This overview from the European Commission outlines how member states can gain more flexibility in social spending while balancing their public accounts. One priority Spain plans to advance during its presidency of the Council of the European Union is giving preferential attention to social protection and inclusion for the most vulnerable groups. This stance was highlighted by the second vice president, Yolanda Diaz, and the Minister for Inclusion, Jose Luis Escrivá, during a joint briefing with European Commissioner Nicolas Schmit. Asked about potential changes after the general elections on 23 July, Escrivá used the moment to praise the labor reform agreed by the current government with employers and unions.
At present, the EU enforces rules that require states to balance expenditures with revenues and, when they run deficits, to ensure they stay within a defined income range. The aim is to control public debt levels and support monetary stability across the Union. Those fiscal discipline rules were suspended for three years to allow member countries to deploy public funds in response to the pandemic and its economic fallout.
The following period saw Spain proposing measures such as ICO loans and other aid to bolster job security, helping to cushion the blow of Covid-19 and contributing to a recovery in the labor market back toward pre-quarantine employment levels within roughly two years. Now, Brussels is gearing up to introduce new budget rules that member states must follow, with the expectation that the EU, under Spain’s presidency, will finalize these rules to come into full effect in the second half of 2023 and be applied in 2025 budgets.
Within the framework of these new rules for budget discipline, the Union is examining how social spending can receive special treatment so that future reductions would not erode it, particularly when addressing the needs of the most vulnerable groups.
“The commission’s proposal includes investments tied to social protection measures in medium-term budget planning,” Escrivá explained at a press conference. “There will be greater flexibility in the process of adjusting certain debt levels.” The precise implementation details—whether social costs should sit within fixed margins, or whether states can treat them as separate lines in their accounts—are among the key issues the 27 EU members must resolve. The government has outlined a timetable to hold an initial discussion this fall in Aranjuez, followed by a final debate in November. Commissioner Schmit stressed that the pandemic underscored the importance of social services for societal resilience.
Engaging more with those who care
Spain’s presidency also prioritizes strengthening social dialogue, advancing a European directive on remote work, and moving toward equal protection for the self-employed and salaried workers. These topics will be revisited after the July 23 elections to determine which government is driving the agenda and in what manner. Nicolas Schmit, the European Commissioner for Jobs and Social Rights, emphasized the need to improve conditions for home care workers in particular.
“Caregivers deserve better support. They often earn modest wages, and improving their working conditions is essential because the demand in this sector is rising as populations age.”