The Crisis of the European Social Model in the Adverse Environment of Globalization

Abstract

This paper examines the apparently adverse environment for the viability of the European Social Model (ESoM) and identifies the main factors relevant to the consolidation of the model. It first looks back at the way in which social issues have been dealt with by European Union (EU) institutions, then seeks to identify the main internal and external challenges facing the ESoM. The crisis and the exit strategy initially adopted in the EU (based on austerity policies) compounded these challenges and threatened the model. An interpretation of this crossroads and the foreseeable scenarios for the model are presented under alternative hypotheses with and without specific EU intervention. This paper adopts the globalization theory of the welfare state. Accordingly, its main hypothesis is that unless decisive action is taken by EU institutions the ESoM faces progressive erosion or dilution in a globalized economy. JEL Classification: I38, H53, F60, F15, F68