10.6092/issn.1561-8048/15702
This article assesses the space for the social dimension of EU economic governance after the Covid-19 pandemic. It does so by looking at the types of instruments that are used to further European social policy. It describes how rule-based, coordination-based and monetary-based instruments are connected to different conceptualisations of European social policy and the role national actors might play, including the social partners. The different instruments are brought together in governance architectures, for example in the European Pillar of Social Rights, the European Semester, and the Recovery and Resilience Facility. Lately, monetary-based instruments have been used more often, also in order to shape European social policy. Moreover, apart from combining different instruments, the governance architectures themselves seem deliberately to be interlinked. The article ends with a provisional research agenda, proposing questions that should be addressed in order to understand how the social dimension is anchored in the wide range of governance instruments.
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The social dimension of EU economic governance after the Covid-19 pandemic: exploring new interlinkages
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Sonja Bekker
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The social dimension of EU economic governance after the Covid-19 pandemic: exploring new interlinkages
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The social dimension of EU economic governance                                   Italian Labour Law e-Journal
after the Covid-19 pandemic: exploring new                                      Special Issue 1, Vol. 15 (2022)
interlinkages                                       NextGeneration EU in Action: Impact on Social and Labour
Sonja Bekker                                                                                           Policies
S.Bekker@uu.nl                                                                                ISSN 1561-8048
                                                               https://doi.org/10.6092/issn.1561-8048/15702




   The social dimension of EU economic governance
     after the Covid-19 pandemic: exploring new
                     interlinkages
                                         Sonja Bekker

1. Introduction. 2. Conceptualisations of European social policy and hybrid governance
architectures. 3. Examples of governance architectures impacting European social policy.
3.1. Example 1: The European Pillar of Social Rights. 3.2. Example 2: the European
Semester. 3.3. Example 3: the Recovery and Resilience Facility. 4. Interconnections between
governance architectures. 5. Conclusion.




                                                 Abstract

  This article assesses the space for the social dimension of EU economic governance after the
  Covid-19 pandemic. It does so by looking at the types of instruments that are used to further
  European social policy. It describes how rule-based, coordination-based and monetary-based
  instruments are connected to different conceptualisations of European social policy and the role
  national actors might play, including the social partners. The different instruments are brought
  together in governance architectures, for example in the European Pillar of Social Rights, the
  European Semester, and the Recovery and Resilience Facility. Lately, monetary-based
  instruments have been used more often, also in order to shape European social policy.
  Moreover, apart from combining different instruments, the governance architectures themselves
  seem deliberately to be interlinked. The article ends with a provisional research agenda,
  proposing questions that should be addressed in order to understand how the social dimension
  is anchored in the wide range of governance instruments.

  Keywords: Recovery and Resilience Facility, European Semester, Pillar of Social Rights,
  Governance architectures, Social Europe.




 Associate professor at Faculty of Law, Economics and Governance of Utrecht University, the Netherlands
 Sonja Bekker                                                            Italian Labour Law e-Journal
                                                                        Special Issue 1, Vol. 15 (2022)
                                                              NextGeneration EU in Action: Impact on
                                                                            Social and Labour Policies




1. Introduction.

    The past decade has been an exciting journey for European social policy, ranging from
austerity-related constrictions during the great financial crisis (2008–2013), to a resurrection
via the European Pillar of Social Rights (2017), and the long-term aim of a ‘fair and just’
recovery from the Covid-19 crisis. This article zooms in on the social dimension of EU
economic governance, focussing particularly on the interplay of the different types of
instruments the EU uses in order to develop socio-economic policies. The domain of
European social policy has always been characterised by an interesting mix of rule-based,
coordination-based and monetary-based instruments. Lately, shifts have been visible in terms
of a growing role for monetary-based instruments, as well as a further interconnection of
governance architectures. For instance, the Covid pandemic has led to the establishment of
the Recovery and Resilience Facility, which is moreover purposefully tied to the European
Pillar of Social Rights and the European Semester.
    This article aims to assess the space available for the social dimension of EU economic
governance after the Covid-19 pandemic. It does so by looking at the types of instrument
used to promote European social policy. First, this article offers different conceptualisations
of European social policy. Secondly, it describes how the rule-based, coordination-based and
monetary-based instruments are connected to the different conceptualisations of European
social policy and the role national actors might play, including the social partners. Next, the
article describes the development of hybrid governance structures and their meaning for
European social policy. Then, it gives some examples of how different types of instruments
are connected in three governance architectures, namely the European Pillar of Social Rights
(Pillar), the European Semester (Semester), and the Recovery and Resilience Facility (RRF).
This exercise will look at how, jointly from national level and EU level, and using a
combination of different instruments that are (more or less) aligned, European social policy
might be shaped after the Covid-19 pandemic. The conclusion ends with a set of questions
that should be addressed in order to better understand how the social dimension is anchored
in the wide range of governance instruments.


2. Conceptualisations of European social policy and hybrid governance architectures.

   In order to analyse the space available for the social dimension of EU economic
governance after the Covid-19 pandemic, it is fruitful to explore, first, the various definitions
of European social policy. This section will show that particular definitions of European
social policy also determine which instruments may be used to promote social Europe.
Moreover, the choice of a particular instrument also shapes the role of national-level and
EU-level actors in designing and implementing (European) social policies.
   Although this section starts with some definitions or conceptualisations of European
social policy, its ultimate purpose is to connect these conceptualisations to the types of
governance instrument that are used to shape social policies. Therefore, this section will not

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    Sonja Bekker                                                                    Italian Labour Law e-Journal
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                                                                         NextGeneration EU in Action: Impact on
                                                                                       Social and Labour Policies




aim for complete descriptions either of what European social policy is, or what the European
Social Model entails. This has been done elsewhere.1 Here, the article follows Streeck by
asking what exactly ‘European’ means in the term ‘European social policy’.2 Streeck gives
three conceptualisations, the first of which refers to national welfare states taken together.
This conceptualisation seeks a common denominator in Member States’ national social
policies. Consequently, this common denominator, consisting of ideas and practices, could
be seen as the European aspect of social policies. This is thus a very nationally oriented view
of social policies, with little role for EU-level policymaking mechanisms. A second
conceptualisation refers to the social policies of the European Union, which are developed
above and come on top of national social policies. Here, the EU adds a supranational layer
to the existing national social policies. In this respect, Streeck speaks of the EU superseding,
regulating, protecting or restructuring the social policies of the Member States. In this
conceptualisation, however, there is still a role to play for the national level, and the
extensiveness of this national role is codetermined by the use of a particular governance
instrument, or the organisational set-up of a governance architecture, such as choices
between soft coordinated steering or harder requirements set via directives. A third definition
aligns with ideas of far-reaching European integration in a federalist social democracy and
sees European social policy as a replacement for national welfare states and a step towards
building a unified European welfare state with identical social policies in all Member States.3
    The three different definitions of European social policy are connected to the use of
different types of vision, instrument, actor and institution for the purpose of realisation. This
is because, if an instrument allows the national level to play a role in developing European
social policies, it means that national governments, but also national social partners, may
shape social policies within the European context. They thus have a major responsibility, so
to speak, in furthering European social policy. Moreover, at times, national and European
level policymakers have a joint responsibility to shape social policies, while interacting in a
multilevel governance setting. Building on this, this article takes the perspective that the
different conceptualisations of European social policy co-exist, encompassing multiple levels
of governance. The article demonstrates this by exploring the establishment and use of
different types of governance instruments that are relevant to social policies.
    Moreover, it distinguishes between three different types of instrument: rule-based,
coordination-based and monetary-based.4 Rule-based instruments, such as directives, line up
more with an idea of European integration, at least at the level of setting minimum standards.
These minimum standards may be adopted not only via the ordinary legislative process of
the Community Method, but may also stem from framework agreements negotiated by the


1 For overviews see, for example, Blanpain R., Colucci M., Sica S., The European Social Model, Social Europe
Series, Vol. 11, Intersentia, Antwerp, 2006; Moreau M.-A., Ulasiuk I., Before and after the economic crisis: what
implications for the European social model?, Edward Elgar, Cheltenham, 2011.
2 Streeck W., European Social Policy: Progressive Regression, in MPIfG Discussion Paper, 18, 11, 2018.
3 Ibid.
4 Armstrong K.A., EU Social Policy and the Governance Architecture of Europe 2020, in Transfer: European Review of

Labour and Research, 18, 3, 2012, 285-300.

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    Sonja Bekker                                                                             Italian Labour Law e-Journal
                                                                                            Special Issue 1, Vol. 15 (2022)
                                                                                  NextGeneration EU in Action: Impact on
                                                                                                Social and Labour Policies




European social partners.5 Coordination-based instruments refer to soft steering of national
social policies, such as happens when using the Open Method of Coordination (OMC).6 The
OMC is an iterative policy cycle, starting with EU-level policy objectives, sometimes
accompanied by quantitative benchmarks.7 For employment policies these goals are set in
the employment guidelines proposed by the Commission, agreed by national governments
and adopted by the European Council. Next, the Commission monitors labour markets and
evaluates each country’s progress. Moreover, Member States submit a national report in
which they describe national reforms that contribute to meeting the EU-level goals, and the
Commission analyses these reports. Based on all these assessments, as well as frequent
dialogues with national governments and social partners, the Commission makes specific
evaluations of each country and drafts country-specific recommendations, which at times are
altered and then endorsed by the Council. These country-specific recommendations (CSRs)
fit the particular challenges facing a country and are not legally binding. The CSRs differ
from directives in this respect. Because CSRs are not binding, and rather offer suggestions,
actors at the national level have ample room to develop their own policies, within the targets
set at the EU level. Finally, monetary-based steering refers to the use of EU funds to
influence social outcomes.8 An example of a monetary-based instrument is the European
Social Fund. Since the height of the Covid-19 pandemic, monetary-based instruments have
started to play a much bigger role, signified by the implementation of the RRF and the
European instrument for temporary support to mitigate unemployment risks in an
emergency (SURE).
    The instruments mentioned above often do not operate in isolation. They mainly form
part of governance architectures. Governance architectures may be defined as strategic and
long-term institutional arrangements, consisting of three features.9 First, they deal with
complex, strategic and long-term problems in a holistic manner. Second, they set substantive
output-oriented goals. Third, they are implemented through combinations of old and new
organisational structures. Governance architectures have both ideational components (policy
paradigms and discourses) and organisational components (formal institutional structures
and instruments).10 The former Europe 2020 Strategy might be seen as a governance
architecture, and has hosted combinations of coordination-based instruments (in other
words, guidelines and country-specific recommendations) and monetary-based instruments
(that is, the European Social Fund [ESF]).11




5 See the process as anchored in Articles 154 and 155 Treaty on the Functioning of the EU (TFEU).
6 An example of an OMC is the European Employment Strategy (EES).
7 De la Porte C., Pochet P., Why and how (still) study the Open Method of Co-ordination (OMC)?, in Journal of

European Social Policy, 22, 3, 2012, 336-349.
8 Armstrong K.A., nt. (4)
9 Borrás S., Radaelli C.M., The politics of governance architectures: creation, change and effects of the EU Lisbon Strategy, in

Journal of European Public Policy, 18(4), 2011, 463.484. Citation on page 463.
10 Ibid.
11 Armstrong K.A., nt. (4).



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     Sonja Bekker                                                                         Italian Labour Law e-Journal
                                                                                         Special Issue 1, Vol. 15 (2022)
                                                                               NextGeneration EU in Action: Impact on
                                                                                             Social and Labour Policies




    Following on from this, governance architectures may have a hybrid character, meaning
that they yoke together different types of instruments in order to achieve their goals.12
Hybridity could lead to mutual interaction between instruments, meaning that those
instruments somehow influence each other. The European Semester (Semester) may be an
example of a hybrid governance mechanism. The Semester was implemented in 2011 and
coordinates EU socio-economic policies. It brings together somewhat harder (more rule-
based) economic and financial steering via the Stability and Growth Pact (SGP) and the
Macroeconomic Imbalances Procedure (MIP), with the softer (more coordination-based)
employment and social policy coordination.13 Moreover, within the Semester instruments
influence each other by pursuing goals or targets in the same policy fields. For instance, the
topic of pensions is interesting both from an economic perspective (public spending) and
from a social policy perspective (reducing old-age poverty), and at times may generate
conflicting messages (for example, cutting expenditure, while fighting poverty). Although
hybridity is not new, it does keep sparking questions on the best governance design, for
instance what the best combination of instruments is in order to attain certain social policy
goals 14; or which combinations of tools and techniques are smart and deliver the desired
results?
    A choice to make use of certain types of governance instrument often means the choice
of a certain role for the EU versus the national level, as well as their respective stakeholders.
Moreover, the choice of certain instruments determines the way in which EU-level and
national-level actors interact when creating European social policies. In determining the role
of the EU versus the national level, the degree of centralisation in EU policymaking is
essential. This could be assessed by finding out whether there is national actor involvement
in drafting a norm or policy, whether proposed policy changes fit with national priorities,
and whether or not proposed changes challenge institutional arrangements at the national
level .15 If centralisation is low, national governments, parliaments and social partners have a
fair amount of influence on reforms in the phases of agenda-setting, design and
implementation. More centralisation would or could mean less national level influence.
    Apart from looking only at the national versus the EU level, the dynamic and recurring
interaction between the levels should be examined, for instance building on ideas of multi-

12 Armstrong K.A., The Character of EU Law and Governance: From ‘Community Method’ to New Modes of Governance,
in Current Legal Problems, 64, 1, 2011, 179-214.
13 The SGP is a set of rules intended to ensure that Member States pursue sound public finances and coordinate

their fiscal policies. It has a soft preventive arm that resembles OMC coordination, but also a corrective arm if
countries keep failing to comply with the rules. The MIP aims to identify, prevent and address the emergence
of macroeconomic imbalances that may harm the economic stability of a Member State, the euro area, or the
EU as a whole. It also has a preventive and corrective arm. Bekker S., The European semester process: Adaptability
and latitude in support of the European social model, in Vandenbroucke F., Barnard C. and De Baere G. (eds), A
European social union after the crisis, Cambridge University Press, 2017, 238–250.
14 Armstrong K.A., nt. (12); Jessoula M., Europe 2020 and the Fight against Poverty – Beyond Competence Clash, Towards

‘Hybrid’ Governance Solutions?, in Social Policy and Administration, 49, 4, 2015, 490-511.
15 De la Porte C., Heins E., A New Era of European Integration? Governance of Labour Market and Social Policy Since

the Sovereign Debt Crisis, in Comparative European Politics, 13, 1, 2015, 8; Bekker S., Hardening and softening of country-
specific recommendations in the European Semester, in West European Politics, 44, 1, 2021, 114-133:
https://doi.org/10.1080/01402382.2020.1739407.

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                                                                              NextGeneration EU in Action: Impact on
                                                                                            Social and Labour Policies




level governance. The Semester is seen as an example of multilevel governance, involving
the dynamic interaction of EU-level and national-level actors.16 In a way, part of its operation
resembles the OMC, as described above. The Semester annually coordinates national socio-
economic policies, starting with the European Commission proposing and the Council
endorsing guidelines. Next the European Commission monitors and evaluates national
progress, and suggests CSRs. As national and EU-level actors interact at various times,
national actors may influence the drafting of the CSRs and thus try to ensure that the Member
States receive recommendations that fit national challenges, priorities and reform capacity.17
Although multilevel governance models describe interactions and influence across
governance levels quite well, the practices they illustrate make it difficult to use a single theory
of EU integration in order to assess what is going on.18 Both the EU and the relevant Member
State are in the driver’s seat.
   The next section will give examples of the different types of governance architecture.
Particularly the Semester, the Pillar as well as the RRF exemplify how different rules-based,
coordination-based and monetary-based instruments are interlinked.


3. Examples of governance architectures impacting European social policy.

   The development of European social policy started already in the post-war era and its
genesis has been described more fully elsewhere.19 Over time, European social policy has
been developed using different rules-based, coordination-based and monetary-based
instruments. At present a patchwork of hard and soft rules, including legislation, guidelines
and funding opportunities exist.20 To name a few, in the broad domain of flexible employment,
one may find directives on fixed-term and part-time work, as well as on transparent working
conditions. However, the Semester also includes economic and employment policy
guidelines on labour market flexibility and security,21 and assesses the progress of Member
States in its monitoring and evaluation exercises, for instance using the Social Scoreboard.22


16 Cardwell P.J., Granger M.-P. (eds), Research handbook on the politics of EU law, Edward Elgar Publishing,
Cheltenham, 2020.
17 Bekker, S., nt. (15).
18 Scharpf, F.W., Notes Toward a Theory of Multilevel Governing in Europe, in Scandinavian Political Journal, 24, 1, 2001,

1-26; Verdun A., Zeitlin J., Introduction: the European Semester as a new architecture of EU socioeconomic governance in
theory and practice, in Journal of European Public Policy, 25, 2, 2018, 137-148.
19 For example, Barbier J.C., The Road to Social Europe: A Contemporary Approach to Political Cultures and Diversity in

Europe, Routledge, London, 2014; Streeck, W., nt (2); Barnard C., EU Employment Law, Oxford University Press,
Oxford, 2012; Pochet P., Twenty years of the publication ‘Social policy in the European Union’: what have we learned?, in
Social policy in the European Union 1999–2019: the long and winding road, ETUI/OSE, Brussels, 2020, 13–35; Pochet
P., From one crisis to another: changes in the governance of the Economic and Monetary Union (EMU), in Transfer: European
Review of Labour and Research, 2022; De la Porte C., Madama I., Researching social Europe on the move, in Nelson K.,
Nieuwenhuis R., Yerkes M. (eds), Social Policy in Changing European Societies, Edward Elgar, Cheltenham, 2022.
20 Barnard C., nt. (19).
21 See, for example, the guidelines on employment policy, Council Decision (EU) 2018/1215 of 16 July 2018

on guidelines for the employment policies of the Member States, ST/10464/2018/INIT.
22 ETUI, The Social Scoreboard revisited, Background analysis 2017.03.



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                                                                                NextGeneration EU in Action: Impact on
                                                                                              Social and Labour Policies




Likewise, in the broad domain of unemployment different instruments have emerged, such as
the guidelines of the European Semester, but also the ESF that funds projects aimed at
fighting unemployment, or the SURE fund that mitigates unemployment risks. Moreover
there are programmes targeted to lower youth unemployment, such as the bridge-to-jobs,
that is a follow-up of the EU’s youth guarantee.
    Some of the instruments have been implemented in relative isolation, while others have
been brought together in governance architectures. The remainder of this article focuses on
the Semester, the Pillar and the RRF, and views these as governance architectures. They
illustrate a new emphasis on EU monetary-based steering in the social domain, as well as a
further interconnection between governance architectures.


3.1. Example 1: The European Pillar of Social Rights.

   The Pillar was launched in 2017 and includes 20 principles aimed at creating fair and well-
functioning labour markets and social protection systems, thus improving people’s lives. The
principles are divided into three chapters, the first on Equal opportunities and access to the
labour market; the second on Fair working conditions; and the third on Social protection
and inclusion. The Pillar may be seen as a governance architecture aimed at reintegrating
social policy in the evolving process of an EU economic and monetary union by bringing
forward an alternative economic model that emphasises sustainability.23
   The name of the Pillar refers to ‘rights’, but in fact the Pillar is non-binding.24 Rather, it
consists of a range of ideas that, in their further design and implementation (the so-called
‘delivery’ of the Pillar), inspire the use of a mix of rule-based and coordination-based
instruments. From the outset the Pillar has been framed as a ‘compass’ that calls upon
Member States and the social partners to help in achieving its goals.25 Thus, the Pillar lacks
any enforceability as EU citizens cannot base direct claims on it.26 This therefore requires
policymaking at the national level in order to achieve results. For instance, principle no. 8
addresses the need to consult social partners on the design and implementation of economic,
employment and social policies. This refers not only to the EU-level social partners, but also
to those at the national level. Although the Pillar in itself does not bestow new rights, it is
accompanied by a package of proposals, containing pre-existing initiatives and new
legislation, as well as soft law measures.27 In May 2021, the Porto social summit resulted in

23 Deakin S., What Follows Austerity? From Social Pillar to New Deal, in F. Vandenbroucke, C. Barnard, G. De
Baere (eds.), A European Social Union, Cambridge University Press, 2017, 160-191; Carella B., Graziano P.,
Back to the Future in EU Social Policy? Endogenous Critical Junctures and the Case of the European Pillar of Social Rights,
in Journal of Common Market Studies, 60, 2, 2022, 374-390.
24 Hendrickx F., The European Social Pillar: A first evaluation, in European Labour Law Journal, 9, 1, 2018, 3-6.
25 Aranguiz A., Bednarowicz B., Adapt or perish: recent developments on social protection in the EU under a gig deal of

pressure, in European Labour Law Journal, 9, 4, 2018, 329-345.
26 Bednarowicz B., Delivering on the European Pillar of Social Rights: The New Directive on Transparent and Predictable

Working Conditions in the European Union, in Industrial Law Journal, 48, 4, December 2019, 604-623.
27 Garben S., The European Pillar of Social Rights: Effectively Addressing Displacement?, in European Constitutional Law

Review, 14(1), 2018, 210-230.

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an Action Plan, consisting of a number of initiatives and setting three overarching targets to
be achieved by 2030. These targets are an employment rate of at least 78 per cent; at least 60
per cent of adults attending training courses every year; and a reduction in the number of
people at risk of social exclusion or poverty by at least 15 million people, including 5 million
children.
    The Pillar has been linked also to concrete legislative initiatives, for instance in the domain
of labour law, albeit based on existing EU competences.28 Examples, which could be seen as
building on a political consensus set by the Pillar, include initiatives to implement a minimum
wage directive, as well as to establish guidelines clarifying the application of EU competition
law to collective agreements of solo self-employed people. Thus, the Pillar aligns or inspires
myriad initiatives, collecting different ambitions and defining different means of achieving
them, including directives and recommendations.


3.2. Example 2: the European Semester.

    As of the 1990s, coordination-based instruments started to emerge in the economic policy
field, as well as in the employment and social policy fields. The Treaty of Amsterdam (1997)
introduced an employment chapter that permitted the establishment of the European
Employment Strategy (EES). It uses the OMC, with ‘soft’ elements such as annual
evaluations of national labour markets and CSRs suggesting how Member States could
improve policies, while instigating policy learning and the exchange of ideas.29 Economic
policy coordination was also developed in this timeframe, notably the Stability and Growth
Pact (SGP) (see above).30 The great financial crisis, as well as the end of the Lisbon Strategy
in 2010, gave rise to a major reform of EU economic governance, aimed at strengthening
the EU’s capacity to steer national economic policies. The SGP was reinforced, and the MIP
was introduced in order to identify at an early stage potential macroeconomic imbalances
that could harm a country’s economic stability, as well as that of the EU. Together with
employment and social policy coordination, the SGP and the MIP were placed within the
framework of the Semester. Thus, essentially, the Semester aligns the annual coordination of
economic, social and employment policies, which makes it an example of a governance
architecture with a range of different instruments.31 The SGP and the MIP may result in fines
in the case of perpetual non-compliance by euro-zone members, while employment and
social policy coordination remains rather soft.32 Arguably, this combination of harder and
softer instruments has led to imbalances in the outcomes of the Semester in terms of a
narrow focus on economic issues that were, moreover, addressed coercively. Thus, in the

28 Hendrickx F., nt. (24).
29 Zeitlin J., Pochet P., The open method of co-ordination in action: the European employment and social inclusion strategies,
Peter Lang, Bruxelles, 2005.
30 Bekker S., The European Semester: Understanding an innovative governance model, in Cardwell P.J., Granger M.-P.

(eds), Research handbook on the politics of EU law, Edward Elgar Publishing, Cheltenham, 2020, 67-81.
31 Armstrong K.A., nt. (4).
32 Bekker S., nt. (13).



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first years of the Semester, economic and financial targets seemed to overrule employment
and social policy measures .33 Particularly, the Semester’s focus on austerity measures and
calls for structural reforms put pressure on national-level social policies.34 For instance, CSRs
were issued on higher pension ages, moderate wage growth and comprehensive reforms of
collective bargaining systems.35 Still, even during this period of austerity Member States made
room to develop socioeconomic policies that went against the EU’s recommendations. This
happened particularly when countries were in the preventive stages of coordination, but at
times also when they were in the corrective grip of coordination.36 Apart from too strong a
focus on economic goals, the Semester was criticised for not including national social actors
sufficiently. Also because of the complexity of governance systems with different
instruments operating across multiple governance levels, actors such as the social partners
faced obstacles when they attempted to become involved in decision-making.37 However,
the Semester does provide opportunities for participation and these opportunities have
proven relevant to national governments and national social partners, for instance to
influence the content of CSRs.38
    After a while, the devastating effects of the great financial crisis started to become visible,
for instance in the spiking youth unemployment. Therefore, after 2015, recovery efforts were
implemented.39 Concerning the Semester, it has involved a gradual socialisation, giving more
space to enhancing social ambitions in the CSRs.40 Furthermore, in 2015 the Semester was
extended to a full year’s coordination cycle, which gives national governments more time to
involve national parliaments, social partners and other stakeholders in discussing policy
measures vis-à-vis national budgets.41 Today, the Semester is a prominent and quite
innovative EU governance mechanism that guides national socioeconomic policies.42 The
Semester has proven to be a fairly flexible governance mechanism that tailors its CSRs to a
country’s specific socioeconomic situation and adjusts its policy focus to dominant social
and economic challenges. For instance, after 2017, the Semester started to include the goals
of the Pillar of Social Rights (see further Section 4).43 Moreover, as an example of multilevel

33 Crespy A., Menz G., Commission Entrepreneurship and the Debasing of Social Europe Before and After the Eurocrisis, in
JCMS, 53, 4, 2015, 753–768; Clasen J., Clegg D., European labour markets and social policy: recent research and future
directions, in Nelson K., Nieuwenhuis R., Yerkes M. (eds), Social Policy in Changing European Societies, Edward Elgar,
Cheltenham, 2022.
34 For an overview of national reforms in this period see Degryse C., Jepsen M., Pochet P., The Euro Crisis and

Its Impact on National and European Social Policies, in European Trade Union Institute (ETUI) Working Paper 05, 2013.
35 Bekker S., nt. (13).
36 Ibid.
37 Ferrera M., Social Europe and its Components in the Midst of the Crisis: A Conclusion, in West European Politics, 37, 4,

2014, 825–843.
38 Zeitlin J., Vanhercke B., Socializing the European Semester: EU social and economic policy co-ordination in crisis and

beyond, in Journal of European Public Policy, 25, 2, 2018, 149–174; Bekker S., nt. (15).
39 Pochet P., Twenty years of the publication ‘Social policy in the European Union’: what have we learned?, in Social policy in

the European Union 1999–2019: the long and winding road, Brussels, ETUI/OSE, 2020, 13-35.
40 Zeitlin J., Vanhercke B., nt. (38).
41 See for example Munta M., EU Socio-Economic Governance in Central and Eastern Europe, Routledge, London,

2021.
42 Verdun A. and Zeitlin J., see no. 18.
43 Bekker S., nt. (13).



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     Sonja Bekker                                                                        Italian Labour Law e-Journal
                                                                                        Special Issue 1, Vol. 15 (2022)
                                                                              NextGeneration EU in Action: Impact on
                                                                                            Social and Labour Policies




governance setting, the Semester hosts ample interactions between policymakers at the EU
and national levels,44 and therefore is classified as neither supranational nor
intergovernmental.45 National government representatives, trade unions and employers’
associations, and parliaments all may play a role at the different stages of the coordination
process, influencing norm-setting, policy design, implementation and evaluation.
   As discussed in the section below, the Covid-19 crisis seems to mark a new stage in the
evolution of the Semester as the RRF uses the Semester’s CSRs as one of the conditions for
financial support.46


3.3. Example 3: the Recovery and Resilience Facility.

    During the Covid-19 pandemic the EU created strategies emphasising green, digital and
inclusive growth, aimed at overcoming the crisis while creating a future-oriented agenda.
Along with this strategy, the EU implemented the Recovery and Resilience Facility (RRF) to
support both national public investment and reforms.47 The RRF is a temporary recovery
instrument that allows the European Commission to raise funds to help Member States
implement reforms and investments. It makes available €723.8 billion in loans (€385.8
billion) and grants (€338 billion). Therefore, the RRF may be seen as a monetary-based
instrument. The loans and grants are accessible only when a country meets certain conditions.
The conditions include a certain level of spending on investments in the green and digital
economy, but also on the implementation of reforms suggested by the CSRs adopted in the
2019 and 2020 European Semester cycles48 (see also Section 4). Depending on the country,
these recommendations cover a broad range of social policy, such as the inclusion of
vulnerable groups in the labour market or giving the self-employed access to social security.49
The reference to the CSRs means that coordination-based elements play a role in the
monetary-based steering of the RRF.
    The conditionality in accessing RRF funds seems not to be the same as top-down steering,
at least according to the underlying Regulation. It is up to national governments to draft a
national recovery and resilience plan (RRP), stating which investments and reforms they want
to make and how these connect to the EU-level strategy to move towards a green, digital and
inclusive economy. Moreover, the process was designed with considerable space for




44 Ibid.
45 Verdun A., Zeitlin J., nt. (18).
46 Bekker S., nt. (15).
47 De la Porte C., Dagnis Jensen M., The next generation EU: An analysis of the dimensions of conflict behind the deal, in

Social Policy and Administration, 2021, https://doi.org/10.1111/spol.12709.
48 Although the Netherlands RRP also refers to the 2022 CSRs, as the country submitted a reform and

investment plan only in the summer of 2022.
49 See Rainone S., An overview of the 2020-2021 country-specific recommendations (CSRs) in the social field: the impact of

Covid-19, Background analysis 2020.01, Brussels, ETUI, 2020, for an overview of topics covered by CSRs.

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     Sonja Bekker                                                                            Italian Labour Law e-Journal
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                                                                                  NextGeneration EU in Action: Impact on
                                                                                                Social and Labour Policies




involving domestic stakeholders in the process.50 For instance, Article 18(q) of the RFF calls
for the inclusion of local and regional authorities, social partners, civil society organisations,
youth organisations and other relevant stakeholders in the design and implementation of the
RRPs. Such stakeholder involvement should be demonstrated in the RRP, as national
governments were asked to include in the plan a section on consultation, as well as to explain
how the views and ideas of stakeholders are reflected in the reform and investment ideas of
the RRP.51
   The three hybrid governance architectures portrayed in this section use either rule-based
instruments, coordination-based instruments, monetary-based instruments or a combination
of these. Although the three governance architectures have been described as stand-alone
examples, the text has already revealed that they are interlinked. While Section 4 explores
these interlinkages, the conclusion will pose questions on what these interlinkages imply for
EU governance, for instance whether it is a sign of maturity, using the strengths of each of
the governance architectures, or whether it results in excessive complexity.


4. Interconnections between governance architectures

    This section briefly explores the linkages that have been made between the Pillar, the
Semester and the RRF. These linkages are visible in various ways. For example, the European
Pillar of Social Rights has been integrated both in the Semester and in the RRF. As regards
the link between the Pillar and the Semester, the Pillar has helped to further socialise the
Semester, while the Semester assists in monitoring the social performance of Member States
as targeted by the Pillar.52 For instance, part of the principles of the Pillar may be traced in
the CSRs that the Semester issues to countries.53 Moreover, congruent with a multi-level
vision of governance, the only new policy tool that the Pillar really initiated was an updated
list of social indicators (the Social Scoreboard), for which the European Semester was used
for monitoring and benchmarking purposes. Moreover, the link between the Pillar and the
Semester is visible in the Regulation on the RRF of February 2021.54 This Regulation
stipulates in its preamble (Part 4) that at EU level, ‘the European Semester for economic
policy coordination (European Semester), including the principles of the European Pillar of
Social Rights, is the framework to identify national reform priorities and monitor their
implementation’. In Article 4 on the general and specific objectives of the RRF, the goals of
the Pillar are repeated. Moreover, information on whether and how the funds contribute to


50 Munta M., Pircher B., Bekker S., Ownership of national recovery plans: overcoming Europe’s crisis of legitimacy through
Next Generation EU?, paper presented at the workshop ‘Representative Democracy in Crisis Mode: Euro crisis
and Covid-19 compared’, Salzburg, 3 June 2022.
51 Ibid.
52 Aranguiz A., Social mainstreaming through the European pillar of social rights: Shielding ‘the social’ from ‘the economic’ in

EU policymaking, in European Journal of Social Security, 20, 4, 2018, 341-363.
53 Rainone S., nt. (49).
54 Vanhercke B., Verdun A., The European Semester as Goldilocks: Macroeconomic Policy Coordination and the Recovery

and Resilience Facility, in JCMS, 60, 1, 2022, 204-223.

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     Sonja Bekker                                                                          Italian Labour Law e-Journal
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                                                                                NextGeneration EU in Action: Impact on
                                                                                              Social and Labour Policies




meeting the goals of the Pillar is seen as essential information that the Member States should
include in their RRP (Article 18). Subsequently, consideration for the principles of the Pillar
forms part of the evaluation that the European Commission undertakes when assessing the
RRPs (Article 19).
    The RRF also explains the alignment with the Semester, which entails helping to address
the national reform challenges as stated in the relevant CSRs.55 Moreover, the Preamble (Part
42) states that, apart from meeting the (spending) targets on a green and digital economy, the
criteria related to the CSRs and to the implementation of the Pillar’s goals should require ‘the
highest score of the assessment’ when the European Commission evaluates the RRPs.
Overall, Vanhercke and Verdun (2022: 208) judge that using the Semester for RRF goal-
setting, monitoring and evaluation exercises is a way of striking a balance between setting
boundaries while acknowledging national autonomy. They explain this as, on one hand, using
the Semester and its CSRs to guide the nature of national reforms, thus providing constraints.
On the other hand, the Semester’s soft mechanisms leave considerable leeway to Member
States to select and implement the national policies they prefer. Vanhercke and Verdun
(2022) find this essential in view of the RRF's ambition to steer a substantial number of
policies and goals that are national competences. Moreover, while a considerable portion of
RRF financial assistance is provided in the form of grants, loans are the major component,
and national governments need to pay them back to the European Commission. This need
to pay back considerable amounts of money is an additional argument for why national
governments and parliaments should have a say in the choice of reforms and investments,
and they require ample leeway to do so. Apart from the arguments made by Vanhercke and
Verdun (2022), the interconnection of governance architectures, as explored in this article,
may point towards using the opportunities offered by combining the strengths that each of
the separate governance architectures. These interconnections between governance
architectures might result in synergies: fruitful combinations of constraints applied to
Member States by building in conditionalities, while offering guidance in monitoring and
evaluation exercises and giving enough leeway for Member States to adjust policies to
national challenges and preferences. Whether such synergies indeed emerge is a question that
should be assessed in further (empirical) research. After all, the RRF is still relatively new.
    For such an assessment we might learn from past experiences with conditional funding.
Although historically the EU has scarcely used monetary steering and conditionalities, there
are some recent examples.56 Notably, after the 2008 great financial crisis, conditional funding
or loans were part of the Memoranda of Understanding that the so-called bailout or
programme countries signed with the ‘Troika’ of the European Central Bank, the
International Monetary Fund, and the European Commission.57 The reforms that were
formulated as a condition for loans addressed core state functions in the fiscal, labour market

55 Ibid.
56 Jacoby W., Hopkin J., From lever to club? Conditionality in the European Union during the financial crisis, in Journal of
European Public Policy, 27, 8, 2020, 1157-1177.
57 Theodoropoulou S., National social and labour market policy reforms in the shadow of EU bail-out conditionality: The

cases of Greece and Portugal, in Comparative European Politics, 13, 2015, 29-55.

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     Sonja Bekker                                                                     Italian Labour Law e-Journal
                                                                                     Special Issue 1, Vol. 15 (2022)
                                                                           NextGeneration EU in Action: Impact on
                                                                                         Social and Labour Policies




and social policy domains.58 Here, lessons could be learned from the very stringent
conditionality for programme countries in contrast to the more relaxed conditionality the
RRF seems to entail. In hindsight, the strict conditions for policy reforms in programme
countries have proven to be too top-down, and included overoptimistic assumptions on the
effects of the prescribed reforms on achieving EU economic goals.59 At the same time, the
prescribed reforms had severe negative effects on societies and economies. As a viable
alternative, the RRF could be explored as a way of creating better socioeconomic policies,
for example because it makes it possible to bring in the national level, including national
stakeholders in the design and implementation phase of (social) policies. Another example
of the past use of conditionalities is their use in the EU’s cohesion funds after 2014, including
the ESF. Here, the requirement was added to take relevant CSRs into account when
designing national programmes.60 This development has been taken further and lately ESF
Plus links financial resources to meeting the targets of both the Semester and the Pillar.61
These conditions in the ESF Plus could be compared to the link between the RRF, the
Semester and the Pillar in order to seek differences and similarities in set-up and outcomes,
viewing for instance the more explicit emphasis on social goals that the ESF Plus seems to
make. Overall, it seems worth examining what the linking of governance architectures means
in terms of EU governance and its outcomes.


5. Conclusion

   Recent decades have witnessed ongoing innovation in EU governance.62 This innovation
has continued after the Covid-19 pandemic. A first significant and innovative step is the
increased emphasis on monetary-based instruments, with the implementation of the
temporary SURE and RRF facilities. A second innovative step is that large governance
architectures such as the Pillar, the Semester and the RRF have been tied together more
firmly and in a deliberate way. The implications of the two steps are yet to be assessed.
Looking at past experiences, one might mention a number of questions that could guide
future research and evaluation, particularly when departing from the idea of developing
European social policy with the purpose of creating fair and inclusive societies. Ultimately
such research could shed light on whether interlinking governance architectures is a sign of
maturity, as it makes it possible to use their respective strengths, or whether it results in
excessively complex EU governance that fails to achieve its goals.


58 Jacoby W., Hopkin J., nt. (56).
59 European Parliament, Report on the enquiry on the role and operations of the Troika (ECB, Commission and IMF) with
regard to the euro area programme countries, 28 February 2014, (2013/2277(INI)), 40.
60 Viță V., Research for REGI Committee – Conditionalities in Cohesion Policy, European Parliament, Policy

Department for Structural and Cohesion Policies, Brussels, 2018; Jacoby W., Hopkin J., nt. (56).
61 Hermans K., Greiss J., Delanghe H., Cantillon B., Delivering on the European Pillar of Social Rights: Towards a

needs-oriented distribution of the social funds?, in EuSocialCit Working Paper, June 2022.
62 Armstrong K.A. nt. (12); Verdun A., Zeitlin J., nt. (18).



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     Sonja Bekker                                                       Italian Labour Law e-Journal
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                                                             NextGeneration EU in Action: Impact on
                                                                           Social and Labour Policies




    A first question concerns the balance between social and economic goals.63 During the
great financial crisis, the use of governance instruments often seemed to favour economic
over social goals. The question is, how this plays out when using the RRF. What role do
social goals play in both the set-up and the execution of the RRF? Are the integration of the
principles of the Pillar and the emphasis on inclusive societies in the RRF Regulation enough?
To put it more generally, how is the interplay of rule-based, coordination-based and
monetary-based instruments related to the goals of European social policy? A second
question concerns the appropriate balance between the input of the actors or stakeholders
at the EU and national levels, where particularly in the social policy domain the social
partners have a role to play. Is their inclusion sufficiently safeguarded by the Regulation on
the RRF (with a link to principle 8 of the Pillar) and the requirement that governments need
to provide detailed insight into the consultation process they have set up, as well as into the
influence of stakeholders on the content of the RRPs? Do (national) stakeholders have
sufficient resources, power and opportunities to play a fruitful role in the implementation of
the plans? Following from the first two questions, a third question addresses the degree of
(in)compatibility of different instruments operating in the same policy domain. Do these
instruments complement or even strengthen each other, or is there rivalry between them,
leading to suboptimal results? A fourth question concerns the degree to which the
governance architectures are open to incorporate new challenges and new ideas that the
evolving economies in our societies pose? Here, the nature of the rule-based instruments
might be more static but also more forward-looking, as they build on fundamental norms
and ideas constituting our societies. Coordination-based instruments, such as the European
Semester, show more flexibility in including new challenges and are able to adjust to new
demands quickly. While this is a benefit, it also harbours the risk of incorporating new
fashions too easily without taking the time to think them through. Here, combinations of
rule-based instruments and coordination-based instruments might actually be quite fruitful,
as their combination may set basic norms while allowing adjustment to new challenges.
    The list of questions reveals that EU governance in the social domain is still very much
work in progress. The mapping exercise carried out in this journal issue is therefore of great
value. As different conceptualisations of European social policy seem to go together, more
insight is needed into smart combinations of tools, techniques and actor-involvement across
governance levels that are able to deliver the desired results.




Copyright © 2022 Sonja Bekker. This article is released under a Creative Commons
Attribution 4.0 International License.




63   See also Verdun A., Zeitlin J., nt. (18).

https://doi.org/10.6092/issn.1561-8048/15702                                                        14
