Social policies represent by far the biggest item in the budgets of the Member States and have a major impact on living conditions in the EU. However, Europe's relatively poor economic and employment performance, as well as the rapid ageing of its societies, pose a serious threat to the sustainability of social policies.
Sustainable Financing of Social Policies in the European Union. Commission Staff Working Paper (SEC(2005)1774)
In preparation of the informal meeting of the European Council on the opportunities and challenges of globalisation (at Hampton Court on 27 October 2005), the Commission services reviewed the way in which social policies are financed in each of the Member States and the main challenges to which these financing arrangements have to adapt. The present paper "Sustainable Financing of Social Policies in the European Union" summarises the main conclusions of this review.
The paper concludes that the way in which Europe can hope to meet these needs is not by giving up its ambitious social policies, which embrace social protection, health, education and family support, including child and elderly care services. Rather Europe should make full use of their potential contribution to economic performance, notably by investing in human resources and promoting the most efficient use of human capital. The European Union has an important role to play in supporting national policymakers in implementing such reforms through the Structural Funds and through policy coordination efforts based on the new Integrated Guidelines on Growth and Jobs of the Lisbon Process and the Open Methods of Coordination on Social Protection and Education.