Erosion of the European Social Model

3 Jun 2014

Today (3 June) the International Labour Organisation has published the World Social Protection Report 2014/15 which heavily criticises what they call the “erosion” of the European social model as a direct result of the crisis and the policy of fiscal consolidation blindly pursued by EU leaders.

Erosion of the European Social Model

The heavy criticism stems directly from the adjustment reforms which we have seen in countries such as Spain, Ireland, Portugal and Greece. This new era of austerity has meant that reduced poverty and the prosperous times experienced following the Second World War is a thing of the past.

A fragmented social security system, which means only the extremely poor in Europe are assured of social protection, “changes the terms of the social contract that has been at the very basis of the European social model” according to the report.

Fiscal consolidation was sold as the path to economic growth. With cuts in jobs, pensions and social protection, a household’s average disposable income decreases. If a household does not have disposable income to spend, it does not spend and it does not consume. With consumption, productivity falls and economic growth is damaged. These are the common sense arguments behind the ILO’s report published in the aftermath of a pan-Europe protest vote in the European elections.

Commenting on the report, CESI Secretary General Klaus Heeger sees the report as confirming the worst: “This report adds to a number of other studies which confirm our fears surrounding the European social model: it is under severe strain and at serious risk. The social contract has already been badly damaged in many  EU countries. EU and national leaders have to put us on a different course before the damage becomes irreparable”.

The report follows the European Commission issuing Country Specific Recommendations in the economic, employment and social sphere, where the Commissioner conceded that the situation in Europe was “dire”.

A summary of the International Labour Organisation’s World Social Protection Report 2014/15 can be read here.