Relevance of gender in the policy area

The European Union (EU) is one of the world’s largest economies, accounting for more than 20% of global gross domestic product (GDP). Trading by EU Member States with countries beyond the EU represents 17% of global trade flows. The perspective of a single market for Member States is at the heart of EU economic and financial policy. All EU Member States form part of the economic and monetary union (EMU), which is an arrangement between the Member States based on a single market. The creation of a single market is the result of a historical process which started in 1957, when the founding Member States of the EU wished to create a common market. The EU coordinates economic and fiscal policies, applies a common monetary policy and promotes a common currency.

EU governments have agreed on a wide range of rules to ensure the quality and appropriateness of their economic policies. All EU Member States are committed under rules known as the stability and growth pact (SGP) to pursuing sound public finances because they are an essential pre-requisite for sustainable economic growth and financial stability. Moreover, all EU Member States present to the Commission the budgetary measures they intend to implement in order to fulfil their commitments. The EU also has rules to encourage economic stability by preventing the development of risky macroeconomic imbalances. The macroeconomic imbalance procedure (MIP) ensures that governments tackle any national economic trends that could pose a threat to other EU economies and discuss these with the Commission and other Member States. The EU’s approach to fighting the economic, financial and sovereign debt crisis can be described as a combination of fiscal consolidation, financial sector stabilisation and structural reforms in labour and product markets. This approach is reflected in the priorities set by the annual growth survey and in the European Commission’s country-specific policy recommendations to Member States in the framework of the European Semester, the EU’s annual cycle of economic policy coordination.

Within this context, gender is considered a relevant factor to overcome economic and financial crisis, and for the recovery of the European economy. The promotion of gender equality will unleash the talents and capacities of women, which are needed to achieve the goals of sustainable growth:

‘The global economy is not making use of great potential that is available. And that needs to change, not just for women’s sake, but for economies’ sake’, according to Christine Lagarde, Managing Director of the IMF, in a keynote speech in Tokyo.

From a macroeconomic perspective, women’s inclusion in the labour market is relevant in terms of fostering economic growth. Looking at the performance of countries and regions, a clear strong positive correlation emerges between gender equality in the labour market and economic growth. The direction of causality goes mainly from economic growth to gender equality, but it is also true that full participation by women in the labour market supports GDP growth, as more (qualified) human resources are involved in the production system. Increased participation of women in the labour market will also mitigate the impact of the contraction of the labour force due to an ageing population, and will stimulate economic growth. The IMF indicates that GDP would rise considerably if women’s labour force participation were equal to that of men.

Providing women with equal economic opportunities and unleashing the full potential of the female labour force, with significant prospective growth and welfare implications, will require an integrated set of policies to promote and support women’s employment. Research suggests that well-designed, comprehensive policies can be effective in boosting women’s economic opportunities and their actual economic participation. Implementing policies that remove labour market distortions and create a level playing field for all would help boost the demand for women’s labour.

With respect to gender, incentives should be in place to increase participation in the labour market by women and/or older people. Along with improving skills, this can produce larger gains in the medium to long term. The issue has been developed in a recent report analysing the impact of government policies on secondary earners. Secondary earners are individuals who are employed and earn less than their partners. They represent the majority of working women in married or cohabiting couples. Women’s labour market participation is known to be responsive to financial incentives and disincentives. The effects of different policies can be seen in increased hours worked, income earned or labour force participation rates for women. For new entrants to the labour market, the effects can be seen in increased numbers starting work. The evidence is consistent with the theory that the design of the tax benefit system, or out-of-pocket childcare costs (or both), can affect the secondary earners’ choice of working hours or their decision to enter employment.

Finally, gender inequalities are particularly relevant when the pension system and reforms are taken into consideration. Many recent pension reforms concern themselves with correcting incentives and other parameters responsible for gender pension inequality and in this sense create a ‘level playing field’ between women and men. If earnings and pay inequality is eradicated in paid labour, it follows that the underlying conditions for gender differences in pensions would cease to exist. In this sense, and if current policies are maintained, the pension gender gap will disappear on its own. Once reformed pension systems settle to their long-term condition, gender will no longer be a cause for concern for pension policy.

Gender equality in economic and financial affairs is thus still influenced by a set of persistent gender inequalities, which are as follows:

  • gender implications in labour market policies and reforms
  • gender implications in fiscal policies
  • gender implications in pension policies and reforms.

Issues of gender inequalities in the policy area

Gender equality policy objectives at EU and international level

Policy cycle in economic and financial affairs

Click on a phase for details

How and when? Economic and Financial Affairs and the integration of the gender dimension into the policy cycle

The gender dimension can be integrated in all phases of the policy cycle. For a detailed description of how gender can be mainstreamed in each phase of the policy cycle click here.

Below, you can find useful resources and practical examples for mainstreaming gender into economic and financial affairs policy. They are organised according to the most relevant phase of the policy cycle they may serve.

Practical examples of gender mainstreaming in Economic and Financial Affairs


The key milestones of the economic and financial affairs policies are presented below.

Current policy priorities at EU level

The European Commission maintains its balanced strategy for jobs and economic growth, focusing on 5 main priorities:

  • pursuing differentiated, growth-friendly fiscal consolidation
  • restoring bank lending to the economy
  • promoting growth and competitiveness for now and in the future
  • tackling unemployment and the social consequences of the crisis
  • modernising public administration (European Commission, 2014)

As indicated in the management plan 2014 of DG ECFIN, its highest priorities in the short term are overcoming the economic and financial crisis, and the recovery of the European economy (European Commission Directorate-General for Economic and Financial Affairs, 2014c). The main objectives of DG ECFIN from a multi-annual perspective are (ibid, pp. 8 – 10):

  • To foster EU growth, employment creation and sustainable development by bringing the budgets of Member States in line with the stability and growth path, and increasing output growth;
  • To promote prosperity beyond the EU, in close cooperation with the Directorate-General for Development Cooperation (DG DEVCO), the Directorate-General for Enlargement (DG ENLARG) and the European External Action Service (EEAS).

DG ECFIN’s operational activities are focused on 3 policy areas (ibid, p.12):

  • Strengthening the economic and monetary union (EMU): Activities include the coordination of economic policymaking between the Member States, as well as coordination of their fiscal policies. The economic policy guidance and country-specific surveillance of the Member States by DG ECFIN follows each year the cycle of the European Semester, which is the annual intervention logic used by the DG ECFIN for the coordination of economic and fiscal planning with the European Council, the Member States and the European Parliament.
  • International economic and financial affairs: A wide range of activities, including coordination with international economic and financial institutions including the IMF, World Bank, OECD and multilateral development banks.
  • Financial operations and instruments: This area includes treasury management of EU budgets, cooperation with the European Investment Bank Group and management of financial instruments under the competitiveness and innovation programme (CIP). These financial instruments should also contribute to the implementation of Europe 2020: a European strategy for smart, sustainable and inclusive growth.

Europe 2020 is a common agenda for transformation, a process driven by 5 EU headline targets for 2020 which are translated into national targets:

  • Out of the population aged 20 – 64, 75% should be employed.
  • The amount of the EU’s GDP invested in research and development should be 3%.
  • The ‘20/20/20’ climate/energy targets should be met (including an increase to 30% of emissions reduction if the conditions are right).
  • The share of early school leavers should be under 10%, and at least 40% of the younger generation should have a third-level degree.
  • The number of people at risk of poverty reduced by 20 million.

To catalyse progress under each of these priority themes a wide range of actions is undertaken, which are summarised as 7 flagship initiatives:

  • Innovation Union, to enhance research and innovation which creates growth and jobs;
  • Youth on the move, to increase the employability of young people;
  • A digital agenda for Europe, to increase the benefits of a digital single market;
  • Resource-efficient Europe, to promote a shift towards a low-carbon economy, the use of renewable energy, modernisation of the transport sector and energy efficiency;
  • An industrial policy for the globalisation era, to improve business and small and medium-sized enterprises (SMEs), and an industrial base able to compete globally;
  • An agenda for new skills and jobs, to modernise labour markets, increase labour participation and mobility, and better match labour supply and demand;
  • European platform against poverty, to ensure social and territorial cohesion, shared benefits of economic development, a decent life and active social participation for all.

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