The social pillar strengthened after EU Porto summit

The social agenda meeting in Porto took place in parallel with a top-level meeting of the social partners and other labour market organisation. This was the first time EU prime ministers met face to face since the start of the pandemic. 24 out of 27 prime ministers participated.

Although there is general agreement that “no one should be left behind”, there were powers struggles behind the scenes both before and during the summit. Some countries wanted the term “gender equality” to be removed from the declaration. 

“I really struggle to understand why. What’s the problem?” said Sweden’s Prime Minister Stefan Löfven in his post-summit press conference.

Yet he did not consider it to be a major problem because the declaration does refer to the 20 principles which will guide EU cooperation – and in particular principle 2, which is headlined “Gender Equality”.

Four central people at the informal EU summit in Porto, here on a balcony at the mayor’s residence. Charles Michel is President of the European Council, David Sassoli is the European Parliament President, Ursula von der Leyen is the EU Commission President and António Costa is Portugal’s Prime Minister.

11 member states – the Nordic and Baltic countries plus Bulgaria, Ireland, Malta, the Netherlands and Austria – had sent a letter to the summit where they argued that the responsibility for issues like employment, education and skills as well as social issues lies with member states. EU initiatives can complement member states’ measures, but they must fully respect the division of power between the nations and the Commission.

The main cause for writing the letter was the issue of statutory minimum wages, along with fear for the future of the Nordic model. Despite the Commission's assurances that countries that have collective bargaining systems should not be forced to introduce minimum wages, there is a fear that this might still happen if the EU Court of Justice intervenes, as it did in the Laval case. 

Swedish LO also points out that the EU’s Legal Service says there are considerable legal obstacles for adopting a directive with the content of the one the Commission has put forward. 

Luca Visentini, General Secretary of the European Trade Union Confederation, said he understood why some countries argued hard that decisions should be made on the lowest suitable level.

“Rightly so, when national systems and practices work well in improving living and working conditions of citizens.

“But when, on the contrary, we face divergence, inequalities, unfair competition, well then that’s the time for cooperation, coordination, exchange of best practices. It’s the time for better and more ambitious legislation, for earmarking European and national resources for upward convergence, economic and social cohesion,” Luca Visentini told the social partners’ summit. 

"Crown jewel"

Ursula von der Leyen did not mention statutory minimum wages in her summit speech, and only referred to the directive on wage transparency presented by the Commission. But during concluding remarks she did mention the minimum wages:

"I am a strong believer in collective bargaining, I am a strong believer in strong trade unions and employer associations. They know exactly all the details and they can bargain really targeted tailor-made wages – that is necessary.

"But if they are not there, if you have no trade unions in place in a region or a sector, if there are no employer associations that are always caring for the fairness among the employees, well, you cannot say: ‘Well, then there is no minimum wage'. Then, we need alternative proposals. And that is what the framework is for: to give guidance for the process of how you can find an appropriate tailor-made minimum wage in such cases," said von der Leyen. She asserted that she preferred collective bargaining, which she described as "the crown jewel".

More education

Several speakers highlighted the importance of education as a way out of the Corona crisis, and that it is also important in the face of other major changes like digitalisation. 

“Europe needs creative thinking and knowledgeable people in order to move forwards with the digital and green transition. The conclusion is clear: Human knowledge is Europe’s most important resource. That is why the EU should aim to have the highest education levels in the world,” said the Finnish Prime Minister Sanna Marin.

The Porto declaration introduced the notion that GDP per capita should not be the only measure for countries’ progress:

“We welcome, as another success of European social dialogue, that the European Social Partners have made a joint proposal for an alternative set of indicators to measure economic, social and environmental progress, supplementing GDP as welfare measure for inclusive and sustainable growth.”  

In March, the EU Commission presented an action plan for how social rights should be realised over the next ten years.

• At least 78% of people aged 20-64 should have a job by 2030.
• 60% of all adults should have access to further education every year.
• The number of people at risk of poverty should be reduced by 15 million (including five million children).

One result from the Porto summit is that social policy developments should be discussed by the European Council – the EU’s top political body – at least once a year. This happens within the framework of the so-called European Semester, where member stated coordinate economic and labour market policy. Now the other issues within the social pillar will also be treated there.