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EU labour market reforms fall short despite €650 billion recovery fund

Audit finds key structural challenges remain unresolved

The EU’s €650 billion Recovery and Resilience Facility (RRF) has only partially addressed labour market challenges in member states, according to a new European Court of Auditors (ECA) report. Despite linking funding to economic and social reforms, many EU countries have not fully implemented key labour market recommendations.

The audit found that only 40% of the EU Council’s recommendations were substantially addressed, while 34% remained untouched. Issues such as integrating vulnerable workers and shifting taxes away from labour were often overlooked. Some reforms, like France’s unemployment insurance changes, show promise, while others, such as Germany’s temporary “Social Guarantee 2021,” are unlikely to have long-term impact.

ECA Member Ivana Maletić warned that many reforms lack clear indicators to assess their effectiveness. The auditors call for stricter monitoring, improved impact tracking, and stronger commitments from member states to ensure meaningful labour market improvements.


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