European Integration and the Welfare State

European Monetary Union and Social Policy


From the perspective of the Citizen, does European Integration Strengthen or Weaken Social Policy at the National Level?

by Shirley Hixson


During European elections in the late 1990s, both national and supranational leaders voiced concern over decreasing voter participation, many blaming low turnout for the climactic shift in political power. At the national level, blame was also assigned to austerity packages that had been implemented as many countries prepared for the introduction of the new European single currency, the euro. Many nations experienced consistently high levels of unemployment, which lowered contributions to social programs. In addition, declining national populations were growing older, leaving fewer citizens to work (and fund) social programs, while a greater proportion were beginning to draw benefits. These rising costs in social programs have placed critical strains on national budgets, necessitating calls for reform of traditional forms of welfare.

Social Europe exists mostly at the national level within the EU, especially in the areas of education, health care and retirement. However, in some areas, member states increasingly have found they retain only a semi-sovereign control over social policy within their borders and are seeking ways to resolve funding shortfalls in budgets caused by factors that include an aging population, economic integration and globalization. Welfare policy enjoys strong political, as well as social, importance because these programs attract a substantial public endorsement and, thus, are a useful tool in garnering electoral support. For this reason, national governments will be loath to surrender their decision-making authority and control to EU institutions.

The absence of new initiatives at the European level is a clear sign that the EUs role in social policy is limited. However, it is also true that social policy within the EU holds a much more prominent position today than ever before and that its domain has continued to expand despite the barriers that member governments have attempted to erect to halt development in this sphere. The EU continues to engage in policies of redistribution -- mainly via the Common Agriculture Policy (CAP) that subsides farmers and regional development aid -- and is emerging as a system of shared political authority. In addition, it must be noted that today's domestic policy initiatives are seldom modified or pursued without acknowledging or taking into consideration the role of the EU in social policy.


The SEA and Treaties of Maastricht and Amsterdam have all contributed to a gradual chipping away at national sovereignty, including in the domestic social policy arena. The success of the erosion of sovereignty is witnessed in the change in political lobbying. More and more, national groups representing various interests in social policy issues -- including national governments -- directly lobby EU institutions in an attempt to influence new social policies. Competition over political and economic power, as well as cultural loyalties, often becomes intertwined with questions of who has jurisdictional control of social policies. Because more than one member state is involved, these competing groups turn to the EU for the resolution of their dilemma.


There is evidence that the EU is attempting to listen to European citizens who have indicated that social policies are among their top concerns. The passage of the Amsterdam Treaty addressed issues such as unemployment, which is the number one priority of Europeans. In addition, the introduction of the single currency in January 1999 attracted an increasing amount of public attention because, for the first time, Europeans perceived the EU as having a direct effect on their everyday lives. While the single currency was arguably a vital component in the successful development in the economic integration of the community, as EU institutions have moved political, social and judicial integration to the forefront of their agenda, they have discovered that they must reach out to Europeans in ways never before necessary. And, as the EU -- and, in this particular case, the EP -- continue to address issues that directly effect the lives of its citizens, Euro-watchers may find that voter interest in European elections will increase as public perceptions change. This will, in turn, introduce additional influxes of democracy into the system.


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See also:

Provides background information on EMU, the new single European currency, and its launch.