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Constitution, Social Europe, and the Failed Peace Project

An in-depth analysis of the complexity of the issue of social policy in the EU

, by Piia Pappinen

All the versions of this article: [English] [italiano]

The unhappiness about social security aspects of Europe have been pinpointed as the reason for turning down the Constitution. The real reasons behind the rejection to Constitution can be debated, and different opinions still remain. This article looks at the interconnectivity of the social policy issues with the functioning of the EU and the relationship between the different levels (European vs national).

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According to the latest Eurobarometer, 45% of Europeans are afraid of unemployment, compared to 24% who fear insecurity and crimes. It is a fact that unemployment levels are too high in most of the EU-countries. The stagnating economies and opening of labour markets to competition are perceived as a threat - whether it can be theoretically justified or not. Why then, do the leaders of Europe still prefer to concentrate on strengthening the HJA-dimension of EU rather than start talking about the need for social policy dimension to EU?

The Constitution was the ill-starred victim of member states vilifying attacks on EU for decades. How should the citizens know who to blame for unemployment, since the institutional and decision-making structure is an incomprehensible entity, politicians are deliberately misleading people by blaming EU for all the misery they actually have produced. The other factor for turning down the Constitution shouldn’t either be overlooked. 56% of the French and 54% of the Dutch were for “a Constitution”. Thus, they chose to turn this Constitution down, because the first time, when their opinion was asked about the direction of EU integration, they could say that they wanted less weight to be put on free movement of capital and goods, and more social rights, and jobs, i.e. “positive” freedom aspects of EU rather than just “negative” freedom. Actions at EU level, in the field social policy are the key to gaining the lost legitimacy of EU back from the citizens, and getting the missing support for Constitution and the whole European project.

Who came up with the idea of EU after all?

“Economic interdependence and the diminished capacity of the nation-state to provide security and prosperity created the necessity of international, transnational or supranational cooperation. Integration helped safeguarding national allegiance by securing that the wide middle classes, labour and agricultural producers stay silent. The inclusion and (incomes) protection of the agricultural sector, namely CAP, was equally viewed as necessary for allegiance as this sector had proved especially susceptible to non-democratic and extremist political pull.” (Kees van Kersbergen)

According to many theorists, EU is just an extension of politics run by national governments. EU-level policies we’re created to buy those social classes’ silence, which we’re especially prone to endanger the social consensus, peace and order. CAP is a school-book example of these dynamics and its prominence and the share in the EU budget is a remnant from this path-dependency. Pooling the subsidies system was the only way for nation states to preserve social peace and curb unemployment which is well known to boost extremist forces. This is one of the reasons for Member States convulsively grasp to CAP as it stands today. The political, financial and social costs of scrapping it are so big, that governments prefer to keep outdated production structures alive with artificial respiration. One of the biggest challenges ahead is the reform of CAP. The Finnish EU-presidency has the so called "CAP reform" on the agenda, but because of unanimous decision-making, extremely high political price to pay back at home and high social costs, fundamental reform is still far away.

Why have social policies remained in the competence of nation states and who has reaped the benefits?

“National allegiance is and remains the primary source of the political power of the elite that drives the integration process. This dependency relation explains why most social policies have remained the exclusive competence of national authority, why social policy is such a contested political domain in the European Union.“ (Kees van Kersbergen)

When national leaders realised the inevitable necessity for co-operation in the social security sphere, they chose a cunning strategy. To keep their dignity and impression of sovereignty on one of the most critical policy spheres, they introduced the open method of coordination (OMC). Considered de jure, OMC is not a binding legislative process, but produces as much harmonisation and convergence in social policies as stringent legislative processes would have resulted. The outcome is the same, except democratic scrutiny is missing. This is an ideal solution for nation states - on paper they keep on mastering their vital source of the national allegiance whilst gain from the added value created by co-operation and coordination of social policies. No surprise that member states are harvesting the fruits, and let the heads "in EU" roll when things go wrong. No wonder that citizens are lost and feel they are not heard when they don’t know how to point their finger at. Half of the Europeans estimate that EU is democratic, majority of these citizens from the new member states. Still only one third of the citizens think that their voice matters at all when decisions are taken in the EU. Clearly, a new concept of democracy has to be introduced to make people feel that their opinions matter. The fairest way would be by making Commission a political government, accountable to parliament with two chambers with equal powers, abolish closed-door intergovernmentalism, not to forget strengthening the European parties and establishing channels and instruments for participatory and direct democracy.

People are asking for social policy actions by EU

As recent developments show, there are also harmful side-effects produced by market integration, such as social dumping, which the member states alone can not effectively address. EU is in need of truly “European regulations” on social security or health and safety issues. This would also ensure the proper functioning of the four freedom of movement, by preventing the member states from using national regulations to impair freedom of person, goods, services or capital. Division of tasks, combined to democratic EU-institutions also in social policies would produce better policy results, make clear to citizens’ who is doing what and who is responsible for the failures and successes. Functional division of competencies between EU-level and member states - also on social policies - is the key to more efficiency and solutions to problems that member states can not handle themselves. European Social policy does not have to mean centralised financing system, but social policies co-ordinated between member states, and social policy co-ordinated with economic and monetary policy. Governments swim against the stream by never mentioning the usefulness of community actions on social policies, even less on financing them with any kind of EU-level taxation. The naked truth nevertheless is that 62 % of people are supporting some level of social policy harmonisation in EU. [1]

Against generally held conviction and expectations, popularity of EU crashed after Maastricht Treaty and introduction of euro. Widely held belief was that common currency would enhance EU reputation but the result was totally contrary. Also the loud battle “fought” against unemployment by nation states (which in the end has mainly remained as lip-service) is a crucial factor in keeping the national allegiance to themselves. Unemployment is waste of resources, but has also proven to be a threat to political order and obedience. EU could now decide whether it should try to steal back the allegiance from the member states and try to gain some of those fruits that really belong to EU-level. If EU-institutions are to think strategically now, they should take use of the one of the most powerful instruments of creating allegiance - social policy. It has been used for almost hundred years in an effective manner to generate loyalty to nation state. It is the easiest solution for balancing EU’s wide-ranging market-liberalism and gaining back the support of masses to the “multi-speed interaction of economic and political integration”, which sometimes is crudely dubbed solely as "a peace project" in the context of the two World Wars.

Social policy - the easiest solution for balancing EU’s wide-ranging market-liberalism and gaining back the support of masses to the “multi-speed interaction of economic and political integration”?!

CAP-example vividly shows that EU was created for maintaining social peace. The goal was not only to deter traditional war but to prevent social unrest. Peace means different thing to the generations grown up on the globalised era. For our generation Peace is not the absence of War. When for instance concept of “human security” covers wide selection of factors, the initial concept behind EU - peace - could also be understood in a wider sense. If EU is to be a “Grand Peace Project”, it should try to ensure peace between social classes and generations, the winners and losers of the sometimes ruthless competition of job security and decent living.

Federal solution to winning back the lost legitimacy of political integration

Given the logic of market integration and the growing interdependence between different policy spheres which have driven the Europeanization of policy-making, co-operation of social policies is inevitably going to be strengthened. What remains to be chosen, is whether people can have democratic control over these policies by creating a federal system, or if the governments keep on using OMC and soft governance instruments. By choosing the strategy of lacking accountability and missing democracy, the widely feared “Brussels’ creeping centralisation” is really taking over. Result from this will be ever more Euroscepticism and eroding legitimacy of EU. Since many people make the simple calculation of liberal market economy cherished by Brussels "equals to job losses, equals to the loss of sustainable livelihood” the vicious circle is there. As the fear of job losses grow among middle classes, the main base of support to European integration will be lost. Those social classes, that are not harvesting benefits from “four freedoms” to the extent of those belonging to the mobile Euro-elite, need tangible examples to realise the usefulness of the EU-integration project. EU has provably become a failed “social peace project.

National governments have been very effective in caricaturing EU as centralised evil when needed in order to claim all progress to themselves that is maybe gained because of EU-level actions.

Strict division of labour between market integration and social and welfare policies is artificial. Market-making and market-correcting regulations have to be in unison after interdependence is growing between these policy spheres. Despite this fact, liberal market policies and monetary policy are made at the European level when economic, welfare and social policy related decisions are mainly left to the member states. This formula of division of tasks was rejected by people in the form of the proposed Constitution. More than two thirds of EU-citizens want harmonisation of social welfare systems, especially younger citizens in the 10 new member states and Greece. Member states are confronting a double-edged sword. Because they would be loosing their most fundamental source of creating political support, national sentiments and allegiance, they still haven’t responded to the expressed wish of citizens to have a “Social Europe”. The starting point would be to take the challenge of starting to define what Social Europe actually means. As negative side-effects of globalisation and stronger lobbying power of capital is eroding the preconditions of member states to be able to run successful social policies, citizens’ allegiance to EU has crashed down along the national failures in mastering their social policies.

National governments have been very effective in caricaturing EU as centralised evil when needed in order to further their own nationalistic ambitions and claim all progress to themselves that is maybe gained because of EU-level actions. Filling in some of the power vacuum left by member states in social policy area, EU could be granted considerable amount of legitimacy.

EU is not legitimate in the eyes of people because the agenda and priorities of the EU-elite and average citizen are light-years away from each other. Why does the EU to-do-list start with fighting terrorists, gathering military forces and creating control mechanisms, rather than concentrating on employment, the number one threat for you and me? If EU was a democratic federation with functioning feed-in channel for citizens’ opinions, the agenda would surely look different. It is high time that citizens become the agenda-setters. For JEFers, the solution to make the interests of European citizens’, “Brussels’ ” and national governments to match, is to create a democratic federation, where effective political scrutiny and influence by people is enabled. Maybe the Social Europe also becomes reality after that.

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Footnotes

[1Future of Europe, special Eurobarometer, Feb/March 2006; source:http://ec.europa.eu/public_opinion/...

Your comments

  • On 30 August 2006 at 01:03, by Jon Worth Replying to: Constitution, Social Europe, and the Failed Peace Project

    I am utterly perplexed by this article. Piia - what are you trying to say?

    Firstly, what is the social policy you are talking about? Do you mean unemployment benefits and other related payments? Or do you mean other components of the welfare state such as healthcare?

    Secondly, you state that ’More than two thirds of EU-citizens want harmonisation of social welfare systems, especially younger citizens in the 10 new member states and Greece’. Yes, that’s all very well. But what might that actually entail? In terms of spending, EU states are actually reasonably close together (in the 35%-45% of GDP bracket mostly), and of course people in the new Member States want social policies that are as generous as in some of the old 15. Further, if you asked the follow up question: would you pay an EU tax to pay for that, I’m sure the majority of people would answer ’NO’.

    As far as I am concerned, the EU in the short to medium term has neither the means nor the financial resources to carry out any meaningful social policy (whatever that is). It should instead focus far more narrowly on the promotion of initiatives to get Europe’s economies growing again - cooperation on R&D, pushing states to invest in education etc.

  • On 1 September 2006 at 08:38, by Piia Replying to: Constitution, Social Europe, and the Failed Peace Project

    >I am utterly perplexed by this article. Piia - what are you trying to say? Firstly, what is the social policy you are talking about? Do you mean unemployment benefits and other related payments? Or do you mean other components of the welfare state such as healthcare?

    Dear Jon, I am not proposing a ready-made, unified model for Social Policies in Europe or same level of unemployment benefits here. Still I do not think that only describing the current situation and being happy about that, takes us anywhere. I am merely trying to discuss and make a theoretical experimentation - what if social policies could be used as legitimate means to bring EU closer to the citizens?

    If EU co-ordinates and legislates on those fields also which come very close to citizens’ everyday needs and life (work, family, healthcare, pensions) they SEE the added value European level can bring to social policy dec-making as well. I would see that the economic and employment policies of EU must be co-ordinated more. This requires EU social policy (Policy meaning action plan, and then whatever instruments are seen best for reaching those goals).

    I am not talking about specific benefits yet. More I want to talk about welfare models, spending and delivering ratio and structure. Even if EU countries would be close in spending, their welfare models and how much they actually deliver services, how much the social inequalities and poverty are reduced, differ more that your number lets us assume. Some states actually have more effective social policy than others, if it is tested with the above mentioned indicators.

    When I am talking about Social Policy in the framework for EU, I first and foremost mean all kinds of state (or EU) authorities’ actions. Those can be legislation, soft instruments like co-ordination, financing, making a statement and having policies in general regarding and related to work. Many of these issues are already partly dealt at EU level, though competencies remain in member states.

    In practice, “EU social policy” in very rough sense of the word, would mean that some social policy aspects would be co-ordinated, only the very necessary implemented on the EU-level (those related to mobility of people, and labour, pensions, some social security benefits) mainly implemented at national (and regional level?).

    I allow myself to refer here to Jacques Delors’ idea - to start from employment policies balance the very strong economy and business related character of EU. The “unrestricted liberal nature” in my interpretation is also one reason for people (esp. French and Dutch) disliking EU (read=rejecting the Constitution).

    >Secondly, you state that ’More than two thirds of EU-citizens want harmonisation of social welfare systems, especially younger citizens in the 10 new member states and Greece’. Yes, that’s all very well. But what might that actually entail? In terms of spending, EU states are actually reasonably close together (in the 35%-45% of GDP bracket mostly), and of course people in the new Member States want social policies that are as generous as in some of the old 15. Further, if you asked the follow up question: would you pay an EU tax to pay for that, I’m sure the majority of people would answer ’NO’.

    If people realise the relationship with paying taxes and getting social security benefits, well functioning, cheap healhtcare, free education - they see that something is done with their taxmoney. This of course differs from country to country according to the political tradition- in many Scandinavian countries high-level of taxes are legitimate because of the universal welfare-system that benefits all. I do not understand why you are so sceptic about people accepting higher taxes if they can get universal services for their taxmoney? Anyhow -“EU social policy” would not automatically require raising tax percentages, and even if it would maybe that is what people want. I do believe in the citizen’s ability to realise that nothing’s free. Welfare policies are a collective system against threats in life that we all have to cope with (birth, sickness, getting old) and thus it is legitimate to pay for such a system collectively.

    >As far as I am concerned, the EU in the short to medium term has neither the means nor the financial resources to carry out any meaningful social policy (whatever that is). It should instead focus far more narrowly on the promotion of initiatives to get Europe’s economies growing again - cooperation on R&D, pushing states to invest in education etc.

    I fully agree with you, but describing how the current budget system and financing functions in the present day EU does not make us the generation ahead. Allow yourself dream a bit and be more creative..I am trying to imagine how the things in EU SHOULD be, not how they ARE or nor how they probably WILL BE.

    Financing social policy actions requires naturally fundamental budget/financing reform for EU. This I do not see in the near future either. Just a new way of allocating competencies and reform of EU budget and the whole way of thinking on how to finance EU. By changing the EU budgetary system into fiscal federalism, which I believe you also support, this could be done on long-term?

    In federations - by definition- resources are reallocated. Social policy is reallocation of resources between richer and poorer, generations and regions. In other words giving equal chances to underprivileged groups or regions in the society by using positive discrimination as a tool. The calls for better social security systems coming from new MS’s was expected- natural process as their living standards get higher and they see how the old EU has designed their social policies. The differences btw old and new EU in social policies will diminish naturally. To the liberal, undressing of welfare state model -direction, or to Scandinavian “flexicurity”- model which can be combined (or increases) with very competitive economy, I do not know? This is a matter of party politics. IN any case, the implementation and financing should follow the principle of subsidiarity. EU social model by no means would be a centralised, unified system. It’d mainly be related to creating legislation/directives on those areas which are needed to ensure the free movement of labour and thus the effective allocation of labour force (which is needed to make EU economies function effectively because businesses need more labour mobility). This already is a vast area of actions.

    Social policy can be used as an instrument to balance the mainly economic/business related aspects of EU integration. Free movement of people does not work well enough and some regions that would maybe need labour force are not getting it because there are no incentives for people to move around Europe and work. EU regulations to promote the chances of women to work/career, encourage (financial incentives) men to take responsibility at private sphere to complement the areas women have been mainly responsible before, for instance could be one specific social policy issue on which EU could produce added-value. Not to forget the demographic time bomb, (in 2030 one fourth of population in EU-25 will be +65 years) one of the major common social policy problems looming ahead in the whole EU. “Britain actually is an exception in the EU-25 because of the migration and thus younger population. Congratulations..” We will face The Problem with elderly people and the care and pensions of them, sorry to put it so bluntly. This will be a hard burden for the health- and elderly-care systems. Huge sums of money are at stake. I believe these issues should be under scrutiny and better policy-making at EU-level in a different way they are at the moment. I see social policy at EU level as an instrument to reach the same things you seem to think can be reached without it. I believe that people are the most important and fundamental factor in making the economy grow. For me social policy means investing to a broad base of human resources, i.e. to people.

    Just a thought play- if EU would be using as much money and effort on social policies, as it does on CAP- what would be the result now? More worker mobility, better quality work force, better education system, real European space for education and research, higher birth-rates and rates of female engagement to working and business life -> higher competitivity and Lisbon goals closer?

    I hope this cleared out a bit what I wrote before. If not, I warmly welcome everyone to start defining this very tricky concept together. Maybe JEF at least could enter into this "swamp" as the generation ahead.

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