The social contract: No more business as usual
Families and individuals around the EU are facing rapidly changing working conditions. Many fear their children may miss out on benefits that once made up the social contract between the state and citizens. The risks and opportunities of artificial intelligence in the workplace have raised new challenges around the bloc.
Economic growth and popular resentment
"I wouldn't say the social contract is broken, but it is changing dramatically," said European Commissioner for Economic Affairs, Taxation and Customs, Pierre Moscovici.
"Growth has come back to Europe, but the legacy of the economic crisis is still very strong," said Moscovici. “We cannot act as if it were business as usual."
The EU has seen seven years of economic growth, and employment is now higher than it has ever been, but inequality and popular resentment around the EU show the level of unhappiness in society, he said.
Moscovici said that the EU budget could be used to help tackle problems of social inequality and job insecurity and that some form of unemployment insurance could become part of a eurozone budget.
Structural funds and cohesion policies can already be used "to reduce divergence between regions," he said. But "we need to be more ambitious. We need a full eurozone budget. As long as we don't have that we can't create convergence."
Deirdre Mortell, CEO of the Irish government-backed Social Innovation Fund, disagreed. "In my opinion, the social contract is broken."
"The social contract is about confidence that each generation can have the same living standards as its parents, or better. That's broken," she said.
"Housing is more expensive now and young people have almost no guarantee of a pension," Mortell said. "There's a reason why we're seeing young people increasingly fail to vote."
Christophe Catoir, a CEO with employment agency The Adecco Group, also said "there's clearly a broken social contract today," with millions out of work around the EU.
He said digitalisation and artificial intelligence would "for sure" kill a lot more jobs.
Catoir called on the next college of Euroepan commissioners to "accept the need for a new relationship with the workplace," and to defend "minimum social protection and citizens’ rights, including training."
Luca Visentini, General Secretary at the European Trade Union Confederation, agreed with Moscovici that "we can't simply continue business as usual with the same macroeconomic model."
He said ETUC surveys showed that a third of trade union members now supported far right populist parties, while a third don’t vote at all.
The union members said this shift away from supporting traditional parties wasn't driven by immigration or defence policies, but because members said they had lost jobs, housing and pensions - or were afraid of losing them.
"This is what a broken social contract means," Visentini said. "We have to decide what we can do to rebuild it."
“What the current Commission has done has been very good in many fields,” said Visentini. “The European pillar of social rights is an important step but it is very important that the next Commission pushes the Members States to implement it fully.
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