European social model: Between competitive modernisation and neoliberal resistance, The

Capital & Class, Autumn 2007 by Hermann, Christoph, Hofbauer, Ines

The 'European social model' is a phrase often heard in European discourse. This article describes the remarkable shift in meaning that the term has experienced in the last two decades. While it was first invented to symbolise Delors's vision of a social-democratic Europe, it was then increasingly used to legitimise a predominately neoliberal integration process, before becoming a justification for the cutting back of existing welfare systems. The popularity of the European social model, however, still stems from the fact that it articulates an alternative to US-style free-market capitalism. The concept is therefore also used by left forces in order to formulate their vision of an alternative Europe.

Introduction

What type of social model is it that has 20 million unemployed in Europe; productivity rates falling behind those of the USA; that is allowing more science graduates to be produced by India than by Europe? The purpose of our social model should be to enhance our ability to compete, to help our people cope with globalisation, to let them embrace its opportunities and avoid its dangers. Of course we need a social Europe. But it must be a social Europe that works' (Tony Blair, 2005). With his speech before the European parliament during the British presidency in June 2005, Tony Blair articulated the remarkable shift in meaning that the concept of the European social model (ESM) has experienced in the last fifteen to twenty years. While initially invented in order to distinguish Europe from the USA and to emphasise the social dimension of the integration process, the ESM is now expected to enhance Europe's competitiveness in a globalised world. Accordingly, the role of the ESM has shifted from symbolising an alternative to unregulated capitalism to legitimising a predominantly neoliberal integration process, to demanding far-reaching restrictions and reforms of national welfare states under the pretence of modernisation. At the same time, however, the ESM is also used by left groups and parties to put forward their agendas for a solidaristic and sustainable Europe. This makes the ESM a highly contentious concept. In this article, we trace the origin of the ESM and analyse its role and the different interpretations of it in the broader process of European integration. We describe the different meanings given to the ESM by quoting from official European documents or the publications of official representatives. We also show how the proposals put forward by modernisers actually put the very nature of the existing social models in question, and discuss what role the ESM could play for the European left.The article ends with some general remarks and a brief conclusion.

The origin of the European social model

The invention of the European social model is commonly attributed to the former president of the European Commission, Jacques Delors. Delors was a supporter of a social-democratic vision of a unified Europe in a globalised world. As French finance minister, he had had first-hand experiences with the failure of President Francois Mitterrand's recourse to Keynesianism in France in the early 1980s. The social-democratic lesson was that after the fall of the Bretton Woods agreement, the subsequent abolition of capital controls and the internationalisation of money markets, it was no longer viable to establish a progressive economic policy at the national level. Instead, social-democratic forces, not only in France but also in other European countries, increasingly focused on the European level in order to build an alternative to the free-market-style capitalism that dominated Britain and the USA. This does not mean that Delors and fellow social democrats were not in favour of the single market and economic and monetary union. However, they felt that Europe had to be more than simply an economic association (Strange, 2006: 198). As Delors once famously stated, 'you cannot fall in love with a common market'. As part of the social-democratic vision, the ESM was also directed against Britain and the USA, which in the 1980$ were both ruled by straightforwardly neoconservative governments. The basic idea was that economic and social progress should be equally important objectives, and that an economically successful union should have an explicit social-policy agenda and strong Europeanwide social and labour standards. Europe, in short, should take the 'high road" to economic growth and prosperity (Hofbauer, 2007: 40).

Yet although the 1992 Maastricht Treaty included, for the first time, a social chapter allowing for majority decisions in social-policy issues and enabling the social partners to negotiate agreements which would then be translated into binding EU legislation, the social dimension remained marginal and the social-democratic strategy failed. Instead, the forces demanding not only a common market in Europe but also unrestricted trade and capital movement between Europe and the rest of the world prevailed (van Appeldorn, 2001:71-2). In this process, the institutional framework that gave free-trade proponents such as Britain, Germany and the Netherlands effective veto rights proved of decisive importance. But the specific nature of the marketcharacterised by mutual recognition rather than supranational harmonisation - also played an important role (Hermann, 2007: 71-2). Such a market could hardly be combined with the social-democratic demand for strong European-wide standards.