Changes from report parliamentary committee draft to plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

▸5 unchanged paragraphs

on the European Semester for economic policy coordination: employment and social priorities – annual report 2026

(2025/2183(INI))

The European Parliament,

– having regard to Article 3 of the Treaty on European Union,

– having regard to Articles 9, 121, 148 and 149 of the Treaty on the Functioning of the European Union (TFEU),

Changed– having regard to the European Pillar of Social Rights (EPSR) proclaimed and signed by the Council, Parliament and the Commission on 17 November 2017, and to the action plan thereof, adopted in 2021, in particular the proposed 2030 headline targets for employment, skills and poverty reduction,

Removed– having regard to the Commission communication of XX November 2026 on the Annual Sustainable Growth Survey 2026,

Added– having regard to the Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97, in particular Articles 3, 4, 13 and 27 thereof,

Changed– having regard to the Commission proposalrecommendation of XXX25 2026November 2025 for a joint employmentCouncil reportrecommendation fromon the Commissioneconomic andpolicy of the Council,euro area (COM(2025)0957),

Removed– having regard to the Commission recommendation of XXX 2026 for a Council recommendation on the economic policy of the euro area,

Added– having regard to the report by the Commission entitled ‘Employment and Social Developments in Europe’, published in September 2025,

Changed– having regard to the Commission report ofby XXXthe 2026Commission entitled ‘Alert‘Labour MechanismMarket Reportand 2025’,Wage Development in Europe’, published in October 2025,

Changed– having regard to the Commission communicationproposal of XX25 November 20262025 entitledfor ‘Drafta Budgetaryjoint Plansemployment forreport 2025:from Overallthe assessment’,Commission and the Council (COM(2025)0958),

Added– having regard to the Commission recommendation of 25 November 2025 for a Council recommendation on the economic policy of the euro area (COM(2025)0957),

Added– having regard to the Commission communication of 25 November 2025 entitled ‘Alert Mechanism Report 2025’ (COM(2025)0956),

Added– having regard to the Commission recommendation of 25 November 2025 for a Council recommendation on human capital in the European Union (COM(2025)0959),

Added– having regard to the inputs of the European social partners to the European Semester 2026 and the Autumn Package in particular,

▸4 unchanged paragraphs

– having regard to the report by Mario Draghi entitled ‘The future of European competitiveness’, published in September 2024,

– having regard to the report by Enrico Letta on the future of the single market, entitled ‘More than a Market’, published in April 2024,

– having regard to the report of the High-Level Group on the future of social protection and of the welfare state in the EU, published in January 2023,

– having regard to Rule 55 of its Rules of Procedure,

Changed– having regard to the report of the Committee on Employment and Social Affairs (A10-0000/2025),(A10-0033/2026),

Change 1

ChangedA. whereas the EU’s employment target of having at least 78 % of people aged 20 to 64 in Juneemployment by 2030 is on track to be achieved; whereas in October 2025, the unemployment rate in the EU stood at 5.96 %, ranging from 2.6 % to 10.6 % among the Member States, while youth unemployment remains high at 14.713.2 %; whereas unemployment levels and precarious working conditions remain persistently high for young people, women, older workers, low- and medium-qualified third-country nationals, persons with disabilities, and Roma and other ethnic minorities, all of whom face structural barriers to employment; whereas for persons with disabilities unemployment stands at 15.1 %; whereas higher levels of employment arein notthe fullyEU matchedshould bygo hand in hand with job quality, decent salaries, wage increases and productivity gains;

Change 2

RemovedB. whereas the European Semester remains a central instrument for coordinating economic, fiscal, employment and social policy across the EU, and thus offers an opportunity to embed social, environmental and intergenerational fairness more systematically into macroeconomic governance;

AddedB. whereas the European Semester remains a central instrument for coordinating economic, fiscal, employment and social policy across the EU, and should aim to embed social justice, environmental sustainability and intergenerational fairness more systematically into macroeconomic governance, putting the EPSR at its core and respecting the principle of subsidiarity; whereas efforts have been made to better balance the monitoring of economic and social objectives in the European Semester process with the development of the Social Scoreboard and the recent integration of the social convergence framework into the process; whereas the 2026 Autumn Package was presented without an Annual Sustainable Growth Survey setting out a holistic and balanced strategy for the EU’s economic, social and employment, and environmental objectives and anchoring the European Semester in a broad vision of sustainable growth for the Union; whereas the EU must remain committed to competitiveness, sustainability and social justice, without allowing one objective to be pursued at the expense of the others;

RemovedC. whereas 21 % of the EU population was at risk of poverty or social exclusion (AROPE) in 2024; whereas insufficient progress is being made towards the objective of reducing the number of children at risk of poverty or social exclusion by 5 million by 2030;

AddedC. whereas 93.3 million people, accounting for 21 % of the EU population, were at risk of poverty or social exclusion (AROPE) in 2024, which shows that limited progress has been made towards the 2030 EPSR target for poverty reduction, with the trend in more than half of Member States moving in the wrong direction; whereas poverty risks are much higher for women, children, older people, persons with disabilities, the LGBTI+ community, low-skilled people, third-country nationals, Roma, single-parent households, and people living in depopulated areas, and significant discrepancies persist between and within Member States, including between rural and urban areas; whereas this divergence between rising average incomes and persistent poverty levels highlights structural challenges in income distribution, labour markets and the design and coverage of social protection systems; whereas more than 40 million people in the EU, corresponding to around 9.2 % of the population, experienced energy poverty in 2024, leading to material deprivation; whereas the insufficient coverage and inadequacy of minimum income schemes, unemployment benefits and family and child benefits, as well as barriers to labour market integration and accessing quality public services such as health, education, care and housing, contribute to the persistence of poverty and social exclusion, particularly among the most disadvantaged groups; whereas without a change of approach to tackling poverty at EU and national level, it will not be possible to reverse the trend; whereas an ambitious EU anti-poverty strategy will be essential to provide responses to the multidimensional phenomenon of poverty;

RemovedD. whereas climate change and environmental destruction have exacerbated inequalities and affected the most vulnerable groups; whereas the transition towards climate neutrality is expected to create about 2.5 million additional jobs;

AddedD. whereas one child in four is still at risk of poverty or social exclusion in the European Union, which is a higher level than for the population as a whole; whereas insufficient progress is being made towards the objective of reducing the number of children at risk of poverty or social exclusion by 5 million by 2030, with the percentage of children AROPE having risen every year between 2019 and 2023 and remaining persistently high; whereas, according to the Commission proposal for a 2026 joint employment report, in 2024 around 19.5 million children (24.2 %) were at risk of poverty or social exclusion in the EU; whereas preventive child and family support policies and services, in line with the European Child Guarantee, are essential to addressing the socio-economic conditions that may lead to family separation and child institutionalisation; whereas a dedicated funding instrument for the European Child Guarantee, as well as synergies with other EU and national funds, are of the utmost importance, both in the current and next multiannual financial framework; whereas according to the Commission, the EU needs to invest more than EUR 11 billion additionally per year, to meet the 2030 Barcelona targets for early childhood education and care (ECEC); whereas children who can benefit most from attending ECEC, such as those from disadvantaged backgrounds, tend to participate least and continue to face barriers to access;

RemovedE. whereas housing cost pressures and high energy prices impose significant burdens on households, yet housing policy has often been under-represented in country-specific recommendations;

AddedE. whereas there are still at least 1.4 million persons with disabilities and almost 300 000 children living in institutions in the EU; whereas residents of institutions are isolated from the broader community and do not have sufficient control over their lives and the decisions that affect them; whereas despite the fact that the EU has long been committed to the process of deinstitutionalisation, efforts are still needed at both EU and national level to enable vulnerable groups to live independently in a family or community environment;

RemovedF. whereas the EU faces a persistent shortage of workers and skills, owing to a number of factors, including poor job quality;

AddedF. whereas 1 in 12 workers (8.2 %) in the EU experienced in-work poverty in 2024, undermining social cohesion, and highlighting that employment does not per se provide full protection against poverty or translate into improved living conditions, due to rising living costs and diminished purchasing power; whereas recent increases in statutory minimum wages, often above 20 % between 2022 and 2025 and above 40 % in several Member States, have helped to protect low-paid workers’ purchasing power and have supported wage growth in low-paid sectors; whereas despite real wages having exceeded pre-pandemic levels in most Member States, several large economies have not yet returned to these levels;

RemovedG. whereas data indicates that more effort is needed across most Member States to reach the target of 60 % of adults participating in education and training by 2030; whereas the integrated approach to policy coordination within the European Semester provides the framework to guide the necessary investment in human capital development, education and training systems;

AddedG. whereas climate change has exacerbated inequalities and particularly affected the most vulnerable groups, which tend to be more exposed to environmental hazards, for example high temperatures, leading to lower standards of job quality, productivity loss and greater job insecurity; whereas the transition towards climate neutrality must be socially fair and inclusive for all, and is expected to create between 1 million and 2.5 million additional jobs by 2030, if supported by the right employment and education policies; whereas strong and adequately funded social protection, as well as quality job creation policies, are a prerequisite for ensuring a fair and just transition towards climate neutrality and digital transformation;

RemovedH. whereas additional investment needs in social infrastructure have been estimated at EUR 192 billion per year, including in affordable housing, health and long-term care, education and lifelong training1; whereas further work is needed to measure the social investment gap in the EU as well as the economic returns on social investment;

AddedH. whereas the EU faces persistent labour and skills shortages in several sectors, driven by different factors, such as demographic and technological change, skills mismatches, job quality and lack of attractiveness of and investment into quality public services, which has been identified as a key barrier for EU growth and competitiveness; whereas limited career prospects and precarious working conditions of young people in parts of the Union contribute to talent outflows between EU regions and third countries, further exacerbating these shortages; whereas the Commission proposal for a 2026 joint employment report highlights that addressing structural labour market weaknesses through better job quality supports higher productivity, economic performance, social fairness and cohesion; whereas improving workers’ rights, collective bargaining, active labour market policies, access to social protection and skills development opportunities for all, including third-country nationals, as well as targeted activation measures for the 51 million people of working age currently outside the labour force, would help strengthen participation, inclusiveness and competitiveness; whereas by 2050, the EU working population is expected to shrink by up to 18.8 million people, which suggests that legal labour migration can help to respond to evolving labour market needs;

Removed1. Stresses the competitive advantage of investing in the EU’s social model; calls for the recommendations of the High-Level Group on the future of social protection and of the welfare state, as well as the recommendations of the Letta and Draghi reports, to be integrated into the European Semester process; welcomes the integration of the EPSR into the economic governance framework and calls on the Member States to take advantage of the possibility of extending the adjustment period for investing in the EPSR priorities; calls for the integrated governance framework to be reflected in the internal processes of the EU institutions, with their economic and social bodies involved to equal extents;

AddedI. whereas in 2022, the rate of adult participation in learning stood at 39.5 %, indicating that more effort is needed across most Member States to reach the target of 60 % of adults participating in education and training by 2030; whereas the integrated approach to policy coordination within the European Semester provides the framework to guide the necessary investment in human capital development, education and training systems; whereas further substantial efforts are needed to ensure provision of, and access to, quality training policies, notably for workers in lower-skilled occupations, to promote lifelong learning and strengthen EU competitiveness, resilience and the inclusiveness of the EU workforce; whereas public spending alone may not meet the scale of upskilling and reskilling needs given the transformational challenges the EU is facing; whereas in 2022, the average score for basic skills among 15-year-olds in the Programme for International Student Assessment (PISA) declined compared to 2018, with underachievement disproportionately affecting disadvantaged learners, highlighting the need for reforms and sustained investment in education and training to support future generations and their transition from education to work;

Removed2. Considers that the Commission and the Council should strengthen their efforts to implement the EPSR; calls for the EPSR action plan targets to be embedded at the core of the European Semester by making them benchmarks in the European Semester assessments;

AddedJ. whereas additional investment needs in social infrastructure have been estimated at EUR 192 billion per year, including in affordable, housing, health and long-term care, education and lifelong training; whereas value must be placed on the economic return of social investments, in particular public spending on children and youth, which not only improve living standards and reduce poverty, but are also key drivers of sustainable and inclusive economic growth, higher productivity and increased employment rates; whereas underinvestment in education and research weakens long-term growth prospects; whereas for children, social investments are an investment in the future, which leads to better education and job prospects, which in turn boost economic indicators; whereas further work is needed to measure the social investment gap post-recovery in the EU, as well as social services investment and coverage and their economic returns; whereas the development of common data indicators on social services expenditure and coverage, such as the European Social Services Index, would strengthen evidence-based recommendations and effective monitoring of their implementation within the European Semester;

Removed3. Welcomes the Commission’s ambition to eradicate poverty by 2050 and its intention to propose a quality jobs act; emphasises the need for coherence between the European Semester, the follow-up to the EPSR action plan and these upcoming instruments, with measurable targets and corresponding country-specific recommendations;

AddedK. whereas housing cost pressures and high energy prices impose significant burdens on households, yet housing policy has often been under-represented in country-specific recommendations, despite its macroeconomic relevance and its central role in income security, social inclusion and cost-of-living resilience; whereas investment in social services and increasing housing supply, including social and affordable housing, as well as in energy efficiency and building renovation and addressing skills shortages, play a key role in reducing poverty, including energy poverty, and improving affordability;

Removed4. Welcomes the permanent inclusion of the social convergence framework in the European Semester; stresses its importance, together with the social scoreboard, for identifying risks and tracking progress on upward social convergence;

AddedL. whereas the EU gender pay gap currently stands at 12 % due to the disproportionate share of household and childcare responsibilities borne by women and the persistent undervaluation of women-dominated professions, among other factors; whereas women face a higher risk of poverty, particularly in older age, with the gender pension gap currently reaching 25 %;

Removed5. Recalls that social investment can have a positive impact on economic growth, productivity and competitiveness, thereby also supporting fiscal sustainability while promoting upward social convergence; calls on the Commission and the Council to treat social investment as foundational to sustainable growth;

Added1. Stresses the competitive advantage of investing in the EU’s social model; calls for the recommendations of the High-Level Group on the future of social protection and of the welfare state, as well as the recommendations of the Letta and Draghi reports, to be integrated into the European Semester process in order to protect and reinforce the EU’s social market economy; stresses the need for a balanced approach that supports social rights, public services, and collective bargaining structures and coverage as much as competitiveness; welcomes the integration of the EPSR into the economic governance framework and calls on the Member States to take advantage of the possibility of extending the adjustment period for investing in the EPSR priorities; calls for the integrated governance framework to be reflected in the internal processes of the EU institutions, with their economic and social bodies involved to equal extents;

Removed6. Emphasises that the Commission’s affordable housing plan should be integrated better into the European Semester, with a stronger focus on affordable, sustainable and decent housing in country-specific recommendations; reminds the signatories to the Lisbon Declaration on the European Platform on Combatting Homelessness about the goal to eradicate homelessness by 2030;

Added2. Urges the Commission and the Member States to fully implement the EPSR; stresses that the updated EPRS action plan must translate political commitments into concrete and ambitious measures, supported by clear, measurable targets and robust monitoring indicators, in order to effectively address poverty and social exclusion and to support workers in managing the green and digital transitions, in particular regarding skills, VET and lifelong learning; calls for the EPSR action plan targets to be embedded at the core of the European Semester by making them benchmarks in the European Semester assessments; notes that the Commission proposal for a 2026 joint employment report focuses to a large extent on skills and labour shortages and falls short of a comprehensive assessment of the implementation of the 20 principles of the EPSR, as required by Regulation (EU) 2024/1263; calls on the Commission to ensure all EPSR principles are addressed in future cycles to ensure an accurate and complete picture of the social situation in the EU;

Removed7. Emphasises that investment in education, upskilling and reskilling is a strategic social investment with long-term returns for competitiveness and cohesion;

Added3. Welcomes the Commission’s ambition to eradicate poverty by 2050, its European affordable housing plan, and its intention to propose a quality jobs act; welcomes, furthermore, the first EU anti-poverty strategy and the strengthening of the European Child Guarantee; emphasises the need for coherence between the European Semester, the follow-up to the EPSR action plan and these upcoming instruments, with measurable targets and corresponding country-specific recommendations;

Removed8. Emphasises that intergenerational fairness must become a structural component of the European Semester; calls on the Commission, as part of its intergenerational fairness strategy, to integrate indicators on youth well-being, access to quality jobs, housing affordability, education and skills into the European Semester’s assessment framework, and to systematically evaluate long-term impacts of fiscal and reform recommendations;

Added4. Stresses the importance of eradicating child poverty and social exclusion in order to break intergenerational cycles; welcomes the inclusion of an assessment of the implementation of the Child Guarantee in all country reports in the 2025 Spring Package and encourages continued monitoring of progress within the European Semester; regrets, however, the lack of follow-up to these findings, with only two country-specific recommendations in 2025 calling for action to address child poverty; considers that the country-specific recommendations should reflect Member States’ budgetary compliance with the minimum allocation requirements for tackling child poverty set out in the ESF+ Regulation;

Removed9. Acknowledges that Member States have committed to investing 5 % of GDP annually in core defence requirements and related security spending by 2035, including through the activation of the national escape clause; stresses that, within the framework of the European Semester, such expenditure must be planned in a coordinated manner;

Added5. Reiterates its call for an increase in the funding of the European Child Guarantee, with a dedicated budget of at least EUR 20 billion, and for Member States to earmark at least 5 % of their allocated ESF+ funds to fighting child poverty and promoting children’s well-being, with at least 10 % earmarked for Member States with child poverty levels exceeding the EU average;

Removed10. Notes that the European Semester recommendations in 2026 will play an essential role in the drawing up of the national and regional partnership plans; believes that reforms and investments should be selected on the basis of the efficiency and effectiveness with which they address the relevant country-specific recommendations;

Added6. Is concerned about the level of youth unemployment, which remains more than twice as high as the overall EU unemployment rate; stresses that, for young people, it is essential to complement employment activation measures with sustained support, including access to integrated social services, housing and mental health support in order to ensure their continued participation in education or employment; emphasises the need for Member States to invest in the reinforced Youth Guarantee in order to ensure quality and timely support for all young people not engaged in education, employment or training (NEETs) under the age of 30; urges the Member States to strengthen the use of the reinforced Youth Guarantee as a tool to support care leavers and prevent the ‘care cliff’, including through access to career guidance;

Removed11. Supports a more democratic European Semester process, with Parliament strongly involved in setting economic policy priorities and taking economic governance decisions; insists on the systematic involvement of social partners, civil society organisations, and regional and local actors in the European Semester process;

Added7. Considers that action at EU and Member State level is needed to prevent and address persistently high levels of poverty and social exclusion, and welcomes the announcement of the first EU anti-poverty strategy in this regard; believes that the strategy must provide a comprehensive approach to tackling the root causes and multidimensional aspects of poverty and social exclusion, with concrete actions, a robust budgetary allocation, clear objectives, milestones and structural measures, while also ensuring strong implementation and monitoring; calls on the Member States to implement the directive on adequate minimum wages to fight in-work poverty and incentivise work; calls for the EU anti-poverty strategy to place the fight against child poverty at its core in order to break the cycle of poverty; urges the Member States to fully implement the Council recommendation on adequate minimum income;