ETUC Statement on the deal reached by EU institutions on the EU Budget and ‘Next Generation EU’: IMPORTANT DEAL FOR A PEOPLE’S RECOVERY



The European Parliament and European Council have fulfilled their political responsibility in agreeing on a long-term budget for the EU and the temporary recovery instrument ‘Next Generation EU’.  It is an increased budget which comes alongside a substantial Recovery Plan and represents a much better response than the one to the previous crisis.

However, we must be aware that the EU Budget alone cannot guarantee critical needs such as a socially fair shift to a low-carbon and digital economy; an improved health care and essential public services for all; and a means to tackle the poverty and inequalities that have only increased since the previous crisis and during the pandemic.

The compromise reached between the negotiators from the European Parliament and the Council, envisages a €16 billion envelop that will top up the current MFF proposals.  Improvements to the budget, compared to the version agreed by the European Council in July, include enriching funds such as Horizon2020 and EU4Health that are quite significant to the European citizens.  However, important funds, like the Just Transition Fund and Solvency Support Instrument for workers hit by company restructuring, have not be sufficiently substantiated to meet the extent of the challenges.  

A roadmap on increasing the EU’s own resources was also agreed upon, this represents a significant advance to avoid that financing the recovery generates unsustainable debt on the EU or national finances.  Of course, it is still to be seen how this roadmap is going to be implemented in practice, on the basis of the Commission’s proposals for new taxation tools and mechanisms to be introduced or strengthened at EU level.

Now the European Parliament and member states must agree on the deal reached by Parliament and Council negotiators. 

All EU institutions and national Governments need to concentrate on making the most of the national recovery plans, to save and create jobs in all sectors and industries, and to make sure that workers’ rights, social dialogue, collective bargaining and democracy at work are respected as an integral part of a sustainable recovery.

The green and digital transitions, which are the cornerstone of the EU recovery strategy must go hand in hand with social fairness. Furthermore, the European social model has to be rebuilt, after decades of austerity, on the basis of the principles enshrined in the European Pillar of Social Rights.

We will fight to get social partners and particularly trade unions fully involved from the very beginning in the design, implementation and monitoring of all 27 national recovery plans.



The ETUC will stay vigilant to ensure that the implementing legislative acts of the deal will solve the problems that are outlined hereunder:

  • The agreement can be welcomed as it aligns the MFF, NextGenerationEU, the Own Resource Decision and the Rule of Law mechanism. However, in reaching this compromise the Institutions have missed the opportunity to make a clear link between MFF and the main EU policy frameworks in the social field. In particular, it does not reinforce the commitment to frontload expenditure to protect workers affected by the economic consequences of the pandemic.
  • The legislative package should tie the MFF and NGEU to transparent and predetermined social objectives. It means that the funds, instruments and facilities financed under the MFF and NGEU must explicitly implement the European Pillar of Social Rights, its overall impact measured with the Social Scoreboard and well-being indicators. In this regard, an ambitious Action Plan to implement the European Pillar of Social Rights has to be considered a necessary complement to this compromise agreement and it should introduce a clear commitment from Member States to include actions for the implementation of the Pillar in their national Recovery Plans.
  • The current compromise does not take into account all dimensions of sustainability. It is not clear how resources under the MFF and NGEU will link up with the agenda on decent work and how much it will contribute to eradicate poverty, offset inequalities, remove gender gaps, promote a highly qualified workforce, tackle the educational divide, or improve supply of public fundamental services in cities and rural areas. The ESF+ and the Just Transition Fund are limited in size and ETUC calls for the mainstreaming of social objectives in the implementation of both the MFF and NGEU.
  • The Just Transition Fund is insufficient to protect workers that have to adapt to the transition to a green and digital economy and may fall short of the necessary means to support most vulnerable regions and workers especially at a time where the European Union decides to increase its climate targets.  In that regard, the compromise fails to restore the initial amount foreseen for the Just Transition Fund (€40 billion) and to indicate a precise plan on how to implement a proper and effective just transition at national, sectoral and local level.

The involvement of social partners, also extending the partnership principle to the RRF, will be crucial in orienting social dialogue for a good recovery. The advantages of social dialogue are two-fold: on one hand it orientates the overall expenditure to increase social resilience, and on the other it complements the Rule of Law mechanism to better protect the EU interests. However, the role of social partners has still to be confirmed in future legislative pieces implementing the MFF and NGEU.