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Are the recently adopted reforms of social protection “recession-proof”?

At CINEFOGO’s first final conference in Brussels 17-18 March 2009 prof. Bjørn Hvinden from the Norwegian Social research institute in Oslo asked whether the reforms are recession-proof and gave his policy recommendations on the topic.

For many years, the European Union has sought to modernize national systems of social protection. However according to prof. Hvinden, it is unlikely to see any strong trend towards union in the overall packages of actual policies, citizens’ rights or the amount of public resources. Activation reforms have since the mid 90’s shifted from passive support for people out of work to more active forms of support which on the one side have tightening up of systems of income maintenance and on the other side have stepped up their investment in human resource. However, prof. Hvinden allarmed: "if European economies are on their way into a deep recession both sides of the activation support may be contested or undermined". Prof. Hvinden also concluded that pension reforms have depended on the overall pension system in individual Member States. Nevertheless, in many Member States an ambition has been to discourage early retirement and postpone the retirement. In recession periods this ambition may be undermined as many companies may be obligated to fire employees. It is therefore an open question how much choice the elderly individual has in practice on postponing the retirement. Moreover, prof. Hvinden emphasized that if occupational pensions or private savings make up substantial parts of the overall pension package, these parts may be at greater risk in a deep recession and the elderly is more dependent on publically provided pensions. Reforms within social protection for persons with disabilities have sought to provide more relevant support by acquiring better skills or improving financial support. Still, in many cases assistance for workplace accommodation, independent living and suitable transport are needed and if provisions are governed by local administrations or limited budget, they will be vulnerable in recession. On these statements, Prof. Hvinden’s recommended Member States to: 1) review the rules and requirements introduced under the activation reforms to ensure that the situation of people out of work not gets worse. 2) review the changes introduced as part of pension reforms to hinder unnecessary negative consequences 3) review the relationships between the different parts of their social protection systems for persons with disabilities to hinder economic or social exclusion Working paper and presentation are available to download from the CINEFOGO database: http://cinefogo.cuni.cz/index.php?&id_result=33515&l=0&w=16&id_event=90 Contact: Communications consultant Ellen-Kristina Kristensen Phone number +45 4674 3307 E-mail ellenk@ruc.dk

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