Europe’s social dilemma

Of all the items on the agenda of the British EU presidency, perhaps the least expected is a debate on ‘social Europe’. Tired of being crudely caricatured as ‘neoliberal’, Tony Blair has invited EU leaders to an informal summit in October to discuss the future of Europe’s social model. Blair, like other European leaders, has been struck by the strong opposition to the constitutional treaty, based partly on fears of an overly liberal EU. In France, the Netherlands, and even Luxembourg, a majority of blue-collar workers voted No in the recent referendums.

What some of those calling for more ‘social Europe’ really want is more protectionism. But their fears of low-cost competition from the new member-states and emerging Asia cannot simply be dismissed. Unless EU leaders reassure voters about the future of Europe’s social dimension, they will not get public support for much-needed reforms, such as the opening of EU services markets.

Beyond a vague commitment to ‘social Europe’, EU governments are struggling to find common ground. The term itself is shrouded in confusion. It stands for two overlapping, but very different, sets of policies: first, the welfare and labour market policies of the member-states; and second, the EU’s limited interventions, such as laws on maternity leave.

All EU countries face similar challenges to their social models: ageing populations, low-wage competition from Asia, and in some places high unemployment and sickly growth. Some member-states are struggling to adapt, while others – particularly in northern Europe – show that countries can prosper without discarding social standards.

But a debate about national welfare reforms – however useful – is unlikely to satisfy those who want the EU to develop a more tangible social agenda. Trade unions and some EU governments have long argued that the EU must develop a concrete social agenda to ‘balance’ the liberalising impact of the single market.

However, most social policy – from education to unemployment insurance – remains the preserve of national governments. The EU has only limited scope for social polices, in three areas: First, the EU has passed rules against discrimination at work, be it on the basis of gender, race or age. These rules have helped women, minorities and older workers in the more socially conservative,member-states. Second, the EU has developed a raft of health and safety regulations. Most of these are uncontested, although they have sometimes proven costly and cumbersome to implement.

Thirdly, and more controversially, the EU has adopted a few labour market regulations, for example limits on weekly working hours and requirements to consult workers. The EU’s occasional forays into labour market policy are the worst of both worlds: too little to satisfy those who want a stronger social Europe; but sufficient to prompt criticism that it is imposing ‘one-size fits all’ policies on member-states’ labour markets.

The danger is that some EU leaders will respond to pressure for a more social Europe by proposing a raft of new labour market rules – when most member-states are moving in the opposite direction. In an EU of diverse labour market practices, such rules would either be so weak as to be meaningless, or risk harming job creation in some member-states.

The EU should not (and cannot) become the focal point for social policy. What the EU needs is not extra rules or powers, but a new narrative that better explains, and advocates, its social dimension. First, EU leaders should refocus the ‘social Europe’ debate from policies to values. It is much easier to show that ‘social Europe’ is based on common values than on a non-existent single social model. This implies that while EU countries share social goals, they will not follow the same path to reach them. Second, EU leaders need to make it clear that – although the EU is not the right vehicle for delivering social policies – it does, and should, take the lead on a number of ‘progressive’ issues, such as environment and development policies.

Finally, European leaders need to place greater emphasis on the social aspects of the EU’s Lisbon reform agenda. After all, Lisbon was drawn up in 2000 by a (then) majority of centre-left governments, and seeks to help member-states not only preserve but also revitalise their social models. This is the proper role for the EU – supporting national social security reforms through peer pressure, benchmarking and best practice. Such an approach will not yield quick results, and many trade unionists and left-of-centre politicians will continue to demand more direct EU intervention. But then there is no such easy answer to Europe’s social dilemma.