The European Commission is presently painting a positive picture on the Macroeconomic developments for Europe. The economic recovery in the EU accelerated considerably in 2017 and continued at a robust pace in early 2018. Economic growth has spread across more Member States and broadened its sectoral base. In line with these developments, labour market conditions have further improved. These positive developments have benefited the social situation in the EU, with a marked reduction in the number of people at risk of poverty and social exclusion. The contribution of investment to growth in 2017 was the largest since the beginning of the crisis. Gross fixed capital formation in 2017 stood at 20.3% of GDP in the EU and 20.7% in the euro area, the highest level since 2010.

However, we are still facing important challenges. Unemployment remains high in Member States that were hardest hit by the crisis, other countries face growing shortages of (skilled) labour. Productivity gains and wage growth remain modest, despite some recent improvements and Rapid technological change is making the labour market more dynamic but also presenting new challenges.

In this challenging context, CEEP agrees that the current economic juncture represents a window of opportunity to reignite economic and gradual social convergence and that this means we should sustain reform efforts. We strongly believe that the timely and meaningful involvement of social partners in the design, sequencing and implementation of reforms can improve ownership, impact and delivery. This follows on from the commitment taken in the quadri-partite statement on ‘a new start for the social dialogue’.

The impact of digitalisation on the world of work is growing year by year and is impacting on the production processes of enterprises, organisational models of the labour market, working conditions and the nature of work. This process is bringing opportunities and challenges. Digitalisation has the potential to increase our productivity, competitiveness and raise living standards. But to ensure that it brings opportunities for all, we need to have strong lifelong learning and training programmes, so that those who find their jobs being displaced by new technologies are quickly able to find new appropriate employment and move into the new jobs that will be created by digitalisation.

Whilst Investments increased, their impact on productivity has been clearly insufficient. It means that a better targeting of our investments is necessary as this could help to absorb unutilised labour supply, raise productivity and thus smooth out differences in labour market situations across countries. A strong potential lies in Social Investments in social infrastructures such as healthcare and education. CEEP supports for this purpose the proposal for an invest EU programme with a strong window dedicated to Social Investments and its empowerment in the context of the MFF negotiations.

Social protection and labour market reforms are required to make systems sustainable in view of demographic change, including increased life expectancy. This is essential to ensure that systems can provide adequate support for future generations. This means not only raising employment levels of older workers but fulfilling labour market potential overall. Reforms to social protection systems must aim to facilitate labour market participation of those who can work, by making work pay compared to welfare benefits, whilst providing income support to those most in need.

Social partners are uniquely well-placed to assess whether and which reforms are needed, to design the appropriate measures but also to contribute to economic and social success by closely associating labour market with economic policies. In some countries, social partners play a direct role in designing the content of labour market reforms. Therefore, social dialogue can be a driving force for successful, sustainable and inclusive economic, employment and social policy-making. Timely and meaningful involvement of social partners throughout the European Semester is key to improve engagement in policies thereby facilitating their successful implementation in a way that balances the interests of workers and employers.

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