As Europe navigates demographic, digital and green transitions, welfare states are under strain and citizens’ unmet social and economic needs are heightening. In a context of economic pressures and geopolitical uncertainty, the EU's most effective strategy to counter disillusionment is to invest in inclusive and resilient societies.
A recent Eurobarometer shows that four in five Europeans are anxious about social issues. Their concerns are immediate and concrete — soaring living costs, unfair wages, declining public services, housing insecurity and limited social mobility.
Today, the long-admired European social model is under pressure. Successive crises have left the Union battered externally and fractured within. Illiberal, populist and far-right movements are gaining traction, feeding on citizens’ frustration with insufficient institutional and mainstream political party responses to real-life problems: unaffordable housing, precarious work, labour market disruption driven by artificial intelligence (AI) and an ecological crisis that threatens future generations. Even young Europeans, once seen as champions of progress, are turning away from mainstream politics.
The EU’s institutional structure — a delicate balance of shared and national competences — has become a constraint. Member states’ fear of losing sovereignty leads to caution at the very moment when decisive action is most needed. National interests and political compromise prevail – whether with governments, industry or foreign powers – where strategic investment and solidarity are required.
Weak EU competence in social policy, limited policy coherence across portfolios, concerns over ‘competence creep’, and hesitation to integrate the inclusive dimension into economic growth policies, limit effective responses. These pressures are exacerbated by demographic change, technological disruption, the green transition and geopolitical instability. The imbalance between the EU's political priorities and its social and labour policies is now clearer than ever, when the need for a stronger social Europe is its most urgent.
For example, while Executive Vice-President Roxana Mînzatu has advanced landmark initiatives — including an Affordable Housing Plan, an EU anti-poverty strategy and the Quality Jobs Act — the proposed EU budget allocates just 14% to social spending, dispersed across multiple funds and left to national discretion. Without adequate financing, flagship initiatives such as the Affordable Housing Plan will struggle to deliver a real impact.
If Europe wants to restore citizens’ faith in the promise of a fair and democratic Union, it must double down on policies that respond to citizens’ daily needs.
The way forward demands action on three fronts.
1. Strengthen social policies with real resources.
Ambitious initiatives must be backed by robust financial commitments by both the public and private sector and long-term political will. The EU should continue to remove barriers to essential quality services, tackle in-work poverty and precarious employment, and guarantee universal and robust social protection systems. At the same time, it must continue supporting social economy actors and civil society, which are pillars of inclusion, economic development, trust and democratic participation.
These priorities should sit at the heart of the next Action Plan for the European Pillar of Social Rights, expected by the end of 2025.
2. Use EU coordination tools strategically.
The Commission has mechanisms to foster more coherent, forward-looking policymaking: strategic foresight, the mainstreaming of sustainable and inclusive wellbeing frameworks, an adjusted European Semester that better delivers on inclusion and sustainability, the Preparedness Union Strategy, and the forthcoming Intergenerational Fairness Strategy.
These tools must be recalibrated to fully integrate social, environmental and economic sustainability priorities, help identify and manage trade-offs and ensure a long-term vision. The Preparedness Union and the upcoming Intergenerational Fairness strategy offer vital opportunities to rethink Europe’s future through a wellbeing lens rather than a purely economic one.
3. Build a shared vision for a social Europe.
The Commission must lead by example, breaking down internal silos and articulating a common vision of inclusive growth that is comprehensible to citizens, local authorities and national governments alike A shared understanding of what inclusive growth means — and how it links to Europe’s democratic future – is essential to rekindle a sense of common purpose and belonging.
If the EU wants to defend its democratic foundations, it must invest where it matters most: in people, communities and evidence-based policies that look beyond short-term crises. Resilience is built not just through competitiveness, but through social cohesion, dignity and opportunity.
This commentary forms part of a series leading up to the European Policy Centre's 2025 Annual Conference. Click here to learn more.
Valentina Caimi is Senior Programme Manager within the Social Europe and Wellbeing Programme at the European Policy Centre.
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