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Explainer: Coronavirus Response Investment Initiative Plus

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How does the Coronavirus Response Investment Initiative Plus (CRII+) complement the measures adopted under the first package?

The first package of measures of the Coronavirus Response Investment Initiative concentrated on the immediate mobilisation of structural funds, to allow for a prompt response to the crisis. In this regard, a number of very important changes have been introduced that extend the scope of support of the Funds, provide immediate liquidity and give flexibility in programme amendments. The first Coronavirus Response Investment Initiative package consisted of three main elements: about €8 billion of immediate liquidity to accelerate up to €37 billion of European public investment, flexibility in applying EU spending rules and extend the scope of the EU Solidarity Fund.

Today’s package complements the first one by introducing extraordinary flexibility to allow that all non-utilised support from the European Structural and Investment Funds can be mobilised to the fullest. This flexibility is provided for through: transfer possibilities across the three cohesion policy funds (the European Regional Development Fund, European Social Fund and Cohesion Fund); transfers between the different categories of regions; and also through flexibility when it comes to thematic concentration. There will also be the possibility for a 100% EU co-financing rate for cohesion policy programmes for the accounting year 2020-2021, allowing Member States to benefit for full EU financing for crisis-related measures. The CRII+ package also simplifies procedural steps linked to programme implementation, use of financial instruments and audit. This is unprecedented and warranted because of extraordinary situation that the coronavirus outbreak has led to.

Furthermore, CRII+ provides support to the most deprived by changing the rules for the Fund for European Aid to the Most Deprived (FEAD). For example, it will be possible to deliver food aid and basic material assistance through electronic vouchers and to provide the protective equipment, and thus lower risk of contamination. Also, it will be possible to finance measures at 100% for the accounting year 2020-2021.

In addition, amendments to the European Maritime and Fisheries Fund (EMFF) will enable a more flexible reallocation of financial resources within the operational programmes in each Member State and a simplified procedure for amending operational programmes with respect to the introduction of the new measures. The amendments will also provide support for temporary cessation of fishing activities and for the suspension of production and additional costs for the aquaculture farmers, as well as to producer organisations for the storage of fishery and aquaculture products.

For the second set of measures, the Commission consulted extensively with Member States, the European Parliament and the sectors concerned over recent weeks, taking account of the more than 200 clarification and advice questions received from national authorities concerning their handling of crisis response measures under the CRII.

Facilitating EU-funded investments

Which changes is the Commission proposing to make to cohesion policy rules?

The Coronavirus Response Investment Initiative Plus allows that all non-utilised support from the cohesion policy funds can be mobilised to address the effects of the public health crisis on our economies and societies. Certain procedural steps linked to programme implementation and audit will be simplified in order to grant flexibility, ensure legal certainty and to reduce administrative requirements. The Commission proposes notably to:

Give the exceptional and temporary possibility for Member States to request for cohesion policy programmes a co-financing rate of 100% to be applied for the accounting year 2020-2021;

Create additional flexibility to transfer resources between the cohesion policy funds, and between categories of regions;

Exempt Member States from the need to comply with thematic concentration requirements, to enable a redirection of resources to the areas most impacted by the current crisis;

Exempt Member States from the requirement to amend Partnership Agreements;

Postpone the deadline for the submission of annual reports for 2019;

Extend the possibility to make use of a non-statistical sampling method;

Exempt the requirement to review and update of ex-ante assessments and business plans, in order to facilitate the adjustment of financial instruments to effectively address the public health crisis;

Make expenditure for completed or fully implemented operations fostering crisis response capacity in the context of the coronavirus outbreak exceptionally eligible;

Allow limited financial flexibility at the closure of programmes, in order to allow Member States and regions to make full use of support from EU funding;

Allow for European Regional Development Fund to provide support for undertakings in difficulties in these specific circumstances consistently with the flexibility provided in State aid rules.

What are the conditions for applying a 100% EU co-financing rate for cohesion policy programmes?

Member States may request amendments to operational programmes to enable a 100% EU co-financing rate to apply for the accounting year 2020-2021.

Such requests can be made during the accounting year starting on 1 July 2020 and ending on 30 June 2021. This exceptional measure is proposed in order to allow Member States to benefit from full EU financing for coronavirus outbreak-related measures. The 100% co-financing rate shall only apply if the corresponding programme amendment is approved by Commission decision before the end of the accounting year concerned.

Is there any limit regarding the transfer of resources between categories of regions?

Currently, Member States can transfer up until 3% of allocated funds between regions. In today’s proposal, there is no longer a limit, as the impact of the coronavirus does not follow the usual cohesion policy categorisation of less and more developed regions. As we are in the last year of the 2014-2020 programming period, this full flexibility applies to the 2020 budget appropriations only.

In order to ensure continued focus on less developed regions, Member States should first examine other possibilities for transferring funding before considering transfers from the budget of less developed regions to more developed ones. In other words, transfers should not impede essential investments in the region of origin or prevent the completion of operations selected before. In addition, the transfer can be requested by Member States only for coronavirus-related operations in the context of the coronavirus crisis.It should be remembered that the goal of cohesion policy is to support reducing the backwardness of the least favoured regions. This principle is enshrined in the Treaty and should be followed even in the current circumstances.

How will the transfer between cohesion policy funds work, and what are the conditions?

The transfer is voluntary. Member States may request to transfer its resources available for programming for the year 2020 for the Investment for Growth and Jobs goal between the European Regional Development Fund, the European Social Fund and the Cohesion Fund.

Following this decision, the minimum share for European Social Fund established at 23.1% and the minimum share of the Cohesion Fund for Member States who joined the EU on or after 1st May 2004 set one third of their total final financial allocation, will not have to be respected.

Transfers shall not affect resources allocated to the Youth Employment Initiative (YEI).

Resources transferred between the ERDF, the ESF and the Cohesion Fund in response to the coronavirus crisis shall be implemented in accordance with the rules of the Fund to which the resources are transferred.

What does the exemption of Member States from the need to comply with thematic concentration requirements entail?

In the programming 2014-2020 period, Member States have to concentrate support on interventions that bring the greatest added value in relation to the Union strategy for smart, sustainable and inclusive growth. Therefore, specific rules were established in Fund-specific regulations that require from Member States to focus European Regional Development Fund on low-carbon economy or support to research and innovation and the European Social Fund on promoting social inclusion and combating the poverty.

In the current circumstances of the coronavirus outbreak, it is justified to exceptionally exempt Member States from the need to comply with these thematic concentration requirements until the end of the programming period. This will help Member States to quickly deploy available resources to respond to the crisis.

What will happen if the coronavirus outbreak is invoked as a reason of force majeure? What influence it will have on the implementation rules?

The Commission considers that all necessary flexibility should be deployed in dealing with failure by beneficiaries to fulfil obligations in a timely manner for reasons related to the coronavirus outbreak (for example, the unavailability of staff). Equally, the Commission will display the same flexibility in assessing the compliance of Member States with their obligations.

Therefore, where the coronavirus outbreak is invoked as a reason of force majeure, information on the amounts for which it has not been possible to make a payment application shall be provided at an aggregate level by priority for operations of total eligible costs of less than €1,000,000.

What does the exemption of Member States from the requirement to amend Partnership Agreements entail?

To enable Member States to concentrate on the necessary response to the coronavirus outbreak and to reduce the administrative burden, certain procedural requirements linked to programme implementation will be simplified.

In particular, Partnership Agreements should no longer be amended, until the end of the programming period; neither to reflect prior changes in operational programmes nor to introduce any other changes.

Taking into consideration a substantial number of programme amendments that will be processed in the upcoming months, this proposal will drastically simplify the re-programming process.

What does the extension of the possibility to make use of a non-statistical sampling method entail?

The current circumstances may have an impact on certain tasks, such as for instance on audit work both in the Member States as well as at EU-level. Therefore, certain procedural requirements linked to audits may be simplified in these exceptional times.

As regards the cohesion policy funds and the European Maritime and Fisheries Fund, the audit authorities may decide, based on their professional judgement, to use a non-statistical sampling method for the accounting year starting on 1 July 2019 and ending on 30 June 2020. This will significantly lower the required number of audited operations, and therefore reduce the pressure on final beneficiaries and audit authorities.

In addition to this legislative change, the Commission will work in close cooperation with national authorities to make use of additional methods that will allow Member State auditors to carry out their tasks.

What does the exemption of the requirement to review and update of ex-ante assessments and business plans entail?

To use the EU financial instruments to tackle this public health crisis, changes in the implementation procedure will be required. Under normal circumstances, Member States would need to amend the supporting documents, demonstrating that support provided was used for its intended purpose. 

However, in the current situation, to reduce administrative burdens and delays in implementation, the review and update of the ex-ante assessment and updated business plans or equivalent documents will no longer be required until the end of the programming period.

How will you allow limited financial flexibility at the closure of programmes?

The Commission proposes to allow Member States to ‘overspend’ up until 10% of the budget allocated to a given priority, provided it is compensated by an equivalent reduction in another priority of the same programme. This flexibility will apply to the total programme, i.e. also the expenditure incurred prior to 1 February, but will only be applied at the closure of the programmes (the acceptance of the last annual accounts). This will enable the possibility of a higher co-financing of different measures, without the need of programme amendments. This does not change the total support available from the cohesion policy funds and the EMFF.

This possibility does not exist under the current rules, and constitutes yet another way of increasing the flexibility for Member States who want to use the programmes financed from cohesion policy and the EMFF in order to address the effects of the public health crisis.

How will you make expenditure for completed or fully implemented operations eligible for reimbursement in the context of the coronavirus outbreak?

To ensure the greatest possible added value of EU investments, EU rules did not allow for the financing of operations that have been physically completed or fully implemented before the application for funding by the beneficiary under the programme was made.

However, in the current exceptional situation of the coronavirus outbreak this should exceptionally be allowed to ensure that operations already implemented in response of the crisis can receive EU support. Such operations may be selected even before the necessary programme amendment is carried out. This means that operations for example where medical equipment is purchased, and the purchase was already made before the entry into force of the amending proposal, become eligible for EU support retroactively. This will alleviate pressure on national and regional budgets to respond to the public health crisis.

Will the Commission waive the obligation to comply with applicable management and control rules under cohesion policy?

The EU budget and taxpayer’s money must be protected and therefore all control and audit mechanism remain in place. The Commission merely proposes to simplify and clarify certain rules related to audit, the implementation of financial instruments or eligibility, in the context of the coronavirus outbreak.

This means that the legislative framework for the implementation of the European Structural and Investment Funds programmes remains fully applicable even under the current exceptional circumstances. This concerns in particular rules on the setup and functioning of the management and control system, which remain an important safeguard for obtaining assurance on their functioning and on the legality and regularity of operations.

What are the conditions for providing support from the European Regional Development Fund to undertakings in difficulty?

The current change in the European Regional Development Fund Regulation aims at ensuring a full alignment between the approach taken under the applicable EU State aid framework and the rules and conditions under which the ERDF may provide support to undertakings in the current crisis situation linked to the coronavirus outbreak. This follows in particular the adoption by the Commission on 19 March 2020 of the State aid Temporary Framework to support the economy in the context of the coronavirus outbreak, which enables Member States to support undertakings that entered into financial difficulty in a more flexible manner.

Alleviating the impact on the most deprived

What is the European Fund for European Aid to the Most Deprived (FEAD)?

The Fund for European Aid to the Most Deprived (FEAD) supports EU countries’ actions to provide food and/or basic material assistance to the most deprived. This includes food, clothing and other essential items for personal use, e.g. shoes, soap and shampoo. Material assistance needs to go hand in hand with social inclusion measures, such as guidance and support to help people out of poverty. National authorities may also support non-material assistance to the most deprived people, to alleviate the forms of extreme poverty with the greatest social exclusion impact, such as homelessness, child poverty and food deprivation. National authorities can either purchase the food and goods, and supply them to partner organisations, or fund the organisations so that they can make the purchases themselves. Partner organisations that buy the food or goods themselves can either distribute them directly, or ask other partner organisations to help. In real terms, over €3.8 billion are earmarked for the FEAD for the 2014-2020 period. In addition, EU countries are to contribute at least 15% in national co-financing to their national programme.

Why do you propose to amend the current FEAD rules?

The coronavirus crisis presents an unprecedented challenge for the operations supported by FEAD. Most importantly, it presents specific risks to the most deprived themselves. Specific measures need to be taken urgently in order to protect them from falling victim to this disease. This includes providing them and the workers and volunteers delivering the aid with the necessary protective equipment, and ensuring that the FEAD assistance still reaches the most vulnerable. Logistical and human resource constraints, notably due to the confinement and social distancing measures increasingly impede the distribution of food and basic material assistance, as well as social inclusion support. Many volunteers, the backbone of the Fund, can no longer be mobilised, as they often belong to groups at a higher risk of severe illness caused by the coronavirus. Therefore, new methods of delivery such as delivery through electronic vouchers are needed to ensure the safety of all the people involved in the implementation of the FEAD and of the most deprived.

What are the amendments to the FEAD rules proposed by the Commission?

The proposed measures include:

Eligibility of the expenditure for FEAD operations that are fostering crisis response capacities to the coronavirus outbreak as of 1 February 2020;

Eligibility of expenditure related to protective equipment for partner organisations is made explicit.

Temporary exemption of certain FEAD support measures from Commission approval;

Possibility to deliver food aid and basic material assistance through electronic vouchers (lower risk of contamination).

Providing 100% of co-financing (instead of 85%) to be applied for the accounting year 2020-2021

The proposed changes are intended to enable Managing Authorities, partner organisations and other actors involved in the implementation of the Fund to react quickly to the emerging additional needs of the target groups that are exposed to further hardship stemming from this crisis. In this respect, and notably on the social inclusion challenges related to it, the European Social Fund (ESF) will complement the support provided by the FEAD.

Supporting the seafood sector

What measures does the proposal include to mitigate the impact of coronavirus outbreak on the fishery and aquaculture sector?

The following specific measures are proposed to mitigate the impact of the coronavirus outbreak in the fishery and aquaculture sector:

support to fishermen for the temporary cessation of fishing activities caused by the  coronavirus outbreak;

support to aquaculture farmers for the temporary suspension of production or additional costs caused by the coronavirus outbreak;

support to producer organisations and associations of producer organisations for the storage of fishery and aquaculture products, in accordance with the Common Market Organisation.

It is proposed that these measures are retroactively eligible as of 1 February 2020 and available until 31 December 2020. 

Additional amendments to the EMFF Regulation aim to ensure a flexible reallocation of financial resources within the operational programmes.

How does the proposal support temporary cessation of fishing activities?

To mitigate the significant socio-economic consequences of the coronavirus outbreak and the need for liquidity in the economy, the European Maritime and Fisheries Fund (EMFF) would grant a financial compensation to fishermen for the temporary cessation of their fishing activities. The EU will pay up to maximum 75% of this compensation, the rest to be borne by Member States. Support for the temporary cessation of fishing activities caused by the coronavirus outbreak will not be subject to the financial capping applicable to the other cases of temporary cessation, thus allowing Member States to grant support on the basis of needs. Vessels that have already reached the maximum six month duration of EMFF support for temporary cessation under article 33 of the EMFF Regulation will nevertheless be eligible for support under the Coronavirus Response Investment Initiative Plus measures until the end of 2020.

How does the proposal support aquaculture farmers?

The proposal introduces compensation to aquaculture farmers for the temporary suspension or reduction of production, where it is the consequence of the coronavirus outbreak. This compensation will be calculated on the basis of the income foregone. The EU will pay up to 75% of this compensation, the rest to be borne by Member States.

How does the proposal ensure simplification of procedures?

Given the urgency of the support needed, it will be possible to apply a simplified procedure for amendments to Member States’ operational programmes related to the specific measures and the reallocation of financial resources. This simplified procedure should cover all the amendments necessary for the full implementation of the measures concerned, including their introduction and the description of the methods for calculating support.

The Commission proposal also includes budgetary flexibility. What is new?

The proposed modification does not imply any changes in the Multiannual Financial Framework annual ceilings for commitments and payments. The annual breakdown of commitment appropriations for the EMFF remains thus unchanged, the EMFF being one of the five European Structural and Investment (ESI) Funds.

With fishing and aquaculture activities locked down or significantly reduced, there is little room for implementing the current EMFF measures and operational programmes normally. The Commission therefore proposes to grant maximum flexibility to Member States to allocate resources at short notice in order to address coronavirus needs. However, resources available for fisheries control, the collection of scientific data and the compensation of additional costs in the outermost regions remain ring-fenced to ensure the implementation of the Common Fisheries Policy (CFP). Other available resources under shared management should be allocated by Member States on the basis of their needs.

The Commission will carefully monitor the impact of the proposed modification on payment appropriations in 2020 taking into account both the implementation of the budget and revised Member States forecasts.

How will producer organisations benefit from the Commission’s proposal?

Given the key role played by producer organisations in the management of the crisis, the ceiling for support to production and marketing plans is increased from 3% up to 12 % of the average annual value of the output placed on the market. It will also be possible for Member States to grant advances of up to 100 % of the financial support to producer organisations.

Why did the Commission decide to reintroduce storage aid and to expand its scope to aquaculture produces?

The sudden disruptions to fishery and aquaculture activities ensuing from the coronavirus outbreak and the resulting risk of jeopardising markets of fishery and aquaculture products, makes it appropriate to set up a mechanism for storing fishery and aquaculture products for human consumption. This will foster greater market stability, mitigate the risk of having such products wasted or redirected to non-human food purposes, and contribute to absorbing the impact of the crisis on the return of products.

This mechanism should enable fishery and aquaculture producers to make use of the same preservation or conservation techniques for similar species and ensure that fair competition between producers is maintained.

In order to enable Member States to react promptly to the suddenness and unpredictability of the coronavirus outbreak, they will be entitled to set trigger prices for their producer organisations to activate the storage mechanism. That trigger price should be set in such a way that fair competition between operators is maintained.

Supporting farmers and rural areas 

What measures will directly support farmers and rural areas under the CRII+?

The Commission is proposing to increase flexibility in the use of financial instruments. Farmers and other rural development beneficiaries will be able to benefit from loans or guarantees of up to €200,000 at favourable conditions, such as very low interest rates or favourable payment schedules under the EAFRD. Usually these financial instruments have to be linked to investments, under this new measure, they can help farmers with their cash flow to finance costs or compensate temporary losses.

In addition, rural development funds can be used to invest in medical facilities and small-scale infrastructure in rural areas, such as the adaptation of health centres to treat growing numbers of patients or the set-up of mobile health facilities to carry out tests and provide treatments to farmers and rural inhabitants.

What measures under the CRII+ will help Member States in the implementation of their Rural Development Programmes?

Member States are facing practical difficulties in meeting certain requirements under the Common Agricultural Policy (CAP) and the Commission aims to help through a range of concrete measures.

Firstly, Member States will be allowed to reallocate money left unused under their Rural Development Programmes (RDP), rather than sending it back into the EU budget. The money will still have to be used in the framework of the respective RDP.

Secondly, Member States will also not have to amend their ESI Funds’ Partnership Agreements concluded for the 2014-2020 budgeting period to modify their Rural Development Programmes, lifting some administrative procedures for Member States.

Thirdly, every year Member States have to send an Annual Implementation Report on their Rural Development Programmes to the Commission. In these exceptional circumstances, the Commission is postponing the deadline for submissions (originally 30 June) to give more time to national authorities to put it together.

What other measures are being taken under the Common Agricultural Policy (CAP) to support the agri-food sector in these exceptional circumstances?

In addition to the measures directly linked to the EAFRD under the CRII+, the Commission is proposing further flexibility and simplification of other Common Agricultural Policy (CAP) instruments.

Firstly, the deadline for CAP payment applications will be extended by a month, from 15 May to 15 June 2020, offering more time to farmers to fill in their application for both direct payments and rural development payments.

Secondly, to increase the cash flow of farmers, the Commission will increase the advances of direct payments and rural development payments. The rate of advance payments will go up from 50% to 70% for direct payments, and from 75% to 85% for rural development payments. Farmers will start receiving these advances from 16 October 2020.

Finally, the Commission will propose a reduction of physical on-the-spot checks and give more leeway for timing requirements. This will reduce the administrative burden and avoid unnecessary delays. Currently Member States have to carry out checks to ensure that eligibility conditions are met. However, in the current exceptional circumstances, it is crucial to minimise physical contact between farmers and the inspectors carrying out the checks.

The final legal steps are currently being taken to adopt these measures.

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InvestEU: EU programme to encourage investment

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InvestEU continues EU efforts to boost investment in Europe, support the recovery and prepare the economy for the future.

MEPs will debate and vote on the InvestEU programme for 2021-2027 during the plenary session taking place on 8-11 March. The programme succeeds the European Fund for Strategic Investments, established in 2015 as the core of the Juncker Plan to increase public and private investment in Europe. The new programme brings together financial instruments aiming to support investments that are crucial for economic growth.

Building on investment success

When Jean-Claude Juncker was elected president of the European Commission in 2014, he announced plans to close the gap in investments needed for the EU to overcome the effects of the financial and economic crisis that started in 2008.

The idea behind the European Fund for Strategic Investments was to use limited resources from the EU budget to offer guarantees to the European Investment Bank so that the bank could take on riskier projects than usual and thus encourage other investors to get involved.

The plan exceeded its target of attracting €500 billion in public and private investment for projects across the EU by the end of 2020. But the Covid-19 crisis and EU long-term goals of a green and digital future have created new challenges.

How InvestEU will work

The new programme will establish an EU guarantee of about €26.2 billion that will allow investment partners to take on higher risks and support projects they might have otherwise ignored. The main investment partner will continue to be the European Investment Bank, but national promotional banks in EU countries and international financial institutions will also have direct access to the EU guarantee.

By supporting projects that will attract many other investors, the InvestEU programme should attract more than €372 billion in investment across the EU, contributing to the recovery and to the EU’s long-term priorities.

EU countries will also be able to allocate resources to InvestEU from the structural funds they receive or from the funds they get from the Recovery and Resilience Facility that aims to support recovery from the pandemic.

Focus on sustainability, small firms and innovation
The EU guarantee will be allocated to four objectives:

  • Sustainable infrastructure: €9.9 billion
  • Research, innovation and digitalisation: €6.6 billion
  • Small and medium-sized enterprises: €6.9 billion
  • Social investment and skills: €2.8 billion

At least 30% of the investments under InvestEU should go towards meeting EU climate objectives. All four policy areas will include projects to support the just transition towards climate neutrality in the EU. Investment projects that receive EU support will be screened to determine they do no significant harm to the environment.

Support for innovation and small businesses are important aspects of the InvestEU programme. Check out the video to see how its predecessor backed German biotechnology firm BioNTech, which went on to develop, together with US pharmaceutical giant Pfizer, the first EU-approved Covid-19 vaccine.

In negotiations with the Council, MEPs from the budgets and the economic and monetary affairs committees ensured that capital support will go to small and medium-sized enterprises hit by the Covid-19 crisis.

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Explainer: the European Pillar of Social Rights Action Plan

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What is the European Pillar of Social Rights?

The European Parliament, the Council and the Commission proclaimed the European Pillar of Social Rights in 2017. It consists of twenty principles that have guided us ever since towards a strong Social Europe. They express principles and rights essential for fair and well-functioning labour markets and welfare systems.

The Pillar is structured around three chapters:

  1. Equal opportunities and access to the labour market;
  2. Fair working conditions;
  3. Social protection and inclusion.

Why do we need an Action Plan to implement the Pillar?

We need to update our ‘social rulebook’ both in light of long-term transformations of our labour markets and economies shaped by climate change, digitalisation, globalisation and demographic trends, as well as the more immediate and drastic changes the pandemic has brought to our jobs, education, economy, welfare systems and social life. The Pillar principles set the framework for the path ahead.

Many people are worried about their jobs and their future. This is why we need to put a strong focus on quality jobs and skills and give adequate protection to those in need to pave the way for a fair, inclusive and resilient recovery and prepare for a just transition to greener and more digital economies. To do so, the Action Plan proposes concrete actions to accelerate the implementation of the principles and further turn Europe’s social rights and principles into a reality. It also proposes employment, skills and social protection headline targets to be achieved by 2030. With the financial support of the Multi-Annual Financial Framework 2021-2027 and NextGenerationEU, and the monitoring under the European Semester, this will guide our joint efforts towards a strong Social Europe and reaching a sustainable impact.

With this Action Plan, we are also responding to calls from the European Parliament and Member States as well as social partners, other stakeholders and most importantly EU citizens. A special Eurobarometer survey has been conducted asking citizens for their views on social issues. In their ‘European Council Strategic Agenda 2019-2024′, Member States have noted that the European Pillar of Social Rights should be implemented at EU and Member State level, with due regard for respective competences. The European Parliament in its ‘Resolution on a Strong Social Europe for Just Transitions’ has also underlined the importance of pursuing the implementation of the Pillar’s rights and principles.

The Action Plan builds on a broad public consultation conducted between January and November 2020, which resulted in more than 1000 written contributions from Member States, EU institutions and bodies, regions, cities, social partners, civil society organisations, international organisations, think tanks and citizens. In addition, the Commission has held a series of dedicated webinars with over 1500 individual stakeholders across Europe.

Why does the Action Plan set EU level targets?

The Commission proposes three headline targets for the EU, to be reached by 2030, on employment, skills, and social protection, in line with the UN Sustainable Development Goals (SDGs):

  1. At least 78% of people aged 20 to 64 should be in employment.
  2. At least 60% of all adults should participate in training every year.
  3. The number of people at risk of poverty or social exclusion should be reduced by at least 15 million.

The headline targets are important to set a common ambition for a strong Social Europe. They will allow the Commission to monitor progress in turning the principles of the Pillar into action. Together with the EU’s political goals for the green and digital transitions, social targets will help to focus policy efforts on reaching results and offer an incentive for reforms and targeted investments in the Member States. The Commission invites the European Council to endorse these three targets and calls on Member States to define their own national targets to contribute to this collective effort.

How will the Commission monitor the implementation of the Pillar?

The Commission will monitor progress through the European Semester, the EU’s framework for coordinating social and economic policies across the European Union.

The Commission proposes to revise the Social Scoreboard, which feeds into the European Semester process, to better reflect the 20 principles of the Pillar, making it easier to monitor the progress of policy priorities and actions set out in the Action Plan. The Scoreboard will include new headline indicators on adult learning, child poverty, disability employment gap, and housing cost overburden.

The Commission will use the new EU 2030 employment, skills and social protection targets as part of its toolbox to monitor Member States’ progress towards the implementation of the rights and principles of the Pillar.

What remains to be done to implement the Pillar?

Since the start of its mandate, this Commission has already taken concrete initiatives for a strong Social Europe. Several principles of the Pillar require further legislative or non-legislative initiatives to become effective. The additional initiatives outlined in today’s Action Plan will further improve the social rights in the EU. The Commission will work to update, complement, and enforce existing EU law, wherever necessary.

Translating all of the Pillar principles into reality is a joint responsibility. It greatly depends on the commitment and action of Member States. They hold the main responsibility for employment and social policies and consequently also most of the tools to implement the Pillar. The Commission therefore calls on Member States, including regional and local authorities, social partners, civil society and other relevant actors, to join their forces. The Commission encourages Member States to organise a coordination mechanism to ensure engagement of all relevant stakeholders at national level in implementing the Pillar. Together they can advance the implementation of the Pillar within their respective spheres of competence.

What is the EU doing to safeguard jobs and social rights in the recovery from the current crisis?

The coronavirus pandemic tragically cost the lives of many people and had a drastic social and economic impact on our lives. For many people, their work routine has changed, some have lost their jobs or risk doing so.

The Commission has been mobilising all means at its disposal to help support Member States to keep people in their jobs. The Commission’s SURE scheme supports Member States by providing financial assistance of up to €100 billion in EU loans. The overall financial support proposed under SURE by the Commission is €90.6 billion and covers 19 Member States. The Commission’s package on youth employment support, skills and vocational education and training presented in July 2020 is specifically designed to help the next generation of Europeans to get on the jobs ladder.

The EU’s long-term budget, coupled with NextGenerationEU, the temporary instrument designed to boost Europe’s recovery, will be the largest stimulus package ever financed through the EU budget. A total of €1.8 trillion (in 2018 prices) will be available both for showing solidarity to overcome the crisis of today, and also for building the next generation EU.

Together with changes to the EU’s social and employment funding programmes like the European Social Fund (ESF+) and the Fund for European Aid to the Most Deprived (FEAD), the package will help tackle the main social and employment challenges that lie ahead, such as rising youth unemployment, the need to steer basic food and material aid to those most in need, as well as addressing child poverty. REACT-EU will bring €47.5 billion in fresh money from 2020-2022. The ESF and FEAD can top up its funding from this new resource to fund measures to counter the negative impact of the coronavirus on the labour market.

The Recovery and Resilience Facility with a total of €672.5 billion will provide large-scale financial support for a lasting and inclusive recovery. It will fund coherent packages of reforms and investments that respond to the challenges identified in the relevant country specific recommendations of the European Semester, many of which refer to labour, skills and social policies. It will therefore actively contribute to the implementation of the Pillar. The Commission Recommendation on Effective Active Support to Employment following the COVID-19 crisis (EASE) provides further guidance on how to use available funding opportunities, including from the Recovery and Resilience Facility, to support the recovery in labour markets.

The European Pillar of Social Rights Action Plan, together with its three EU 2030 headline targets on employment, skills, and social protection, will offer an additional incentive for Member States to invest in a strong Social Europe.

What has the Commission done so far to implement the European Pillar of Social Rights?

In her Political Guidelines, President von der Leyen has committed to putting forward an Action Plan to fully implement the European Pillar of Social Rights and reconcile the social and the market in a changing economy.

Since the start of its mandate at the end of 2019, this Commission has contributed to the implementation of the Social Pillar principles with the following initiatives, among others:

A full list of key Commission actions is available in Annex 1 of the European Pillar of Social Rights Action Plan.

What specific proposals will the Commission present in the future?

This week the European Commission presents three concrete deliverables of the European Pillar of Social Rights Action Plan:

  • A Commission Recommendation on Effective Active Support to Employment following the COVID-19 crisis will promote job creation and job-to-job transitions towards expanding sectors to boost the economic recovery.
  • A new Strategy for the Rights of Persons with Disabilities 2021-2030 aims at enforcing their right to take part in all areas of life, just like everyone else.
  • A proposal for a Directive on Pay Transparency will improve workers’ access to information on pay, raising awareness of discrimination and making it easier to enforce the right to equal pay.

Further key Commission initiatives for a strong Social Europe in 2021 will include, among others:

  • a proposal for the European Child Guarantee;
  • a new strategic framework for Occupational Safety and Health;
  • launching a platform of collaboration against homelessness;
  • a Communication on Decent Work Worldwide;
  • a legislative initiative to improve the working conditions for people working through digital labour platforms; and
  • an Action Plan for the Social Economy.

Further initiatives will be proposed until the end of the Commission mandate, such as a proposal for a Council Recommendation on minimum income in 2022 to effectively support and complement the policies of Member States, a review of the Quality Framework for Traineeships or an initiative on long-term care.

A full list of key Commission actions is available in Annex 1 of the European Pillar of Social Rights Action Plan.

What are the next steps?

The Action Plan presents the Commission’s contribution to the Porto Social Summit, organised by the Portuguese Presidency of the Council of the EU, in May 2021. The Summit will focus on strengthening Europe’s social dimension, and it will be an occasion to renew, at the highest political level, the commitment to implement the Social Pillar.

The Commission invites the European Council to endorse the new social and employment targets and calls on Member States to define their own national targets, as a contribution to this common endeavour.

Engagement of national, regional and local authorities, social partners and civil society is essential to ensure an effective implementation of the Pillar. The Commission therefore encourages coordination mechanisms at national level to ensure all relevant actors engage to implement the Pillar’s social rights and principles.

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EU Politics

Pay Transparency: Commission proposes measures to ensure equal pay for equal work

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The European Commission has today presented a proposal on pay transparency to ensure that women and men in the EU get equal pay for equal work. A political priority of President von der Leyen, the proposal sets out pay transparency measures, such as pay information for job seekers, a right to know the pay levels for workers doing the same work, as well as gender pay gap reporting obligations for big companies. The proposal also strengthens the tools for workers to claim their rights and facilitates access to justice. Employers will not be allowed to ask job seekers for their pay history and they will have to provide pay related anonymised data upon employee request. Employees will also have the right to compensation for discrimination in pay.  

New measures, which take into account the impact of COVID-19 pandemic on both, employers but also on women, who have been hit in particular hard, will increase awareness about pay conditions within the company and give more tools to employers and workers to address the pay discrimination at work. This will address a number of substantial factors contributing to the existing pay gap and is particularly relevant during COVID-19 pandemic, which is reinforcing gender inequalities and puts women into greater risk of poverty exposure.

President of the European Commission, Ursula von der Leyen, said: “Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve.”

Vice-President for Values and Transparency, Vera Jourová said: “It is high-time both women and men are empowered to claim their right. We want to empower job seekers and workers with tools to demand fair salary and to know and claim their rights. This is also why employers must become more transparent about their pay policies. No more double standards, no more excuses.”

Commissioner for Equality, Helena Dalli, said: “The pay transparency proposal is a major step toward the enforcement of the principle of equal pay for equal work or work of equal value between women and men. It will empower workers to enforce their right to equal pay and lead to an end to gender bias in pay. It will also allow for the detection, acknowledgment and addressing of an issue that we wanted to eradicate since the adoption of the Treaty of Rome in 1957. Women deserve due recognition, equal treatment and value for their work and the Commission is committed to ensuring that workplaces meet this objective.”

Pay transparency and better enforcement of equal pay

The legislative proposal focuses on two core elements of equal pay: measures to ensure pay transparency for workers and employers as well as better access to justice for victims of pay discrimination.

Pay transparency measures:

Pay transparency for job-seekers – Employers will have to provide information about the initial pay level or its range in the job vacancy notice or before the job interview. Employers will not be allowed to ask prospective workers about their pay history.

Right to information for employees – Workers will have the right to request information from their employer on their individual pay level and on the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value.

Reporting on gender pay gap – Employers with at least 250 employees must publish information on the pay gap between female and male workers in their organisation. For internal purposes, they should also provide information on the pay gap between female and male employees by categories of workers doing the same work or work of equal value.

Joint pay assessment – Where pay reporting reveals a gender pay gap of at least 5% and when the employer cannot justify the gap on objective gender neutral factors, employers will have to carry out a pay assessment, in cooperation with workers’ representatives.

Better access to justice for victims of pay discrimination:

Compensation for workers – workers who suffered gender pay discrimination can get compensation, including full recovery of back pay and related bonuses or payments in kind.

Burden of proof on employer – it will be by default for the employer, not the worker, to prove that there was no discrimination in relation to pay.

Sanctions to include fines – Member States should establish specific penalties for infringements of the equal pay rule, including a minimum level of fines.

Equality bodies and workers’ representatives may act in legal or administrative proceedings on behalf of workers as well as lead on collective claims on equal pay.

The proposal takes into account the current difficult situation of employers , in particular in private sector, and maintains proportionality of measures while providing flexibility for small and medium enterprises (SMEs) and encouraging Member States to use available resources for reporting of data. The annual costs of pay reporting for the employers are estimated to be from €379 to €890 or companies with 250+ employees.

Next steps

Today’s proposal will now go to the European Parliament and the Council for approval. Once adopted, Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission. The Commission will carry out an evaluation of the proposed Directive after eight years.

Background

The right to equal pay between women and men for equal work or work of equal value has been a founding principle of the European Union since the Treaty of Rome in 1957. The requirement to ensure equal pay is set out in Article 157 TFEU and in Directive on the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation.

The European Commission adopted a Recommendation on strengthening the principle of equal pay between men and women through transparency in March 2014. Despite this, the effective implementation and enforcement of this principle in practice remains a major challenge in the European Union. The European Parliament and the Council have repeatedly called for action in this area. In June 2019, the Council called on the Commission to develop concrete measures to increase pay transparency.

President von der Leyen announced binding pay transparency measures as one of her political priorities for this Commission. This commitment was reaffirmed in the Gender Equality Strategy 2020-2025 and today the Commission is presenting a proposal to that end.

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