1. The EU and social policy The case for a European Social Union Frank Vandenbroucke Summer School ‘The EU Inside Out’ 22 May 2015

2. Main argument A basic consensus on the European Social Model and the role the European Union has to play (and not to play) in the domain of social policy… … is not a luxury. It is an existential necessity.

3. Structure of the presentation The diversity of European welfare states Why is a basic consensus on social policy a necessity? – Eurozone – EU28 Which solidarity? The idea of a ‘European Social Union’ Example: social investment as a common ambition Policy recommendations & tough nuts to crack

4. The diversity of EU welfare states Input: expenditure on social protection, gross, in % of GDP (2010)

5. The diversity of EU welfare states Outcome: a two-dimensional map of outcomes

6. The diversity of EU welfare states: poverty Poverty risk and poverty threshold: “national” conception (SILC 2010)

7. The performance of European welfare states

8. The welfare state is not ‘the problem’

9. Structure of the presentation The diversity of European welfare states Why is a basic consensus on social policy a necessity? – Eurozone – EU28 Which solidarity? The idea of a ‘European Social Union’ Example: social investment as a common ambition Policy recommendations & tough nuts to crack

10. The consequences of monetary unification

11. Transfers might mitigate the symmetry/flexibility trade-off

12. The EU’s way: more symmetry, more flexibility Flexibility determines social order Institutional advantage of coordinated bargaining Competitiveness: symmetrical approach necessary => convergence

13. Defining the EMU’s social objective is a necessity rather than a luxury EMU forces upon the member states a shared conception of flexibility A basic consensus on the functioning of the social model is necessary for the long-term sustainability of EMU – short term: stabilisation – mid term: a symmetric guideline on wage cost competitiveness & institutions that can deliver – long term: sustainability of pensions Symmetry => convergence w.r.t. fundamental parameters => shared objectives Legitimacy => convergence in prosperity ‘excessive social imbalances’ associated with inadequate and disparate investment in human capital

14. The human capital asymmetry: employment and formal educational attainment

15. Why a ‘European Social Union’? an inevitability of European Monetary Union integration and social regulation in EU28 – Social dumping? – Social sovereignty? the very core of the European project.

16. Why a ‘European Social Union’? an inevitability of European Monetary Union; Freedom of movement and national social cohesion in EU28: – Social dumping? – Economic freedoms  right to strike (Viking, Laval) the very core of the European project.

17. Social dumping…

18. … or “convergence machine”? Source: Lefebvre and Pestieau, Peut-on mesurer la performance de l’Etat Providence?

19. Why a ‘European Social Union’? an inevitability of European Monetary Union; Freedom of movement and national social cohesion in EU28: – Social dumping? – Economic freedoms  right to strike (Viking, Laval) the very core of the European project.

20. Why a ‘European Social Union’? an inevitability of European Monetary Union; Freedom of movement and national social cohesion in EU28: ‘a balancing act’ – Social dumping? – Economic freedoms  right to strike (Viking, Laval) Two dimensions of solidarity: domestic (national) and pan- European

21. Why a ‘European Social Union’? an inevitability of European Monetary Union; Freedom of movement and national social cohesion in EU28: ‘a balancing act’ – Social dumping? – Economic freedoms  right to strike (Viking, Laval) Two dimensions of solidarity: domestic (national) and pan- European

22. Structure of the presentation The diversity of European welfare states Why is a basic consensus on social policy a necessity? – Eurozone – EU28 Which solidarity? The idea of a ‘European Social Union’ Example: social investment as a common ambition Policy recommendations & tough nuts to crack

23. A European Social Union A Social Union would support national welfare states on a systemic level in some of their key functions guide the substantive development of national welfare states – via general social standards and objectives, leaving ways and means of social policy to Member States – on the basis of an operational definition of ‘the European social model’.  European countries would cooperate in a union with an explicit social purpose, pursuing both national and pan-European social cohesion

24. Convergence in prosperity: the social investment imperative A social investment agenda (cf. Europe 2020, SIP) – Child-centred social investment strategy – Human capital investment push – Reconciling work and family life – Later and flexible retirement – Migration and integration through education and participation – Minimum income support and capacitating service provision The political deal the EU needs is one wherein all governments pursue budgetary discipline and social investment, and are supported therein in a tangible way by the EU.

25. Spending on education 2004-2008-2012

26. Spending on education 2004-2008-2012 and PISA results

27. Convergence in prosperity: the social investment imperative A social investment agenda (cf. Europe 2020, SIP) – Child-centred social investment strategy – Human capital investment push – Reconciling work and family life – Later and flexible retirement – Migration and integration through education and participation – Minimum income support and capacitating service provision The political deal the EU needs is one wherein all governments pursue budgetary discipline and social investment, and are supported therein in a tangible way by the EU.

28. Structure of the presentation The diversity of European welfare states Why is a basic consensus on social policy a necessity? – Eurozone – EU28 Which solidarity? The idea of a ‘European Social Union’ Example: social investment as a common ambition Policy recommendations & tough nuts to crack

29. The case for a European Social Union support national welfare states on a systemic level in key functions (e.g. stabilization) guide the substantive development of national welfare states – via general social standards and objectives  symmetric w.r.t. to competiveness (wage policy & capacity to deliver)  social investment  minimum wages and minimum income protection  solidarity in reform – leaving ways and means of social policy to Member States

30. The case for a European Social Union support national welfare states on a systemic level in key functions (e.g. stabilization) guide the substantive development of national welfare states – via general social standards and objectives  symmetric w.r.t. to competiveness (wage policy & capacity to deliver)  social investment (investment in and protection of human capital)  minimum wages and minimum income protection  solidarity in reform – leaving ways and means of social policy to Member States

31. The case for a European Social Union support national welfare states on a systemic level in key functions (e.g. stabilization) guide the substantive development of national welfare states – via general social standards and objectives  symmetric w.r.t. to competiveness (wage policy & capacity to deliver)  social investment (investment in and protection of human capital)  minimum wages and minimum income protection  solidarity in reform – leaving ways and means of social policy to Member States

32. The case for a European Social Union support national welfare states on a systemic level in key functions (e.g. stabilization) guide the substantive development of national welfare states – via general social standards and objectives  symmetric w.r.t. to competiveness (wage policy & capacity to deliver)  social investment  minimum wages and minimum income protection  solidarity in reform – leaving ways and means of social policy to Member States Tough nuts to crack

33. Thank you! 1.F. Vandenbroucke, The Case for a European Social Union. From muddling through to a sense of common purpose, Euroforum Policy Paper, Sept. 2014 www.kuleuven.be/euroforum/papers www.kuleuven.be/euroforum/papers 2.F. Vandenbroucke, with B. Vanhercke, A European Social Union. 10 Tough nuts to crack, Friends of Europe, Spring 2014 http://www.friendsofeurope.org http://www.friendsofeurope.org 3.Unequal Europe. Recommendations for a more caring EU. Final Report of the High-Level Group on Social Union, Friends of Europe, Spring 2015 http://www.friendsofeurope.orghttp://www.friendsofeurope.org