Delivering on the European Pillar of Social Rights: Towards a needs‐based distribution of the European social funds?

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AbstractThrough the European Social Fund (ESF) and the Fund for European Aid to the Most Deprived (FEAD), the European Union (EU) acts as a ‘material supporter’ of national welfare states. Remarkably, the European Social Fund Plus, integrating ESF and FEAD, is presented as the main financial instrument to implement the European Pillar of Social Rights (EPSR). This raises the question of what these levers can do in terms of financial support, especially for Member States with greater social needs. By using the Social Scoreboard indicators that monitor the implementation of the EPSR, we analyse the size and distribution of ESF and FEAD according to Member States' economic capacity, social needs and efforts required to meet the European social goals. We find that the funds benefit relatively more the poorer Member States who also tend to have greater social needs. However, especially for ESF, there are significant deviations from this general pattern. Some countries consistently receive less funding than others with similar levels of social needs, and vice versa. Moreover, if, from the perspective of upward convergence, the budgets are expressed as a percentage of the efforts required to lift all income‐poor citizens to the EU‐wide at‐risk‐of‐poverty threshold, countries who need to make the greatest efforts receive less funding. These outcomes are partly driven by the funds' allocation rules, which give only little importance to the great social discrepancies between countries. This raises the question whether social needs should be taken more into account in the distribution of the funds.