Patrick Diamond - The Social Reality of Europe After the Crisis: Trends, Challenges and Responses

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THE SOCIAL REALITY OF EUROPE AFTER THE CRISIS

Trends, Challenges and Responses

Patrick Diamond, Roger Liddle and Daniel Sage

London New York

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ISBN: PB 978-1-78348-538-3

Library of Congress Control Number: 2015940889

ISBN 978-1-78348-538-3 (pbk. : alk. paper)

ISBN 978-1-78348-539-0 (electronic)

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ACKNOWLEDGEMENTS

This pamphlet would not have been possible without the generous support of the Foundation for European Progressive Studies (FEPS). In particular, we would like to thank Ernst Stetter and Ania Skrzypek, who provided intellectual inspiration as well as practical assistance. Solidar kindly hosted a conference in the European parliament at which the social situation in Europe was discussed with leading experts in the field. We would also like to thank our colleagues at Policy Network for their dedication and professionalism in preparing this report, especially Ben Dilks, Robert Philpot and Renaud Thillaye.

Patrick Diamond, Roger Liddle and Daniel Sage

INTRODUCTION

T he economic crisis that has unfolded since 2008 has had, and continues to have, a profound effect on the lives of Europes citizens. Economically, politically and socially, the crisis has led to fundamental changes in many EU member states.

This report seeks to examine the new social reality of post-crisis Europe. In essence it describes how a profound divergence of experience between north and south challenges previous assumptions that European integration would drive a seemingly automatic process of convergence. Altogether, we identify four separate dynamic forces that have the potential to reshape Europes social reality in the coming years. First, the most explicit effects of the crisis have been felt across economies and labour markets , with Europes relative economic performance analysed and compared in the first section. Second, there is much debate about the effects of the crisis on Europes poorest citizens, particularly in relation to poverty and inequality , the issues that dominate section two of the report. Third, the EU has set ambitious targets for progress in education, while the effects of the crisis on health have been much discussed; there are ongoing debates about the sustainability of existing systems of public service provision, specifically education and health . These challenges are assessed in the third part of the report. In the fourth section of the report, the political and cultural makeup of post-crisis Europe is examined, with unsettling implications for Europes political class.

The divergence this report describes has taken place against the backdrop of trends and developments already in train long before the crisis hit. The process of deindustrialisation and the associated decline of employment in manufacturing industry has been wrought by technological change, a global shift in economic power from west to east and rising consumer demands for services. These long-term, structural trends across most EU member states have contributed to the rise of more precarious work arrangements and the strengthening of insider and outsider divisions in labour markets. Moreover, the implementation of policies today associated with crisis austerity programmes such as benefit conditionality, employment activation, higher retirement ages and reductions in benefit entitlements are not new policies in European welfare states. They have been part of the reform landscape of Europe since the late 1990s. Such policies were pioneered before the eurozone crisis in countries such as Germany, Sweden and the UK, with new recruits such as Italy and Spain now following suit. This interplay between policy change and more fundamental, structural forces has influenced debates about the future of Europe since before the crisis, with calls for a new welfare state or social model for Europe, achieving their strongest political expression through the launch of the Lisbon agenda in 1999. As well as creating new challenges, the crisis has accentuated the impact of pre-existing trends, raising profound questions about the sustainability and success of the European model.