TCS Daily

A Truly Social Europe

By Marc de Vos - June 7, 2004 12:00 AM

In the slipstream of May Day and in the run up to the European elections, socialist parties in several member states have joined labor unions across the continent in condemning the EU as a free market leviathan. Europe, we are told, is a conservative, neo-liberal bulwark that submits everyone and everything to the iron rule of its free market. Therefore, unions and politicians alike should unite in charting a new map for a more "social" European Union. Central to this "social" ambition is the development of a minimum European level of harmonized social protection and tax rates, as to avoid competition to the bottom between member states. This growing unison for a so called "progressive" alternative to perfidious "conservative" Europe is as disconcerting as it is unjustified. European unification is not an asocial jungle under a free market dictatorship. It is instead the most social and progressive operation in European history.

The specter of a European free market that traps all social concerns inside an ice cold neo-liberal prism is hyperbolic to the point of parody. A free internal market has obviously been the core of European unification to date. But a free market is not a chilling ideological abstraction; it is a liberating practical reality that allows millions of European citizens to live together in sheer unbounded peace and prosperity.

The European internal market is constructed on four pillars: free movement of persons, goods, services, and capital. Thanks to these fundamental freedoms, the citizens of the EU can freely work, live, travel, study, invest or produce throughout all the member states. This liberalization has yielded tremendous benefits, not in the least in terms of employment and standard of living. Companies have a bigger home market and consumers enjoy a greater choice of high quality and often cheaper products. Since its inception on 1 January 1993, the European internal market has generated 2.5 million additional jobs and extra prosperity of almost €900 billion: an unparalleled social record by any standard.

The EU is therefore not a conservative and asocial demon, but on the contrary perhaps the most progressive and social operation in the history of our continent and its adjacent British isles. This corner of the globe, for the first time since the heyday of the Roman Empire, has now known six decades of continued and apparently secure peace. Millions of European citizens, whether as employees, entrepreneurs, self-employed, students, consumers, tourists or retirees, daily enjoy the sweet fruits of a common market. The enthusiastic new member states and the aspiring flock now eagerly assembled at the entrance gate, have understood this perfectly. Not so, it seems, most of the labor unions and several socialist political parties. Their critique of a neo-liberal and asocial Europe is a myopic caricature that masks a very political vision of a so called "social" Europe.

The entente cordiale of labor unions and socialist parties blame Europe for its lack of common fiscal rules and social protection. Only by developing such common rules for employment, welfare and taxation can Europe become genuinely "social". The gravamen of this recipe is clear: only a socialistic Europe is indeed "social" in the eye of the socialist entente. A European level in welfare state is their aim, whilst the gigantic social achievements of the European free market are professionally ignored.

The rhetoric against perfidious a-social Europe must therefore be adjusted: not a more social, but a more socialist Europe is in fact the battle cry. However, that Europe already exists - not through guidance from Brussels but at the autonomous level of each member state. It is there that employment regulation, social security systems and taxation have formed variations of the celebrated welfare state. The EU, despite all the slander of blind neo-liberalism, has never contested these national welfare systems. On the contrary, it has complemented them with a super-structure of fundamental rights, worker protection in a convulsing common market and interchangeable welfare rights. This dynamic mosaic of diverse national systems under a European umbrella is typical for the European construction. The EU is based upon subsidiarity, a murky constitutional concept that only allows for European action where member states cannot sufficiently act themselves.

An agenda for social protection and taxation at the European level runs afoul of subsidiarity and pushes Europe down the slippery slope of a centralized super-state. The labor market may well need more genuinely European rules as its European dimension grows. But that is not the motivation, nor the ambition of the socialist entente. Some level of a European-scale welfare state must a priori be achieved to avoid competition between member states in the areas of social protection and taxation. This pierces the thin veil of the angelical plea for a more "social" Europe and reveals the true face of classic protectionism: A common European social protection and taxation must in fact shield its own, neatly trimmed front garden against pollination from the wild back garden of new member states with less social protection and lower taxation.

The curators of the national welfare state watched with disgust as citizens in the Eastern European member states, in a historic pendulum swing, left communism for an Anglo-Saxon model with limited social protection and low taxation. Their reverberating slogans for a more "social" Europe are contorted spasms of self-interest. Their social Europe seeks to dam up the national welfare state against the raging forces from the Wild East. Their nationalistic and arch-conservative message rocks the very foundations of free European integration but is sold as the progressive alternative for a conservative Europe: il faut le faire.

Fortunately Europe is now 25 member states strong and not all of them, including those with socialist governments, approach the enlarged Europe in similar fashion. No sooner had the people of Eastern Europe liberated themselves from the communist yoke than, as an entry ticket to the European Union, they were forced to swallow countless reams of European legislation. Now that they have been admitted to the club, they are nonetheless discriminated against in subsidies and access to the common market. Low wage cost, limited regulation and a generous tax climate are almost their only tools as they start a difficult battle for progress. As their prosperity will rise through the dynamics of the free internal market, their wages, social protection and taxation will spontaneously follow suit. Let us grant them this temporary competitive edge, even under mutual competition, and thereby contribute to an organic growth of prosperity and stability for the entire European Union. That is the truly social Europe.

The author is Professor of labor and employment law, Ghent University and the Free University of Brussels, and vice president of Nova Civitas


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