Commission paper calls for courage in globalisation debate
Europe needs courage to challenge the "vested interests" opposing modernisation and to restructure its budget to protect citizens from trade shocks caused by globalisation.
The recommendations have been spelled out in an internal document, seen by EUobserver, which serves as the basis for the paper on the future of the European social model, to be adopted by the European Commission on Thursday (20 October).
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The document was produced by the Bureau of European Policy Advisers, the key body involved in drawing up a report which Brussels will present to EU leaders at a summit next week.
The paper sums up the main challenges faced by the social systems in Europe, which are diverse, but also "based on a number of values that are held in common, such as universal access, solidarity and equality".
It highlights economic problems in several member states, such as high unemployment and low workforce participation, as well as shorter working time and lower labour productivity in Europe compared to the US.
Gloomy economic indicators suggest that the continent's growth might prove insufficient to face the rising public expenditure, related to an ageing population and higher health and social protection costs.
The authors of the report argue that reforms of labour market and social institutions - mainly in France, Germany and Italy, as well as further economic integration should boost growth and "make social protection systems more affordable".
However, they also point out that "a two-handed approach to economic change" is needed, "encouraging flexibility but dealing with the social implications".
EU budget re-visited
As a concrete example of such an approach at EU level, the report suggests the bloc should restructure its budget to provide finances for unexpected shocks caused by economic transition.
In terms of trade-related shocks caused by globalisation, member states are advised to re-consider the commission's proposal to set up a fund dealing with situations such as outsourcing of big companies, or cheap imports of goods from the emerging Asian superpowers.
"To manage redistribution problems the member states and Europe need a common strategy how to deal with transitional problems", suggests the paper.
Stop the destructive debate
But to make this strategy work, the character of debate about common challenges needs to change also.
Both national politicians and EU officials are urged to join forces and "reverse the tone of the political debate from destructive 'social versus neo-liberal' to constructive 'modernisation that yields both social and economic benefits'."
That would also imply a shift from the debate "currently dominated by interests preaching fear that open market policies to promote growth will jeopardise the social model", argues the paper.