Porto Social Commitment: the EU’s 2030 precarization program

12 May, 2021

Michel, franked by von der Leyen and Costa shows the signed text of the "Porto Social Commitment".
Michel, franked by von der Leyen and Costa shows the signed text of the "Porto Social Commitment".

The EU’s Porto Social Summit unveils, decades later, its long-promised “social pillar” program. The “Porto Social Commitment” has been triumphantly presented as a shift towards employment and workers, a return to the welfare discourse that would definitively close the door to more precariousness and “austerity”. Nothing could be further from the truth. The commitment will be austerity’s banner.

Table of Contents

The EU that came to the Porto Social Summit

Following the signing of the Porto Social Commitment, the heads of state and prime ministers held an “informal meeting” of the European Council

The EU arrived at the Porto Social Summit after a series of setbacks which in various ways expressed the never-ending crisis of disintegration and confrontation among its members, but also a level of bureaucratic incompetence which seems to know no limits.

The EU is becoming increasingly marginalized in the great imperialist game and lagging further behind in the competition against the US and China. From Macron to Wall Street and London analysts already say without qualms that the recovery funds are insufficient and will be too late. Especially after the approval of the US ones which in passing have left Europe behind in the race for green capital and forced Brussels and Berlin to step on the gas.

The Spanish press has imposed a gag and focused on the anecdotal -especially on sofa-gate and Lavrov’s sadistic spectacle with Borrell. But neither in the foreign ministries nor in the media of the great powers did it go unnoticed that Biden left Brussels, Paris and Berlin out of the deactivation of the latest Russia-Ukraine war flare-up.

And above all, what has undermined most the credibility of the Brussels juggernaut and the European states among its competitors and allies seems beyond repair: the fiasco of centralized vaccine purchasing and the delay in vaccination rates compared to Britain and the US. At the end of the day, for a class of managers and financiers if there is anything unforgivable it is being scammed out of a contract for failing to understand the clauses.

The return of the social issue

The three 2030 goals of the Porto Social Commitment approved at the Social Summit

In this context the Oporto Social Summit with its informal summit of the European Council (the presidents and prime ministers) was not only the high water mark of the Portuguese presidency, but the opportunity to regain ground and change the discourse by signing a Porto Social Commitment that would change the axis of the debate.

Von der Leyen, Michel and Sassoli, supported by the unions, employers, Costa and the heads of state or government of virtually the entire Union, aimed to show the European difference. They did so with unusual histrionic mannerisms and forced enthusiasm. And what came out was not pretty. In her speech to take stock of the Porto Social Commitment, Von der Leyen urged, for example, that children should have access to at least one meal a day. Yes, that’ s how ambitious they are.

The great success as highlighted with one voice was that for the first time the so-called Porto Social Commitment sets figures and a date, 2030, to some social goals supposedly very ambitious in a document with legal value. Let’s see how far it goes:

  • At least 78% of the working population aged 20-64 will be employed
  • At least 60% of adults shall participate in ongoing training courses each year.
  • 15 million people, a third of whom will be minors, will no longer be at risk of poverty and social exclusion.

Let’s reflect a bit on the three concrete objectives of the Porto Social Commitment:

  • The 78% employment rate means that, should the social goal be met, the 2030 unemployment rate will be less than 22% at the EU average. But… the highest unemployment rate in EU history occurred during the 2020 lockdowns and barely exceeded 12%. What future horizon are they thinking of to make a 22% unemployment rate in 2030 an achievement?
  • For 60% of active workers have to undergo at least one vocational training course per year means that they are thinking of an unprecedented workforce mobility. Not even 60% of companies change equipment, technology or products once a year. The level of precariousness that would justify a permanent effort of that magnitude would be close to 70% temporary employment. Are they taking for granted an accelerated precarization proces over the coming years?
  • Improving the situation of 15 million of the 92.4 million poor people in the EU today does not seem very ambitious, especially when the figures keep increasing month by month. Especially if we think that the previous target, that of the Europe 2020 plan, set the goal of lifting 20 million out of poverty… and despite the supposed bonanza of the second half of the decade failed to reduce the rates any more than a reduction from 21.6% of the population in 2018 to 21.1% at the outbreak of the pandemic.

Either the EU and state 2030 scenarios are truly apocalyptic, or the Porto Social Commitment is a bad joke. Surely both of these things are true.

Labor reform under the Porto Social Commitment

Following the signing of the Porto Social Commitment, the heads of state and prime ministers held an “informal meeting” of the European Council

The documents of this summit and the Porto Social Commitment itself are written in the usual Brussels language: endless sentences in which wishful thinking cloaks the key words. For example, labor reform is stated in this paragraph of exemplary bureaucratic style committing the institutions and governments to:

Take measures to improve the functioning of labor markets so that they contribute to sustainable economic growth, international competitiveness, foster decent working conditions and fair wages for all, and promote the integration of women, youth and vulnerable categories in the labor market;

Porto Social Commitment

Does it need a translation?

  • Take measures to improve the functioning of labor markets = push for labor reform
  • contributing to sustainable economic growth = lower total labor costs (wages, employer contributions to Social Security, etc. )
  • international competitiveness = and thus be able to increase exports
  • to promote decent working conditions and fair wages for all = by encouraging the concentration of wages around a slightly high minimum wage, wiping out average wages
  • and promote the integration of women, youth and vulnerable categories in the labor market = not forgetting Social Security reductions and other specific programs to reduce the labor costs of women, youth, the disabled and migrants to make them competitive with the standard workforce.

That is, what they are committed to is promoting a labor reform that will lower total labor costs (wages, employer Social Security contributions, etc.) and thus be able to increase exports, encouraging wage concentration around a slightly high minimum wage, not to mention Social Security rebates and other targeted programs to reduce labor costs for women, youth, the disabled and migrants to make them competitive with the standard labor force.

As a social goal it is clear. There is no shareholder company that would not support it.

The new “Social Performance Scoreboard” of the Porto Social Commitment

The main demand of the trade unions has been the inclusion of social indicators in the evaluation of the results of the Porto Social Commitment

Neither the much touted concrete goals of the Porto Social Commitment nor the inclusion of labor reform have been highlighted by the media in their coverage of the Social Summit. What has been welcomed, however, is that European employers and trade unions have agreed on a set of 14 indicators of social, economic and environmental well-being designed to complement GDP and obtain a better representation of a country’s economic performance and its relationship to the well-being of its citizens.

The battle to incorporate new indicators into the euro’s convergence criteria and Brussels’ analyses is by no means new. Historically, Southern countries – and especially Varoufakis’ Greece during the 2012 debt crisis – have insisted on the need to broaden the parameters by which the men in gray in Brussels judge governmental performance.

Thus, the discourse on the new economic indicators must be interpreted in the key of a north-south battle within the EU. Extending indicators would be the way to soften the so-called convergence criteria around the euro in favor of the southern countries, which aspire to be able to justify a certain margin in their levels of indebtedness and inflation. The underlying reason is that the single currency does not bring about the convergence of national capitals, but quite the opposite. To match French GDP per capita and reduce unemployment to a minimum, for instance, Spain would need accelerated growth which would inevitably be associated with an inflation rate of more than 4% for nearly 30 years.

But beware, what was approved in the Porto Social Commitment does not mean that the ESC indicators will immediately be useful to governments to compensate for deviations in the convergence criteria. It is only a recognition of these indicators as a way to evaluate the social pillar and limited to it, not a reform of the euro rules and EU standards.

Reading the Porto Social Commitment it seems that in fact, what it will serve for in the short term is to push even more for labor reform by lowering social costs for companies (pensions) and making workers more precarious, which is in fact what they are already doing in the national recovery plans, pushing for labor and pension reform.

We confirm that, in the framework of an EU economic and social governance, the European Semester and its different tools, such as the renewed Social Scoreboard, are the appropriate policy framework to monitor progress in the implementation of the European Pillar of Social Rights and, on this basis, call for a regular assessment at the highest political level of progress towards the 2030 headline targets and upward convergence. The extraordinary resources made available to support Europe’s recovery are an opportunity that cannot be missed in order to move towards a better implementation of the necessary reforms at national level in line with the principles and goals of the social pillar.

Oporto Social Commitment

The Porto Social Commitment does not change the EU’s precarity-inducing goals

The Porto Social Commitment is an attempt to dress up the needs of European capitals, trapped in a deep and long-standing crisis, with standards that are so minimal that setting them as a horizon for 2030 seems apocalyptic

The precarizing objective of EU policies stems from the need to increase the competitiveness and short term profits of national capitals trapped in a deep and long term crisis of capitalism as a whole. The Porto Social Commitment is nothing more than an attempt to dress up the same precarity-inducing goals as usual with such minimal targets that even just the prospect of setting them out as a horizon for 2030 seems apocalyptic.

And yet it provides us with a measure of the fears and perspectives of the European bourgeoisies. The true confession of the Porto Social Commitment is its insistence on the need to reform the labor market in order to gain competitiveness in the world market. The Porto Social Commitment, the new banner of the European social model, is nothing more than the manifesto of the greatest attack on the living and working conditions of European workers in the last fifty years.

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