Veli-Mikko Niemi: 'Economy of Wellbeing' offers EU policy-makers a new mindset
One of the main objectives of the European Union is to promote the wellbeing of its citizens. However, many still see the EU as little more than an economic union and a single market. Has the EU forgotten the human element? Would it be possible to forge a stronger link between the economy and people’s wellbeing?
The objective of ensuring wellbeing is enshrined in the EU Treaties and the Charter of Fundamental Rights. The first European rules on social security date back to the 1950s.
Wellbeing and economic growth are interdependent
The Economy of Wellbeing approach aims to put people’s wellbeing and the economy on an equal footing. One cannot prosper without the other. This truth has become increasingly obvious across the world over the past decade.
The International Monetary Fund (IMF), the World Bank and the Organisation for Economic Co-operation and Development (OECD) have concluded that you cannot have a healthy economy without looking after people’s wellbeing. Preventing diseases, maintaining ability to work, promoting gender equality and ensuring opportunities for continuous learning are examples of measures that boost economic growth.
The wellbeing sector is also an industry, and one that is set to grow. New business opportunities will open up as a result of digitalisation and the harnessing of data resources on health and wellbeing. As our populations become older and we also have to find ways to meet people’s need for indispensable wellbeing services.
Finland wants EU policy-makers to adopt Economy of Wellbeing approach
Finland’s Presidency is proposing to integrate an approach it calls the 'Economy of Wellbeing' into EU policy-making. This requires a new, horizontal mindset. The EU has a strong grip on economic policy, especially in the eurozone. However, many policies with an impact on wellbeing fall within the competence of the member states.
The Economy of Wellbeing provides an opportunity to look at both the economy and people’s wellbeing simultaneously. One challenge is to find ways to measure wellbeing. Financial monitoring has traditionally used indicators such as gross domestic product. However, it has been acknowledged that these indicators do not adequately reflect wellbeing. We need better methods of data collection, statistical analysis and causal research. Some tools are already available from the EU’s statistical office Eurostat.
The European Semester for economic policy coordination is one of the key tools used by the Commission and the member states to monitor and develop ways to measure wellbeing. This approach has also been advocated by the President-elect of the European Commission, Ursula von der Leyen.
Finding a balance between the needs of people and the needs of the economy in EU policy-making will also strengthen the legitimacy of the European Union in the eyes of its citizens.