How do Social and Economic Rights Relate to Each Other in the Social Market Economy: An Introduction to this Special Issue

Frans Pennings

doi:10.18352/ulr.507

Abstract

The term ‘social market economy’ was introduced in the Treaty on European Union in order to emphasise that social and economic objectives of the European Union are both important, and have to be reconciled with each other. This contribution describes how social objectives have been developed in EU law since the establishment of the European Economic Community. The Court of Justice of the European Union has interpreted Treaty provisions to give them maximum effect for the realization of these objectives. However, tensions with the economic objectives exist when economic freedoms are confronted with social rights. This contribution examines how the CJEU balances these interests, and how this relates to the social market economy. There are also areas where economic rights have no counterpart at the EU level, but where they interact with social policies of Member States. Here too, the concept of social market economy is relevant. After a discussion of these various dimensions of the term social market economy, the subsequent articles of this Special Issue are introduced.

Highlights

When the Lisbon Treaty was adopted, some of my colleagues working in the area of economic law at my university were puzzled by its new Article 3(3) Treaty European Union (TEU): The Union shall establish an internal market
It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment
Some of the judgments discussed in the preceding sections could lead to higher costs for employers, for instance when they have to pay higher wages to a foreign worker than they intended as a result of the equal treatment rule, or if they have to pay women the same wage as men

Summary

Introduction

When the Lisbon Treaty was adopted, some of my colleagues working in the area of economic law at my university were puzzled by its new Article 3(3) Treaty European Union (TEU): The Union shall establish an internal market. A compromise text was laid down in Article 117 of the EEC, that provided that: Member States agree upon the need to promote improved working conditions and an improved standard of living for workers, to make possible their harmonisation while the improvement is being maintained They believe that such a development will ensue from the functioning of the common market, which will favour the harmonisation of social systems, and from the procedures provided for in this Treaty and from the approximation of provisions laid down by law, regulation or administrative action. Equal treatment of men and women was only a small part of the total area where social policy was considered desirable and the lack of such social policy was increasingly seen as unsatisfactory This appeared, in particular in the 1970s, when the economic recession and the development of the common market had the effect that companies sometimes restructured themselves and moved (partly or fully) to Member States where wages and other employment conditions were at a lower level.

Currently their successors

Where economic and social rights and values are confronted with each other

Where economic or social rights meet each other in the Treaty

EU economic rights affect social systems of Member States

Insertion of social policy values in an economic instrument

Conclusion and outlook to the contributions of this Special Issue