National-level social governance of the European Semester and the Recovery and Resilience Facility

Eurofound has been monitoring and producing annual reports on the involvement of the national social partners in the European Semester since 2016. This report continues the series, focusing on the quality of social partner involvement in the European Semester and the Recovery and Resilience Facility (RRF).
 

Initially established in response to the COVID-19 pandemic, the RRF has been extended (until 2026) and is the cornerstone of the ambitious NextGenerationEU package.  It has been integrated into the European Semester framework for economic and social policy coordination. The European Commission encourages EU Member States to involve the social partners in the European Semester, and the RRF regulation requires that they be consulted in the preparation and implementation of national recovery and resilience plans (RRPs).
 

This report explores two critical dimensions of social partner involvement in the European Semester. First, it looks at the extent to which the national social partners have been involved in designing and implementing the RRPs and, more generally, social policy measures directly influenced by these plans. Second, it identifies general trends in the implementation of national RRPs, with a particular focus on measures in the social policy field.
 

Policy context

The EU institutions recognise the social partners’ crucial role in economic and employment policy coordination and implementation. Several policy documents published as part of the 2024 European Semester cycle confirm this. The Annual Sustainable Growth Survey (published on 21 November 2023) highlights the importance of social dialogue and social partner involvement in the European Semester, specifically regarding the green and digital transitions.
 

In February 2024, the Commission published the mid-term evaluation of the RRF, examining its relevance, effectiveness, efficiency, value added and coherence. The subsequent Commission communication on strengthening the EU through ambitious reforms and investments emphasises social partner involvement as a key factor in the planning and implementation of measures while pointing to significant differences in the nature of their involvement between Member States. It refers to dissatisfaction on the part of some stakeholders – including the social partners – with their level of involvement, and highlights the pivotal role of the social partners in implementing labour market and social policy reforms.
 

The Council recommendation on strengthening social dialogue in the European Union (C/2023/1389), published in December 2023, refers explicitly to the European Semester and reiterates that Member States, in accordance with national law and/or practice, must involve the social partners meaningfully in the design and implementation of employment and social policies and, where relevant, economic and other public policies.
 

In 2024, new EU economic governance rules were established and the Stability and Growth Pact was reformed (through Regulation (EU) 2024/1263). Member States committed to submitting national medium-term fiscal-structural plans (MTFSPs) outlining strategies for sustained and gradual public debt reduction, inclusive growth, structural reforms and investment focusing on EU common priorities. Like the RRF regulation, the revised EU economic governance framework recommends consultation with the social partners, prior to the submission of MTFSPs to the Commission.
 

Key findings

• Member States have established governance structures to implement the RRPs, including mechanisms for social partner involvement. The research identified three main types of institutional settings for social partner involvement: existing bipartite and tripartite social dialogue institutions; bodies or working groups created for the European Semester or RRP implementation; and ad hoc consultation processes.
   
• This report classifies Member States into three governance clusters with distinct social partner involvement characteristics. The industrial-democracy-based cluster (Austria, Denmark, Finland, Germany, the Netherlands and Sweden) prefers less institutionalised channels for social partner involvement. Both the state-centred cluster (Belgium, France, Greece, Italy, Luxembourg, Portugal, Slovenia and Spain) and the market-oriented cluster (Bulgaria, Croatia, Cyprus, Czechia, Estonia, Hungary, Ireland, Latvia, Lithuania, Malta, Poland, Romania and Slovakia) display more diversity, relying on existing social dialogue institutions and specific bodies or working groups for social partner involvement. The latter approach has not proved effective in guaranteeing the social partners’ involvement in some countries, such as Poland and Romania.
   
• The social partners’ degree of satisfaction regarding the quality of their involvement in the European Semester and in the design and implementation of RRPs is uneven. While the social partners in a few countries with strong social dialogue frameworks report moderate satisfaction, those in most Member States describe their involvement as a box-ticking exercise.
   
• The social partners in a few Member States report that they were not involved at all or hardly involved in the design and implementation of RRPs. In most Member States, the social partners criticise specific shortcomings in consultation, including a lack of sufficient time for proper and meaningful exchanges and the poor advance information provided.
   
• The new economic governance framework of April 2024 has raised concerns among the social partners. Even though Regulation (EU) 2024/1263 enshrines in law the need for consultation with the social partners before submitting the MTFSPs, the social partners fear that the transitional derogation that allows Member States to conduct only voluntary consultation in the process of drawing up the plans could send a negative signal. Employer organisations acknowledge that greater flexibility in the first year of implementation may help Member States to allocate funds efficiently. However, they warn that this room for manoeuvre to pursue policies, including social ones, should be used wisely and consistently.
   

Policy pointers

• As implementation of national RRPs enters the final phase, with completion in 2026 in sight, social partner involvement should be reinforced and qualitatively improved. This will help to ensure the most effective use of NextGenerationEU funds, by targeting the most relevant economic sectors and incorporating a strong social dimension into the twin transition.
   
• Given current geopolitical insecurity and other challenges to EU integration, such as demographic change, the effective involvement of the social partners is essential to foster a sense of ownership and legitimacy and to ensure the successful implementation of measures designed to address these changes. To achieve this, ongoing initiatives such as the 2023 Council recommendation on strengthening social dialogue, the La Hulpe declaration and the Pact for Social Dialogue, signed on 5 March 2025, must be used to address existing weaknesses in social partner involvement in policymaking.
   
• Social partner involvement should be enhanced at all levels to contribute to achieving the goals of the economic governance framework of 2024. Specifically, consultation with the social partners before submitting MTFSPs should be ensured, taking into account sectoral, regional and local dimensions. By strengthening social partner involvement, the EU can promote a more inclusive and effective policymaking process, ultimately leading to more successful implementation of the RRPs and a stronger European economy.