Aligning the European Recovery Plan and the European Semester with the SDGs
SDSN’s online event of October 22, 2020 focused on the alignment of the European Recovery Plan and the European Semester with the Sustainable Development Goals (SDGs) and the Paris Climate Agreement. The event included speakers from the European Commission , the Institute for European Environmental Policy (IEEP) , the Centre for European Policy Studies (CEPS) , as well as representatives from the SDSN networks in Europe (Germany, Italy and Greece).
María Cortés-Puch , Vice-President of SDSN Networks , opened the webinar by evoking the historic agreement reached by the European leaders to address the consequences of the pandemic. The European Recovery Plans seeks to address the immediate crisis, but also to lay the foundations for a more resilient and more sustainable Europe. Ms. Cortés-Puch stressed that the European Recovery Plan and the European Semester would need to lead to a transformation that is aligned with the SDGs. Although the recently published Annual Sustainable Growth Strategy for 2021 recognizes this necessity in principle, there are still many questions regarding the operationalization of such transformations. In this context, Ms. Cortés-Puch referred to the Six Transformations approach proposed by SDSN, an integrated and holistic framework for action that reduces complexity, yet encompasses the 17 SDGs, their 169 targets and the Paris Agreement.Estelle Göger , Member of the Cabinet of the European Commissioner for Economy , Paolo Gentiloni, presented the EU Recovery and Resilience Facility (RRF), the cornerstone of the EU Recovery Plan. Here are some of the key features of the RRF, as discussed by Ms. Göger:
- RRF constitutes approximately 90% of the Next Generation EU;
- National Recovery and Resilience Plans are to be submitted by April 2021;
- Recovery and Resilience Plans made by the Member States under the RRF will be embedded in the European Semester and the Commission's assessment thereof will replace the European Semester Country Reports in 2021;
- There will be no Country-Specific Recommendations in 2021;
- 37% of the expenditure under the Recovery and Resilience Plans has to be related to climate;
- 20% of expenditure has to be related to the digital transition.
While the main focus of the RRF is the digital and green transition, RRF is also expected to foster the Member States’ overall resilience. Ms. Göger further explained that the policy objectives of the RRF can be linked to the SDGs and that the national plans will be assessed, among other criteria, on whether they effectively contribute to the green and digital transitions. However, she said that more efforts were needed to align the Recovery and Resilience plans to the SDGs.
Jorge Núñez Ferrer , Senior Research Fellow at the Centre for European Policy Studies (CEPS) evoked the response to the 2008 financial crisis and raised concerns regarding the rising levels of public-debt in the Member States due to the pandemic. He noted that the recovery from the 2008 financial crisis was based on the notion of economic sustainability, whereas little attention was given to the notion of social sustainability. For this reason, Mr. Núñez Ferrer underlined that Member States need to be very prudent about the way they spend the resources from the Recovery Fund. The RRF will need to appropriately prioritize public spending and the implementation of National Recovery and Resilience Plans will need to be closely monitored. In order to monitor better, greater use should be made of the big data related to the SDGs.
Eloïse Bodin , Policy Analyst at the Institute for European Environmental Policy (IEEP) , presented the five sustainability tests proposed by the IEEP together with other sustainability think tanks and which Europe’s recovery plans must pass. Ms. Bodin noted that there had been a change in semantics, putting the European Green Deal at the heart of the recovery plans. Furthermore, Ms. Bodin noted that with the 2020 Spring Package the European Semester had shifted away from a traditional growth focus. The Country-Specific Recommendations included an annex on the SDGs and recognized the interconnectedness of economic, social and environmental spheres. However, she found that, although the European Semester can be a key instrument in the EU’s progress towards the SDGs, there is an implementation gap in the Country-Specific Recommendations that needs to be closed.
IEEP proposes the following:
- Aligning the different processes, such as the European Semester and the European Green Deal, to have coordinated recommendations and monitoring;
- Picking the right indicators and monitoring tools;
- Aligning funding, incentives and compliance mechanisms; Supporting greater policy coherence for sustainable development at the Member State level;
- Enhancing democracy to promote public support; Introducing an independent assessment of green recovery plans to fuel democratic debate.
Furthermore, Ms. Bodin said that more coordination was needed among competent authorities at EU level as well as an independent assessment of the recovery plans.
Three chairs and managers of the European SDSN Networks then provided their input, focusing on how knowledge networks can engage with the EU’s key instruments and their implementation in the Member States.
Adolf Kloke-Lesch from SDSN Germany observed a fundamental shift in the narrative that seems to have taken place after the outbreak of the pandemic. Contrary to 2019, main European documents (President Von der Leyen’s State of the Union speech, Sustainable Growth Strategy, Commission’s working papers on the Recovery Plans) make no or very little reference to the SDGs. What is more, in their wording, the CAP and the Commission’s working papers on the Recovery Plans that were discussed and released recently, do not seem to reflect the transformations and the wording of the EU Green Deal. As confusion is likely to emerge from the changing political communication, Mr. Kloke-Lesch advised the sustainable development community to limit the number of key messages that they communicate and which should correspond to the transformations envisioned by the EU Green Deal.
He further stressed that there was a risk of the stimulus package trickling away in a myriad of channels and levels of government, without creating long term impacts. The sustainable development community therefore needs to engage in the public debate on the recovery. So far, there has been only limited involvement of the knowledge institutions in the European Semester process, but, moving forward, organisations such as SDSN should engage with the process, at the Member State level, with the governments and the Commission representations.
Angelo Riccaboni and Sabina Ratti from SDSN Mediterranean and SDSN Italy reiterated that SDSN resources can be used to effectively contribute to the national and European political processes. He said that SDSN Networks have the capacity to support the integration and measurement of the SDGs in the EU Semester’s instruments, including the National Resilience and Recovery Plans (NRRP). Networks can therefore help in determining targets and indicators related to the 17 SDGs and the Six Transformations, both in the planning phase and in the monitoring phase. In particular, SDSN Networks may be able to contribute to the improvement of the SDGs social indicators. Commenting on the European Recovery Plan, Prof. Riccaboni highlighted the relative absence of a reference to youth and of a gender-equality perspective in the NGEU, despite its focus on future generation.
He, therefore, called for a global and holistic approach to sustainable development and to the SDGs as a framework for the whole Semester process. Resilience, he said, should serve as a compass for the EU’s future and the academic community should be its main advocate in the national and European policy debates. In this regard, constant interaction and dialogue among the SDSN EU Networks and the EU institutions and MPs would certainly be worthwhile. Finally, he reflected on the digital transition desired by the Commission and specified that, in order to ensure a transformative impact against each of the 17 SDGs for a greater, global, social integration, such transition should be purposeful.
Phoebe Koundouri from SDSN Greece emphasized the need for cooperation on the SDGs in Europe in order to identify sustainable pathways that can have a long term impact on our countries and the EU as a whole. She also saw the need to influence and train policy makers in building truly resilient plans funded through the Recovery & Resilience Facility.
She highlighted the work of the SDSN Working Group on the Energy Transition and the Six Transformations to Achieve the SDGS and Support the European Green Deal. This working group is currently conducting an assessment on the basis of the SDSN SDG Index and dashboards that is aimed at supporting the alignment of the Recovery and Resilience Plans, the European Green Deal and the Country-Specific Recommendations with the SDGs. This document is expected to serve as a basis for recommendations regarding national Investment Pathways that will be funded in great part through the RRF. Those Investment Pathways will be grouped according to SDSN’s 6 transformations identified by the SDSN.
María Cortés-Puch reminded the audience that the UN SDSN was a member-based organization with some 1400 members (universities, research centers and NGOs) organized under national and regional Networks. In Europe only, SDSN brings together more than 300 members that cover 22 EU countries. On the one hand, SDSN Networks work on generating knowledge and evidence on sustainable development for the attention of policymakers. On the other hand, the networks educate on sustainability - not just academically - but also by creating discussion spaces, and uniting different stakeholders.
Ms. Cortés-Puch concluded by saying that a lot needs to be done in the upcoming period. SDSN will continue its efforts of bringing these somewhat arduous processes closer to the sustainable development community and ensure that knowledge institutions are participating in them. SDSN Europe Sustainable Development Report 2020 will be launched at the beginning of December and soon thereafter the document prepared by the SDSN Working Group on the European Green Deal.
Questions & Answers
- What instruments are there within the European Semester to ensure close monitoring of the Recovery and Resilience Plans? Will there be any sanctions or any kind of enforcement?
Esttelle Goeger: The monitoring is not built into the Semester but rather in the RRF regulations themselves. In their National Plans, Member-States do have to identify clear milestones and targets, and they can present a request for disbursement twice a year. They will then have to prove that at least a certain number of targets and milestones have been reached. The Commission assesses whether it is the case, with the Council validating the conclusions, and only then can the disbursement be completed. A form of a sanction would be that the Commission does not disburse if it considers that the milestones have not been reached.
- What do we mean by the term ‘resilience’? What is key about ‘resilience’ in the EU? ”
Phoebe Koundouri: Resilience is about economy, society, and interaction between humans and nature. It means being better prepared and less vulnerable to shocks. After a shock (environmental, economic, cultural), resilient societies and organizations have the ability to quickly regain their structure and function. In all academic and scientific documents, sustainability includes resilience. There can be no sustainable development without resilience. Resilience, of course, includes the capacity to adapt.
Adolf Kloke-Lesch: The notion of resilience is somewhat problematic. “Resilience” appeared relatively recently in the narrative, and it is a notion that is rather defensive. It is not so progressive in the way that it may refer to a future that one envisions. It was encouraging to hear from the EU Commissioner responsible for the strategic foresight processes, Mr. Maroš Šefčovič, that some sort of objective that society is thriving for needed to be built into the notion of resilience. The sustainable development narrative is still more progressive since it rolls out objectives that we are working towards. Commission President Von der Leyen spoke about fragility, which is more or less the flipside of resilience. We should have a vision for society that actually strives for human wellbeing.
Jorge Núñez Ferrer: Resilience is the capacity to go on when things change, which also means flexibility. Some see resilience as maintaining a status quo, but it is also being able to adapt to change more easily. This means for example that a country’s economy does not rely entirely on tourism, or that it focuses on one thing and neglects others. Resilience is the capacity to absorb and to adapt to change. This is more important than sustaining things the way they were in the past.
- How can the RRF as well as the European Semester be used to avoid divergence from social dimensions, specifically following the pandemic, in particular leaving vulnerable groups behind?
Estelle Goeger: The idea to avoid divergences between Member States, or to avoid their increase was at the core of the NGEU Proposal. The Commission’s activation of the General Escape Clause and Temporary Framework for State Aid at the beginning of the crisis has allowed Member States to take the necessary measures to confront the crisis. But not all Member States had the same margin of action and capacity to do this. This is why, in May 2020, the Commission published the Proposal to give all Member States more support, also with the Allocation Key so that those in need could receive the greatest share of the funds. That is the whole philosophy behind NGEU.
For the RRF specifically, addressing some of the CSRs would already help the convergence.The logic of the CSRs is to compare the Member States and determine areas in which progress would be needed.
The temporary Support to mitigate Unemployment Risks in an Emergency (SURE) was also part of the European Semester spring package. This was opened to all Member States, but only 17 or 18 applied. It’s an additional layer of support for short-term work schemes, for instance.
- We have a decision to realign the Semester and the SDGs, and a decision that the Semester and Recovery will work together for the years to come - so why has the Commission not included any reference to the SDGs in its working documents?
Estelle Goeger: It is unlikely that that was a conscious political decision against the SDGs.With the crisis new language was used in the documents, with a focus on vulnerabilities and how to address them (the reply is resilience). However, if you look at the policy objectives as such, you do find the link to the SDGs, referred to through a different terminology. More can be done of course to strengthen this linkage through implementation, final decisions and the stepping stones towards the implementation of the RRF. The Commission should come forward with a document before the end of the year to focus again on the SDGs and to explain how the Commission approaches the SDGs. It will not be a fully-fledged SDG strategy, but it will explain how the Commission intends to take the SDGs forward.
Phoebe Koundouri: The wording of the European Green Deal, of the Recovery Plan and of the SDGs is not identical but the concepts are consistent. What Estelle has said is absolutely true, especially if you study the documents word by word and do the 3D mapping. It would have been better if we had an explicit SDG reference, but consistency is there. Maybe the lack of explicit SDG reference in the Commission’s documents is our fault, the one of the SDG advocates who have not been vocal enough and maybe countries find it difficult to implement the SDGs. It would therefore probably be better if we decide to communicate the 6 transformations in a stronger way.
- Is it possible to envisage an EU well-being strategy, moving away from GDP-oriented fiscal policies?
Eloise Bodin: Indeed this is possible and is something that various stakeholders are advocating for. We see this type of strategies adopted by the well-being economy alliance, which includes New-Zealand, Iceland, Scotland. These territories have been doing a lot of work on wellbeing in the past years. In New Zealand, for instance, 83 indicators are used to measure the well-being of the population, and the Ministry of Economy uses these results for their economic policy-making. It is showing good results for now. This could one day be implemented in the long run as part of European Semester in the EU and the EU could be at the forefront of the well-being economy.
Angelo Riccaboni: In the last 2 years, the movement of Beyond-GDP was not really at the centre of the debate. We hope we can return to the debate of beyond-GDP, but the impression is that with the global pandemic, everyone is just referring to GDP and the need to restore it. We are not optimistic that we can go back to the Beyond-GDP debate.
- UN SDSN’s community has agreed to coordinate action across the European SDSNs, and needs to bring these processes to the general public more prominently, bring universities and knowledge producing centers to provide evidence to this debate. But how can we do this in terms of mobilising funds?
Jorge Núñez Ferre: Much of the funding that knowledge institutions can apply for goes through the Horizon programme, but also through individual DGs of the European Commission (eg. DG for Regional and Urban Policy). Knowledge institutions could also look at the national structural funds.
Phoebe Koundouri: Horizon Europe and the European Green Deal calls are a good opportunity to raise funds, especially the calls focused on citizen participation. SDSN has sufficient capacity to respond to one of these calls. SDSN European networks could try and jointly build a common proposal. Organisations should also bring in other regular, non-academic partners. This proposal needs non-academic partners, explicit co-funding that proves the interest of different stakeholders’ and deep demonstration projects. We have the capacity to bring all of this in.
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