EU Socialists double down on social guarantees and public support in draft action plan

3 months ago 16

Europe’s Socialists and Democrats are set to double down on their calls for social guarantees and solid public support to tackle ongoing economic challenges, proposing in their draft action plan a batch of additional revenue streams for the bloc’s funding resources.

The plan for 2024-2029, seen by Euractiv, will be made public on Thursday (4 July).

The overarching priorities of the S&D group in terms of economic policy contrast sharply with those of the biggest political group in the new European Parliament, the centre-right EPP, also expected this week. The S&D will put a strong emphasis on guaranteeing a continued role for EU-level public funding to tackle ongoing economic challenges.

“NextGeneration EU and its Recovery and Resilience Facility (RRF) provide unprecedented investment support to the EU’s ongoing economic, social, digital and ecological transformation. The EU needs to create the conditions and instruments to ensure enough private and public investment for its ongoing transformation beyond this date.”

“At the heart of this endeavour should lie a permanent investment capacity starting by 2027, which we estimate to at least 1% of EU GDP annually of additional public investment funding,” the group’s document said.

This investment capacity, it said, “should have a broad scope to prevent a funding gap in European public goods – including the green and digital transitions, industry including clean tech manufacturing, energy […] social climate and adaptation policies […] and social investment,” the draft work plan says, adding EU-wide funds should also aim to “close the existing funding gap with key global players including the United States and China”.

The group also emphasised that these resources “must be additional to the resources allocated to a robust and reformed cohesion policy,” and that would therefore warrant widened revenue streams for the bloc’s existing “own resources”.

The group argued that such additional streams could be easily sourced through a more efficient fiscal treatment of capital gains, financial transactions and corporates’ “windfall” profits.

“Workers’ income remains one of the main sources of public finance in the EU,” the S&D noted – at 51.4%. “Meanwhile, revenue from taxes on capital represents only 8.5% of GDP. Governments tax income from capital less than income from work.

“Several tax initiatives can at the same time make for less unequal societies and provide new public income needed to finance the transition at national and European levels, not least via new own resources that strengthen the EU budget,” it said.

Contrary to the EPP’s roadmap for the next mandate, which will for a “competitiveness” conditionality on at least 70% of the bloc’s spending, the centre-left will call for a “social conditionality” clause to be added to all EU spending, “with the social dimension of EU spending becoming a cross-cutting criterion for all policy areas.”

Moreover, the group will call on EU co-legislators to keep the different components of the EU budget “closely coordinated, anchored in shared management, decentralisation […] and a place-based approach”.

This pushes back against recent pressures to turn the bloc’s cohesion and agricultural spending into an RRF-like, ex-ante allocation process only involving the European Commission and national governments, rather than local and regional authorities.

Among other priorities, the group will call for a directive for a just transition “ensuring reliable support mechanisms for workers who fall victim to economic change”, which should be “accompanied by a reform of the EU Company Law Package”.

The draft document also lists “a new EU Green Industrial Act capable of achieving a competitive and green re-industrialisation of Europe built on quality jobs, affordable energy prices, a Green Deal Industrial Plan, a ‘BuyGreenandEuropeanAct’ building on the Net Zero Industry Act […] and advanced strategic autonomy, in particular in critical industries”.

*Additional reporting by Max Griera.

[Edited by Zoran Radosavljevic]