What does it mean concretely to move towards a socio-ecological state? What social and fiscal policies are needed? And how can it guarantee all the elements necessary to a good life in sustainable economic systems?
On 15 May 2023, SOLIDAR’s President Anne Van Lancker took part in a panel discussion on the future of the welfare state organised in the framework of the Beyond Growth Conference 2023 at the European Parliament. This panel, moderated by Philippe Lamberts, Member of the European Parliament (Greens/EFA), brought together researchers, policymakers, think tanks and civil society representatives to discuss how to build and finance welfare systems that are compatible with sustainable economies that improve citizens’ wellbeing and respect planetary boundaries.
Anne Van Lancker stressed that the various crises that Europe is facing demonstrated that politics of economic growth are no longer viable foundations of the welfare state, and that we must transition from a traditional welfare state to a socio ecological state founded on sustainability, equality, wellbeing of all, that respects the boundaries of the planet. A paradigm shift is needed to develop sustainable development models. This requires a change in the EU toolbox and a shift in the governance system. She highlighted three main areas:
Strengthen social protection systems. The crises Europe has experienced in recent years have increased inequality, poverty and social exclusion. They have also shown that countries with robust protection systems have proven to be more resilient and capable of faster and stronger recovery. A socio-ecological state should be based on a thorough implementation of the European Pillar of Social Rights (EPSR) through concrete initiatives such as adequate minimum wage, adequate minimum income, and social protection for all, including atypical workers like platform workers. The key is to build resilient, well-functioning welfare systems, based on the 20 principles of the EPSR, to create a real European Floor of Social Rights for all. Particularly in the context of the ecological transition, it is essential that people who need to re-skill, change jobs, or will become unemployed are adequately supported and protected from income insecurity.
Invest in people who need it, not in those who already have a lot, and reconcile the purchasing power of vulnerable people with the ecological carrying capacity of the planet. It is important to ensure that EU funds such as the Social Climate Fund are used to support vulnerable people with low incomes and collective investments in home renovation, sustainable (public) mobility, energy efficiency improvements and local energy production systems, instead of benefiting those who do not need support. This would not only make people less dependent on fuel energy and energy imports from abroad, but also support community development, local employment opportunities and citizen participation and ownership.
Transform the European macroeconomic governance system into a truly social, environmental and economic policy coordination mechanism that supports long-term social and green public investments. SOLIDAR is concerned about the pending proposals that leave the 3% deficit and 60% debt targets untouched. Even if the system were to move towards country-specific medium-term structural plans, the target of 0.5-1% debt reduction for highly indebted countries, on top of stronger enforcement rules, would make it almost impossible for these countries to make the necessary socially just investment to face climate change and tackle current social inequalities. This is why SOLIDAR calls for the introduction of the golden rule for public investments, while ensuring an adequate level of current spending, which would ensure that net public investment is excluded from balanced budget rules. Furthermore, SOLIDAR calls for the introduction of a social imbalance procedure, to counterbalance the macroeconomic imbalance procedure, which currently focuses exclusively on fiscal sustainability and leads to austerity policies.
Anne concluded by stressing that Europe has the potential to lead by example in promoting a Just Transition. But social and civil dialogue are key in supporting this process as trade unions and civil society organisations have a huge transformative and creative power to push for this paradigm shift. Maria Joao Rodrigues, President of FEPS, former Minister of the Portuguese Republic and Professor of Economics at ISCTE-IUL, recalled that if the EU invented the welfare system, it now needs to update it to socio-ecological systems. In this sense, the European Pillar of Social Rights is a good starting point, even if it needs to be updated with a much clearer action plan on environmental concerns.
According to Juliana Wahlgren, Director of the European Anti-Poverty Network, discussions on growth should be shared with people experiencing poverty. At the European level, this issue is linked to energy poverty. Indeed, energy is seen as a commodity rather than a human right, which means that citizens don’t have access to basic services anymore. She stressed that the economic model based on growth is designed to alleviate poverty, and not to solve it. A socio-ecological state should therefore address the root causes of inequality and poverty.
Timothée Parrique, researcher in ecological economics at Lund University, pointed out that the cost of degrowth today will be lower than the costs of degrowth tomorrow. He emphasised that this is mainly a problem of resource allocation.
Simone d’Alessandro, Professor at the University of Pisa, explained that climate policies often have negative distributional effects on citizens, creating social barriers and backlash that slow down the process of ecological transformation. He stressed the importance of anticipating the negative consequences of the ecological transformation on workers and jobs, for instance by promoting the reduction of working hours and universal basic income.
Milena Buchs, Professor at the University of Leeds, defined sustainable welfare as a system that meets needs and redistributes resources in an equitable way by design, thereby “failure demand” and hence inequality. She put forward policy examples such as a wealth tax, targeting energy emission inequality, limiting luxury energy use, and guaranteeing access to Universal Basic Services.
Sebastiano Sabato, Senior Researcher at the European Social Observatory (OSE), stressed that the Just Transition framework of the European Green Deal needs to be strengthened in order to build a true socio-ecological welfare state. This means strengthening the European Pillar of Social Rights through bottom-up approaches and civil dialogue, identifying the gaps present in the Just Transition framework (related to the worker protection and the monetary buffers), and integrating the Just Transition objectives into the economic framework.
SOLIDAR would like to thank the organisers of the Beyond Growth Conference 2023 for the invitation and the fruitful debates.
A recording of the panel can be found here.