Will More Integration Save Europe’s Social Model?

BRUSSELS – At high-level gatherings of the European Union elite, one often hears the following type of statement: “Europe must integrate and centralize economic governance in order to defend its social model in an age of globalization.” European Commission President José Manuel Barroso and his counterpart at the European Council, Herman van Rompuy, are particularly keen on this argument.

But the claim that only deeper EU integration can save the “European” social model from the onslaught of emerging markets is not true. Yes, globalization represents a challenge to all EU member states; but it is not clear how more integration would help them to confront it. More European economic governance is not a panacea.

In fact, it is not even clear which European social model needs to be saved. There are enormous differences among EU members in terms of the size of their public sectors, the flexibility of their labor markets, and almost any socio-economic indicator that one can think of. The common elements that are usually identified with the “European” social model are a quest for equality and a strong welfare state.

But neither of the main problems confronting Europe’s social-security systems – slow economic growth and aging populations (a function of low fertility) – can be addressed at the European level. This is obvious for fertility, which is determined by deeper social and demographic trends that cannot really be influenced by government action. And, while aging could be transformed into an opportunity if the elderly could be made more productive, this requires action at the national and societal levels, not more European integration.