Social Europe: Scorched Earth or Fertile Ground? - roundtable

04/04/2012

Event report

This report provides an overview of the third roundtable in the Reforming European Economic Governance series, which took place on 7th March 2012. The roundtable brought together speakers from across Wales, the UK and Europe to explore the implications of the economic and financial crisis for the future of 'Social Europe' and the 'European Social Model'.

The worsening economic and financial crisis within Europe has driven national governments to adopt severe austerity measures and economic reforms, triggering social unrest and protests in many European States, notably Greece and Hungary. The crisis has potentially far-reaching consequences for the vision of ‘Social Europe’ or a ‘European Social Model’ which combines sustainable economic growth and improved living and working conditions. Furthermore, the perception that these reforms have been forced upon States by the European Union and International Monetary Fund has significantly challenged the legitimacy of European integration. Although the European Commission has stressed the importance of balancing austerity measures with strategies for generating growth and job creation, there is increasing concern that the social agenda within Europe is being sacrificed in favour of fiscal discipline.

Future of the European Social Model

The roundtable began with Dr Owen Parker (University of Sheffield) and Professor Dan Wincott (Cardiff University) discussing the characterisation of the ‘European Social Model’ and its perceived demise in the face of Europe’s liberalising tendencies. Dr Parker argued that the character of the ‘European Social Model’ – defined as a social counterpoint to economic liberalisation – had been shaped by different national contexts across the European Union. Professor Wincott highlighted Sapir’s fourfold categorisation of social models – Nordic, Continental, Anglo-Saxon and Mediterranean – and noted that these categories combined both social and growth models. Furthermore, Dr Parker and Professor Wincott argued that the identification of distinct social and growth models within Europe may provide a useful foundation in analysing the nature and responses to the current economic and financial crisis – which similarly appears to have manifested in different forms across different Member States. Overall, claims that the process of liberalisation had undermined the ‘European Social Model’ and constrained national autonomy were questioned by the speakers but they noted that recent responses to the economic crisis provided a renewed challenge.

European Commission's commitment to social policy

The second speaker, Mr Egbert Holthuis from the European Commission, provided an overview of the role of social policy in the Commission’s response to the crisis. He noted that individual European States and the wider European labour market faced a range of severe structural challenges – including an ageing society, increased inequality within and between Member States and the increasing problem of young people not in education, employment or training (NEETs). Furthermore, the evidence suggested that the ‘trickling down’ of wealth had not occurred in the economic good times prior to the crisis and unsurprisingly inequality and unemployment rates were on the rise since its beginning. Mr. Holthuis noted that social policy was relatively recent addition to the European agenda and remained primarily the responsibility of Member States. However, he stressed the key role that social inclusion plays within the Europe 2020 agenda and that social policies were not a luxury but a crucial pillar in encouraging smart and sustainable growth.

Importance of flexibility

Mr Matthew Percival, Confederation of British Industry (CBI), provided an employer’s perspective on the social policy agenda and the European Union’s response to the economic and financial crisis. He stressed that the European Union and the Single Market remained of crucial importance to employers within the UK but that a recurring challenge was the tendency of European institutions to seek to micro-manage labour markets. There was a real danger that regulations originating in Europe could stifle competitiveness and attempts to develop more flexible responses on behalf of employers. Mr. Percival argued that rather than an adversarial relationship, a mutual benefit employment relationship had emerged between employers and workers – highlighted by initiatives during the recession to prevent job losses. In his view the approach of the Commission threatened to constrain the flexibility needed to develop similar approaches in the future and that a ‘one-size-fits-all’ approach would fail to encourage growth and employability.

Challenging discourse and narratives

The fourth speaker, Dr. Philippe Pochet, European Trade Union Institute (ETUI) argued that the narrative of a ‘European Social Model’ that emerged in the late 1980s and early 1990s under Jacque Delors, President of the European Commission, had been increasingly challenged by recent developments driven by Mario Draghi and the European Central Bank. However, he noted that whilst there was this change in narratives at the European-wide level, the impact of the crisis at the national level had varied across Member States. Indeed the ‘open method of coordination’ had relatively little impact and a range of contrasting ‘national narratives’ had emerged. Dr. Pochet challenged the discourse and perceptions that has emerged in response to the economic and financial crisis at the European level. He argued that concepts such as ‘Smart Growth’ simply papered over tensions within policy-making and that the characterisation of the crisis as a ‘crisis of debt’ and the austerity measures which have followed have been driven by ideological priorities rather than a coherent evidence base. Finally he concluded by noting that the absence of democracy within the responses to the perceived crisis threatens to cause unrest and problems for European integration in the long term.

Wales and the European Union

The final speaker, Alun Davies AM, Deputy Minister for Agriculture, Fisheries, Food and European Programmes, provided an overview of the Welsh Government’s engagement with the European Union and the challenges which lay ahead for Wales within the context of the economic crisis. The Deputy Minister emphasised that the Welsh Government was ‘firmly pro-European’ and wanted to further strengthen and deepen its relationship with the European Union. However, this objective needed to be balanced with Wales’ continued role as part of the wider UK team, even when the priorities of the Welsh and UK Government may not be aligned. The Deputy Minster noted the substantial benefits that Wales had received from European funding but reflected that a core aim of the Welsh Government was to ensure that no part of Wales qualified for the highest level of structural funds in future rounds. He stressed that the policy agenda being pursued by the Welsh Government would hopefully complement the Commission’s priorities on social inclusion and combating poverty.