Iain Begg (photo: CC BY 2.0 Chatham House)
Because of the depth, intensity and duration of the series of crises that have affected the EU over the last five years, fire-fighting and action to reform the institutional framework for economic governance have dominated the policy agenda. It is little surprise, therefore, that ‘social Europe’ has lost traction, although as Bart Vanhercke has argued rather more has gone on ‘under the radar’ than is sometimes acknowledged.
Gradually, the acute phase of the crisis is passing, though multiple economic fragilities and political risks persist. By contrast, the social legacy of the crisis is increasingly being recognised as a major new policy challenge that will have to be confronted. In parallel, the EU will have to contend with long-run transformations resulting from ageing of the population and from societal change.
As findings from the NEUJOBS project show, the transitions in prospect will require a comprehensive policy response. Although there has been a spate of EU initiatives in response to evident social challenges such as youth unemployment or the incidence of poverty, it is unrealistic to expect these interventions to make much of a difference rapidly, even if they can be thought of as the right direction to take. Moreover, as I explain elsewhere, there are too many respects in which EU policy is prone to be tangential to the real policy debates and of too little consequence to have much impact.
Thus, although a social dimension is prominent in the Europe 2020 strategy, the strategy as a whole seems to have been side-lined compared with the more pressing business of the eurocrisis or because of the degree of policy attention commanded by the European Semester. Also, as the EAPN (in its response to the 2014 public consultation on the future of Europe 2020) and others have stressed, there is an imbalance within the strategy between measures aimed at growth, competitiveness and jobs and the apparently much lesser weight given to social cohesion.
Looking beyond the immediate problems associated with the aftermath of crisis and even of the medium-term aims of Europe 2020, three broad facets of social Europe deserve attention. The first is that low and erratic economic growth has become a fundamental challenge, not just because it restricts the resources potentially available for the welfare state, but also because it calls into question the role of the state in mitigating risks. It cannot be efficient for the state to step back too far from social matters because of the need for fiscal consolidation. Macroeconomic and fiscal sustainability, in other words, appear to be a constraint on social sustainability. Yet in some ways the reverse is also true, insofar as adaptation of the social model is necessary for a more sustainable macroeconomic position, a proposition central to the logic of social investment as a supply-side policy. It is clear, though, that the pace and direction of welfare state reforms varies significantly among EU Member States, potentially storing up future problems. These will be all the more serious to the extent that they are concentrated in those countries facing the greatest difficulties in dealing with the new demands engendered by the crisis.
The new European Commission under Jean-Claude Juncker has work to do to strengthen the social dimension of European integration (photo: © European Commission 2014)
Second, social change calls for reappraisal of how policies are funded, targeted and delivered, as well as the model that underlies them. For example, an ageing population will place new demands on the health and long-term care sectors, much of which is met by the provision of social services of general interest (SSGI). However, these services face constraints over and above funding. NEUJOBS research has shown that the workforce in these sectors – predominantly female – is itself ageing, with the implication that ensuring a future supply of labour will have to take account not just of a growing demand for such services, but also a high rate of replacement of existing workers. There are several plausible ways of meeting this demand, but they pose further social challenges. Examples studied in the NEUJOBS project include how to facilitate active ageing, effective work-life balance policies to reconcile work and parental and other care obligations, immigration and the inclusion of the most disadvantaged groups, including ethnic minorities such as the Roma.
Third, as a paradigm, rather than just a list of policy preferences, social investment appears to offer a way forward for a revived European social model. But in developing its practical application in the EU, the legal and institutional framework would benefit from some clarification. There is ambiguity about the degree to which the approach acknowledges rights alongside obligations. There will also be issues around the means by which social policy interventions are delivered. For SSGI, for example, the balance between public and private provision and the associated impact on access to services will have to be addressed.
A more social Europe has, in the past, been viewed through the lens of distributive politics and, latterly, as part of the debate around austerity policies. But long-term transformations also have to enter the discussions and become part of the narrative of defining what the EU is for.
Iain Begg is a Professorial Research Fellow at the European Institute of the London School of Economics. He is an experienced applied economist who has published extensively on economic integration and EU economic policy issues.