6 June 2011

Last month the OSE (Observatoire Social Européen) published an opinion paper on the relationship between the current economic crisis and social investment entitled "The EU needs a social investment pact”. In the paper the authors (Vandenbroucke, Hemerijck & Palier) argue that long-term goals of social and economic policy in the EU should not fall victim to short-term policy orientations prompted by the financial crisis, but that a social investment impetus in Europe today is more acute than ever before. The publication highlights that the long-term repercussions of the crisis are far from benign as many of the jobs lost after 2008 will not come back, new jobs will require more qualifications and skill mismatches will grow rapidly in the coming years: by 2015 there will be an estimated shortage of 700,000 ICT specialists, including many unfilled vacancies in the social and health care sector. Vandenbroucke, Hemerijck and Palier argue that these are among the many reasons why social and labour market policies will have to be strengthened, rather than weakened; the current challenge is as much political as it is policy related.

The opinion paper stresses that the key challenge for the future is to make long-term social investment and short-term fiscal consolidation mutually supportive at both EU and Member State level. According to the authors, social investment means reform and in order to convince social actors of the necessity to reform, social investment strategies should be embedded in an attractive perspective of social progress, based on a shared notion of fairness and the political willingness to fight growing inequalities. Moreover, the authors draw the conclusion that in the long run a Social Investment Pact would impact positively on public finances solely on the basis of the employment and productivity growth that social investment induces.

Click here to download the OSE Opinion Paper: The EU needs a Social Investment pact.