European climate policy has entered a phase of regression. Public fatigue, economic pressures, social tensions and protectionism are pushing leaders to recalibrate their green commitments. Yet there are also reasons for optimism. Europe has built a unique infrastructure for a just transition—one where social and ecological goals can converge. To borrow from Karl Polanyi: the old is dying and the new has not yet been born—but when it does, Europe will have a framework — fragile and unfinished, yet providing the foundation to lead the great transformation of our time.
Building that infrastructure began at the Union’s founding, evolved through the 1970s and 1980s, gathered pace in the 2000s and accelerated during recent crises. The emerging framework—combining social inclusion, climate ambition and solidarity—may already be more advanced, and more irreversible, than many realise.
A framework born of necessity
The EU’s social dimension has never been an afterthought. Since the 1950s, the principle of social subsidiarity—that welfare should remain national but within a cooperative European framework—has guided integration. Far from weakening welfare states, this approach allowed them to flourish, shaping some of the strongest and most resilient social models in the world.
As markets deepened and the EU grew larger and more diverse, integration increasingly generated spillovers—labour mobility, fiscal competition, asymmetric shocks—that European welfare states could not manage alone. This created an imperative for national welfare systems to gradually socialise the integration process, weaving social protection into the fabric of European cooperation.
From the outset, Europe’s architects understood that economic integration without social coordination would prove unsustainable. The Treaty of Rome included provisions for labour mobility and social security coordination. As integration deepened, so did the recognition that market forces alone could not ensure cohesion across an increasingly diverse Union.
Over five decades, the EU has given real substance to the notion of solidarity—moving from workers’ rights and anti-discrimination toward a broader, decommodifying social inclusion goal. This evolution is anchored in the Lisbon Treaty and expressed through the European Pillar of Social Rights (EPSR) and its 20 principles on equality, fair work and social protection.
Social inclusion as a common EU objective naturally aligns with the just transition agenda. To ensure that no region or person is left behind, the Union can build on its still-evolving social inclusion arsenal of hard and soft law, evaluation tools and monitoring systems. The integration of social and ecological goals remains very incomplete, but instruments like the Social Climate Fund already draw on indicators from the social inclusion framework to ensure fair allocation of resources.
EU social governance evolved not by grand design but through layering—adding new instruments and converting old ones. With the Open Method of Coordination, the Union learned to “govern by numbers”, using data, benchmarking and peer pressure to drive convergence without imposing uniformity.
Through the EPSR Action Plan and its Social Scoreboard, social performance now informs the same European Semester policy cycle that monitors fiscal rules and competitiveness. Within this framework lies the potential to embed social and ecological dimensions at the very heart of European governance, moving closer to a common social market economy that balances economic dynamism with social protection and environmental sustainability.
Soft coordination is increasingly complemented by binding instruments that give the EU’s social agenda legal force. The Treaties offer a basis for substantive action against social exclusion, and a significant social acquis translates shared goals into enforceable rights among them adequate minimum wages, a necessary condition for creating a social floor across European societies. This combination of soft and hard governance creates multiple pressure points for progress, even when political will wavers.
The virtuous circle of reciprocity
The real game-changer lies in interstate solidarity and goal-oriented funding. Social and ecological objectives are now tied to major EU budgets—from the European Social Fund Plus (ESF+) to the Social Climate Fund. While the new ESF+ carries certain risks, and the climate funds have yet to prove their full effectiveness, these instruments link financial solidarity to shared goals, creating a virtuous circle of reciprocity: common standards require solidarity, and solidarity makes common standards necessary.
Under ESF+, at least a quarter of national allocations must target poverty reduction—an approach that, to prevent free riding, presupposes binding minimum standards such as adequate minimum incomes. Food aid through the Fund for European Aid to the Most Deprived (FEAD) must not become a Trojan horse undermining national social assistance but rather complement and strengthen existing systems. The Social Climate Fund, financed through emissions-trading revenues, redistributes resources to countries and citizens most affected by the extension of emissions trading to buildings and transport (ETS2). This too requires a social level playing field—one in which national welfare states are bound to make sufficient efforts of their own to enhance social inclusion.
This interdependence between solidarity and common standards represents a quiet revolution in European governance. Unlike traditional federal systems, where redistribution follows from political union, the EU is creating solidarity mechanisms that drive political integration from below. Each crisis—financial, pandemic, energy—has strengthened this dynamic, making retreat increasingly difficult.
Europe is not building a federal welfare state but a multi-tiered Eco-Social Union—a framework that supports, guides and complements national systems while respecting their diversity. Its foundations are already visible in shared social and ecological goals, hard and soft law, monitoring systems and EU funds tied to social and climate objectives.
The process is neither linear nor perfect. Climate and social policies still run on separate tracks too often, and the shift from narrow, work-centred social rights to a broader agenda of social inclusion remains hesitant and slow. Today we are living through a phase of regression, yet the direction is unmistakable. Pursuing shared social and ecological goals will only grow in importance—for the Union’s unity, its global standing, its security and the wellbeing of its welfare states and citizens.
As the financial, economic and health crises have shown, this calls for interstate solidarity—and that very solidarity, in turn, depends on common binding standards. This interdependence is what makes the Eco-Social Union increasingly necessary and irreversible. Each step forward creates constituencies and institutions with stakes in further progress, while retreat would unravel carefully constructed compromises.
Critics dismiss “Social Europe” as rhetorical window dressing. But today’s architecture tells another story. Europe has quietly assembled a socio-ecological policy framework that rivals any comparable project in the world. No other supranational entity has attempted to link social protection, environmental sustainability and economic integration at this scale.
The stakes could not be higher. The twin transitions—green and digital—will test social contracts across the continent. Yet if Europe can sustain the course, the integration of its social and climate frameworks could yield the defining policy model of the 21st century. The infrastructure is there: monitoring systems that track both carbon emissions and child poverty, funds that link climate action to social protection, governance mechanisms that coordinate without centralising.
To return to Polanyi: in 1944, the “new” was the national welfare state, built on social security systems that were already taking shape. So too with Europe today—when the new is finally born, it will have its infrastructure ready to build an Eco-Social Union where solidarity is both moral duty and functional necessity. The regression we witness today may prove to be the darkness before dawn, the final resistance before transformation becomes irreversible.
Bea Cantillon is emeritus professor at the University of Antwerp, chair of the University Centre Saint-Ignatius Antwerp and member of the Herman Deleeck Centre for Social Policy.
