PEIW: Political Economy of Integration and Welfare

European integration and the expansion of the welfare state are closely related institutional innovations of the postwar era. Together, these innovations contributed effectively for many decades to the development of economic growth, social solidarity, and public well-being. But today they have people worried, not merely because of the straitened fiscal aftermath of the global financial and Eurozone sovereign debt crises.

Existing policy repertoires no longer seem able to effectively buffer and mitigate many social and economic risks. On the one hand, changes in employment patterns and family structures have eroded the effectiveness of social protection systems built around the male breadwinner. On the other, the success of European market integration and the travails of monetary union have challenged the autonomy and stability of national social and economic policy-making. 

Welfare state reform

As a consequence, a wave of social and economic reform has swept across European political economies over the past two decades. The scope of such reform varies widely across the member states of the European Union. In some cases economic liberalisation, privatisation and welfare state change   has been accompanied by deep social conflicts, while in others unpopular reforms have obtained broad  consent from opposition parties, trade unions and employer organisations. Alongside retrenchment, there  have been deliberate attempts in many advanced European welfare states to rebuild programs and institutions to accommodate the new economic and social realities of the 21st century. At the EU level, decision-makers struggle in the wake of the euro crisis to balance demands for stronger and more uniform rules with respect   for legitimate national diversity, as well as to reconcile the Union’s social and economic goals. Whether these circles can be squared, through which institutional mechanisms and policy mixes, and how EU crisis resolution strategies will interact with ongoing reform struggles within the member states, are crucial unresolved questions for the future of Europe’s social market economy.

Affiliated researchers