The Restructuration of the European Social Model Brussels 16 November 2012 Mahmood Messkoub Int. Institute of Social Studies (Erasmus University of Rotterdam) The Hague 1

European social model or national models? National social models and responsibilities Social model as the objective and outcome of economic and social policies at the level of nation state… building a nation state … BUT EU Directives: e.g. ‘The basic provision in the EC Treaty "Each Member State shall... ensure and... maintain the application of the principle that men and women should receive equal pay for equal work" (Treaty of Rome art 141)Treaty of Rome art 141 EU Laws…national implementations… …national compliance….or go to EU to test compliance… 2

Common denominators of the social policies across EU Reducing the role of market (de-commodification) in the provision of livelihood and means to achieve it Areas of intervention: e.g. health, education, housing …also…: minimum standard for working hours, working age, minimum wage, labour rights and protections, Gradual increase in scope of provisions (up-scaling), e.g. cover for medical provisions in case of accident is extended to general health problems. Gradual increase in scale of provisions, extension from one target group such as military to civil service to rest NB Reduce Vulnerability, (increase flexibility?) 3

…from de-commodification to universalism… ….A matter of degree… Need is the standard criterion for the use of services and goods, and not ability to pay Limited redistribution of output Limited redistribution of assets, e.g. through inheritance tax Constraints on accumulation BUT income and asset inequalities reduced and not eliminated. National solidarity is the underlying principle of universalist approach… financed through taxation, income generated from productive activities of the state and its control of national mineral resources 4

….Impact of Crisis…Unemployment… Increase in: Unemployment (10%), esp. of youth (EU21%, over 50% in Greece and Spain, 30% Ireland), low skilled (15%), and migrants (20%) Long term unemployment (40% of total) Incentive to work? In 2010: 7 times more unemployed people than job vacancies in the EU, 76 in Latvia, 39 in Ireland, 27 in Portugal, 21 in Spain, 16 in Greece Lack of demand or lack of incentive to work? 5

….Impact of Crisis…Poverty… Before the crisis – no decline in poverty, (16%) despite boom years of growth and jobs 2011: 115 million (23.4%) - increase of 2 million. Unequal impact - 40%: Bulgaria, Romania BUT 15%: Czech Rep., Netherlands, Sweden Worst hit groups - youth, children and families, but also long term unemployed, migrants/ minorities. Eviction and Homelessness on increase (e.g. Spain) Suicide on increase Poverty whilst employed: 1/3 of the poor Ref.: (EAPN, 2012) 6

….Did workers and poor caused the Crisis….? Origin of global crisis in the financial sector National crisis triggered by global crisis Origin of national crises varies (e.g. housing market in Spain, poor monitoring and corruption in Greece) Large budget deficit in all countries? No! Are all EU countries in ‘crisis’? No! 7

…Some Indicators… Country (Debt /GDP) %(Budget Deficit/GDP) % Greece15010% Luxemburg191 Netherlands635 8

…Crisis…’Solutions’?... Different causes….same solutions… Budget deficit to be cut below 3%...to zero Cuts in public expenditure: – Health – Education – Social welfare – Pension – Bring MARKET back 9

….Crisis….Social Agenda… What happens to jobs and employment and in general income earning opportunities? What happens to social spending? What happens to social transfers? 10

….Crisis….Social Policy … (variation across EU) Vouchers in Education Partial privatisation in Health and education Public services privatised User charges Reduction in minimum wage Increased hours worked Increased work intensity Weaker employment protection Raising retirement age Reduction in pensions Salary Freezes Increase in VAT Work as the source of security. Flex-security or flex-insecurity? 11

Are there any alternatives? Social policies on EU economic policy agenda Link social indicators to financial indicators (e.g. poverty rates and budget deficit targets) Who should bear the burden of adjustment? Rich or poor? Equal share? No! Asymmetric Solidarity: higher taxation on rich Social support to poor in crisis countries Protect welfare budget of children and youth Organise against cuts in non-crisis countries Undermining of social model bigger threat to EU than Euro and financial crisis 12