At the end of 2002, a high-level panel of social and labour experts was asked to find a way forward for social policy in an enlarging European Union. Their report demonstrates how the European social model can maintain its central place in a functioning market economy.
A commitment to social welfare has been an underlying principle driving the European project. In March 2002 in Barcelona, the Council of Ministers reaffirmed its obligation to maintaining Europe’s prized social model, which it defined as being based on “good economic performance, a high level of social protection and education and social dialogue”.
Yet many have raised concerns about the EU’s ability to keep social and economic policy on an equal footing as it deals with globalisation and enlargement. The expansion of EU borders brought celebration, but it also raised fears, particularly in the founding member states, that social solidarity may be corroded. Concern revolved around accelerated ‘delocalisation’ or the outsourcing of labour to lower-wage countries, as well as social dumping and unfair tax competition.
Conversely, there are those who argue for more economic reform in Europe. Without greater liberalisation and competitiveness, Europe will not be able to afford its expensive social model in the future, they argue. Thus, a central challenge has been to find the right balance between economic and social policies – while at the same time maintaining wavering public support for more European expansion and deeper integration.
The mass migration myth
Identifying the path forward in an enlarged EU was the High Level Group’s mission. Made up of labour experts, academics and former politicians, the group published its report in May 2004, just as the Union was embracing its ten newest members. On the question of enlargement, the authors base their conclusions largely on the lessons learnt from the previous wave of expansion in southern European. But on the issue of whether, in a globalising world, social policy should take a back seat to economic reform, the experts were unequivocal: “An enlarged Europe [should] keep the balance between economic and social policy, even if this balance must move along with the world economy and the evolution of our societies.”
The authors recognise that challenges lie ahead – specifically, enlargement, an ageing European population and globalisation. The report debunks most fears about enlargement – such as mass migration from poorer to wealthier states – but notes that these concerns must be addressed, not ignored. It identifies the greying of the European population as a significant problem and urges action within the next five years: “The last window of opportunity before the working age population begins to shrink.” Here, the report puts particular emphasis on the need to get young people into the workforce as early as possible.
Young at risk of poverty
The authors say that globalisation can provide opportunities for job creation, but add that stronger commitments in Europe to “lifelong learning” policies will help protect people against inevitable job losses. Globalisation, too, will put pressure on the European social model, which the experts argue will have to adapt if it is to be sustained. The report recommends a more equal distribution of the overall tax burden on all forms of revenue, including profits, labour income, consumption, property and pensions.
There are other concrete policy recommendations covering areas, such as employment, social protection and demography. The authors urge the architects of the EU’s next social agenda to take five main messages from their report. These include not forgetting young people which the report warns are as much at risk of poverty in Europe today as the elderly; developing “more selective and better integrated immigration”; and defining “common objectives” in an enlarged EU.
In all, the report of the High Level Group, in a succinct, constructive form, demonstrates how social policy can maintain its central place within the framework of a market economy. The architects of the EU’s social agenda for 2006 to 2010 clearly felt the same, as they included several of the group’s recommendations in their February communication.
Read the full Report of the High-Level Group on the future of social policy in an enlarged European Union