Reviving the ‘Social Europe’ Myth – from Ring of Gyges to European Prometheus

Dr Nicola Countouris and Prof Mark Freedland FBA

It is common knowledge that when the European Economic Community (EEC) was set up in 1957, there was little or no ‘Social Europe’ to talk about. Surely enough, all of the six founding Member States had already some fairly sophisticated labour law and social security systems, and took pride in their respective welfare state models. But that was pretty much it as far as social Europe was concerned. The Treaty of Rome itself was oblivious to either the need for, or the desirability of, any type of supranational social regulation and - with the exception of a timid ‘equal pay for equal work’ clause – it completely neglected to introduce any provision directing the EEC to the creation of a common social policy. The explanation for this important gap is pretty obvious: the EEC was primarily about setting up a regional free market where all factors of production (including ‘labour’) could move unrestricted and achieve the optimal allocation that market forces were seen as guaranteeing. As the ‘Spaak Report’ noted ‘the spontaneous tendency to harmonisation of social systems and of the level of wages […] will be favoured by the progressive creation of a common market’. The self-regulating myth of the marketplace was being resurrected at a pan-European level, after most nation states had decided to opt for a far more interventionist, at times overtly Keynesian, approach in their domestic economic affairs. As they recorded in the opening provision of the Treaty of Rome, the founders professed that (merely) by establishing a common market, the Community would ‘promote … a harmonious development […], a continuous and balanced expansion […], an accelerated raising of the standard of living’. 

One of the many problems with the ‘invisible hand’ though is that it is just that … invisible. Just as with Plato’s Ring of Gyges, one is left to speculate what it could do for justice and social progress if only it could be seen. But since it cannot be seen, when things do not quite go in the predicted direction of ‘spontaneous harmonisation’ and ‘accelerated raising of the standard of living’ etc., people unsurprisingly persuade themselves that market failures are failures of the Market, and a process of alienation and rejection of the Market project itself begins. This is true now, in 2012, and it was probably much more vividly perceived in the ideologically divided Europe of the 1970s, following the first and second oil shocks and the beginning of that long period of economic and political stagnation that European historians sometimes refer to as ‘Eurosclerosis’. Unsurprisingly, already in the early and mid-1970s, EEC Member States progressively sidestepped the paucity of social standard-setting powers provided by the Treaty of Rome, and took some remedial action by adopting some first European instruments in the areas of equal-treatment and restructuring of enterprises.

The genius of Jacques Delors, the French socialist politician who headed the European Commission between 1985 and 1994, was to move beyond this ‘papering over the cracks’ approach, and bring about a more comprehensive package for political, economic, and social reform that would speak both to the minds of European political and economic elites and to the hearts of Europe’s citizens and its numerous, and often fractious, labour movements. Europe was to become a sort of two-faced Janus where the deepening of the European free market project (exemplified by Delors’ 1985 ‘White Paper’ and later on by the 1992 Maastricht Treaty itself) would be accompanied and compensated by the further development and broadening of a European ‘social dimension’. The EEC, with the assistance and support of European business and the European trade union movement, was thus to develop a set of European social policies - mostly in the form of European Directivesproviding for minimum standards in a number of areas of labour regulation - that would both contribute to introducing a level-playing field for companies to operate and compete freely and fairly, and to enhancing Europe’s social progress credentials and legitimacy amongst European peoples. As Delors himself put it, ‘nobody falls in love with a single market’. Europe had to become more social and, just as importantly, had to be perceived to become. 

Successive treaty reforms, introduced under the watchful eye of the Delors Commissions in 1986 and 1992, ensured that the European Community (EC) was at least equipped to talk the talk of ‘Social Europe’. While some important areas of social regulation (such as pay, industrial action, and freedom of association) were left outside the Social Europe equation, there is no denying that, at times, the EU was almost-unanimously credited with delivering more justice, fairness, and equality to European citizens, and that the broad political support it received had visible legitimising effects. Social Europe was undoubtedly much more than a slogan, and Eurosocialist MEP Richard Corbett was no doubt right when he said that ‘through various decisions (…) introduced as part of the Maastricht Treaty, the EU has provided and safeguarded important rights including maternity pay and parental leave, paid holiday as well as a raft of health & safety legislation’. There was indeed a time when Social Europe even appeared to be a possible bulwark against the worst negative effects of globalisation, setting up mechanisms such as the (arguably insufficiently endowed – compare its Euro 500 million budget to the £850 billionspent by the UK alone to rescue its financial sector in 2009) European Globalisation Adjustment Fund. The formal proclamation of the, now binding, Charter of Fundamental Rights of the EU in 2000, with its Solidarity title introducing a qualified protection for a range of important socio-economic rights, can probably be seen as the heyday of the ‘Social Europe’ project.

Paradoxically the appeal of the ‘Social Europe’ promise has been such as partly to obfuscate the fact that, during the 1990s and at the turn of the millennium, the other, free-market, deregulatory, and increasingly neo-liberal face was relentlessly gaining prominence and, in many ways, entrenching a number of political and institutional changes that were depriving European citizens and workers of the very same rights that the ‘social face’ of Europe was meant to deliver. In terms of classical and mythological metaphors, gone is Janus Bifrons, enter the ‘Trojan Horse’. Talking critically about the European Monetary Union and the Euro, and the tight macroeconomic and financial stability requirements attached to them since the Treaty of Maastricht, British historian Brian Blackburn perceptively noted that ‘at different times this [was] a programme that [had] been espoused by such varied sponsors as German Christian Democrats, German Social Democrats, German Greens, French Gaullists and Socialists, Italian former Communists and neo-conservatives, British New Labour and the Spanish Right. The project was flimsily disguised by attaching to it the phrase ‘social Europe’. 

Through the same optic, the Lisbon Strategy should be seen the other strong candidate for the Social Europe ‘Trojan Horse Prize’. Building on the earlier European Employment Strategy, it enticed European Member States into deregulating their labour laws and social security systems and introducing new forms of flexible labour contracts (see the very first 1998 Employment Guidelines) offering as a trade off the promise that by 2010 Europe was ‘to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion’. The Lisbon Agenda was meant to transform labour market deregulation into more jobs which in turn would contribute to furthering economic growth. Member States embraced this God-given gift and eagerly began a process of deregulation that, for once, even appeared to satisfy the insatiable OECD. But by 2010 the now largely deregulated Europe was in the midst of its worst economic recession since 1929, recording falling GDPs and historically high levels of unemployment. Nobel Laureate Pissarides had of course already warned the EU that ‘job creation is not likely to be the main contributor to growth. The link runs the other way: more growth will bring job creation’, but it was all falling on deaf ears. In spite of its obvious failure the Lisbon Strategy was revived in 2010 with the introduction of the essentially identical Europe 2020 Agenda. Lisbon is dead, long live Lisbon!

And this is arguably one of the main failures of the process of European integration and governance these days, its inability to listen and to learn, no doubt because national governments often prevent it from doing so (as Joseph Weiler famously put it ‘the States, like the Olympian Gods, would forever remain ultimate Masters of their creation’).  The French and Dutch ‘No’ votes to the ‘European Constitution’ in 2004 partly reflected a profound dissatisfaction of the progressive electorate with the stagnation of ‘Social Europe’. But nobody listened and Europeans had to settle for an equally socially uninspiring ‘Lisbon Treaty’. The uncompromising opposition of the European trade union movement to Viking and Laval, two deeply anti-union judgments produced by the European Court of Justice in 2007, which according to Mr Mario Monti himself  ‘exposed the fault lines that run between the single market and the social dimension at national level’ (page 68), resulted in a belittling Draft Regulation which academic commentators view as a codification and entrenchment of those judgments. Even the occasional calls for more social rights are met with lacklustre responses such as the recently presented 'Employment Package'. The following comment by Commissioner Reding is quite telling of the changed attitude of some European institutions in respect of the fate of ‘Social Europe’:  ‘Jacques Delors once said that nobody falls in love with a single market.  I believe it is high time to change this. Because our single market is the best asset that Europe has, in particular in these times of economic downturn’. 

We have now moved beyond the ‘Trojan Horse’ analogy. Proponents of neo-liberalism and free-market dogmas appear to have lost any compunction and no longer feel the need to disguise their deregulatory intentions with social fig-leaves so as successfully to penetrate and demolish the last few citadels of social progress. The current ‘Greek Tragedy’ is perhaps the best example of this more recent trend, whereby Social Europe has once again worn its invisible cloak, and the neo-monetarist 'mediaeval medicine' prescribed by the EC-ECB-IMF, with the explicit or tacit support of a number of key European Member States, is administered in massive doses to struggling Member States on the verge of sovereign defaults. Joseph Stiglitz recently said that ‘A principled Europe would not leave Greece to bleed’. But Greece is bleeding, and so are a growing number of European citizens whose working conditions, employment prospects, and living standards are deteriorating on a daily basis. One could not blame the Greeks (or the Irish, the Portuguese, and the Spaniards for that matter) for seeing Europe as merely ferrying them into uncharted territories of despair and pain, while the monetarist dogma of fiscal austerity is being institutionalised and entrenched in the European constitutional framework with provisions such as the ‘Euro Plus Pact' and the new 'Treaty on Stability, Coordination and Governance in the EMU' . Obviously, as noted by Krugman, not only are these policies choking growth and economic recovery but they become the backdrop of deregulation of what is left of the European social model, which is now perceived as the only flexible and soft ‘variable’ in an EU where all the other macroeconomic variables are placed into the neo-monetarist straightjacket of fiscal austerity ‘targets’. This gives rise to a perverse catch-22 challenging the fundamentals of Social Europe and of European social and political cohesion at large.

So is there a future for Social Europe, and indeed for European integration as such? 

In spite of this rather grim account of its recent history we like to think that there is indeed a future as long as Europeans are willing to rediscover ‘Social Europe’ as Europe’s modern-day Prometheus. But to do so, it is first important to debunk two negative myths about modern-day Europe. The first one is that Europe is short of credible alternative ideas. That is simply not true. They exist and they are at everybody’s fingertips… just use your preferred search engine in your favourite internet browser, and you will find a wealth of alternative visions of European politics and economic affairs meticulously illustrated by Nobel prizes, illustrious academics, respectable think-tanks, workers organisations, and (even!) political parties. 

Paraphrasing Gramsci, we are convinced that it is now essential ‘to dissipate the dark cloudbanks of heavy pessimism … which represent a great danger … because of the political passivity, the intellectual torpor and the scepticism towards the future which they produce’. The second myth is that the EU is a non-democratic organisation, constitutionally incapable of responding to the changing demands of the European people. False. Surely enough the EU’s system of governance is far from being perfect, and undoubtedly – as noted above - the last 20 years of European integration have seen several attempts on the part of (note, democratically elected) EU Member States to rig the rules of the game, and constitutionalise a neo-liberal vision of Europe where ‘there is no such thing as society’. But none of those changes are irreversible, as long as the European people decide that the time has come for their governments and the EU to change direction. Europe’s 'problems are political, not economic' or institutional.

In fact a Promethean vision of Social Europe based on the meaningful protection of fundamental values such as dignity, freedom, equality, solidarity, and social justice can go a long way towards redirecting European politics and economics, and the process of European integration, towards a brighter future. As our colleague and fellow labour lawyer Alain Supiot would say ‘fundamental rights cannot be subject to economic considerations, since on the contrary it is the economy that must be placed at the service of fundamental rights’. 

The authors are also the two main organisers of the ‘Resocialising Europe and the Mutualisation of Risks to Workers’ conference, funded under the UCL European Institute's 2012 Call for Proposals. For further details see http://www.resocialisingeurope.org/