Enlargement and social policy Nick Manning University of Nottingham, UK

Key issues in session 1 Impact of enlargement on the socio-economic models in the new member states Differences between old and new members Social realities, EU15 & NMS-12

Impact of enlargement on the socio- economic models in the new member states Away from state socialism Towards neo-liberal, or not Cyclical swings Towards the ESM? ….. We need to look at “models”

What is social policy? … all models do this: functions Production – human capital investment Reproduction – health and education Solidarity/legitimacy – pensions & poverty

… with a mix of these: Inputs Direct Supply Finance Regulation Outputs Meeting needs - equity economic efficiency political stability

What is European social policy? From the “outside” ESM (Neo) Liberal Productivist Clientalist From the “inside” – national welfare regimes »Continental - equity »Nordic – equity & efficiency »Anglo - efficiency »Mediterranean - neither »Transition from state socialism – from equity to efficiency

ESM Social democratic s Neo-liberal Flexicurity – (back to) the future? Marshall’s hyphenated society: democratic-welfare-capitalism – 1950s

European social policy preferences A vague ensemble of different institutions, policies and values (Dauderstadt, 2002) Finance>Economics>Employment>Social protection (Daly, JCMS, 2006) Equality Non-discrimination Solidarity Redistribution (European Parliament, 2006)

How does social policy change? ESM’s triple transformation –Reaction to deindustrialisation, ageing and gender –European integration –European enlargement Constitutional asymmetry –European economic rules constrain national states –National states impede European SP, politically, economically and culturally –New member states

Three ‘worlds of compliance’ World of law observance (DK, SE, FI) – compliance even if difficult World of domestic politics (AT, BE, DE, NL, ES, UK) –compliance if no other difficulties World of neglect (IE, IT, FR, EL, LU, PT) –non-compliance typical Poland between 1&2 – no race to the bottom –Leiber, S (2007) JESP

EU/enlargement and social policy change – some models (1) Elites and civil society – enlargement itself elite civil/mass society EU++ Poland ++ EU-- Turkey +/--

(2) Cognitive Europeanisation (Spain) EU - a model means for political action establish a vision of preferred future grasp the means of realising the vision procedural and substantive change

(3) Policy transfers (most EU members) Adopted where they fit OECD advice routinely rejected values for or against networks of contacts definitions of the problem to solved Positive, instrumental or coercive?

(4) Catching up – can NMEs do the same? Ireland, Greece, Portugal and Spain per capita income social protection spending eurobarometer life satisfaction

(5) A “regulatory union”? Cost Prior systems Implementation (no worse than old members)

(6) Resource redistribution – unrealistic now Cost Population size

(7) Cultural context Gender Family Religion Military Political roots

Differences between old and new members? Tax – is there a race to bottom? – no evidence for this Wages – level and dispersion – NME’s growing and dispersing Government spending – level and trends –Slow convergence in different cycles

Figure 1 Real GDP growth (figures are generated from the micro-data available through TransMONEE 2001, Florence: UNICEF. Each figure includes the 8 CEE accession countries, plus Russia for comparison)

Figure 2 General Government Expenditure/GDP Ratio

Social realities, EU15 & NMS-12 Inequality - growing, and worse in NMS Social spending –Health – continued variation –Pensions - this is complex –Education – continued variation Crime – not as bad as we think Women – NMS better than many OMS Minorities – highly varied across the EU Migration – already slowing down Time to convergence? years or never? – general convergence, but very, very slow

Race to bottom? low wage competition low social standards higher unemployment

Race to the top? Skilled workforce with high wages Good social protection Low unemployment