8.1 Social Europe: introduction

"Social Europe" is one of the most developed policy areas in the EU and covers social and employment policies. (The terms "social" and "employment" tend to be used interchangeably.)

It encompasses the ideal of the "European Social Model" which is broadly characterised by:

• Social protection. There is generous welfare provision, not least of all for the unemployed, which is costly and, unless allied with very active labour market policies for encouraging unemployed people back to work, acts as a disincentive to obtain employment.
• Employment protection. There are extensive labour market regulations that contribute to inflexible labour markets. Employers are reluctant to take on employees, a feature that is exacerbated by high social on-costs for employers.
• Protectionism in product markets. There is a reluctance to open up competitive markets either internally or externally.
• Partly as a consequence of generous welfare spending, the public sector is a high proportion of GDP. These are high tax, "big state" economies.

Countries in which the European Social Model is prevalent tend to show the following features:

• High unemployment.
• Anaemic economic growth.

The drivers behind much of the EU's social and employment policies are:

• Social harmonisation and the creation of level playing fields in terms of working conditions and terms of employment in order to stop "social dumping" and "unfair competition".
• Job protection - though extensive employment protection regulations discourage job creation by making the dismissal of employees expensive and difficult.
• Employee relations and industrial democracy.
• Equality in terms of gender, race, ability/disability, age, religion and belief and sexual orientation.

RL, February 2007