Is Europe broke? This is the question European leaders are struggling to come to terms with at the moment, as country after country goes onto life-support. Can we afford a “European social model” of generous welfare systems and social protection whilst our governments get further and further into debt? Some of our readers believe passionately that the values of the so-called “European social model” are really at the heart of what it is to be “European”. On our Facebook page, MandyandPj argues:
Most definitely this EU has moved way way beyond that which would be supported politically…in any western member EU nation… No wonder old aged pensions, health care, social services etc are being scrubbed in Europe… [they are] not compatible with US capitalism. Overhaul the treaties? why bother….just admit the total surrender to the enemy!
Others argue that we can care for the elderly, young, unemployed and the sick more effectively if we stop relying so much on government protection. Joe, who contributes to the blog No Pasaran!, added the following comment to Debating Europe:
We need governments and borders to get their boots off of the necks of people who make things, move things, and take the risk of starting enterprises and the risk of hiring people. That’s what it all boils down to… It’s about getting out of the way of those productive people who do the real work of fixing what governments pretend they do: creating the growth that gets people out of poverty and [creating] the wealth that permits societies to care for the young and old.
We spoke to Julian Le Grand, Professor of Social Policy at the London School of Economics, and asked him what he thought of this debate. Can Europe’s social model survive an “age of austerity”?
Clearly, it’s under threat in areas such as Greece, because governments are pursuing such harsh austerity programmes. I do believe, however, that in the long-run the ‘European social model’ (really several models) is not under threat. We have been here before – during the 1970s and 1980s. Every time people say the European social model is doomed, but it never happens. There are all sorts of threats of public cuts, but it doesn’t happen.
There are good reasons for it not happening. One is that the needs are still there, leading to a greater demand for social care and pensions. We’ve still got problems of disability; the needs are still there, and they don’t go away. But, also, I think that at the end of the day, politicians will come to their senses on this. Actually, cutting back in education and healthcare is bad for the economy in the long-run. And, actually, cutting public spending in a time of recession is an anti-Keynesian move and bad for the economy in general.
Is it sustainable, though? With demographic changes on the horizon and a “greying population”, can we go on increasing government spending in healthcare, or are we going to have to be more flexible and take a more market-based approach?
I think we will see changes, and we are seeing changes in the form of delivery. We are seeing the move in some countries towards more private provision, more not-for-profits. More generally, greater plurality of provision of services is a good thing. A greater awareness of the role that competition can play should be encouraged.
What about Joe’s point about governments needing to “get their boots off of the necks” of productive people? Are we risking over-regulation and a regime of too much “red-tape” in Europe?
I think this is a good populist line. I actually think there’s very little evidence to support it, though. Certainly, if you look at Germany, this is not an ‘under-regulated’ country and yet it’s doing better than many of us. The UK, on the other hand, is not well regulated, yet it’s not doing as well. I don’t think there is any link between the two.
What do YOU think about the “European social model”? Can we afford to keep it in a time of financial and economic crisis? Do we need to reform and move towards a more market-based system, or is that “surrendering to the enemy”? Let us know your comments and ideas in the form below, and we’ll take them to policy-makers and experts for their reactions.