Competitiveness and defence drive the 2025 Spring Package – Social Agenda Still Takes a Back Seat
The European Commission announced the European Semester Spring Package 2025 on 4th June. The Package contains, among others: the Spring Package Communication, giving an overview of its main objectives and rationale; the Employment guidelines, guiding national employment policies; the Country Specific Recommendations, containing the main recommendations on socio-economic measures from the Commission to Member States; the Country Reports, analysing the performance of Member States concerning their economic, fiscal and social situation; a set of documents focusing on the macroeconomic and fiscal aspects of the Semester.
This Spring Package is the first one published under the new Commission’s mandate and showcases the two main priorities of Von der Leyen II Commission: competitiveness and defence.
The elephant in the room
In March 2025, the Commission announced the possibility for member states to activate the national escape clause under the reformed EU economic governance, which allows for the suspension of the Stability and Growth Pact fiscal sustainability rules for exceptional circumstances. This initiative was part of the ReArm Europe Plan/Readiness 2030 package, and doubts have been raised about the correctness of the clause activation based on the renewed economic governance.
The political choice to suspend financial requirements clearly and unambiguously highlights that respect for the Stability and Growth Pact is not vital and that it can be applied flexibly and even suspended if urgent conditions materialise. Problematically, the urgency is perceived only for defence-related objectives by the Commission and socio-environmental priorities, despite their essential role for the future of Europe and the globe – also in economic, and therefore security and competitiveness terms – are not prioritised as they should. The 2025 Spring Package includes proposals for Council recommendations on activating the national escape clause for 16 member states that have requested it.
The Spring Package Communication reveals that the Competitiveness Compass is identified as the guiding framework for the 2025 cycle (and those to come) and that increased public spending on defence is part of the path towards achieving the overall strategic objective of the Commission: boosting competitiveness. This translates to a series of actions and priorities reflected in the entire Package, which include:
- Investment in innovation and research;
- Decarbonisation of our economies while boosting competitiveness and enhancing security;
- Simplification of the regulatory environment for investors and businesses;
- Improving cross-border investment and business opportunities within the Single Market;
- Stimulation of domestic private investment and the development of a Saving and Investment Union.
An unbalanced approach
For over nine pages, the Communication focuses extensively on the challenges to competitiveness. And while clearly some of the priorities presented above are important, like the push towards the decarbonisation of the EU economy, this perspective dangerously underestimates the vital importance of social progress vis-à-vis economic growth, competitiveness and security. Moreover, even the decarbonisation ambitions are contradicted by the planned investments in the highly polluting defence sector.
Four pages at the end of the Communication are more centred around social convergence and fairness. Of these, one and a half is solely focused on the skills for the labour market, underscoring, once again, the labour market-centred approach, as opposed to the human-centred, that the Commission has been applying and that perfectly aligns with the current strong focus on competitiveness.
When looking at the overview of the thematic areas covered by the Country-specific recommendations:
- All member states received defence recommendations
- Only 14 were advised on housing
- Just 16 on poverty
In general, the Country-specific recommendations are concentrated in the areas of defence, innovation, energy, as well as skills, education and the labour market.
The space for social objectives
On the bright side, the analysis of social convergence highlights the particularly challenging situation of income inequality and risks of poverty and social exclusion. However, far less elaboration and emphasis are reserved for this major social challenge. Instead, the housing crisis is adequately underlined, with reference to the need for increased investment in affordable housing stock, including social housing solutions, which is welcome.
While recognition of some important social issues is present in the 2025 Spring Package, the importance accorded to economic competitiveness and defence largely outweighs social priorities. This will be even more exacerbated by the disproportion of resources allocated for defence in comparison to social investment as a result of the activation of the national escape clause. To attenuate this unacceptable disparity, a new MFF that finally recognises the utmost importance of social investment is imperative.
To end on a hopeful note, the recognition by the Commission and the consequent invitation for Member States to intensify the engagement of civil society is an important element that can potentially strengthen the social dimension of the Semester.
