Anti-market law protests outside the EU Council and Commission buildings in Brussels. Photo Flickr - Teemu Mäntynen

The social Europe the Member States do not want

18-04-2016 | Jan Marinus Wiersma, Michiel Luining

How serious is the attention towards Social Europe, Jan Marinus Wiersma and Michiel Luining ask.

We must confront rethoric with reality

Jan Marinus Wiersma is Senior Visiting Fellow at the Clingendael Institute.

Michiel Luining is Research Assistant at the Europe cluster of the Clingendael Institute.

The EU struggles currently with major issues, such as macroeconomic and budgetary reform in the aftermath of the economic crisis and in dealing with the refugee crisis. Therefore, it has recently given less attention to the discussion on social progress and well-being. Nevertheless, latest developments seem to demonstrate that the social character of Europe is gradually getting more attention of both the EU and the member states, as it is of course connected to the major issues at hand, argue Jan Marinus Wiersma and Michiel Luining in the opening article of EUforum’s Social Pages. But how serious is it, they ask.


Growing attention
Europe’s ambition to earn a ‘social triple A’ is mentioned in the report of the Five Presidents of the EU from June 2015 on 'The Nature of a Deep, Genuine and Fair Economic and Monetary Union'. European Central Bank activities influence interest rates of the Eurozone which spark a debate concerning pension and social investment funds in some member states. ‘Social Europe’ or lack thereof, is highly relevant with regard to the actual national debates to preserve and reform the social welfare states, and the anxieties concerning the burden of refugees.

An important case is the EU British membership renegotiation deal of last February, which indirectly assumes that Europe threatens the social welfare state: restrictions on benefits for EU migrants were agreed upon in the case a member state can show that EU migrants are putting an excessive pressure on the functioning of its social services.

Also the Dutch referendum on the association agreement with Ukraine on April 6 uncovered fears of social dumping, unfair competition and social financial burdens. In other words, it has become increasingly apparent that trust in and support for the EU is dependent on the reputation to deliver positively. But will it and can it?

Past and present
In the past, the European integration project could count on (relative) popular support and strong political legitimacy as it could show results benefitting national welfare states. In the context of post-war poverty and reconstruction particularly, the communist narrative of a social paradise needed to be countered: the benefits of European free-market integration became - and were sold as - the means to build and pay for growing prosperity. But today, in the expanded EU internal market of 28 member states and 19 Eurozone members, increased inequality and imbalances within the European project have occurred and globalisation processes and concomitant competition have put pressure on the national welfare state.
Although unemployment figures in the EU are overall decreasing since 2013 and economic growth has picked up modestly, youth unemployment remains high, social exclusion is still widespread and income gaps between and in member states are widening. It could be argued that the European project does not live up to Article 3 of the EU Treaty and Article 9 of the Treaty on the Functioning of the European Union, failing to deliver on social commitments. The Luxembourg presidency in the second half of 2015 gave the discussion on ‘Social Europe’ a new start in presenting the social dimension of European policies as one of its priorities. The report ‘A New Start for Social Europe’ published in February 2016 is an important outcome.

Confronting rhetoric with reality
The main aim of the EUforum ‘Social Pages’ is to lay bare the contradictions of Social Europe between the Brussels agenda and the actual intention and rather limited ambitions of member states. In order to have a proper discussion on what ‘Social Europe’ really stands for it is necessary to confront the rhetoric with reality. Lately politicians have indeed been putting more emphasis on the need to improve social conditions to compensate for the strict austerity measures and economic reforms that have been adopted to tackle the Eurocrisis.

‘Social Europe’ however is a container concept that has many different meanings and interpretations. It ranges from protecting and promoting the ‘European social model’ to the whole of specific social policies introduced by the EU over the years. Some – mainly in North Western Europe - want the EU to offer better protection of national systems, that should remain to be the core of social security in individual member states. Others – to be found mainly in the South – claim on the contrary an European role in financing for example of common unemployment benefit schemes. These visions compete for priority in Brussels. The former is supported by the fact that the Treaties explicitly state that social security is an exclusive national competence. The latter points out that nevertheless the internal market and the European Semester force the EU to directly and indirectly intervene in the social area, thereby setting precedents.

 

Member States social performance
Most EU social regulations are products of the internal market. Creating level playing fields was and is a very important goal in this area: regulating labour conditions such as working hours or safety at the workplace and – a more recent example – tackling the negative impact of labour mobility. The European Commission can initiate legislative proposals. But since most social policies are a shared responsibility, member states have a big say. And of course neither the Commission nor the member states can go beyond the Treaties.

Many EU countries prove to be conservative when it comes to extending the area of competence of the EU. This is caused partly by a more general reservations about increasing the role of Brussels – and a reluctance to change the treaty - but also by the wish to be able to protect different national social security systems. These differences also bring about a lack of solidarity which blocks real progress towards European social transfers.

There are huge gaps in expectations and demands amongst EU countries

What social Europe is and how it develops, is in the end determined not by Brussels but by the Member States. At the EU level ambitions are put on paper, but their success depends on the capitals. At that level the results have not been very promising. Take the Lisbon Agenda or Europe 2020. Many of the agreed goals on for example jobs and fighting poverty have not been met. And Europe lacks the instruments to put pressure on Member States, with the exception of those that receive emergency funding. Better coordination, best practices and peer pressure are soft measures that allow the Member States a lot of room for manoeuvre. There are no indications that this will change soon.

 

Juncker’s social triple A
President Juncker used the term ‘triple A’ when referring to ‘Social Europe’ at the beginning of his term. With this basic narrative he reacted to an European Parliament demanding a more social Europe. But since he knew that the member states are divided on the issue and aware of the fact that also the political groups of the EP interpret ‘Social Europe’ differently, he limited his more practical proposals to three areas: a big investment programme to boost employment (EFSI), the youth unemployment scheme and renewal of the Social Dialogue. This was almost two years ago.

Member states have not responded to the challenge of Juncker. The debate about more centralised social security schemes has stalled and the member states are more or less left to their own devices when tackling unemployment and poverty. The pressure of Brussels to limit social security claims (pensions, flexsecurity) in the framework of the European Semester remains as do the 3%/60% demands of the Growth and Stability Pact. So the whole setup of Juncker has been somewhat misleading.

 

A social Europe: one or 28 models
‘Social Europe’ does not really exist in practice because it cannot be built on 28 different traditions and systems. There are huge gaps in expectations/demands amongst EU countries: to promote or on the contrary to limit ‘Social Europe’? Interpretations differ: on the scope of EU competences for example. There is the eternal competition between more and less market: between more or less regulated. Take for example the East West controversy on labour mobility. North and South – rich and poor – have no common vision on EU wide solidarity and social transfers. All this put together make obvious that ‘Social Europe’ may be a politically attractive but in practice rather empty concept. For it to become less limited than it is now, Member States in essence will have to converge their social security systems, which will not be easy given the existing differences. Only then sufficient trust will be created to build a more common social house. So it will have to be bottom up and not top down.

 

Let the discussion begin
This can be illustrated by analysing the perspectives on ‘Social Europe’ not only of Brussels and the European institutions but from some of the capitals. Several layers in the discussion and related basic questions deserve closer attention in order to clarify where there is common ground and where not for the national debates and the Brussels agenda:
- On causes (Does the European market threaten the social welfare state or do deficiencies in the member states? What are the tensions between the EU competitiveness agenda and social goals?)
- On drivers (Internal and external migration, euro crisis, developments of EU case law)
- On policy issues (Labour mobility, social security, social investment)
- On solutions (What is the added value and the role of the EU?)

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Jan Marinus Wiersma is Senior Visiting Fellow at the Clingendael Institute. He is also a former MEP & Fellow at the Wiardi Beckman Foundation, a think-tank linked to the Dutch Labour movement. More about the author on our website Clingendael.nl.

Michiel Luining is Research Assistant at the Europe cluster of the Clingendael Institute. More about the author on our website Clingendael.nl.

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