 |
Former President of the European Council Mr. Herman van Rompuy (X) and the President
of the Christian Workers Organization 'beweging.net' Patrick Develtere (Y)
posing together with the speakers at the Conference
coming from 26 European Countries, members of the European Union. |
Since the
financial crisis, inmediately followed by an economic crisis, a debate
is going on in Europe about how the crisis should be resolved. At
stake is the preservation of the welfare state. According to many,
the welfarestate threatens to collapse by the European wide austerity
policies, the reforms of the pensionsystem and retrenchment of the
social protection system, in particular the care for the chronically
ill and the elderly.
Both left and
right-wing governments join this policy, such as in the Netherlands
with its coalition government of the conservative liberal VVD party
and the classic social democratic party PvdA. Under strong protest of
the trade unions, the coalition has raised the age for the state
pension to 67 years. To reduce the costs of healthcare and social
protection, the Netherlands should become a so called participatory
society, where tasks are transferred to local authorities and social
care again becomes a task of family, friends and neighbors. Another
example is Greece, where an election victory of the far left Syriza
party could not avoid a strict austerity and reform programme imposed
by the EU. The German Christian Democratic Chancellor Merkel and
French Socialist President Hollande demanded strong state budget cuts
and radical reforms in the tax system, social protection system and
others.
During the
recently held Fifth European Conference on 'The State of the Welfare
State in the EU in the year 1992 and 20 years later' in the city of
Leuven (19-20 October 2015), Belgium, an overview was given of the
state of the welfare state by as much as 26 academic speakers from as
many countries. There was also a fascinating lecture by Herman van
Rompuy, who told his chronicle about the five years he was the first
President of the European Council (2010-2014) and Jo Vandeurzen,
Flemish Minister of social policy, health and family, who explained
the radical Reforms of the Flemish social protection system.
The first
conference on this topic was held in 1992. The Congress document "Aim
of the Conference" provides a brief review. The year 1992 was
"an important moment in the European integration process as
major steps had to be taken with a view to completing the internal
market. Efforts to attain this goal, however, were leading to growing
concern about the creation of a 'Social Europe', which in several
aspects was developing at a slower pace. In this context,
implementing EMU (European Monetary Union) and attaining convergence
were imposing new constraints on national social protection systems.
"
The second
conference in 2000 was an update of the state of the welfare state in
the 15 EU members. "Eleven of them already Entered the Monetary
Union.The welfare states had stabilized at a relatively high level.
The creation of the Eurozone did not jeopardize this. Social
protection was not considered counterproductive for economic
development. In the third European Conference in 2005 we observed
them ( the new member states of Central and Eastern Europe) lagging
behind the old Member States, while at the same time catching up at
an incredibly fast speed and inventing new ways of social protection
or rediscovering older ways . "
“The timing
of the conference in April 2010 allowed us to compare the welfare
state with the situation just before the crisis (the financial and
economic crisis that struck the world economy in 2008) and made us
wonder whether the crisis was already over. The question here was no
longer whether and why the welfare state was in danger. Quite the
contrary, in fact, as the welfare state had played an important role
in absorbing the crisis. However, the question arose as to whether it
also had been a source that helped solve the crisis.Since that time a
new financial and broader budgetary crisis has ocurred, affecting the
very core of the welfare state, and we have witnessed a deepening and
espacially greater entrenchment of the economic crisis.How the
Welfare States can survive this turmoil... is the question.”
Since the
beginning of the crisis in 2008, the European trade union movement
struggles for the preservation of the welfare state. In his opening
speech entitled "Maintaining and Improving social protection in
Europe: a robust system against a persisting crisis" Patrick
Develtere of the Belgian Christian Social Organization gives an overview
of the main views of the trade union movement in this debate.
Without social
protection of the welfare state, the economy would have further
collapsed and poverty have been much greater. Social protection such
as unemployment benefits, sickness benefits and pensions have ensured
that the purchasing power of the common people remained more or less
stable. One can therefore argue that social services have been "a
cushion" to absorb the shock of the economic crisis and to protect the
economy from further collapse.
Thanks to
these social services the government functions also as a sort of
"automatic stabilizer". The system ensures that the
national economy continues to operate at a reasonable level. But the
government can do more. By investing for example in the modernization
of education and expansion of care the government can give the
economy a new boost. Like the European trade union movement Develtere
advocates a classic Keynesian policy in which the government will
invest anti-cyclically by spending more money in stead of cutting
budgets. With such a policy the state therefore can not avoid to
having to raise taxes. Especially the so-called rich should pay more
through taxation of equity (capital). Such a policy would also bring
about a better distribution of wealth. So far it is not yet.
Meanwhile, tax evasion is tackled more vigorously.
In the
chronicle of Herman van Rompuy, we read other views on the nature and
solution of the crisis. Although he agrees that the ultimate goal of
European policy is a social Europe, but this had to wait until the
Euro crisis had been solved: "the disintegration of the euro
zone would have jeopardized the survival of the EU. It would also
have led to a depression in most countries and have increased
inequalities between the member states. "
According to
Van Rompuy the most problems already existed before the
beginning of the crisis. The crisis brought the underlying problems
only to the surface: lack of competitiveness, unsustainable public
finances and a lack of supervision of the budgetary -, macroeconomic
- and banking situation. "Divergence in economic growth and
employment between members of the Eurozone after 2007 was already
there but was hidden by borrowing. The growth in some countries was
artificial ... So the structural unemployment rate in the eurozone at
the end of 2007 was already 8.8% (10% in 2014) and the number of
people at risk of poverty already 16.6% (as in 2013). "
Van Rompuy
concludes that "the structural economic growth, the economic
potential for many years was too low, even in the strongest
economies. Sure to keep our social model financially viable and to
play a role in the world. Weak demographics (the aging of the
population) , lack of innovation and business investments were among
others some of the causes. The 'common' market was too' fragmented
'in the sectors of energy, Information and Communication Technology
(ICT) and Research & Development (R&D) "
In summary,
the debts were too high (thanks to the euro which made the initial
debt financing of all European countries with low interest rates
possible) while the economies underperformed. There are still
additional problems like the aging population, higher government
costs for pensions, more care for the elderly and the globalization
that requires more and better competitiveness. It is clear that only
a Keynesian policiy will not be enough to strengthen the European
economies so that social security and social protection can be
maintained at the same level as before.
Europe therefore is
looking for a fair balance between debt reduction and (public and
private) investments to get economic growth, to create jobs and to
make more sustainable the social welfare state for the next future.
The
conference was organized by The research Institute for Work and
Society (HIVA) of the Catholic University of Leuven for and in
collaboration with the European Centre of Workers' Questions EZA with
the financial support of the Belgian Federal Public Service Security
and in association with the Athenian Policy Forum APF.
