The document discusses the future role of the European Social Fund (ESF). It makes three key points: 1) While EU social policy action is marginal compared to national efforts, the ESF can have an impact through "process effects, role effects, and volume effects." However, these effects are small, especially in net contributor countries. 2) For the ESF to be effective, interventions must be well-targeted in areas where there is genuine European added value that national actors cannot provide alone. Broad goals like "smart growth" are too vague to guide funding. 3) The role of the EU in developing social policy is supportive and supplementary in nature. It should focus on collective needs, long

1. ESF Conference 23 June 2010
Daniel Tarschys
The future of the ESF
1. For all the talk about a crisis of the European social model, it is
quite obvious that the Member States share a lasting commitment
to ambitious policy goals in the social sphere. Accents differ a bit
between different forms of redistribution, social insurance and
service provision (with varying shares assigned to public funding,
employment-linked schemes, corporate social responsibility,
outsourcing, voluntary programmes, and families) but the
essential features are very much the same. Whether we call it “the
Rhineland model”, “l’état-providence”, “der Sozialstaat”, “the
welfare society” or “the social market economy”, Europeans are
basically agreed on the need for social protection, extensive
social services and an active labour market policy.
2. But which of these tasks should be handled by the European
Union? In its conclusions on the 2020 Agenda, the March 2010
European Council spoke of “a mix of national and EU level
action”. Now as far as social policy funding is concerned, we all
know what this mix looks like: for every € included in the EU
budget, there are 20 or 40 or even 100 € in national, regional and
local budgets. Social policy in the broad sense of the term is by
and large a responsibility of the Member States and sub-
national levels of government.
3. Compared to the extensive social commitments of the Member
States, EU action in this field is marginal and will remain
marginal. We may distinguish different contributions of the
ESF - process effects, role effects, volume effects - but let us
never forget that these effects are small compared to the
national efforts, in fact very small at least in the net
contributor countries.
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2. 4. For this reason, interventions will have to be exceptionally well
targeted. Given the scarce resources in the European budget, we
must concentrate our efforts on highly strategic activities, with a
leverage not provided by the Member States on their own. The
main question about the future of the ESF is not whether its
interventions have been effective (many have) or whether the
success stories are impressive (many are), but in which fields
and types of intervention there is genuine and exceptional
European added value in the years to come.
5. The answer cannot be “everywhere”. Just invoking the 2020 grand
objectives does not make sense, because these goals are too broad
and sweeping. If an Occam’s razor is needed to make sharp
decisions, the 2020 priorities are simply too blunt. Smart growth,
sustainable growth, inclusive growth - fine, such rallying
cries may be good for marketing and legitimacy but they do
not provide much guidance. The do not help us identify the
areas where EU contributions are particularly efficient and
effective.
6. Another non-starter is pretending that the goals of “social Europe”
are invented at common European gatherings and then translated
into national action. This perspective of the policy process is often
found in documents released by the EU institutions, but it has few
supporters elsewhere. The welfare state has deep if slightly
divergent roots in each and every one of our countries.
Reducing the many agents and agencies involved in its
realisation to mere implementers of European decisions is a
harmful centrifugal illusion.
7. In this context, a particular word of warning is due against the
concept of “delivery”. This term signals a crude and distorted
conception of who-achieves-what and what-achieves-what in
public policy interventions. Some texts seem to convey the image
of a fleet of delivery vans dispatched from Brussels to the
European periphery, with their load of social cohesion. A
question often asked is, “how should the ESF be delivered”?
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3. First of all, deliver us from this misleading word which
conceals the essentially supplementary and supportive nature
of the ESF.
8. Speaking of support, there is every reason to recognise the wide-
spread popularity of cohesion policy. This is confirmed by the
Euro-barometer and several other studies. The various structural
funds have strong constituencies among beneficiaries,
implementers, politicians and a wide community of service
providers.
9. But about the lasting impact of the programmes we know far less.
When funding streams from different sources are fused it is
notoriously difficult to isolate the specific contributions of each
and every one of them. This is one reason why the efficiency of
the various structural interventions is so difficult to assess,
despite the fortunes sunk into evaluation ex-ante, ex-post,
mid-term and now even continuously. Even the meta-
evaluation reports make clear how little we know about wider
and longer-term impacts.
10. Exaggerations abound, however. Sometimes we are told that
the Structural Funds “mobilise” so-and-so much capital from
national and sub-national governments and from business. In good
cases this may be perfectly true, but many such reports should be
digested with a grain of salt. The lower-level response to higher-
level money takes many forms, ranging from commendable
institutional and policy innovations and to less commendable
exercises in creative accounting.
11. As a strong supporter of the European project, I would
gladly see a doubling or a trebling of the EU budget. But we also
need some order in the division of public funding between
different levels, and I see little point in using precious European
money on things that are essentially national or local in character.
We have so many important collective needs in Europe that
we must be utterly careful with the few billions that we
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4. manage to wrest from the Member States to our common
budget.
12. What, then, is the role of the Union in the development of
this “social Europe” which, even if it is increasingly infused by
common principles, can only remain a nationally-based
undertaking? It is by no means insignificant. Let me sketch out
five points.
(i) To borrow a term from medical ethics, primum est
non nocere. First of all, make no harm. There is a
strong need to avoid messing up many already well-
functioning and carefully devised national systems for
social protection, social services, labour market
support, etc. Even where the national systems are not
so well-functioning and not so carefully devised and
valuable impetus for change may come from the
European level, the burden of adjustment should
largely fall on national political processes.
(ii) For this reason, the regulatory powers of the
Union must be used with caution and restraint, and
social aspects should always be given due weight in
the application of common market rules. We have a lot
of principles and practicalities that must be upheld and
enforced at the European level, so this balancing act is
by no means easy, but many complex issues of social
policy and labour relations require a special
Fingerspitzgefühl when dealt with by the institutions
of the Union, not least the European Court of Justice.
(iii) When it comes to the budgetary side, we should
give strong priority to the truly collective needs.
Many interventions are of course mixed, producing on
the one hand private and individual benefits and
contributing on the other to common endeavours,
including those covered by the Lisbon and Europe
2020 objectives. But the greater the purely private
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5. gain, the less reason is there normally for public
funding. There are many exceptions to this rule in the
social sphere, but the degree of collective benefits
should be an important criterion in project selection.
(iv) Another important criterion should be that of
sustainability and long-term effects. Investment-
type spending should as far as possible trumph out
consumption-type spending. Now that distinction is
not so easy to make: current spending on health and
education may contain significant investment
components while some capital spending for ill-
conceived projects may be a short-sighted waste of
money - all our countries have some experience in
“political investments”. But we should at least aim for
considerable long-term effects. To give but one
example: if we want a robust and sustainable welfare
state, investing in better fiscal systems and insurance
mechanisms may be far more effective than short-term
redistributive measures.
Unfortunately, such structural ambitions are often
absent from the interventions of the structural funds. A
particular cause for suspicion is the frequent reporting
of “jobs created” and “jobs maintained”. Measuring
results in this undefined currency says nothing about
long-term impact.
(v) Finally, there is a strong need to refine, develop
and specify the criterion of European added value.
All too often this formula is used as an all-purpose
mantra, serving to justify almost any type of spending.
But if it is to serve as sharp instrument to identify the
most meritorious policies and policy instruments, high
thresholds must be established for admission to this
particular category of expenditures. The best qualified
programmes and projects will normally be those where
economic externalities reduce the propensity of
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6. Member States to take action on their own and where
there is substantial contribution to the sense of
European community.
13. Many worthy projects compete for EU funding. Established
EU objectives laid down in solemn documents are often advanced
to support such pleas, but the multiplicity and wide coverage of
these objectives renders this advocacy unhelpful and
unconvincing. Among the goals there is a need to make clear
distinction between various types, as for instance:
• Historical goals which already have been attained, such as the
promotion of the internal market, the promotion of the monetary
union and the promotion of various stages of the enlargement.
• Utopian goals which are noble but unlikely ever to be attained.
• Grand goals which do not seem to exclude any type of action
(smart growth, sustainable growth, inclusive growth).
While the structural funds have already done their job as far as
the historical goals are concerned, the utopian and grand goals
may still serve some very good purposes. They provide legitimacy
and a general sense of direction, but apart from that they give
little guidance and help when it comes to setting priorities and
making tough choices. For this we need sharper tools.
14. In seeking to define the future tasks of the ESF, the
challenge is not simply to identify policies that contribute to the
2020 objectives. We must, more specifically, look for
programmes and interventions that do so in an exceptional way
through very significant elements and dimensions of (i) public
goods, (ii) long-term effects, (iii) trans-frontier interaction and (iv)
symbolic or emblematic substance. Only in such areas is there a
sufficient measure of European added value to justify
inclusion in the programmes of the next Financial Perspective.
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7. 15. So, in conclusion: passing the 2020 test is not enough.
We must look for elements in the ESF agenda that pass that
test with fanfares and flying colours.
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