European Social Policy in the Covid-19 Crisis

Silvana Sciarra

Italian Constitutional Court & University of Florence

Editors’ Note: This post is part of an IACL-AIDC Blog Symposium, Social Rights During and After COVID-19. The full set of posts can be found here.

The main argument I wish to offer to wider discussions on the legal dimensions of the responses to the Covid-19 pandemic is centred on the effects of the emergency measures adopted in the wake of the crisis, which inevitably developed into economic and social disruptions. The methodology policy makers ought to adopt should be long-sighted, while dealing with temporary solutions. The possible directions for these policies will no doubt need to be framed within the existing legal and political constraints while also being mindful of the need to respect and fulfill the principles set out in the European Social Pillar, which includes equal opportunities and access to the labour markets, the adoption of fair working conditions, and social protection and inclusion. All of these essential components will be implicated in future action at the European level, and it is therefore imperative that a systematic view of legal systems, both national and supranational, should prevail. Hence it would be problematic to transform emergency measures into permanent ones. Legal systems should continue to breathe the air of shared fundamental constitutional values which are meant to facilitate further evolving steps, in less trying times.

Opening of Political Space for a Renewed Dialogue

At the launch of her mandate as President of the European Commission, Ursula von der Leyen put forward promising plans to reconcile ‘the social and the market’ and implement the European Pillar of Social Rights. One of the promises she then kept was to start the consultation of the social partners for a European measure on minimum wages. This was a remarkable step, because it revived social dialogue (art. 154 of the Treaty on the Functions of the European Union - TFEU) on a very sensitive theme. Low wages throughout the EU had frequently been recalled as one of the contentious inheritances of the global economic and financial crisis in the aftermath of which several European supra-national institutions played a vital, yet contentious role.  The European Commission’s Recommendations during the European Semester often concentrated on this and related issues, recalling states’ responsibility in establishing fair working conditions, as well as in enhancing growth. Fair wages were also central in rulings delivered by several Constitutional Courts, arguing on the compatibility of austerity measures with fundamental rights and establishing criteria of proportionality and reasonableness. Comparable wages for work of equal value were also crucial in reforming European secondary legislation on posted workers. Some of them continue to cross borders during the pandemic because they provide essential services in the health sector and have been granted special permissions to circulate.

Despite the scepticism of Business Europe and the reluctance of Nordic unions to enter the field of wage policies, the floor has been opened for a discussion. This discussion,  will prove to be highly stimulating in strict legal terms, considering that wages are excluded from EU legislative competences (art. 153.5 TFEU) and yet included in soft-law recommendations. Furthermore, the European Social Pillar (adopted by the  European Parliament, the Council and the European Commission in 2017) refers to this principle, recalling most relevant international sources. A closer coherence with international standards is of extreme relevance when discussing ‘adequate’ wages and framing them in an interconnected economic context.

The public health dimension of the Covid-19 pandemic, which has been the most urgent priority for policy-makers, continues to remain pressing. However, wages should be kept at the core of future social policies and run parallel to other measures of economic support for people who were compelled to stay at home with no income. The fear that there will be unemployment caused by the pandemic should not distract policy makers from terminating the consultation on minimum wages. To the negative imaginary of an austere Europe which was complicit in rolling back citizens’ rights during the economic crisis, no other destructive symbols should be added. A sign of attention to dignity could be connected to fair wage policies, especially during the incoming German presidency of the EU. In Germany, legislation on minimum wages was enacted in 2014, in line with recommendations coming from European institutions. The results of this reform are promising.

Establishing the Net and Funding Recovery: Possible Options

The President of the Commission had also put an emphasis on the ‘European Unemployment Reinsurance Scheme’, a project sponsored by her predecessor and widely discussed in academic circles. Even in this case, the emergency caused by Covid-19 imposed a sudden change of manoeuvre. Hence, on April 2, 2020, the Proposal for a Council Regulation on the establishment of a measure for ‘temporary Support to mitigate Unemployment Risks in an Emergency’ (SURE) was presented. This instrument should be made available to Member States on a temporary basis, unlike the EU Solidarity Fund, which should now be extended to cover major public health emergencies. The lending scheme underlying both instruments is ‘underpinned by a system of guarantees from Member States’. The idea is to provide financial assistance on short notice and to implement work schemes for both employees and self-employed persons at risk of unemployment. The legal basis is in art. 122 (1) and (2) of the TFEU. Principles of subsidiarity and proportionality should guide recourse to this Fund, accessible under precise circumstances, whenever a relevant increase in public spending is required to counteract unemployment caused by the Covid-19 outbreak.

The technicalities connected to the functioning of this new proposed instrument arise due to its need to be compatible with the multiannual financial framework. It should be appreciated as the necessary means in complying with a transparent management of the funding required. SURE is intended to complement national initiatives in support of the unemployed and must be requested by the Member State in need of sustenance. This, in turn, has the capacity to induce synergies and good practices. Therefore, the initiative taken by each single state should be at the centre of public debates. However, it is also imperative that the EU’s support is made visible while also showcasing the anticipated benefits of these combined measures at the national and supranational levels. Good communication is also part of renewed trust in the EU. 

However, in an overall strategy of budgetary reforms that should keep EU institutions occupied in the very near future, long-sighted proposals must be presented. Social policies – with few exceptions – have typically lacked the support of specific EU budget lines. The Youth Guarantee scheme is temporary and should be turned into a permanent measure, to combat youth unemployment.  On April 17, 2020 the European Parliament voted in support of the proposal to use uncommitted money from the cohesion policy funds, lifting the burden of co-financing. This too is a path to follow and to explore even further for all available structural funds.

Pathways to New Solidarities

The Covid-19 outbreak is causing the positive effect of opening up new solidarities in a broad and generalised manner. Social policies are grounded in social dialogue, which is inherent in European traditions and mentioned in art. 152 of the TFEU. All this must not be forgotten, both in discussions taking place at EU level and in initiatives at national level.

In Italy, on March 14, 2020 a Protocol was signed by government, employers and unions to enforce guidelines on health and safety at work. Issues related to the public interest acquire stronger credibility once they are the outcome of negotiations. Legislation later adopted refers to the Protocol and incorporates it in binding rules. Other agreements at a decentralised level have been signed, introducing detailed measures for companies, which are allowed to restart production. Furthermore, the legislature indicated that companies receiving economic support should guarantee employment stability and negotiate this with the unions.

It is not a minor point that negotiated solutions are encouraged and that the social partners become protagonists of the reconstruction. We need to listen to voices closely connected to the needs of all that are suffering and feel deprived of their rights. Employers’ associations and labour unions are now asked to measure their powers as representatives of very diffused interests. In responding to the Covid-19 emergency, we must avoid indifference and uncritical acquiescence.

Silvana Sciarra is Judge, Italian Constitutional Court and Emeritus Professor of Labour Law and European Social Policies, University of Florence.

Suggested Citation: Silvana Sciarra, “European Social Policy in the Covid-19 Crisis” IACL-IADC Blog (14 May 2020) https://blog-iacl-aidc.org/social-rights/2020/5/14/european-social-policy-in-the-covid-19-crisis