is traditionally important, and how this is part of a rapidly society

I wish you the best for today’s high-level conference and I am certain the panel will be extremely interesting!

[1] EESSI (Electronic Exchange of Social Security Information), ESSPASS (European Social Security Pass), eIDAS (Electronic Identification and Trust Services), OOTS (Single Digital Gateway), and EBSI (European Blockchain Services Infrastructure).