Is the coronavirus going to reshape the European welfare state?

In the wake of the pandemic, the classical variety of national welfare models must be transformed into a multi-level social citizenship.

Stefanie Börner

At the beginning of the pandemic, strong government interventions and border closures unleashed a debate on the ‘renationalisation’ of politics. Yet, several months on, it is quite clear that the coronavirus crisis is strengthening not the nation-state but the welfare state. The question is: what will remain of this insight in the long run? 

Will austerity and privatisation leave the global stage and make room for a welfare rebound? Will the awareness of the most socially vulnerable labour-market groups last, or will economic considerations overshadow these groups’ needs over time, given the negative economic impacts of the pandemic? Will renewed state-market relations arise from the coronavirus crisis, thus redefining the ‘nightwatchman’ role of the neoliberal state? 

The answers to these questions will indeed be partly national ones. But this would not be the complete story: it would simplify the complexities of today’s multi-level governance in Europe, including the roles of the subnational and supranational levels.

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Three stages

With respect to infection numbers and policy responses, Europe witnessed two initial stages of the pandemic. With the onset of autumn, Europe has entered a third stage, marked by a steep rise in infections, moderate policy responses and regional rather that nationwide restrictions. 

During the first stage, when infections were highest—and strict policy responses, such as lockdown and social distancing, were required—social policies were oriented towards direct support, with temporary expansions or facilitation of eligibility, provisional increases to some benefits and suspension of conditionality. During the second stage, when infections were lower during the summer and lockdown measures were eased, social and labour-market policies, such as the one-off German child bonus, were tailored towards stimulating the economy and getting people back into work. 

States, such as the UK, which have long favoured deregulation, privatisation and ‘market efficiency’ have had to make greater efforts than generous welfare states, such as Sweden, Denmark or Germany. While Sweden was spared the painful experience of closed kindergartens, schools, shops, restaurants, it is still unclear whether it is better off economically in the long run, compared with those countries that faced lockdown periods. Yet the path taken by the Scandinavian country emphasises a personal autonomy which also belongs to the DNA of social citizenship. 

By European standards, Sweden and Denmark have provided the most generous allowances for short-time working. While short-time work allowance is still the instrument of choice, its long-term effectiveness might be limited, given the severity of the slump and the prospective expiry of short-time contracts. Therefore, the list of economic and company support measures has lengthened: corporate grants, credit schemes, tax cuts, deferrals and temporary reductions of value-added tax. 

Since not only the ‘big spenders’ but all welfare states rely on taxes and social benefits, this focus on economic recovery and the workforce is understandable. Yet it misses out on important lessons the pandemic-induced crisis has taught.

Health and social risks

While during the first stage those directly affected by the lockdown and the so-called essential sectors received a great deal of attention, not much is left of this attentiveness months later. As a recent UK study shows, the much-praised essential workers face the most pandemic-related health and social risks because they do not work at home, belong to the low-paid sector, are ‘over-represented in temporary and part-time work’ and are at risk of unemployment and social deprivation. So the question as to how to shape the future of work is not limited to the much-discussed digitalisation, but must take in income stability, the inclusion of precarious workers and a revaluation of the social-service and care sector as well.

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A second (linked) question is how to prevent the most vulnerable from being excluded. Existing and adjusted stage-two measures benefit especially the better-off workforce and render labour-market participation the major gateway to social participation. Surprisingly few countries have reacted to the fact that the coronavirus crisis deepens income divides. The Spanish government, for instance, finally approved of a long-debated, guaranteed-minimum-income scheme in May. In Belgium social-assistance recipients have received a monthly supplementary payment of €50 for six months. Both approaches strengthen citizens’ social rights by weakening ‘deservingness’ considerations.

Thirdly, the pandemic provides an opportunity to rethink the connections between climate neutrality, a sustainable economy and social security. Denmark was among the first states to link economic development to the expansion of climate-neutral technologies and sustainable corporate investments, such as climate-neutral housing and renewable energy. In May, Norway launched a green-transition package, which aims to invest in hydrogen, renewable energy and a circular economy. And although less ambitious than needed, the European Union’s €750 billion recovery package includes stimuli for member states to make green investments.

Transnational solidarities

Last but not least, the pandemic reveals nothing more clearly than the transnational interrelatedness of social life and the economy on the one hand, and the multiplication of territorial levels crucial to social politics on the other. The struggle against Covid-19 could act as a motor of international co-operation, transnational solidarities and supranational policy solutions. Conversely, the crisis bears the risk that significant EU achievements could get lost: migrants’ rights, free movement within the single market or international student mobility. 

Especially since all these are Europe-wide phenomena, political leverage and foresight could turn the pandemic experience into a multilevel approach, combining national, sub- and supranational action in the (interrelated) areas of social minima, work, the green transition and public health. Taken altogether, this would comprise a comprehensive and sustainable European social citizenship.

In contrast to previous crises, the coronavirus crisis poses challenges in all welfare fields—health, labour-market and unemployment policies, social services, family and the elderly—without questioning the role of state intervention. The pandemic made us rediscover society, as the sociologist François Dubet has put it.

The lockdown has made us aware not only of the social division of labour, the functioning of organisations and the way we depend on each other, but also how this intersects with personal autonomy as well as fundamental and social rights. Each society (in Dubet’s traditional sense of national society) is deeply intertwined with its domestic welfare regime: the ways we plan our careers, look at certain social groups and consider questions of solidarity and justice are shaped by how social security and education are organised and work is regulated. 

Nordic model

From the perspective of social citizenship, the Nordic welfare model is an especially thorough method of linking the state to the lifeworld of individuals. It is relatively generous and woman- and family-friendly and offers free or highly-subsidised services. There is however no standard recipe, given European countries’ extreme divergence on economic and labour-market performance, not to mention exposure to Covid-19.

The experience of the pandemic rather calls for a great transformation and modernisation of social citizenship: universal social rights, which end the exclusion of those in precarious employment; transnational rights, from free movement to social entitlement, which endure amid shocks; and the goal of climate neutrality aligned with social imperatives. The question is thus not whether the European welfare state ‘might be here to stay’, but which path it will take.

This is part of a series on the Coronavirus and the Welfare State supported by the Friedrich Ebert Stiftung