The Social Protection Committee (SPC) published its Annual Report that analyses social conditions across the EU and developments in social protection policies. This year’s report mainly focusses on the measures taken to address the energy and cost of living crisis.
The report indicates that in general economic growth in the EU slowed down in 2022, but despite fears of recession, there has been positive growth in the first half of 2023. Prices have risen considerably since the start of Russia’s war of aggression against Ukraine, staring from energy prices and then having an impact on food, services and other goods. As a consequence, households’ purchasing power has been affected, particularly for lower income families, who spend a larger share of their income in energy and food.
It is observed that social conditions stayed quite stable on average across the EU with some slight improvements: total employment continued to expand slowly; the share of the population living in (quasi-)jobless households decreased in many countries; declines in the depth of poverty have been observed.
The report underlines the importance of income support measures that sustained disposable income in nominal terms. The general stability of the social conditions is also a result of the income support measures that have been put in place since 2020 to counter the negative effects of the pandemic, energy and inflation crises on incomes.
However, some indicators also show how real disposable income of households worsened in 2022, as the affordability of many items declined due to the rise in inflation. Standard and severe material and social deprivation rates increased in around a third of Member States and the at-risk-of-poverty-or-social-exclusion rate of older people (65+) raised in more than half of Member States.
The report also stresses actions that Member States should undertake to support the population. In particular:
- Mitigate the impact of price increases and volatility to protect households’ purchasing power, together with ensuring access to essential services with a focus on energy poverty
- Implement social protection and inclusion policies supported by social investment, to accompany the positive employment dynamics of the post COVID-19 to ensure fair growth and reduce the risks for the vulnerable parts of the population including those related to the green and digital transitions
- Modernise the social protection and inclusion systems improving adequacy, coverage and take-up of benefits for both workers and the self-employed
- Improve the availability, quality and affordability of early childhood education and care to counter child poverty and the transmission of poverty from one generation to the next
- Protect living standards of the elderly, through: indexation of pensions to ensure their adequacy and consider targeted measures such as means-tested payments for those who are retired, while at the same time implementing active ageing policies aiming at guaranteeing longer and healthier working lives; guaranteeing access to high quality affordable long-term care services.