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2018-09-27_Utrecht_ILRS-Conf._Vandenbroucke_sh_16-9

A European Social Union is a necessity not luxury ILRS Conference: 27-29 September 2018 in Utrecht Frank Vandenbroucke Professor at the University of Amsterdam Structure integration and robust welfare states: tragic dilemma? 1 The social dimension project according to founding fathers: belief convergence 2 Explanations: what stopped ‘convergence machine’? Increasing heterogeneity Member States erosion states 3 policies (social investment) 4 reconciling openness domestic cohesion: political challenge Design flaws Pillar Rights way forward: • would support simultaneous pursuit economic progress cohesion both within countries (through gradual development states) between upward across Union) Initial division labour: – development: supranational coordination security rights & anti-discrimination: national sovereignty (in theory) machine worked… more or less… until 2004/2008 dilemma integration? project? enlarged heterogeneous EU)? Minimum wages governments can do: net disposable income couple with children one minimum-wage earner 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 LU IE AT FI UK DE FR NL DK BE IT SI EL CZ ES SK EE PL HU LT PT LV RO BG Net Gross wage Source: CSB/MIPI Poverty risks population < 60 by work intensity household 10 20 30 40 50 Very high High Medium Low low At-risk-of-poverty rate (< 60) Work 2004-06 2012 Bron: Eurostat SILC 2005-2007; 2013 Erosion states? Changing composition households? More precarious jobs? Migration? long-term trend increasing inequality poverty: diagnosis policy lessons for EU There no one-size-fits-all explanation hence silver bullet tackle inequalities We need set complementary strategies instruments that improve protection employment perspectives households weak attachment labour market Improving our human capital requires child-centred investment strategy addresses opportunities should promote Reconciling Openness ‘balancing act’ feasible Access benefits: general principle non-discrimination exception: posting workers Transparency coverage minimum regimes Division consequences monetary unification: traditional view De Grauwe EMU as an insurance union: vaccination metaphor Why are stabilization centralized unions? Risk sharing (pooling) Externalities public good (vaccination) •Vaccination: compulsory (minimum requirements) subsidized (re-insurance) •Minimum requirements effective stabilisation capacity: –sufficiently generous unemployment benefits notably short-term; –sufficient rates benefit schemes; –no segmentation leaves part force poorly insured; proliferation relations integrated into insurance; –effective activation unemployed individuals; –budgetary buffers times so automatic stabilisers do their bad •These principles become fortiori imperative if Eurozone be equipped re-insurance systems (to avoid ‘institutional moral hazard’) EMU: common standards resilient shared conception flexibility Labour institutions deliver on (effective collective bargaining) Cluster adequate capacity MS: sufficiently sufficient insured against unemployment; individuals ⇒Convergence some key features ⇒European Gothenburg Summit 17 November 2017 => Resilient EU27 bargaining education ECEC better markets / positive incentives low-skilled labour…) transparency predictability How Rights? Clear priorities Credible roadmap combining… legislation Policy benchmarking Funding (tangible MS) Mainstreaming fiscal surveillance Semester Completing union Union: •support systemic level functions (e g fair corporate taxation …) •guide substantive via objectives leaving ways means basis operational definition ‘the model’ cooperate explicit purpose pursuing pan-European ⇒based reciprocity Resources From Europe 27 https://www socialeurope eu/gothenburg-social-summit-european-social-union puzzles paradoxes in: Boone Marc; Deneckere Gita Tollebeek Jo (eds ) End Postwar Future – Essays Ian Buruma Verhandelingen van de KVAB voor Wetenschappen en Kunsten Nieuwe reeks 31 Uitgeverij Peeters 2017; accessible www frankvandenbroucke uva nl Barnard Baere after Crisis Cambridge: Cambridge Press https://doi org/10 1017/9781108235174 (1st chapter see item 263) Reduction Sharing Moral Hazard: Vaccination Metaphor Intereconomics Vol 52 May/June Number pp 154-159 Rinaldi In: Vision Consortium ): Redesigning Ways forward Gütersloh (http://www vision-europe-summit eu/)