Streamlining open coordination in the field of social protection

With the intention of complementing and adding value to the policy coordination methods and processes of Member States in the social field, the Commission presents a communication aimed at streamlining the open method of coordination. This streamlining should strengthen the quality and coherence of the European Union's (EU) global socio-economic governance.

ACT

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Strengthening the social dimension of the Lisbon strategy: Streamlining open coordination in the field of social protection [COM(2003) 261 final - Official Journal L 314 of 13.10.2004].

SUMMARY

This communication from the Commission derives from the need for policy cooperation and coordination in the field of social protection. While the Member States retain full responsibility for the financing and organisation of their protection systems, the role of the Community is essential in supporting and complementing activity in this field, as outlined in the Treaty of Amsterdam and Treaty of Nice. The Lisbon conclusions (March 2000) also saw modernised and improved social protection systems as an important building block towards achievement of the objective of an integrated socio-economic strategy for Europe within the next ten years (2000-2010).

Strengthening the social dimension of the Lisbon strategy

Policy cooperation in the field of social protection took a huge step forward when the Lisbon European Council outlined its vision of an integrated socio-economic strategy for the decade to 2010. Contributing to this strategy involves streamlining the economic and employment policy coordination processes.

Economic policy coordination is organised within the framework of the Broad Economic Policy Guidelines (BEPGs), multilateral surveillance (aimed at assessing the implementation of the BEPGs) and the Stability and Growth Pact. As for employment policy coordination, this is organised within the framework of the European Employment Strategy (EES) and the European Employment Policy Guidelines (EEPGs) - which set out common objectives and priorities for employment policies and which are put into practice nationally through National Action Plans (NAPs). The overarching objectives are full employment, quality at work, the promotion of social cohesion and inclusion.

This streamlining has been a major achievement, but due to the major expansion in the number of different procedures concerned with coordinating economic and related policies, the need to better streamline the Open Method of Coordination (OMC) in the field of social protection is clear.

The Open Method of Coordination and its role within the strategy as a whole

The OMC has been considered by the Lisbon European Council as a mechanism for coordinating and taking forward work in the fields of social inclusion and pensions, which has allowed progress to be made in these areas. Nevertheless, questions regarding health and long-term care - key issues for the development of Europe's social model - have not yet been considered within the framework of cooperation in social protection. It is therefore necessary to define which methods are the most appropriate to deal with these issues.

The Commission believes that the currently segmented organisation of work should be replaced, and future work brought within a unified structure referring to social protection as a whole and organised in principle into three pillars relating to the three policy areas of social inclusion, pensions and health and long-term care.

The application of the OMC was introduced at the Lisbon European Council as a means of spreading best practice and achieving greater convergence towards the main EU goals. It was conceived as a flexible governance method, in complement to the existing Community method and other Treaty-based procedures, such as the BEPGs and the EES, which continue to be the Community's core instruments. The OMC is used on a case-by-case basis, alongside the programme-based and legislative approach in some areas, such as employment and social policy. In short, it should be a complement, rather than a replacement, for Community action and always take account of the institutional balance.

It will be the role of future cooperation in the field of social protection via the OMC to undertake a detailed analysis of the issues which confront national systems and the particular contribution which they will be able to make to the Lisbon strategy.

In order to establish a streamlined approach to integrated policy cooperation for the three pillars of social protection policy (social inclusion, pensions and health and long-term care), the Commission proposes that the set of objectives to be achieved be reviewed and replaced by the Council in 2006, acting on a proposal from the Commission. The new set of common objectives should be defined under the Lisbon strategy and closely connected with the BEPGs and the EEPGs, which will be adopted in 2006. Progress achieved within the OMC in the field of pensions should also be examined in 2006.

The set of common objectives should also include a limited number of cross-cutting issues that have a more general relevance, such as gender mainstreaming.

Reporting mechanisms

The key instrument of the new streamlined process will consist of a Joint Social Protection Report, drawn up by the Commission and the Council, which will assess progress made across the full range of common objectives. This report will replace the "Social Protection in Europe Report" provided for under the Decision establishing the Social Protection Committee and will take effect from 2005. In 2006, Member States will feed into the preparation of the Joint Social Protection Report, setting out their strategy for reaching the common objectives; in 2007 and 2008, the reports submitted will focus on the progress made in implementing the strategies. After 2006, national reports will replace the NAPs on social inclusion and the National Strategy Reports on pensions.

Indicators

The big challenge for the new streamlined social protection process is to reflect progress in a transparent and effective way. Therefore, it is essential to establish an agreed set of common indicators. This requires a commitment from Member States to develop such key instruments as ESSPROSS (expenditure on the different branches of social protection), SILC (the annual Community-wide survey of the income and living conditions of households) and SHA (system of health accounts).

The period of 2003-2006 should be used to prepare the conditions for launching the new process. During this period, initiatives in the field of social inclusion, pensions and health care will be undertaken.

This communication also indicates the steps to be taken in the transition to streamlining in 2006 (Annex 1); outlines the implementation of streamlining during 2006-2009 (Annex 2); and shows how streamlined social protection will function alongside the streamlined BEPGs and EES in the period after 2006 (Annex 3).

RELATED ACTS

Proposal for a Regulation of the European Parliament and of the Council on the European system of integrated social protection statistics (ESSPROS) [COM(2006) 11 - Not published in the Official Journal]Codecision procedure (COD/2006/0004)

Council Conclusions of 20 October 2003 on open coordination for adequate and sustainable pensions [Official Journal C 260 of 29.10.2003] [PDF ]

Communication from the Commission. A concerted strategy for modernising social protection [COM(1999) 347 final - Not published in the Official Journal].

Last updated: 25.01.2005