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EU funds. Report: money from the reconstruction fund has not improved the situation on the EU labour market
The €650 billion provided by the European Union to aid the economic recovery following the COVID-19 pandemic has resulted in only minimal enhancements in the labor markets of member states. According to a report from EU auditors released on Wednesday, as much as half of the intended reforms have turned out to be ineffective.
The €650 billion Recovery and Resilience Fund (RRF) established by the EU in response to the pandemic has, contrary to expectations, not resolved the majority of labor issues that member states are facing, as reported by the European Court of Auditors, which oversees EU operations.
Funding from the reconstruction fund did not enhance the situation
In order to access the funds, EU nations were required to commit to executing reforms, particularly those related to labor and employment policies. However, the audit revealed that while member states anticipated nearly 100 labor market reforms in their national recovery plans, such as support for job seekers, activation initiatives for the unemployed, and employee training, not all of these have proven effective.
For instance, there has been no success in boosting the integration of the most marginalized social groups into the labor market or in transferring the tax burden from labor to alternative tax sources.
The auditors highlighted social guarantees implemented in Germany, which were intended to ensure that the pandemic would not increase social security contributions. The issue, however, is that this measure was only effective in 2021, leading the auditors to note that the likelihood of it providing any relief to the employment sector in such a brief period is low.
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There were also achievements
Nevertheless, not every initiative has been unsuccessful. The ECA has praised the French unemployment insurance reform, which was designed to motivate unemployed individuals to rejoin the workforce and reduce short-term contracts, effectively addressing several challenges within French employment policy.
However, the auditors pointed out that there is still a lack of evidence demonstrating that approximately half of the executed reforms have yielded concrete results or influenced the labor markets of member states. The report stresses that, in reality, none of the EU countries have fully embraced the Brussels reform recommendations, and four have not planned any reforms at all.
– Meanwhile, the EU’s objective was specifically to ensure that the funds would motivate member states to undertake essential structural reforms and enhance the resilience of their economies, stated Ivana Maletić from the ECA, while presenting the report.
However, the auditors acknowledged that the implementation of the reconstruction fund is still in progress and some reforms, particularly those related to the labor market, remain incomplete. „There is still an opportunity for the reforms to yield more noticeable results,” the report’s authors concluded.
