Changes to Economic and Monetary Union and Their Effects on Social Policy

Abstract

This article argues that the way fiscal and economic integration is pursued within EU Economic and Monetary Union (EMU) has changed since the Euro area crisis, resulting in a higher degree of interference with national social policy choices and a resurgence of the so-called social deficit. In view of the situation, attempts have been made to take social policy into account within the new EMU framework for economic and fiscal monitoring. The article argues that while these reforms constitute an improvement, they are not enough to address the post-crisis social deficit. This question does not have an easy solution, and ensuring an optimal fit between economic and fiscal integration and social policy is one of the greatest challenges facing the EU. Ensuring an optimal fit is necessary to make EMU sustainable, as well as to ensure legitimacy and support for the European project. The final section of the article provides concluding reflections and an overview of the proposals currently on the table.