Social Investment Recovery for a Resilient Eurozone

The most competitive economies in the EU spend more on social policy than less successful ones. Their social investment credentials were key to reconciling economic sustainability and social inclusion in the decade of the Great Recession. In the background, by equating public consumption outlays and long-term public investments, the architecture of the EMU remained grounded in a neoliberal view that forced member states to keep their ‘wasteful’ welfare states in check. The policy response to the COVID-19 pandemic marked a turn towards the (re-)appreciation of public investment to relaunch growth, backed by the temporary instrument of Support to Mitigate Unemployment Risks in an Emergency (SURE), the issuance of common EU debt envisaged in the Next Generation EU (NGEU) package, and the associated Resilience and Recovery Facility (RRF). This opened a new window of opportunity for real social investment reform in member states adversely affected by the multiple crises of last years. Yet, recent advancements in the EU economic governance remain temporary in their nature. In the wake of the Ukrainian crisis, it is imperative to structurally reconcile economic growth and social progress in a still fragile Eurozone, with a different understanding of both the welfare state and the E(M)U. While poverty mitigation through inclusive minimum income protection ‘buffers’ remains a prerequisite for an effective social investment strategy, only by placing investments in human capital ‘stocks’ and labour market and life-course ‘flows’ on a firmer fiscal footing the EU can deliver on the promise of the 2017 European Pillar of Social Rights and recoup its future-oriented upward convergence momentum.