Project: Europe Programme, Vision Europe

Director, Chatham House
Associate Fellow, Europe Programme

Fabian Mushövel, PhD candidate, European Institute, London School of Economics and Political Science

The European welfare state needs to be recast to confront today’s challenges, but there are reasons to be optimistic that reformed systems can promote sustainable growth and be competitive assets.

Employment office in Madrid, December 2014. Photo: Sebastien Berda/AFP/Getty Images.Employment office in Madrid, December 2014. Photo: Getty Images.

Summary

  • For many in Europe, the values and norms that underpin the continent’s social model are at the heart of what it means to be European.
  • Welfare states perform a number of redistributive functions and protect the vulnerable. Contrary to negative portrayals, welfare states also invest in human and social capital. All European citizens both use and contribute to the welfare state at different stages of their lives.
  • Pressures on public finances, and the burden that social spending imposes on the ‘productive’ parts of economies, raise questions about whether European countries can still afford their welfare states.
  • Welfare systems first designed 50 or more years ago need to be recast to confront today’s challenges. They must accommodate the extensive societal transformations associated with population ageing, closer global economic integration and the spillover effects of climate change.
  • Welfare states will also have to adapt to new social risks resulting from the changing nature of European economies, especially evolving patterns of work and employment. They will have to use resources more efficiently and make the most of relevant technological advances, without unduly sacrificing key principles such as solidarity.
  • A number of dilemmas about appropriate forms of decision-making and democratic oversight surround efforts to reform welfare, but there are reasons to be optimistic about the future of the European social model. Well-designed welfare states can promote sustainable growth in Europe and be a competitive asset.

Expert Comment

Can EU Countries Still Afford Their Welfare States?
Iain Begg