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Social Policy and Croatias EU Membership: Glass half full or half empty?

Paul Stubbs* and Sinia Zrinak**

One of the key problems is the lack of informed political debate about social policy. Hence, real choices about social policy priorities, discussions about social rights as human rights, and learning from outside the EU, tend to be dismissed. Social policy remains marginal within the Croatian government, with more focus on supposed benefit fraud than on those not reached by current provision, service users still have no voice, and reforms are painfully slow and tend to be steered by the World Bank within an economistic frame. Unless there is a revitalization of social Europe in the next few years, it is hard to see this changing in Croatia.

the EU today: more or less social? The meanings of the social dimension of EU membership are hotly debated by both scholars and advocates alike, in the context of a rather fast changing policy landscape within the EU itself. It is widely recognized, however, that changes as a result of so-called Europeanisation are never automatic but are always a complex result of the translation of European Union requirements through a domestic policy and political landscape. This is definitively the case in the area of social policy, social protection and social rights, which is, mostly, governed by the rather soft processes of the Open Method of Co-ordination (OMC) and not part of the hard acquis. In this sense, what we can learn from the experience of earlier waves of accession countries and, indeed, from the experience of Croatia in the accession period itself, is limited. It is certainly the case that the sheer length of the accession process did mean that the Commission, or rather its Directorate General for Employment, Social Affairs and Inclusion (DG EMPL), largely through the process of drawing up, implementing and assessing a Joint Memorandum on Social Inclusion (JIM), was able to exert some influence on the direction of Croatias social policy and, to an ex tent, learn lessons from the criticisms of the JIM process in earlier enlargements in 2004 and 2007 when the Commission had a rather shorter time in which to exert influence. Indeed, the World Bank as an external actor shaping the parameters of social policy reform in the last two decades has been as important, if not more important, than the EU. In addition, internal tendencies to
* ** Ekonomski institut / The Institute of Economics, Zagreb Studijski centar za socijalni rad, Pravni fakultet / Social Work Study Centre, Faculty of Law, Zagreb 1

maintain a quite residual set of social rights for the poorest, combined with a degree of capture of social policy by key groups such as war veterans, receiving passive benefits rather than active reintegration, continues to structure Croatian social policy today. Croatia joins the European Union at a time of the greatest crisis of the EU itself in living memory. There is a hegemonic struggle going on regarding the future direction of the EU and, in particular, the relationship between economic, political and social dimensions of membership. There is an attempt, led by Germany, but joined by parts of the Commission (notably DG Economics and Finance), the European Central Bank and the IMF, to reorder the Union as primarily an economic and monetary union requiring fiscal discipline and, in cases of bad behavior, to oversee a set of ever harsher and ever more rigid austerity measures. In short, the social dimensions of the European Union are in retreat at the moment, with a reiteration of a familiar neo-liberal mantra that high social spending limits growth and that poverty reduction must wait for the results of growth to trickle down. As always, however, there are some countervailing tendencies. After the abysmal failure of the Lisbon Strategy, the European Unions new strategy Europe 2020, contains some positive elements. Referring to the importance of a social market economy, Europe 2020 remains focused on growth, albeit smart, sustainable and inclusive growth (European Commission, 2010) delivering high levels of productivity, employment and social cohesion. Amongst five headline targets which Member States have to translate into national targets and trajectories are targets on the rate of employment (meant to reach 75% within the EU as a whole by 2020) and, crucially, a target to reduce by 20 million the number of people in the European Union at risk of poverty and social exclusion. At the time that the objectives were set, some 120 million people in the European Union were at risk of poverty and social exclusion. The numbers at risk have grown since then, as a result of the economic and financial crisis and, of course, the austerity measures which have accompanied it. The calculations are also quite complex: risk of poverty and social exclusion is defined using three indicators: a traditional measure of relative poverty living on an income less than 60% of the median income in the country; severe material deprivation lacking at least 4 out of 9 items deemed important for active participation in society; and living in jobless or low-work intensity households. A person is at risk if she or he falls into at least one of these categories. As social policy is governed by the Open Method of Co-ordination, Member States are relatively free to set their own national targets based on indicators which they consider the most

appropriate. They are under no obligation to match the overall EU target of a reduction in poverty and social exclusion of one sixth. As before, the Commission may monitor, comment and, even criticize Member States targets with the hope that, through a process of naming and shaming sometimes more diplomatically phrased as learning from best practice, then the less ambitious Member States may revise their targets. The key document which Member States produce regarding Europe 2020 is the National Reform Programme (NRP). The first batch of these, perhaps not surprisingly, contained little or nothing regarding the EU social objectives. As a result of lobbying by DG EMPL, the European Anti-Poverty Network (EAPN) and others, Member States are now also obliged to write, every two years, a National Social Report (NSR) although unlike the NRP, this is not a binding document. The hope is that some commitments in the NSRs and, crucially, Commission comments, may reorient Member States to incorporate more progressive social policy priorities into their NSRs and be held accountable for these in much the same ways as they are currently held accountable for economic and fiscal priorities. This, in the current reality, does appear to be more of a hope than an expectation, however.

Croatian social policy: the realities The question regarding the impact of EU membership on social policy in Croatia can be framed in very different ways, therefore, depending on how one views the current realities within both Croatia and the EU. One framing might be in terms of how far Croatia can save some features of its social model and protect public goods from privatization, given the demands for liberalization associated with the European Economic model. A different framing, more skeptical regarding the positives of existing Croatian social policy, but more positive regarding potential EU influence, is certainly possible and, perhaps, even plausible. This would ask to what extent Croatias social policy, marked as it is by clientelism, capture by particularistic interests, and its residual, even punitive, character, can be reformed in the image of a more comprehensive European Social Model. In our more academic writings (cf. Stubbs and Zrinak, 2007, 2009, 2010, 2012a), we have emphasized the importance for social policy of the legacies of war, state- and nation-building processes in the 1990s. The break-up of former Yugoslavia and the construction of new states with very complex relations between each other, influenced significantly the social rights of large groups of people, be they displaced persons or refugees, or new ethnic minorities inside new state borders, in the context of changing and contested notions of citizenship. In social policy,

the main political focus on protecting the new state was reflected in the high degree of centralization of state functions. Social policy centralized at the state level, and Centres for Social Welfare, which, during communism, had been decentralized institutions dealing with all social problems in local community, became merely deconcentrated branches of the Ministry of Social Welfare, a state which was not changed so far. New welfare providers (NGOs, local authorities, international organizations, and the private sector) emerged and found their own niche, albeit in an uncoordinated way, producing welfare parallelism, as each sector had their own agenda, and their own way of doing things. The situation has changed in the meantime, and the non-profit sector is not considered any more as a kind of anti-state sector. However, welfare parallelism still exists as in general there is no effective mechanism of coordination between centralized state welfare institutions, local authorities, and non-profit sectors, as well as a lack of regulation and standards for private providers. Another important feature of social policy in Croatia is clientelism (Stubbs and Zrinak 2012b). Without invoking the notion of clientelistic exchange it is not possible to understand the social rights of Croats in neighbouring Bosnia and Herzegovina, the extent of rights enjoyed by war veterans, including those diagnosed as disabled, and moreover the public rhetoric about this issue, as well as political patronage on the local level and in state institutions where employment and other rights and work possibilities are in direct relation to loyalty to a particular political party. Indeed, the idea that these aspects of Croatian social policy have become woven into political commonsense, so that no major political party dare question them, both undercuts the political advantage to be gained by one political party, whilst ensuring that they remain core elements of Croatian social policy regardless of changes in Government. The figures make rather depressing reading, albeit one in contrast to a dominant picture of Croatia as a high social spender with low levels of poverty. Croatia is the fifth worse performer of the (soon to be) 28 EU Member States regarding levels of poverty and social exclusion. Statistics for 2011 show that 1,380,000 people, or 32.7% of the population, are at risk of poverty or social exclusion, an increase from the figure of 31.3% in 2010. In Croatias Economic Programme 2013 (Republic of Croatia, 2013), a target to reduce poverty and social exclusion by 100,000 by 2020 is set. The first response from the European Commission (European Commission, 2013) is that this is a target lacking ambition which is quite an understatement given that even if we assume the population of Croatia remains steady (and it is much more likely to fall, perhaps by as many as 80,000), then the target would lead to a poverty rate of 30.3% by 2020. There is also no

indication of which people will be brought out of poverty, nor how. Bearing in mind that the Governments target for total employment rate by 2020 is a disastrous 59% by 2020 compared to 57% in 2011 and 55.3% in 2012, it is hard to see how poverty will be reduced. Indeed, the lack of ambition here is also clear, and was noted by the Commission. Instead of catching up with the EU average, then, Croatia is expected, by its own G overnments target, to fall further behind, not even aspiring to reach levels between 60.6% and 62.9%, achieved between 2006 and 2009. When we look at social expenditures, Croatia spent 20.8% of GDP on Social Protection in 2010 (the same as the figure for 2009). Were it already a Member State, this would make it the 19th ranked in terms of size of spending, with the Czech Republic, Malta, Lithuania, Slovakia, Poland, Bulgaria, Estonia, Latvia, and Romania spending less. Spending in neighbouring Hungary (23.1%) and Slovenia (24.8%) is higher. Croatia is most exceptional, however, when we come to look at the proportion of benefits spent on different social protection functions. 51.5% of social protection expenditure (or 10.7% of GDP) is spent on Sickness/healthcare and disability. This is the highest in the entire EU, with the EU-27 averaging 37.4% of all social protection expenditures. This appears to relate, primarily, to war veterans of working age, receiving pensions on the basis of physical disability or, in a significant number of cases, a diagnosis as suffering from post-traumatic stress syndrome (PTSS), and reflects, in general, poorly developed social services.

the EU and Croatian social policy: 5 features If we look at the impact of the EU on Croatian social policy, social rights, and social protection, now and in the future, we can frame this in terms of five inter-linked but separate dimensions. 1. Redomaining: Whilst it may appear to be only a question of language, the fact that, as a result of the EU, we now refer to social protection, social inclusion and social cohesion rather more than social rights is significant. One aspect of Europeanisation is the creation of new policy sectors or domains as well as particular constructions of what should be included and what not in those domains. Whilst pensions and health care are a part of what the EU terms social protection, the issue of social inclusion is concerned with active inclusion, poverty, and social services. Broader issues such as gender equality and the rights of minorities may also be included under social inclusion. This matters as it reframes the way in which different aspects of social policy are talked about. One would imagine, therefore, in the future, that there may be more emphasis on access to pensions

and health care, and not just their cost, as well as a focus on levels of poverty and social exclusion, as well as their territorial distribution, than is currently the case in Croatia. 2. Statistical alignments: Whilst the idea of evidence-based policy is, itself, sometimes ideological and, in any case, a long way from reality in Croatia, it surely matters that Croatias performance in terms of social protection and levels of social spending can now be compared with those of the rest of the European Union. It is certainly important that the benchmark becomes the other Member States and not much the countries which, for example, the World Bank tends to compare Croatia with. At the same time, the meaning of these comparisons can be disputed, particularly the definition of relative poverty as 60% of median income within the Member State (not the EU as a whole), and are constantly being revised (the definition of severe material deprivation will be changed before 2020, for example). 3. Actor Mobilization: What has been termed cognitive or better ideational Europeanisation (Guilln and lvarez, 2004) has occurred and is still occurring in Croatia. Citizens and citizens movements (not just NGOs) are more conscious of, more vocal about, better networked around, and more successful in advocating for, certain agendas such as gender equality, social inclusion, and environmental justice. Of course, we have witnessed, at times, some of the stronger NGOs in Croatia rushing to Brussels to complain about what they see as violations of human rights but it is important to remember that they would not do so, and would not have any leverage, were it not for the idea that membership of the European Union is, still, about respect for human rights, democracy, the rights of minorities, and so on. How far social policy fits here is hard to measure; we have certainly witnessed policy issues which would not have been taken seriously by the Government, such as the importance of reducing the numbers of children, and children and adults with disabilities, in institutional care (often called deinstitutionalization), being addressed in part because advocacy organizations managed to lobby the Commission about the topic. In addition, at least during the JIM process, the active participation of all stakeholders was insisted upon by the Commission, changing a culture in which social policy priorities were decided without public participation. Whether this will extend, in the future, to wider participation and consultation, including service users who were largely ignored, remains to be seen.

4. Strategisation and Projectisation: Whilst not confined to social policy, of course, Croatia has managed to refine, in the process of EU Accession, the writing of ever more strategies and action plans which look better and better in terms of quality of presentation but remain what Nomi Lendvai has called fictions (Lendvai, 2013) which neither the Government nor the Commission really believe in. In social policy, there has been too little clear prioritising, almost no costing of priorities, and too little meaningful monitoring. Even if these were to be improved, the idea that commitments in social policy do not need to be either ambitious nor actually carried out, remains. At the same time, large-scale commitments are often converted into pilot or small-scale projects, with little real impact other than on consultants employed within them who earn large salaries. It should not be forgotten, either, that the World Bank still claims both competence and a mandate to be involved in social policy issues, often cutting across the EU. 5. Technicisation and Residualisation: One of the key problems is the lack of informed political debate about social policy. At times, what should be political issues are reduced to being technical matters to be discussed by experts. At the same time, some experts are seen as more important than others: economists and lawyers have greater influence than those of us whose expertise is on social policy, for example. Hence, real choices about social policy priorities, discussions about social rights as human rights, and learning from outside the European Union, tend to be dismissed. Social policy remains marginal within the Croatian government, with more focus on supposed benefit fraud than on those not reached by current provision, service users still have no voice, and reforms are painfully slow and tend to be steered by the World Bank within an economistic frame. Unless there is a revitalization of social Europe in the next few years, it is hard to see this changing in Croatia. The kinds of policies which are being discussed elsewhere in the world, and are being pushed by the EAPN, need to have a political platform in Croatia. These include the importance of minimum income schemes as a right built into the EU charter; universal child benefits schemes, social pensions (recently dropped as a commitment in Croatia) and the importance of access to appropriate and free or low cost community based services.

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