Saving European Social Security from the Populists

ROME – Austria’s presidential election has thrown into sharp relief one of Europe’s fundamental challenges. In the first round, held on April 24, Norbert Hofer of the far-right Freedom Party of Austria (FPÖ) won the largest share of the popular vote, having campaigned on the claim that unchecked immigration risked burdening Austria’s welfare state to the point of collapse. He faces off against Alexander Van der Bellen, a member of the Greens, on May 22.

Claims like Hofer’s may be the subject of fierce disagreement among labor economists, but they have struck a chord with the European electorate. All across the continent, right-wing populist parties are gaining ground by exploiting voters’ concerns about migration and access to the welfare state. And, in the United Kingdom, worries about “benefit tourism” are fueling efforts to pull the country out of the European Union.

If the EU is to survive as an area of free mobility, it will need stronger enforcement of its external borders, combined with stricter implementation of social insurance principles across its internal borders. Creating a closer link between benefits and past contributions for workers who have moved from one country to another will be essential to the long-term integrity of the common labor market.

The European policy debate has given some consideration to strengthening external borders, but there has been no talk of coordinating welfare benefits across EU borders. It is time for the EU to introduce a single social-security identifier that allows governments to track workers as they move from one country to another and ensures that welfare benefits are portable across national jurisdictions.