The European Commission is putting forward changes needed for the EU’s social funding programmes to tackle social and employment challenges in the post-crisis era.

Today, the European Commission is putting forward the changes needed for the EU’s social funding programmes to tackle the main social and employment challenges that lie ahead in the post-crisis era such as rising youth unemployment, the need to steer basic food and material aid to the most deprived, as well as the risk of child poverty. Today’s funding proposals will also accompany workers as they navigate the green and digital transitions through investing in skilling opportunities, allowing them to thrive in a climate-neutral, more digital and inclusive society. At the same time, we are future-proofing our funding actions by introducing a crisis-response mechanism for future emergencies.

This requires a swift update to the rules of both the current funding programmes and the future budget proposal, in order to respond to the new challenges. The European Social Fund Plus will be the main financial instrument to implement the European Pillar of Social Rights. It remains our compass to ensure a socially fair recovery. Other instruments such as the already existing European Social Fund (ESF) and the Fund for European Aid to the Most Deprived (FEAD) will be beefed up using fresh funding, so that efforts can start immediately on getting people back to work and directing aid to the most vulnerable

Commissioner for Jobs and Social Rights Nicolas Schmit said: “Making Europe more resilient, sustainable and inclusive in the future means investing in its people now, and especially the younger generations. Our priority is to quickly overcome the social and economic shock caused by the coronavirus crisis and to ensure that no one is left behind.”

The immediate response: Significant additional resources for the European Social Fund (ESF) and Fund for European Aid to the most Deprived (FEAD)

The cohesion policy funds (European Regional Development Fund, European Social Fund, Cohesion Fund) are proposed to receive €55 billion in fresh money for 2020-2022 to counter the negative impact of the coronavirus on the labour market. The tool for this is REACT-EU in which the European Social Fund 2014-2020 plays a key role in sustaining employment and supporting social inclusion.

The additional ESF resources should be directed to primarily support:

• Maintaining jobs, including through short-time work schemes and support to self-employed to protect their income
• Creating new jobs, in particular for people in vulnerable situations
• Youth employment measures
• Education and training
• Skills development, in particular to support the twin green and digital transitions
• Measures to enhance access to social and health care services, including for children.

The Commission also proposed that Member States can equip the Fund for European Aid to the Most Deprived (FEAD) with additional resources until 2022, within REACT-EU. This will provide additional resources for food and basic material assistance and accompanying measures, and for dedicated social inclusion measures. It will ensure that funding for key crisis repair measures and support to the most deprived can continue without interruption.

In spending these funds, Member States should duly promote gender equality which is a horizontal principle in social funds legislation.

The longer-term response: A strengthened European Social Fund Plus proposal

In the framework of the new proposals for the future long-term EU budget 2021-2027 adopted today, the Commission proposed important amendments to the European Social Fund Plus (ESF+) proposal.

• The amended proposal includes strengthened support to youth employment. Member States with an above Union average rate of people aged 15 – 29 not in employment, education or training should invest at least 15% (up from 10% in the original ESF+ proposal) of their ESF+ resources to targeted actions to support young people.
• The ESF+ will also help to tackle child poverty. No child can be left behind in the aftermath of the coronavirus pandemic. The amended ESF+ proposal requires all Member States to allocate at least 5% of their ESF+ resources to implement measures that reduce child poverty.
• In addition, the ESF+ will make a strong contribution to the green and digital transitions by driving investment in skilling opportunities so that workers can thrive in a climate-neutral, more digital and inclusive society.
• To be better prepared for future emergency situations, the ESF+ includes a crisis-response mechanism. This will ensure that under exceptional circumstances, the Commission can adapt it to respond to such events, swiftly amending fund management rules for Member States as needed.

A reinforced European Globalisation Adjustment Fund (EGF)

The European Globalisation Adjustment Fund (EGF) supports workers who have lost their job as a result of major restructuring events, by financing targeted training and other support for their reintegration into the labour market. Given the expected increase in demand in the wake of the coronavirus pandemic, the Commission proposes to increase the annual funding available to € 386 million from 2021 onwards.

Additional funds supporting employment and social objectives

Moreover, many other funds will invest significantly to support social and employment objectives.

The new Recovery and Resilience Facility has a budget of €560 billion which can be tapped by Member States to support social investment and reforms through grants and loans. This facility links in with the European Semester guidance which builds on the European Pillar of Social Rights. Therefore, it will help Member States to address the structural economic and social challenges in various areas notably social, employment, skills and education.

The Commission proposed to provide substantial additional funding for the Just Transition Fund, bringing the total to €40 billion. This funding will be used to alleviate the socio-economic impacts of the transition towards climate neutrality in the regions most affected, by for example supporting the reskilling of workers.

InvestEU will also benefit from increased resources to support social infrastructure or microfinance to entrepreneurs, notably in the social economy. InvestEU is proposed to have a total budget of €32 billion.

And Erasmus, with a total proposed budget of €25 billion, will invest in young people, offering them opportunities to gain new experiences by going abroad. It also provides crucial financing in the area of skills and Vocational Education and Training (VET).