Commission welcomes political agreement on the ESF+

This article is brought to you in association with the European Commission.

The Commission welcomes the political agreement reached between the European Parliament and EU Member States in the Council on the Commission’s proposal for a Regulation on the European Social Fund Plus (ESF+). The ESF+ will be a key financial instrument to implement the European Pillar of Social Rights, to support jobs and create a fair and socially inclusive society. It will also provide much needed resources to Member States for the recovery of our societies and economies after the coronavirus crisis.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “This financing instrument will be our main path to invest in people and build a more social and inclusive Europe as we emerge from the crisis. ESF+ will help to create more equal opportunities, better access to the labour market, fairer working conditions and improved social protection. It will focus on fighting poverty and developing the right skills for the digital and green transitions, emphasising the value and needs of young people: our next generation.”

Nicolas Schmit, Commissioner for Jobs and Social Rights, said: “The European Social Fund Plus invests in people. I welcome the political agreement reached because this Fund is more crucial than ever. The crisis has put young people, children and vulnerable communities especially at risk. We must put our energy into social inclusion. We need to create new job opportunities and grow a skilled and resilient workforce ready for the transition to a green and digital economy. The ESF+ will help Member States to rebuild a fairer and more inclusive society that tackles poverty and creates opportunities for everyone.”

The ESF+ has a total budget of €88 billion (in 2018 prices). It will invest in people, creating and protecting job opportunities, promoting social inclusion, fighting poverty and developing the skills needed for the digital and green transition. It will also include a more ambitious requirement for investing in young people and addressing child poverty, as proposed by the Commission.

Under the political agreement, the ESF+ will:

• Invest in young people, who have been particularly hard hit by the socio-economic crisis following the coronavirus outbreak. Member States which are above the EU average rate of young people not in employment, education or training (the so-called “NEETs”, aged between 15-29 years) should devote at least 12.5% of their ESF+ resources to help these young people find a qualification, or a good quality job. All other Member States must allocate an appropriate amount of their ESF+ resources to targeted actions to support youth employment measures. The Commission is urging Member States to use this and other existing funding opportunities to further increase investments in youth employment measures.
• Support the most vulnerable suffering from job losses and income reductions: Member States will have to allocate at least 25% of their ESF+ resources to promote social inclusion.
• Provide food and basic material assistance to the most deprived, by integrating in the ESF+ the current Fund for European Aid to the Most Deprived (FEAD). All Member States will devote at least 3% of their ESF+ resources to this aim.
• Invest in children who have suffered the effects of the crisis. Member States with a level of child poverty above the EU average should use at least 5% of their ESF+ resources to address this issue. All other Member States must allocate an appropriate amount of their ESF+ resources to targeted actions to combat child poverty and the Commission is urging Member States to use this and other existing funding opportunities to further increase investments in the fight against child poverty.
• Directly support social innovation through the new employment and social innovation strand of the ESF+ with a dedicated financial envelope of €676 million.

Next steps

Following the political agreement, the European Parliament and the Council will have to formally approve the ESF+ Regulation for its entry into force.

The EU’s long-term budget, coupled with NextGenerationEU, the temporary instrument designed to boost Europe’s recovery, will be the largest stimulus package ever financed through the EU budget. A total of €1.8 trillion (in 2018 prices) will help rebuild a post-COVID-19 Europe. It will be a greener, more digital and more resilient Europe.

The last step of the adoption of the next long-term EU budget was reached on 17 December 2020. The European Commission has started committing the funds under the new EU long-term budget as of 1 January 2021.

For the Commission to start borrowing under NextGenerationEU, thus making the instrument operational, the ratification of the new Own Resources Decision by all Member States in line with  their constitutional requirements is still needed.

Background

The ESF+ will be the EU’s main instrument dedicated to investing in people. It aims to build a more social and inclusive Europe. It will support Member States in tackling the crisis caused by the coronavirus pandemic, and achieving high employment levels, fair social protection and a skilled and resilient workforce ready for the transition to a green and digital economy.

The ESF+ thereby contributes to financing the implementation of the principles from the European Pillar for Social Rights through actions in the area of employment, education and skills and social inclusion.