Maurizio Ferrera
Rotta di collisione. Euro contro Welfare?
[On a Collision Course. Euro against Welfare?] (In Italian)
Laterza, Bari, 2016
The studies on European integration and the studies on welfare have developed as research branches independently of one another. The experts of the first branch have a prominent economic or institutional background, the experts of the second frequently adopt a comparative viewpoint. The two branches have had few occasions of overlapping, their intersection is a nearly empty set. Maurizio Ferrera’s book fills this very emptiness in a rigorous, influential and passionate way.
The welfare state and European integration are the bequest of the 20th Century, but in the last twenty years or so they seem incompatible. A distributive conflict (sometimes hidden, sometimes evident) arose between rich and strong countries and poor and week countries, breeding amidst the former – especially in Germany – oppositions to the transfer of resources to the latter. Solidarity only works (although with some resistance) on a national level, but it finds many difficulties in asserting itself on a European level. Those difficulties depend – according to the author – on four underlying tensions.
The first one affects the institutional processes related to European integration. Those processes have de facto separated the economical dimension (restrictively seen as the creation of the single market and the monetary union) from the social one. While the EU has been entrusted to deal with the former, the member states deal with the social dimension. The tension between the two dimensions is inevitable and – in order not to formally undermine their sovereignty – the States imposed on themselves restrictive constraints to their freedom of action (Stability Pact, Fiscal Compact).
The second tension affects the public debt issue. Europe is divided between countries that resort to taxation in order to cover their welfare public expenditure, and countries that resort consistently also to public debt. The conflict – to use Wolfgang Streeck’s words – is between Steuerstaaten and Schuldenstaaten. To avoid that the former have to pay for the debts of the latter, no solution has been found but austerity, which has eaten away welfare and has hurdled recovery and – moreover – has isolated Germany, contributing to foster anti-euro movements among the debtor countries.
The third tension affects the controversies regarding the access of “foreign” citizens from other EU member states to welfare, services and job market. These controversies put in question one of the pillars of integration: freedom of movement and, most of all, the principle of nondiscrimination on grounds of nationality (for instance, regarding payments for health care and social security). In the UK, this issue has played a pivotal role in the debates during the referendum on the Brexit.
Lastly, the fourth tension concerns the institutional framework, the internal divisions arisen from the opt-out rights obtained by some countries and – generally speaking – the weakening of the EU Commission in favor of the European Council, where decisions taken unanimously prevail. The aspiration to proceed towards an ever closer union appears as a wishful thinking.
These conflicts have blocked the integration process, seriously jeopardizing EU popular legitimation.
The division of tasks between Brussels (which deals with markets, competition, liberalization, efficiency) and the member States (which deal with social cohesion and welfare) puts at odds two logics that are, as the book title reads, on a collision course. It is true, Ferrera says, that welfare needs reforms and rethinking, but it is necessary to avoid that the EU be “perceived by public opinion as a friend of the market and an enemy of solidarity” (p. 66).
In Brussels, an econocracy has been established, dominates EU policies, and imposes as priorities the economic objectives of balanced budgets, debt containment, public expenditure reduction and tax burden adjustment.
Yet, the welfare state emergence modified its legitimation basis. It is not sufficient that the State grants a sufficient security level (internal and external), it is not sufficient that it manages the juridical framework of citizens’ transactions, just as it is not sufficient that an ideological support is given to a political party in order to grant one’s support to institutions. Legitimacy always passes through the exchange between consensus and services like education, health care, pensions, etc.
The EU – as an embryo of State organization – is not enjoying the support of a true supranational raison d’état which legitimates before the citizens its existence. It is true that the Union is an emanation of democratically elected governments, responsible before their electorates. Nonetheless, this indirect democratic legitimacy is not sufficient to create a European raison d’état, which would anyway be weak and exposed to turbulences. “The EU – Ferrera says – has become a scapegoat for all socioeconomic problems and their distributive consequences, with a clear and worrying drop of legitimacy” (p.98)
Solidarity links operate – not without resistances – in the national framework: it is possible, for example, to ask for sacrifices to the Bundesrepublik citizens in order to sustain the reunification effort, but the appeal to solidarity is not as efficient if Greece or Portugal are concerned. Moreover, governments showed to be jealous of their welfare sovereignty, given its crucial importance for the maintenance of the sociopolitical order: the economic Europe has left aside the social Europe. According to Ferrera, the social Europe should evolve side by side with the economic Europe in order that the European construction can foster a sense of belonging and attain legitimacy.
Moreover, the perspective of reshaping the welfare borders on a European scale – “in order to gradually extend the solidarity links between the different national communities” (p.111), seems nowadays particularly problematic. If we want to avoid the collision between the “reasons of the market” and the “reason of a welfare state”, some form of pan-European solidarity must be added to (but not replace) the national solidarity which already exists within member States.
Taking some steps towards a social Europe is for the author the way: i) to reignite the (weak) feeling of belonging, an idea of “us” as European citizens; ii) to give a political meaning to the themes of expenditure, taxation and – therefore – representation.
The crisis and the “inter-governmental drift” which has followed, has created damages, a deep-seated mistrust towards the EU, a mutual mistrust between North and South and East and West and latent (but sometimes also evident) feelings of hostility, for example towards Germany and the Germans. Is it possible to mend such damages and rebuild that much or that little amount of trust necessary to retake the path of unification?
In Ferrera’s opinion, proceeding in the direction of a European Social Union (ESU) is a necessary condition to get closer to political union. It would be possible, for instance, to start from the creation of a European system of social security measures financing the unemployment benefits, increasing the European fund against poverty, adopting a framework directive on the minimum wage and endowing the EU with the resources to finance it.
This kind of measures would allow citizens to feel protected and not threatened by the EU – as it actually happens – without creating additional expenditures; but they will only replace what the States – often inefficiently – already spend.
This would require leaders up to the task, leaders capable of filling the gap between the places where people vote (the national States) and places where decisions are taken. That gap creates extremely worrying consequences for the future of democracy.
Translated by Lorenzo Spiller
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