Committee on Employment and Social Affairs Ordinary meeting
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EMPL European Parliament
Follow its sittingsMarit Maij
This was a proposal that does not do what we think the European Social Fund should do. All aspects that the European Social Fund has and that make the European Social Fund so unique are under pressure in the proposal from the Commission. If we look at the proposal that says 14% of social expenditure as a target in the NRPPs, this actually means that a lot of social spending is at risk. We have calculated that for most of the member states, this means that there will be a decrease of around 50% in their social spending. So I'm happy that together with my co-rapporteur, David Casa, and also with the shadow rapporteurs, we are working on restoring the regulation.
On an ESF with, as was said, a dedicated budget, its own objectives, and thematic concentrations. And that's the basis of our draft report. Because without clear objectives and without thematic concentrations, all of those good projects that we have right now and that are financed by the ESF are at risk. We see that all these measures can be at risk if we do it the way that the NRPP is proposing right now. The flexibility, as was mentioned, we have talked to our other stakeholders, to our shadow repertoires, and we see that with the flexibility, we might lose it because member states will have the opportunity also to use this money for other targets.
And we want the money to be used for the targets of those that are at risk in our societies. So people under long-term employment that are finally supported to get an employment position, people that live in poverty that need food assistance from our food banks. Youth unemployment that is still in some areas of the European Union is prevailing too much. Supporting people with disability, homeless people, or migrant women to help them learn the language so they can participate. And last, but of course not least, the child guarantee, focusing on children living in poverty.
We should make sure that we can do all of this together with, as we said, a European social fund that is a standalone fund that has a dedicated budget with clear objectives and thematic concentrations. I look.
Very much forward to cooperating with David on the next phases of our endeavor for this stand-alone European social fund. Also, with.
The political groups, we feel a lot of support already from discussions that we've had with our shadows. And I think together, we can make a difference, and I'm more than ready to make that difference. Thank you so much.
Li Andersson
Thank you very much. And then we move on to the shadow repertoires, two minutes each, starting with Missus Verbruc from the Patriots.
Séverine Werbrouck
Thank you, Madam Chairman. Colleagues, thank you very much for this very substantial work and the ambition there. The situation is a bit unique because we're awaiting the conference president's decision, which makes this somewhat vague still. But I would point out that the envelope and the principle of NRPP was adopted in the interim report last year. So I expect there's an agreement between the EPP and the S and D to distribute the reports between them, have voted in favor of this interim report.
So it's a question of clarifying your internal positions and your respective groups. Our group can support the autonomy and the independence and autonomy of the ESF. Yes. We need a guaranteed envelope, but it's a fund which doesn't rely on a performance-based budgetary model. The structure itself is secondary to this question, question of undermining the budgetary control competence of the parliament, which has been avoided, including legislative aspects and the binding nature of the European semester.
So the money versus reform choice, the only winners out of this would be the stock markets, who would decide who decides on the money distribution would be the commission, and that relies on no democratic legitimacy. Our position is very clear. So an autonomous social fund needs to be really autonomous. If it's a question of deciding who's going to decide between employment or autonomy, we need to consider our opinions here. We will agree to the ambition in the report.
It's a first step, so we're heading towards autonomy. What's most important for us is the management model. Otherwise, in any case, the parliament will be excluded whether it's autonomous or not, with governance and performance criteria. There will be no democratic control over the social.
Li Andersson
Thank you. And next, speaker on behalf of Missus Tereskoye is Missus Gemma.
Thank.
Chiara Gemma
You, chairman. Colleagues, the commission has presented this proposal for the next European Social Fund as a significant project for the investment of people. But in its current form, it runs the risk of being an empty letter. It's missing the budget. Without any clear, credible financing, this is not really a strategy.
It's an empty promise. Secondly, what's presented as a coordination runs the risk of becoming control. Strict alignment with the European semester and centralized programming within the NRPPs could reduce the member states' ability to establish their own priorities. The European labor markets are different, and they require flexibility, not standardized governance. Rigidity for minimum obligatory standards would undermine the flexibility in both investment, social investments, but imposing fixed quotas runs the risk of causing a waste of resources and ignoring national realities. On the other hand, the administrative burden will only increase. More indicators, more reports, more complexity, and this takes time and resources away from achieving results in the field.
How can we improve this? Well, first of all, we need an autonomous to reduce the administrative burden. We need to guarantee real flexibility for the national labor models. We need to have priority for skills, productivity, and demographic resilience and economic competitiveness, not to abstract objectives, distance from the economic reality. We need to promote the inclusion of people into the labor market, not imposed by random social goals.
So we need to have fewer reports, fewer regulations, and more results. Thank you.
Li Andersson
Thank you. And next speaker is Missus Van Embele from Renew. Thank you very much, President.
Brigitte van den Berg
Giving the Renew opinion, I would like to say we want to keep the goal in mind. Make sure that we all understand that investing in people is the cornerstone of our cohesive societies and our competitive Europe, that we want to empower citizens, that we want to foster inclusion, and that we want to drive long-term economic growth. And for that, the European Social Fund has to be the most effective tool, to have the most effective tool to prioritize skills, inclusion, and empowerment. And we do have a really long standing tradition of investing in vocational training and digital upscaling for workers in transition and bringing funeral groups into the labor market. We want to fund accessible childcare to help parents, especially women, stay in the workforce.
And we want to make sure that migrants can do language courses to speed up their integration. And for all that to be a success, we need some simplification and streamlining of the European Social Fund. So Renew Europe believes that the AMPL committee must have the strongest voice in shaping social spending, because that's what we're here for. But we can support keeping the ESF within the national regional partnership plans to ensure a certain alignment with other funds. But we also really want to push for the possibility, for instance, to set the specific objectives and the eligible actions in the ESF regulation.
So, to balance that, we make sure that, on the one hand, we have the coherence with the other funds while ensuring that social spending is really well defined. So I would want to make sure that we invest wisely, that we have a simplified process, and that we empower those that can really deliver results so we can really build on a strong Europe. Thank you.
Villy Søvndal
Thank you, Thier, and thank you for the cooperators for the work you are doing. Social issues should not be something we just discuss in between. People's well-being should be part of any discussion. The European Social Fund is and has always been a cornerstone in the EU progress towards a social justice union where no one is left behind, and ESF plus should continue to be that. Therefore, we have been part of the majority here in the parliament fighting for a stand-alone ESF plus, and thank you for that.
We are, though not agreeing on the idea that a standalone ESF plus is meaning that it should be outside of the framework of the NRPPs. The horizontal conditionalities are also beneficial for the ESF Plus. We have to also say the commission's proposal does not make it a bit difficult to work on this file. We will have, amongst other things, to add an article 3 as there was none. For the ESF Plus to stand alone, it needs its own specific objectives and budgets, but still under the NRPP framework.
I think we'll have to find a model for that. As input committee, we have a special responsibility to make sure that the ESF+ goes to people in vulnerable situations. In a chaotic world where climate change was an increasing inequality, we really hope that we can find a majority for an ASF plus that helps our societies to be more just and equal. This secures a sustainable union that fights inequality and promotes access to quality employment and universal care. For that reason, we want the cycle of disadvantage across generations and want to break and promote social inclusion by ensuring equal opportunities for all, tackling discrimination, and also addressing health inequalities taking into account agenda and intersectional perspective.
Thank you very much.
Li Andersson
Thank you very much. I have no further requests for the floor. So I'll ask if there are still members who wish to take the floor and catch the eye. If not, then I will give the floor to the commission representative, Miss Ruth Passarman, for the next three minutes.
Ruth Paserman
Yes. Thank you very much for the floor, and thank you very much to the rapporteurs, Miss Maye, Mr Casa, for having drafted this important report, that will influence the negotiations on the next MFF in general and also specifically on the NRPPs. We fully agree with you on the importance of investing in social and policies and all the specific areas that were mentioned here in the room. We, the commission, in our proposal, we stress the importance of having more flexibility across the budget. The experience of the past, MFF, which has been implemented during a period of multiple crises, has shown that we need a budget that is more flexible, that has the capacity to act and react fast when their circumstances change unexpectedly or when there are new policy priorities that need to be addressed.
We also believe we should have simpler, more streamlined, and harmonized financial programs so that citizens and companies can easily find access to funding opportunities. But we also believe that the fund, the budget should be tailored to local needs, investments, and reforms where it matters most, ensuring a faster, more flexible support for a more economic, social, and territorial cohesion across our union. That is why we have tabled an ESF fund specific regulation based on article 164 of the treaty, which will be delivered through the NRP plans and will be subject to the single rule book, which is the NRPP regulation, a bit like the CPR is now. This approach responds to one of the key objectives that the commission is pursuing, more flexibility and more simplification across the budget so that we have the capacity to react when their circumstances change. We, the NRPP regulation specifies that there will be a budget of at least 14% of the overall envelope, including the loan support, but excluding the amounts earmarked for the common agricultural policy and for the social climate fund.
We have a dedicated budget which, of 14%, for social objectives, which amounts to at least €100,000,000,000. And this approach allows us to combine the strength of paying attention to the social employment goals with integrated programming, which allows better coordination across the different policy areas, but also a more tailored approach which can reflect the national and the regional needs of the member states. We, it is true that we will use the semester as a reference framework for the negotiations with the member states and the regions. But it's also true that the regions will participate in these negotiations, and they will be involved. And the taking into account the needs at the national, regional, and local level remains very important, and that is also why we believe that there has to be flexibility in what can or cannot within the envelope, of course, between within the overall, employment and social objectives.
There has to be a negotiation of what are the national, regional, and local priorities without top-down fixing certain percentages. Thank you.
Li Andersson
Thank you very much. And then, the floor back to the corruptors for final remarks, starting with mister Kas.
David Casa
Thank you, chair, and thank you, colleagues, for this exchange. I believe we all acknowledge the importance of the European Social Fund, especially now in times of pressure and uncertainty. And while I note the position of the commission, by and large, I have to say that this is not the approach shared by this committee. When it came to flexibility with other areas like agriculture and fisheries, there was no resistance for a stand-alone with other committees, with other sectors. I really cannot understand the resistance by the commission with us coming from the AMPL committee.
And this resistance is that this resistance is not only coming from this committee, but now from all plenary in the interim report. So I think within this committee, there is an excellent basis for cooperation in the coming months. And I am happy to note that in many areas where we do agree and where we are further apart, we should find a way how to come closer together to find a common position and that parliament can be proud of. I really thank my colleagues for their suggestions. Of course, we will continue to be closer together when it comes to amending this report now.
I look forward to your amendments, and thank you for today, madam chair.
Marit Maij
Thank you, and Missus Mai. Yes. Thank you very much, chair.
And thank you, colleagues. I think what some of you have said is that we have to keep in mind who we do this for. We have to keep in mind who the targets of or the people that are being targeted by the European Social Fund are in the European Union, those that have a distance to the labor markets, people that are excluded, and that we want to have them participate in our societies. They don't have tractors that can come here in front of our European parliament and protest. They are people that are often much more silent, but we do need to listen to them and include them in our policies.
So I think I share what our colleagues have said, that it is strange that we can do this for the one part of the NRPP, but we cannot do it for the part that is less vocal and that we don't hear. But we do want to support them because they are part of the social fabric of our European societies. Our European competitiveness is not only based on economics. It's not only based on supporting companies or supporting farmers. It's also based on supporting the people in our societies, and especially those that are maybe in more vulnerable positions than we are ourselves.
So I think this is an aim that we have to support the budget, but also support the increase of the budget. Again, we have asked many times to the commission if we can get some information on what the real numbers are and what the difference is between the current European social fund and what is being calculated right now. With the 14%, we do not get the answer. I think this makes me believe that we are actually right, in what we have calculated. So I think this also supports our goal in having, you know, not just the standalone fund with the dedicated budget, but also with a strong budget, and with the targets that we need.
We need to do this for the people, that we cannot hear and that cannot protest here in front of our parliament. Thank you very much.
Li Andersson
Thank you very much. And the deadline for amendments to this very important report is on May 12. Then we move on to the next item on the agenda, the consideration of amendments to the draft report on the implementation of the Council recommendation of 30/10/2020 on a bridge to jobs reinforcing the youth guarantee. The draft report emphasizes that despite progress since 2020, significant challenges remain in ensuring timely and quality offers for young people. Over 400 amendments have been tabled, highlighting the importance of this subject.
So we start by giving the floor to Mister Petrov to comment on these amendments for the next five minutes.
Hristo Petrov
Thank you, chair. Dear colleagues, I would first like to thank all the political groups for the amendments they have tabled to my draft report, as well as for their constructive approach. Our task will be to work towards a shared vision that meets the expectations of young people across Europe. We now have a real opportunity to produce an implementation report that does not simply take stock of the yacht guarantee situation in the European Union, but one that sets out concrete and ambitious recommendations, recommendations that, above all, can make a real difference to young people's path to employment. A clear picture is evident from our amendments, despite their considerable potential.
The guarantee is still being implemented too inconsistently among the member states. The shortcomings are well known: lack of visibility among young people, difficulties in reaching the most marginalized groups, and monitoring mechanisms that remain inadequate for assessing the outcomes of interventions. These weaknesses are holding back the impact of what is nevertheless an essential instrument. Moreover, as many amendments have rightly pointed out, there is no uniform profile for young people's needs. Their circumstances are varied, often complex, and require a tailored and personalized response.
A young woman from the Roma community, for example, may face more discrimination when accessing employment. A young person living in alternative care may need extra support to find accommodation, gain stability, and integrate into society. Recognizing this diversity is in itself a step towards improving the effectiveness of the yacht guarantee and the measures that are meant to address such barriers. This need for comprehensive support also stood out as a shared priority. In my view, the guarantee must remain a scheme focused on helping young people enter the labour market.
However, it cannot operate in isolation. It's essential to strengthen links with social services, whether in relation to child care, housing, or health care. This is because social barriers are often the primary obstacles to entering the labor market. Without proper housing, it's more difficult to undertake training. Without decent living conditions, it's impossible to envisage the future unemployment.
On this basis, I believe we can work together to convey clear and guiding principles, strengthen the capacity of public employment services to ensure high quality personalized support for every young person who takes part in the scheme, further develop the preventive aspect of the yield guarantee, in particular by strengthening ties with schools to combat early school leaving, improve the quality of the opportunities offered by defining specific indicators for monitoring and evaluating results, and ensure adequate and sustainable funding for the yield guarantee in the next MFF. Finally, let me revisit the issue of volunteering, which seems to have raised some questions. My intention is not to divert the yield guarantee from its main objective, but to enrich it. And discussions with stakeholders and young people themselves have shown that a non-formal approach can be a relevant step for certain profiles. Some young people do not wish to return to a traditional school setting, yet are not ready to take up a stable job immediately.
In such situations, volunteering can serve as a valuable stepping stone, a way to rebuild confidence, develop skills, and gradually reengage with a pathway to integration. And it could be an additional option within the yield guarantee schemes aimed in particular at the most vulnerable young group and in no way substitute for existing offers. I have, in fact, clarified this point in my amendment to avoid any misunderstanding. I'm confident that we can still bridge the gap between our positions on this matter during the upcoming negotiations. So, dear colleagues, I'm, of course, here to listen to your views as we prepare the next stages of our report, and work together to produce an ambitious, coherent, and useful report for Europe's young people.
Thank you.
Li Andersson
Thank you very much. We then move on to the shadow reporters, two minutes each, starting with Miss, Mister Goyking from the APP.
Thank.
Niels Geuking
You, chair, colleagues. Firstly, I'd like to thank Mr. Petrov, for this excellent report. It's a good foundation for our work. It shows that despite any progress since 2020, the economy is a structural problem for the EU.
The report shows that there were clear challenges related to the quality of offer available for young people. We're not just talking about problems of resources, but also about the problems of implementation. Our amendments are designed to tackle these challenges. The youth community cannot function as an isolated village. Its success is based largely on policies in other areas such as family and education policies, housing, childcare, and the broader infrastructure.
Young people cannot be helped with just one instrument. Member states need to look up to where the needs are. We need to build on the synergies we have and target young people and parents. We're not talking about dreams. We're talking about concrete measures.
Just as importantly, we need robust control mechanisms. Whenever public funds are used for the youth guarantee, we have to ensure that the follow-up measures are there. We're not just talking about increasing bureaucracy, but we want to ensure that young people are not excluded from society, and that the money goes to those who really need it. Colleagues, the youth guarantee is a central pillar of work in the EU. Let's ensure it doesn't remain words on a page, but actually is translated into action.
I'm looking forward to working together with my colleagues. The work has been very constructive so far. So thank you very much indeed.
Aodhán Ó Ríordáin
Gormelgus, thank you again to the Rapporteur Petra for your work. On the basis of our last committee meeting on this file, I know that many colleagues agree that the reinforced youth guarantee is one of the EU's most important commitments to young people, but that the gap between ambition and delivery remains unacceptably wide. Our s and d amendments are built around four priorities to change this. First, reaching those furthest from the labor market. One size fits all approaches through online portals have failed.
We need to increase awareness by communicating in a language that young people understand, and to reach them proactively in their communities through youth organizations, educational institutions, and so on. And when they receive support, it must be tailored based on the specific barriers each young person faces, be that discrimination, care responsibilities, homelessness, disability, or addiction. We need targeted interventions for the most vulnerable, including care leavers, young migrants, and those leaving incarceration. Second, targeted investment in disadvantaged areas. Areas with the highest youth unemployment need increased funding and strengthened delivery capacity.
To ensure this is possible, we demand ring-fenced funding in the next self-standing ESF for the youth guarantee. Third, a holistic approach. Employment activation cannot succeed in isolation. Housing, child care, mental health, and social protection are prerequisites, not add-ons. The RYG must be structurally linked with social protection and essential services, and age-based restrictions that penalize young people from accessing social benefits must be removed.
Fourthly, quality of offers. Unpaid offers and explosive traineeships have no place in the scheme funded by the EU taxpayers. We are calling for a binding quality framework based on fair remuneration, decent conditions, and real career progression, enforced through funding conditionality. The UK guarantee must be a real promise to our young people. I look forward over the coming months to working with all groups to make sure it delivers.
Li Andersson
Thank you very much from the ECR. No. Then, next speaker is Mister Bosanac from the Green.
Gordan Bosanac
Thank you. I would like to thank the repertoire for the report and for the collection of 408 amendments, which constitute a good basis for our future work. Mister Petrov, I see that you have personally tabled almost 100 amendments covering a wide array of issues, and I'm certain that this level of personal commitment bodes well for successful negotiations. I would like to emphasize three main points that we would like to see in the final version of the report. First is quality of offers, second outreach, and third, data collection.
Firstly, we welcome the commitment made by member states to young people under the age of 30 to offer them good quality employment, continued education, or a traineeship opportunity. In this respect, we stress that job quality remains a major challenge in youth employment. Public policies should contribute to combating precarious forms of work, including unpaid or underpaid trainerships, involuntary part-time work, temporary agency work, and undeclared work, while promoting fair working conditions and sustainable education and labor market integration. Let us not forget that more vulnerable groups such as women, racialized youth, youth with disabilities, youth from remote or rural territories, or with a migrant background, face a higher risk of unemployment as well as structural barriers to accessing training and skills development. Furthermore, there is a need for an integrated support system that encompasses housing, health care, and social protection to create a conducive environment for employment.
Secondly, we should call member states and the commission to invest dedicated efforts in outreach, or you could say in branding and marketing of the youth guarantee, to ensure comprehensive awareness among young people, particularly targeting vulnerable and marginalizing groups. And thirdly, we need to effectively assess the quality, inclusiveness, and long term outcomes of youth guaranteed schemes. For this, we need the development of common indicators, minimum quality standards, including fair pay based on a living wage, access to social security protection, monitoring frameworks, and improved data collection and transparency. Those will be our priorities. Thank you.
Kathleen Funchion
Chair, I also want to thank our rapporteur for all of its work on this to date, and I welcome this debate. So we have not quite submitted 100 amendments. We've submitted around 27 amendments, covering a wide range of issues that affect young people, not just obviously in our own home country of Ireland, but right throughout the EU as well. So there's many issues as we know, housing, the child guarantee, decent paying conditions, and we've also tabled some amendments in relation to language rights as well. As I have said on a number of occasions in this committee and in other committees, the youth guarantee and well-designed youth policies, they're not budget costs, and I don't think we should look at them in that way.
We should look at them as what they are, which is an investment in the next generation in our young people. And that's why we will be also calling for a fully funded and a standalone ESF Plus in the next multiyear budget. We must place a focus on jobs and recognize and begin to address the phenomenon that younger workers are often overqualified for the roles. They are often as well mismatched in terms of the end up in part-time employment after qualifying, due to this, you know, not having the experience, and they're kind of caught in a catch 22 situation. And I think that needs to be recognized, and then that the knock-on and the long-term effect that has for workers, particularly in terms of pension and things that none of us think about when we're younger.
And then as you get older, obviously, people start thinking about that. And we know as well that can affect women a lot more as well. And we have put some amendments, obviously, in relation to addressing that issue as we see it. We need to call out the spread also of precarious work and low-paid forms of employment in the labor market, which particularly impacts our younger people. Amendment 135 that we have put in is in relation to that issue.
And I want to touch on this, and it was mentioned as well by the MEP over here on the issue of trainees and interns. We have to recognize workers and trainees and interns and their entitlement to fair wages and fair terms and conditions, that really is an important part of this. Because far too often, we have staff and trainees taken advantage of, underpaid and overworked. So it's my hope we can produce a forward-thinking and progressive document. And given the work of all the shadows and the rapidity of data, I think that we can achieve that.
And, yeah, I will leave it at that for now, chair. Thank you.
Li Andersson
Thank you very much. Are there other members who wish to take the floor under KHDI? If not, then I will give the floor back to the rapporteur, Mr. Petrov, for the final remarks.
Hristo Petrov
Thank you, chair. Dear colleagues, thank you once again for highlighting your priorities and the key points set out in your amendments. This discussion has been valuable in giving me a clearer understanding of the upcoming negotiations. Beyond our own priorities, we share a responsibility to provide solid solutions for our young people. And while the yield guarantee is the suitable tool, the way it has been implemented so far has not allowed it to reach its full potential.
The question, therefore, is not how to reinvent the yield guarantee, but how to make it more effective, more accessible, and more equitable. Many of you have emphasized the need for better targeted support, more personalized guidance, and greater attention to the most vulnerable young people. Others have highlighted the importance of the quality of offers or the key role of funding and implementation at national level. So, these priorities are not contradictory. They are complementary.
Following this exchange, I'm convinced that we have everything we need to produce a positive, ambitious, and, I would say, useful report, a report which, with your help, can serve as a road map for making a real difference to the lives of young people across Europe. Thank you.
Li Andersson
Thank you very much. The work will continue on the compromises, and the vote on the final report is scheduled for July. We then proceed to the consideration of amendments to the ample opinion on the proposal establishing a budget expenditure tracking and performance framework, and other horizontal rules for union programs and activities. Following last month's exchange of views on the draft opinion, members have tabled 539 amendments, reflecting strong political interest, particularly in ensuring a shift towards results- and impact-based monitoring of EU spending. I will now give the floor to the ample repertoire, Missus Kellemans, to present the overall direction of the amendments.
Estelle Ceulemans
Please, you have the floor for the next 5 minutes. So, thank you. Thank you, chair. I will speak in French.
I'll let people put on their headsets. As I said, well, as has been said today, we're discussing a technical topic, but it's actually a very political topic too. It's the way in which we define and measure the performance of the next EU budget. Performance isn't just about figures or Excel sheets. It's a political choice too.
It's about deciding what we want to measure, and deciding what really counts. Are we measuring how much money is spent? Well, yes, that's the objective, also the actual impact of EU policies on the lives of the citizens. The commission's proposal aims to simplify the framework with harmonized indicators in a centralized system. This objective is shared by us.
We are against bureaucracy and we're pro simplification, and many amendments go in that line. Most political groups, obviously, in amendments too, they want to simplify, yes, but without losing the capacity to truly measure the results, especially in terms of employment, competition, social inclusion, or skills. So sustainability must take a key role. Social justice, scientific rigor, are also important. Other amendments focus on the quality of jobs because that, well, it's also something we think is very important in this committee and the impact on workers.
This has to be at the heart of any assessment. These priorities show a key debate, so we want to analyze a performance that shows actual change. As the rapporteur, I conducted some visits, and I saw how the European Social Fund is vital. It allows groups, local actors to help people toward a job, training, and toward dignity, but these impacts really change lives. So we have to continue to finance these structures, too.
So we have to have a true European Social Fund. It must be standalone and with its own budget. Thank you.
Li Andersson
Thank you very much. And, next speaker, that I have present here is Missus Cema from the ACR.
Chiara Gemma
Thank you, chairman. Thank you, colleagues. The commission's proposal introduces a useful framework, but the decisive factor is how it will be applied to work. As we wanted to stress in our amendments, it needs to be anchored in three criteria: efficiency, proportionality, and respect for member states' competencies, a performance system without measuring concrete results, competition, inclusion. But the framework cannot represent greater administrative burden today, to complex reduces provisions reduces the efficiency for the SMEs or local authorities, undermining the efficiency.
In this context, there's also a broader risk that is of a progressive centralization, a too rigid system based on standardized measurements undermines the social model. Indicators are a key point here. They need to be pertinent. They need to be limited and used in a flexible manner. Otherwise, they're no longer useful for evaluation and simply are operational in slowing the whole procedure down.
The same is true for the subsidiarity principle. The performance framework cannot be used to introduce, even indirectly, standards or conditions in areas which remain national competence, in particular in the labor market and social policies. And finally, it's right to strengthen the focus on employment, competitiveness, and inclusion as well as on the people with disabilities. But all of this needs to be very specific by linking this all to the results. The goals need to be very clear, a budget which works better and which is more transparent and simpler to apply, because the efficiency of a European expenditure depends at the end of the day, on member states' capability of using it properly.
Thank you.
Brigitte van den Berg
Yes. Thank you very much. Unfortunately, my colleague Christophe had to leave the meeting early, so I'm happy to step in for him. Our amendments pursue a clear objective to strengthen the performance and monitoring of EU spending on concrete priorities. First, we must reinforce the horizontal principles of the budget.
Respect for fundamental rights, whether for children's rights, those of persons with disabilities, or in the fight against all forms of discrimination, must be embedded in all policies. These priorities cannot remain declaratory. They must actively guide our budgetary policies. Second, this requires a strong social convergence in both our reforms and investments. I therefore suggest introducing social and employment guidance to operationalize the objectives of the European Social Fund and the national and regional partnerships plans.
By setting thematic enabling conditions and clear guidelines for funding, we can ensure a more coherent and strategic use of our resources. Third, we need greater clarity and comparability. The introduction of core performance indicators to be used by all member states would allow us to track progress, evaluate priorities, and measure results transparently across the union. Finally, we must move beyond a purely quantitative approach. Quality matters.
I am suggesting a mid-term review of this regulation to introduce impact indicators across all intervention fields. This would also allow us to assess the real effectiveness of our spending and adjust our policies based on their impact on our citizens and our regions. This is essential to ensure a budget that is targeted, efficient, and delivers tangible added value. At the same time, we have to strike the right balance. This regulation should remain focused on monitoring and evaluating performance without overlapping funding eligibility criteria, which belong to other instruments.
I look forward to the upcoming negotiations on this key file, central to the future architect of the mutual financial framework. Thank you.
Li Andersson
Is Missus Lakalenic ready to take the floor immediately? I can give you a few seconds to settle down. No worries. So it's, yes. It's the same file, different.
Isabelle Le Callennec
Thank you, chair. The performance regulation is a technocratic tax, but it's also political. It's a strategic instrument for a more effective budget, and will help the beneficiaries of the funds. It raises a lot more questions than responses. However, it will add administrative burden, while at the moment we hear speeches about trying to reduce this burden.
And in this committee, this regulation is not really adapted to our work. There seem to be difficulties in calculating figures for the outcomes. I submit a number of amendments, I would really like to repeat my points. So refocus the budget so it causes true social change on the classification of activities, so follow-up. This has to be proportionate and justified, depending on the main objective of the action.
The fight against poverty and social exclusion is another important objective. Limiting administrative burden for managing authorities and beneficiaries have a competition as a horizontal priority to strengthen the EU capacities to actually build on jobs in the EU. The horizontal principle of doing no significant harm. Finally, on coherence with the NRP regulation and sartorial rules. On this point, the compromises of the commission seem to be going in the right direction, but there's still a bit more work to do to make it more readable and more operational.
We will work with the. Thank you.
Li Andersson
Thank you very much. And I am speaking as a shadow rapporteur for the left. I once again want to thank the rapporteur for what I think was a very good draft opinion, as already mentioned the last time this was discussed. And I also agree with the speakers who have pointed out that this is not a technocratic issue, but also one of political importance, of political content. And I agree very much also with the objective of transforming this into a policy-driven instrument that really also supports us being able to achieve the social objectives laid down by the European Union.
So it's important to make social outcomes and also impact-oriented evaluation the focus, such as quality employment, poverty reduction, social inclusion as priorities of the EU budget. In addition to this, decisions to be made regarding what is to be considered social spending and with which coefficient will be of high importance also from the point of view of the social spending all in all in the next multi-annual financial framework. It was already discussed here with regards to the ESF that there is a decrease in overall social spending. But what the actual difference will be will also be impacted by whether or not the 14% in the social spendings, investments that have not previously been considered as social spending will be counted into this. So that is also a very important point for us to work on.
When it comes to the horizontal principles, I once again want to reiterate our priority, which is the United Nations Convention on the Rights of Persons with Disabilities, to have this as a strong horizontal principle. We have also drafted several amendments in this regard, meaning it as an overall obligation that cuts to all policies, legislations, and funding programs rather than limiting this to only disability-specific policies, because we need it as an overall horizontal principle for the whole MFF. So looking forward to working with you on this topic. And then, are there other members who wish to take the floor at this point? If not, I will give the floor to the commission representative, Miss Ruth Possemann.
Ruth Paserman
Thank you, and thank you for your comments, colleagues. I would like to come back well, as you know, the whole idea of the performance regulation is to simplify, because it's the same indicators which would be used across all the budgets and all the programs. And the number of indicators which are, let's say, your indicators which are needed has gone down from some 5,000 to about 900. So, and we are sure now that we use the same definitions for everything across all programs, which I think this is really a great step forward. Now, on this point, I think, yeah, I think this is a very good solution.
Now, of course, there are two points that you mentioned, which I think are very important. One is the last point about the coefficients which are attached to what is considered social spending, which, as you know, can be zero, 40, or 100%. A 100% is exactly, is basically corresponds to what is now financed by the European Social Fund. 40% are other types of expenditure, which nonetheless have a social component, so for example, infrastructure. Now, there is a proposal, I understand there is a proposal to include a further coefficient.
In our opinion, this complicates even further the calculation because it's very difficult to determine what is, you know, already like this. Why 40, not 50? Why this and that? So, we are proposing a system which is already widely used with just the three coefficients, and, we think adding further coefficients would really further complicate the matters. On the issue of measuring real performance, I agree that this does not measure real performance, real impact, but we are using these coefficients also to pay the member states.
An impact normally doesn't depend only on the money put on the table, but also on the environment around. So, for example, you can subsidize employment as much as you want, but if there is a declining macroeconomic cycle, it's very difficult to get people back into employment. And you don't want that to influence the payment, let's say, the success of the rate necessarily of the member states. So while I completely agree that impact is the final goal is what we want to measure performance, given this the proposal of the commission is based on reimbursing the member states on the basis of achievements of milestones and targets, and that these targets have to be based on the indicators contained in the performance regulation. They have to be something which is measurable and which depends directly from the funding and not from other environmental factors. So that is why, it's not where we are at the end of the day, we do want to measure impact, and we would measure impact with the evaluations.
That's how we would do it. So it's a way, it's a bit similar to what we do now with the evaluation of the funds. I think I've already overshot my time. Thank you.
Li Andersson
Thank you very much. I will now give the floor back to the operator, Miss Kellermans, for her final remarks. Well,
Estelle Ceulemans
Thank you very much indeed to everybody for contributions, and thank you very much indeed to the shadow reporters for their amendments, because I think many of those are quite similar because we're talking about performance, effectiveness, simplification. If we want to achieve that, then we have to keep our eyes on the true beneficiaries, including those who are organizing and managing the programs. Because if our policies aren't carried out correctly without follow-up assessment, a priori, posteriori, well, I mean, we're not here to make a profit. We're here to meet the final objectives of our policies, which here in the Emperor Committee are particularly pertinent. So I'm looking forward to working together with the shadow reporters over the next few weeks, and I'm sure we will end up with a draft report, which should be able to convince the commission.
Thank you.
Li Andersson
Thank you very much. And the vote for this is scheduled on September 2. Yes. We are discussing the fact that we are ahead of schedule, and there might be members that have planned to come for the presentation of the study, which is scheduled for 4:30. So I would propose a break now, to continue at 04:30 when we originally scheduled, for the presentation of the reports.
Is this acceptable to the members present here? Because our understanding is that there are several sample members in Bajj that are discussing ESF at the moment, so maybe they have time to come back. So 04:30. Okay. So now would be the time to call back your colleagues and MEPs for the presentation of the study.
So we'll be starting shortly. Okay. So we proceed to the presentation of the study requested by the policy department entitled Mapping and Analyzing the Support to Employment and Social Policy in the Proposals for the 2021-2027 multi annual financial framework. As we know, in July 2025, the European Commission presented its proposal for the next multi-annual financial framework. And in this context, our committee requested additional expertise to better understand the potential implications for employment and social policies.
The study provides a comparative analysis of the proposed framework against the current 2021-2027 programming period. It places particular emphasis on the potential impact on the implementation of the European Pillar of Social Rights. It also examines key structural changes, notably the shift towards national and regional partnership plans, and the introduction of a revised governance framework, which raise important questions regarding the future orientation, visibility, and effectiveness of social spending at EU level. We are therefore very much looking forward to hearing the main findings and recommendations. So I will now give the floor to the lead author of the study, Mr. Eijin Begg, professor at the European Institute, London School of Economics and Political Science.
So please, mister Begg, the floor is yours for your presentation for the next 15 minutes.
Iain Begg
Tak. I'm pleased to come here to present this, and I will very briefly introduce myself. I'm someone who's been doing work for many years, no. Correction. Decades for the parliament on different aspects of the EU budget.
And I'd also like briefly to present you can wave Harry Crichton Miller, is one of the researchers involved in this project. I'm not sure there's a message to be had in the fact there are two Brits, but you wouldn't digest that yourselves. So let's proceed if the clicker works, which I'm assured it does. I know you've been discussing this for half the afternoon, so I don't need to dwell very long on the background. You're familiar with the it's working.
You're familiar with the NRPPs, the National and Regional Partnership Plans. You're familiar with the and I think resistant to the idea that the ESF should no longer be a standalone fund. And it's also worth noting that the same is true of the Just Transition Fund, which is going to be folded into these NRPPs as well. If you look through the competitiveness fund, which you might think in some respects is the big innovation of this multi-annual financial framework proposal, there are elements that can be identified as social. But as we tried to analyze them, it got trickier and trickier to work out either what they were, and more importantly, how much money they would generate.
Skills, features in the competitiveness fund, but it's more so in the recitals than in the articles. And, therefore, it's very hard to work out whether there's really going to be much of a budget within the competitiveness fund for what can, at least at one level, be regarded as social objectives. So that's a concern. It's also worth highlighting something which is going to be more transformative on the budget than just having the national plans, and that is that performance-based budgeting, which is a trend that's been arising over the last couple of multi-annual financial frameworks, it was very prominent in the recovery and resilience facility, is going to be much more prominent in the next round. And that prominence itself is something that this committee and others in the parliament are going to have to try to accommodate, because it's not as easy as it sounds.
Great idea. Relate what the EU spends its money on to performance, but the practicalities are far more difficult than you might think, especially in one instance, which is where it becomes linked to the country specific recommendations part of the semester process. They'll be linked to the outset of the next MFF, but we don't know quite what impact future country specific recommendations might have on the governance. And the other thing to note on all this, and I think there's already a degree of consensus on this, is that the whole approach brings to the fore a nexus between the Commission and the member states. And that leaves, to some extent, on the sidelines, other institutions like the parliament, committee of auditors, maybe even the regional level within member states. So there's a transformation going on here which we can't neglect.
Harry Crichton-Miller
Be careful to this is not working very well. Can you move to the next page, please, whoever is in control of it? Next one. Yeah. Second one.
Second page. Go back up. Yes. Is that the second one? Yes.
Iain Begg
No. You have gone too far. Back one. Right. It's about numbers in many respects.
And the first aspect of numbers is that if you look at the arithmetic of this, the full budget for national and regional partnership plans is going to be around 47 percent of the next MFF. If you look at what was in cohesion policy and agricultural policy in the current MFF, it's over 60. So it doesn't take much imagination to realize that this is going to be a reduction in the core functions of the EU budget. It's quite a big one. Then we're told repeatedly that 14% of the national plans has to be for social purposes.
It's a minimum. The research we did made it pretty clear that it's a minimum which will apply to all member states, even though some member states will have differing views on what constitutes social. But there's the trick in it, which is the minimum is not the denominator for this minimum is not the whole 865000000000 at current prices of the allocation for national plans, but you have to subtract the amount for agriculture. So this minimum is based on a much lower denominator and therefore yields much less money. That's why we come out with the view that it's going to be worth in this approximate ESF equivalent, €79,000,000,000 in current prices for the next MFF compared with if you escalate current prices from the current MFF, something more like 95, 98, even 100.
Now then, you hear the commission telling you that, no, that's not correct. The next MFF is going to have a €100,000,000,000 for social, broadly speaking. Now you can see why I've gone old Donald Trump here and put my next word in capitals and said, really? Well, this relies on adding loan funding from the Catalyst Europe Fund to the grants. And it means that you're having a combination of grants and loans to arrive at the 100,000,000.
Okay. Maybe some of you are quite happy with that being grants, loans as well as grants, but it does mean that it's not the same as it was before. And the social content in the Competitionist Fund, we just cannot calibrate with accuracy. It's headed nonthematic lines, and these nonthematic lines contain things which are very remote from social. So it's only a small proportion of the non-thematic line within the competitiveness fund, which will work for social.
Harry Crichton-Miller
Let's see if this works this time. Now it keeps going to the next page, please. Governance, then. How do you apply policy-based budgeting to social interventions? You might think it's easy.
Iain Begg
Why should it be any different from regional interventions, infrastructure interventions, or any other? But it's harder because, first, social policy change takes longer. Social policy change is also difficult to monitor with hard indicators. So we look at something like the proportion of the population at risk of poverty. That's a very slow-moving variable.
I remember years ago, Frank Vandenbrucker, whom I'm sure you all know, saying he had lost faith in that particular indicator, and that if you want to measure change, you need something more detailed. Also, what happens if there's a milestones and targets approach to funding, and the beneficiaries do not meet that milestone or target? Is their funding cut? Particularly, what happens if it's outside their control, which means it could be something to do with conditioning on the country specific recommendations. There could be a country-specific recommendation at the national level.
The member state fails it. Is it the beneficiaries who are going to suffer? It would be the question to pose. And when you have this member state commission nexus that I referred to, who's going to set the priorities? Will it feed up from social actors at regional levels within a member state?
Will it feed down from the European level to the decisions taken on what goes into a member state's plan? These are very difficult questions that could be answered. I won't bother risking this anymore and just ask you to move to the next slide now, please. So our first set of conclusions, I'm being very telegraphic about this, is that there will be a cut in funding for social, widely determined. I think that's pretty unambiguous.
There's a degree of uncertainty I mentioned a couple of times already about the ECF. And in our opinion in this study, loans are not a sufficient or adequate alternative to using grants for social purposes. They have a different way of operating, and loans mean that you have to repay them and service them, so it doesn't add. There may be administrative simpler simplifications, and this is one of the big selling points of the MFF proposal, but there could be costs. Beneficiaries are used to a certain way of operating cost-based.
Some have simplified cost options. But if you switch to a performance-based approach with financing not linked to costs and other aspects, that gets more complicated. So there could be a learning process for beneficiaries in many member states to before they work out how these new rules apply. So simplification looks as though it's on the horizon. It's not guaranteed, and there may be transitional costs which make it worse.
Can I move to the next slide, please? Other conclusions. We all respect the European pillar of social rights, but the bigger narrative within this next MFF is going to be competitiveness. It's gonna be pervasive, and there's a danger in this context, and this was reinforced by many of the people we interviewed for the studies, was that competitiveness looks like it's more likely to win. And yet, EPSR really ought to be regarded as part of the added value of European budgetary policies.
If you want added value, the EPSR sets a way of looking, establishes a way of looking at it. And also social partners, another benefit, other actors who are involved in both project policy design and implementation, their role may be weakened in this new approach. For the EP, the European Parliament, the risk is that the vital legitimation role that the parliament offers, and again, this was stressed to us by many of those interviewed for the study, could be weakened. The EP is elected. I don't need to tell you that, do I?
But being elected means you can legitimate. And, also, there are ambiguities in the way the MFF proposal is set out about what happens with autonomous transfers. Are they subject to quite strict rules as indicated by the financial regulation, or will the commission have much more leeway to do what it wants? I would advocate for the parliament, particularly for this committee, that you seek as much certainty as you can on this. Very carefully, can we move to the first bullet point on the next slide?
And one more click. What I've done here is to summarize. I know the font is rather small at this point, but there are a lot of recommendations. Some of the recommendations we've tried to put forward. And the first set contains concerns about the adequacy of funding between the two MFFs, the current and the 2028 to 2034 proposal.
First, straightforwardly, boost the funding for social, bring it back to its current level. You can do that in one of two ways. You either raise the minimum percentage instead of 14, 16, 20%, or enlarge the denominator that four so that 14% no longer has the agricultural component cut out. It doesn't really matter which way you do it. The objective should be more funding.
Social priorities. To what extent will the new social priorities be dominated by member states? Well, we think you need to clarify that at the EU level, EU creates public goods. EU should designate what is public goods and use this to influence what's in national plans. Vulnerable groups already have earmarking in the current MFF.
Is that earmarking going to be at risk? Here, the commission and we do not necessarily agree. The Just Transition Fund has a very specific function. It probably should be kept outside as a standalone fund, which brings us on to something I believe you've been discussing already today, and that is whether the ESF should remain a standalone fund. Now here are the retentions.
Because if a case is made for the ESF to be a standalone fund outside the national plans, guess what? Somebody's gonna stand up and say, well, so should the common agricultural policy, and so should the ERDF. So if there is a dismantling of the national plan approach, it would have repercussions beyond the ESF. Nevertheless, our recommendation is to endorse what you're really trying to do and say, go for it. Try to advocate it coming outside and restoring its own regulation in the more developed form it has in the current MFF, rather than the reduced form it would have in the next MFF.
And last, within the Competitiveness Fund, CV can strengthen its provisions. One more click, please. Next, some of the many things that we think about the implementation. Harmonize milestones and targets, because if you don't, you get confusion. Harmonize standards for clearing and rigorous definitions of milestones, again, for the same reason.
Although the performance approach is supposed to focus more on results, that is to say the implications of changes rather than direct outputs like numbers of jobs created, it's far more tricky in the social field. So we would argue for somewhere between slightly elaborated outputs and minimal results as the approach. Impact is beyond the reach of the MFF. Limit CSR application and be sensitive to protecting the suspension of payments, which could arise from applying M and T too forcefully. There may also be a case for removing these kinds of rules from more innovative approaches.
Social policy needs experimentation, and that experimentation should be encouraged. Technical assistance for the organizations to reflect the fact that there's a new approach. And there's one more methodological point, which is it'd be helpful if the commission were to produce a payout handbook to explain how payouts would happen in all these circumstances. I've gone through this very quickly. It's all in the report.
Last slide, please or last click. This takes us on to the European pillar of social rights and the role of the parliament. And here, I think that maintaining a focus on the visibility of the UPSR ought to be important for you. Don't let it get lost in traffic. Gender mainstreaming ought to continue, and there's a case for adding a more robust social mainstreaming perhaps to article six of the performance regulation.
Quite how that will be done is maybe for this committee more than me to advocate. Highlight the role of the social partners because they are an important aspect of delivering social policy, and stress the key role of the parliament in a number of respects in social in legitimating, in limiting the autonomous transfers by the commission, and in controlling ultimately through the con committee and others the way these budgets are spent. So last slide, which means I stop. Thank you very much for listening.
Li Andersson
Thank you very much. Super interesting and also very clear presentation and a very good report. We then move on to the repertoires and shadows of the MFF related files here in our committee. I think both our European Social Fund repertoires are in budge, but we have, mister, Humberto here, who is the repertoire for the opinion on the NRPP regulation. So I will start by giving you the floor.
Please.
Sérgio Humberto
Thank you, madam chair. I will speak in Portuguese. Sir, president.
Chair, colleagues.
officer.
colleagues.
Sérgio Humberto
and professors Ian Berg, authors of the study. Now the study we're discussing here today does confirm a number of our concerns. The new architecture of the MFF is designed to achieve simplification via the NRRP, but this simplification cannot lead to the dilution of social policy. As my draft opinion says, and as I have argued at other times, we have to guarantee clarity and distinction between two different regulations. We cannot allow overlaps and contradictions.
We need a strong ESF to protect concrete social provisions, and we need the NRPPs, which will work as a solid framework for this. Each national plan must contain a social chapter, which is clearly identifiable and dedicated to the matter. And we talked about competitiveness, yes, but we have to look at high-quality employment as well. This requires robust strategies looking at different qualifications to ensure that the local economy is fully supported, that is our SMEs, as well as the social economy, by also always respecting the particular characteristics of our regions. I'd like to conclude with two questions for the authors of the study.
Firstly, in order to ensure this clear division and avoid the ESF and its financing being absorbed by the NRPPs, we need robust safeguards to protect the funds which should go to the most vulnerable parts of our population to fight youth unemployment. How can we do this? The second question, knowing that investment in human capital, as the professor said, takes years to bear fruit, can we identify indicators in the new budget without undermining the viability of the most complicated and long-term social projects? Thank you.
Li Andersson
Thank you very much. And then to our repertoire for the opinion on the performance framework regulation, Mrs. Kalamaz. Well, as.
Estelle Ceulemans
We've just heard by a previous reporter, this study has confirmed a number of concerns we've had here in the employment committee. I think that you followed some of the discussions we had this afternoon on the ESF. And I think that our position here is clear. We're not trying to raise the ceiling from 14% to 20%, but we want a standalone European fund that isn't part of the national plans and with a ring-fenced budget. As you said, we don't want €79,000,000,000, but we need a lot more than that.
So we've had an interim report today, which looked at it, said €125,000,000,000, and there were different points which have an impact on this as well. But here, in any case, in the employment committee, it's pretty clear for us. Our position is clear, especially on the performance framework. I like to hear that you said that getting the figures for the sake of having the figures isn't the objective. You have to look at the output and the indicators as well.
Now, yesterday, I met with an organization which isn't covered by the ESF but works on regional employment here in Brussels. And this was an organization which is designed to bring people back in the labor market, and their KPI is to ensure that at least 25% of the job seekers actually get a job. And if that figure is not reached, then the organization who works with these people, these job seekers, would lose, well, or rather they wouldn't be reimbursed for the money they've spent. This organization has as its job. Well, they may well end up trying to find jobs for people who are a little less tricky, as it were, who are a bit closer to getting a job.
So when we look at these performance indicators, we can see they're not always fit for purpose, that is, hitting our numerical targets rather than actually achieving our goals. Over the next few months, we will be fighting to turn the tide here, I think, because there isn't a guaranteed transitional period for the time being. We know we're going to have to negotiate for months on end here in the Parliament in order to finalize our report. The commission's proposal will come into force as of 2028, so that's in no time at all. And there's no transitional period.
There are no plans for a soft launch. So a lot of operators are simply giving up. They think if it's going to be that complicated to request European funds, there is no point. So we really will lose out across the board. So in our report, I think the recommendations that you have made, I think we really do see eye to eye on this.
I don't really have any questions for you now. I'm sure I will come back to you at a later date. But I really hope we can ensure that this report goes beyond the our committee. Perhaps some member states could take a look at it, because we really are looking at a landmark moment here. They are going to be directly affected as well, and that's a real concern here today.
So thank you once again for this study.
Li Andersson
Thank you very much. Are there other shadows or other members who wish to take the floor? Missus Fairbrook, do you wish to speak? Thank.
Séverine Werbrouck
You, madam chairman. Well, thank you very much indeed for this very informative study. We've already discussed this issue at length this afternoon, so I won't come back to all the points. There is a consensus and unanimity here for a distinct and autonomous effect. Just a question about the links.
How would this be linked with the rest of the CFP? And with respect to the budgetary performance framework, could we consider an exception comparable to the Interreg fund, which is based on cost? Thank you.
And next speaker is Missus Scheibi.
Leila Chaibi
Thank you very much for the study and your conclusions, which, as Estelle said, do fit in with many of our concerns. I'm not a shadow rapporteur, but my colleague, Strea Gallan, was unable to be here. I have a question. Do you have any kind of estimate about the impact in terms of jobs of integrating social into the MFF because the ESF Plus? I mean, maybe you have an idea because the ESF Plus, we know, is implemented by NGOs, associations. And no, you've not, you've shook your head. We often talk about the impact on the beneficiaries, but we rarely talk about the impact in terms of jobs of everything that's implemented in the health and social areas, the NGOs, the associations, all of those who, in fact, ensure that the funds arrive at the appropriate beneficiaries.
Li Andersson
Thank you very much. I also have an additional question. It's mentioned in the study, but I don't think it went into very much detail in the presentation. But, of course, there are a lot of different viewpoints that are important for parliament and that have been discussed here. But I was also interested in this question of what is counted into the social spending, the 14%, because there is also a change in this regard that projects, which would not have been financed by the ESF in the current MFF, can get a 40% coefficient qualifying them under the social spending under the 14%, which, of course, also would like to hear just your analysis on what implications this will have for the actual social spending in the proposed new MFF.
So, I have no further requests for the floor or questions. So I will give the floor back to Professor Begg to respond for the next eight minutes.
Iain Begg
I'll try. Well, first, thank you for the various comments, and thank you particularly for saying the report will be helpful. Study will be helpful because that is, after all, our ambition. I'll try to just go through the various points that I picked up. If I miss something, do come back to me.
Safeguards for the vulnerable. What they are, to some extent, they're in the current MFF. It's ambiguous whether they'd be retained in the next MFF, because the responsibility for doing it would devolve to member states much more than at present. And if you don't have an earmarked amount, the concern is that member states will have their own interpretations and own priorities of what should be safeguarded. The risk is therefore tangible for the vulnerable groups that they do not get the same kind of protection of budgets as they have at present.
Mister Humberto, you always also mentioned the hope I have the right name. You also mentioned the whether it could be dedicated budgets within national plans, dedicated social budgets. I'm not sure if there's an easy answer to that because there's an amount, the 14%, even with the restricted denominator, but it doesn't specify what that's going to be on. It's very much for member states because they will be the ones making up the proposals for the national plans to determine where the money goes. I could easily imagine that Ireland would have a different set of priorities from Latvia or that your country would have a very different set of priorities from Sweden.
So it's going to be down to what the member state sees in domestic politics as being the main priorities, then filtering through into what is included in the national plans. So I don't, I can't answer. I don't think anybody can answer you at this stage because we don't know how the negotiation of those plans will proceed. Maybe when the commission comes in, they'll give you some answers to this, but we can't really tell. I
Speaker 32
Couldn't speak French, but I prefer to remain in English if that's okay.
Iain Begg
I think that you pick up on this 79,000,000,000 estimate compared with a 198 or a 100,000,000,000 at present. To me, that's pretty unambiguous. It's a cut. So there's not much to discuss there. You also pick up the points of neglecting those most remote from the labor market and with the risk or those remote from social inclusion even rather than the labor market.
And I think that's something that really ought to come top down from the parliament insisting that this is a priority of the parliament, that it's a long standing element of the pillar of social rights and therefore should shape it. That's why I tried, we tried to link in the study the protection and the visibility of the pillar with the detail of how money is expended. There is I'm pleased that you regard the shape of our recommendations as being correct. And as for whether we can disseminate it further, well, that seems to me that it's your job rather than mine or the job of the parliament, the job of the parliament in general. Madame Verbruc, can we emulate or have the same approach as the Interreg?
I think that was your question about having mainly cost-based. Again, it's uncertain. It's gonna be speculative whether it goes in that direction or another because the underlying message of the performance based approach is that as much as possible should be subject to that methodology, which means financing not linked to costs, which means something many beneficiaries are not used to. So that comes together to say that it's not something that's going to be all that comfortable in the early stages, and could lead to delays. Now whether a mix of cost based or simplified cost options or financing not linked to cost is the outcome and whether it tilts one way in social policy and another way in European Regional Development Fund or its successor within the national plans, I think is up for discussion.
But you and others will need to make the case strongly for saying why it would not work in social. We've tried to give you some ammunition for that, but I think you need to develop it and say, this is something with more hazards for social policy than it is for infrastructure where you can visibly see a bridge. You cannot visibly see some of the transformations of social policy because they are often lagged indicators anyway, and the output and result indicators you'd want to use may not be as sensitive to the changes you're trying to implement. The employment impact, I'm afraid the reason I was shaking my head is that it's only at this stage speculative. Certainly, if there are attempts to downplay the role of NGOs which are involved in it or regional authorities, which is among the things that have been identified, they could lose significance.
But once again, if this goes through in its current form, then it's very much for those authorities within the member state or the NGOs within the member state to push their national administrators of the funds to say, we need to preserve this accumulated knowledge, use that knowledge as a way of dealing with it. I think I don't want to be dismissive of it, but I don't think saying it's a risk to employment is the ideal approach. It's much more is that knowledge and skill in dealing with the beneficiaries, something that risks being lost. That's something we try to highlight in the report. So, I hope that in between answer goes some way to answering your question.
And last, intervention fields where they're so numerous and so loosely defined in some cases in the outputs and the results which are derived from the intervention fields. I think we could spend hours discussing which intervention fields are most vital, but it's a bit of the elephant in the room thing. We all broadly speaking know what the social interventions are supposed to do, and it's whether the indicators capture that in a way which feeds in sufficiently to a performance based approach, which really should be the question rather than whether we can define intervention fields, outputs and indicators adequately this far in advance of the new system. So, again, somewhat unsatisfactory answer to your question.
Li Andersson
Alright. Thank you very much. And we still have Ruth Passerman from the European Commission for your additional remarks. I will try to pose a question for you also, just to get clarification on the overall social spending, to see if the chair has understood this correctly. But as far as I have understood, one difference between the study and the parliament calculation has been how the cap money affects the overall base based on which the 14% is counted.
So is it correctly the interpretation I understood from the study that it is February, but it doesn't.
Could I add something on this?
Iain Begg
Because we it's effectively in a footnote in the report. We checked with unnamed persons in the commission, and they are clear that the 295296, 297 deduction would not vary if the amount the member state chooses to spend in agriculture changes. It's an ex-ante deduction. I don't know if Ruth is able to confirm that.
Li Andersson
Thank you. So this would have been my question, but better phrased can be a confirmation on this. And the other question I would have for clarity is, does the commission include the catalyst loans in the base on which the 14% is counted, even though the member states do not use them? So if we could get some clarifications on this, it would be great. The floor is yours.
Ruth Paserman
Sorry. On the first question, the agriculture issue, what you mean is whether the extra that was announced on the, after the Mercosur agreement, where it is counted. So there, yes, it continues to be part of the denominator. It is not excluded, like the income support of farmers is from the base. That's that remains, and which is what was confirmed to you.
Yeah? So we are aligned. And, yes, the calculation that we have done is based on the basis that the catalyst Europe the 100,000,000,000 is based on the assumption that the catalyst is completely taken over, which is part of the base. But here, I would like also to intervene on one of the points that professor Berg mentioned, which is the fact that you have a certain amount in grants and a certain amount in loans in the budget that a member state uses. It doesn't mean that in the same proportion, it has to use it for social or for infrastructure.
I mean, for some of the intervention of the NRPP, it could be mainly loans, and some from other interventions under the title ESF could be mainly grants. I mean, this doesn't have to be apportioned exactly at all. So first of all, it's a question of whether member states want to take loans or not, and that honestly depends on their advantage in the financial markets. For some member states, it's more interesting than for others. And secondly, then they will decide how they want to apportion the loans and the grants.
It doesn't have to be proportional. So it could very well be that for the ASF, it's 100% grants. But the calculation is indeed based on the assumption that the full catalyst is taken on board. Now this is to answer your questions. Now, to come back to some of the points that you made.
Now the European semester is, the link to the European semester and all the reference frameworks is to indeed make sure that the European priorities are taken into account. And at the same time, so we are taking away, if you want, the thematic concentrations which you would like to maintain. But at the same time, we are having a discussion with the member states and with the regions on their priorities. And if we think that in a member state, the priority is access to early childhood education, the commission will insist in the negotiation that it happens. If in another country it is not, it will not insist on that point.
So I think the point of, or the fact that, member states are different and may have different priorities is what actually we're trying to take into account in having this, let's say, more flexible approach on one hand, but on the other hand, still based on negotiation between the commission and the member states and the regions. First point I wanted to make on the semester. The second point is on the performance-based budgeting. Now as I said before, I do think that performance based manager is a bit of a bit misnomer because we are doing my center targets, which are then used for payment, they have to be verifiable, which means that they cannot be, you know, they cannot be, in your case, like what you mentioned, that people actually are again reemployed in the labor market, but it will be on how many people have participated in the training and or have obtained a certification at the end of the training. So things which are linked within the thing that the beneficiary has control over.
So, and this admittedly is not performance. So if you want something else on performance, it's another thing, but it cannot, it doesn't mean that, by the way, that you cannot finance operations based on performance, which are also going towards the most vulnerable. It's a question of how you put the targets. For example, you pay €1,000 for someone who's close to the labor market, and you pay €5,000 for someone who's far away from the labor market. I mean, I'm you know, you can modulate it.
Okay. Let's not go too much into details, but just to say that we are going to prepare guidance on this performance-based budgeting or, it's not whatever you want to call it, payments on the basis of milestone to target. So how to define a milestone, how to define the target, how to define intermediary targets, how to define payout values. All this, we are already starting to prepare the guidance, indeed, with the idea to be ready, yeah, before the end of this year. Then, if I may add on, there was another point that you mentioned.
Yes. I actually have a bit of difficulty understanding why you think the role of the European Parliament is weakened. The role the European Parliament is intervening now in the negotiations. Then it is qualified normal qualified majority with all the sectoral regulations. It will participate in every year in the discharge on the budget.
So the role is the same, although the architecture is different. We I don't see this big difference in the role of the parliament, and I don't see this big difference in the way, I mean, the biggest difference, I think you have identified rightly, is in the implementation on the ground with the performance based pass duty. But the overall architecture of the plan, the amount of money that the member states, yes. The other difference is that the less money, I can't contest that. I agree.
I think in the end, it is less money because the overall envelope for the traditional policies is less. But within that overall envelope, actually, it's the same proportion between what was before spent on agriculture or on regional policy or on social. And on the other hand, we believe that there are better synergies that can be achieved by putting everything in a single envelope, without separate funds. The same, for example, for the just transition funds. All the opportunities that the just transition fund currently supports could have been already supported by the regional development fund and by social fund.
It was created for visibility, which I understand politically is important, but in practice, it could have been financed by what existed already. And the experience of this period has been that of a proliferation of funds, which has not helped. This also has not helped managing authorities, and has not helped beneficiaries. Last point I want to make, I apologize I'm speaking too long, is about the competitiveness fund. Indeed, the companions fund has two important aspects from the social point of view.
One is the fact the skills. And from what I understand, the I mean, we had there is the fact that one we expect to invest in skills and that any investment in competitors should also include a skills component or could include a skills component. So everything that concerns skills is possibly to be financed also by the Competence Fund. Second point is that the Competence Fund has incorporated what is now the InvestU guarantee, and we had now a social investment and skills window in social infrastructure skills window, I think it's called, in InvestU, and that kind of operation will be financed via the Competitiveness Fund. So that's basically support to microfinance, support to social housing, support to impact investment, which is what we were discussing before.
So, the for this committee, also, the companions fund is important. Thank you. Alright. Great.
Li Andersson
This was very enlightening. So thank you all. We need to end because we have another meeting starting. But thank you very much for this useful exchange, and also for the study, which is, as was already mentioned, very useful for our work. This concludes the committee meeting for today.
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