EUROPEAN SOCIAL MODEL IN THE 21 CENTURY: REVISITED AND TOWARDS SOCIAL INVESTMENT

Abstract

Discussing future of the European Union largely depends on understanding the key principles on which the Union was built. Strong welfare was one among its corner stones and has been ever since. However, numerous crises have affected the way European welfare state is structured and there is a need of modernising it through the European Social Model. It is the model of regulating social policy across the member states, despite the differences among them and it can serve as a good starting point for making sustainable, just and equal union. The new social model needs to be based on the social investment state, as a way of uniting political and economic affairs in order to create competent citizens. On the other hand, the state should be organised in a way to be service oriented with carefully planned ways of investing and spending, so the potential future crises can be overcome with greater ease.

Full text

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Branko Boskovic MA
Special Issue Vol. 2 Issue 1, pp. 1566-1579
DOI- http://dx.doi.org/10.20319/pijss.2016.s21.15661579
EUROPEAN SOCIAL MODEL IN THE 21 CENTURY:
REVISITED AND TOWARDS SOCIAL INVESTMENT
Branko Boskovic MA
Teaching Assistant at the University of Donja Gorica, Podgorica, Montenegro,
branko.boskovic@udg.edu.me
____________________________________________________________________________________
Abstract
Discussing future of the European Union largely depends on understanding the key principles on
which the Union was built. Strong welfare was one among its corner stones and has been ever
since. However, numerous crises have affected the way European welfare state is structured and
there is a need of modernising it through the European Social Model. It is the model of
regulating social policy across the member states, despite the differences among them and it can
serve as a good starting point for making sustainable, just and equal union. The new social
model needs to be based on the social investment state, as a way of uniting political and
economic affairs in order to create competent citizens. On the other hand, the state should be
organised in a way to be service oriented with carefully planned ways of investing and spending,
so the potential future crises can be overcome with greater ease.
Keywords
Welfare state, European social model, investment, sustainability, equality, education,
modernization
1. Introduction
Europe is changing often in many ways, socially, politically, economically etc. but since
the foundation of the European Union it has been united or has at least looked like that.
Democracy has been coupled but other mechanisms of integration there were aimed at creating
stronger Union in which member states can act jointly but also protect their sovereignty where it
is possible. Social politics have always been in the middle, having EU institutions set the

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milestones and member states to choose ways how to implement these. The economic crisis has
brought further problems and this paper argues that is it is exactly the field of social politics that
can be the base of the new and future Europe. However, there has to be new model that will be
implemented and accepted by citizens, member states and EU institutions.
The paper is divided into several sections. The first part is looking into social changes
that have been going on in Europe lately, in relationship with the welfare state. The second part
emphasises the need of transcending current divisions in welfare state principles, while the third
and fourth section define the European Social Model and the ways it is being changed. Last two
sections discuss possibilities for the future that can result from the lifestyle changes and new
ways of defining the way we live today.
2. New social environment in Europe
Political and economic position of the EU today is insecure, shifting and uncertain.
Lisbon Treaty and all of the changes that followed, especially after the crisis, influenced the way
Union functions but also the way member states act one towards the other and to the EU
institutions as well. This paper is looking how social politics have changed as a result of
political, economic, social and demographic changes that have been going on for already decades
now. The EU has to develop differently and look for different ways of sustaining its current
status. Bureaucratisation and distancing of the institutions from the everyday life do not
contribute to stability and strengthening of European continent but rather opposite, produce
instability and divisions among member states.
Social and demographic changes have altered the outlook of the European society as we
are now witnessing demographic and family revolution (Epping Andersen, Gallie, Hemerijck &
Myles, 2002), but also rising individuality which is making personal biographies and narratives
be the primary choice of the person (Giddens 1991). Families are becoming less stable and as a
result, single parent families’ numbers are rising and new types of families are becoming
numerous. This alteration has two effects which have been present in Europe for a long time:
lowered birth rate and ageing society. Europe and with it, European Union, is becoming the
continent of old people and the key institutional effects will be on creating successful social
politics, mainly health and pension policies (Homeric 2012; Natali 2011).

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Among the changing structure of the citizenry of the European Union, its institutional
character is changing as well. After the Lisbon Treaty there have been numerous alterations in
the way the EU is organized which were supposed to prevent further negative effects, either in
economy or politics (Beck, 2013). However, internal affairs have not been dealt as successfully,
mainly due to divisions that have rampaged the way the EU functions. Dividing member’s states
on numerous accounts has brought into effect the actual disintegrating politics that came as effect
of the economic and political disparities between them. It appears that decision making
procedure is the outcome of the informal agreements, rather than fully defined procedures
(Giddens, 2013; Beck, 2013; Streak, 2015). The result of this is that making stable union
becomes rather difficult and mechanisms of protection of member states on different accounts
have to be made constantly. The key result is inability of the EU to function as a Union of equal
member states and citizens who are solidary with one another. To put it another way, there have
to be new way of searching for better union that will be more functional. Social politics and
European Social Model can be a good starting point (Boskovic, 2015).
3. Need of advancing from the traditional social democracy and neoliberalism
Classic social democracy proved to be effective in the golden years after the Second
World War and decades that followed. Stable growth with numerous labour force guaranteed
strong welfare state that was able to provide means for all parts of the society that needed it.
Giddens (1999) emphasises domination of the state on the civil society, collectivism, full
employment, egalitarianism, one-way modernization, internationalism and attachment to the
bipolar world as the main characteristics of classic social-democracy. As the time has passed
however, the model became unsustainable and it is the case especially now, after the economic
crisis. The major failure of the classic welfare state is that it acts as provider after the “bad” has
already happened so it stimulates spending but ineffectively. Therefore, it creates passive citizens
who are not willing to activate and participate in the labour market, especially if the means
provided are significant (Giddens, 2007). It is not argued here that the classic welfare state
should be abandoned but only that specific principles of its functioning should be changed and
based on different principles. Vandenbroucke and Vleminckxx (2011) clearly show that it is
important to keep some of the functions of the classic welfare state, so its key aims, equality and

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inclusion, can be sustained. But sustainability is very much dependent on the austerity measures,
which became the principle during and after the crisis. Generosity had to be replaced by
effectiveness so the measures of the social protection result in positive outcomes for those who
are aimed by them (Homeric, 2012).
On the other hand, neoliberal polity does not prove to be as successful in creating society
based on equal opportunity and chances for all, as have for long been principles of European
integration and community. Neoliberal polity defines reality on rather opposite arguments from
the social democracy but the economic crisis has proved that unsustainability remains its key
problem as well (Jenson, 2009). Deregulation does not make positive effect neither on equality
nor on quality employment (Ibid.). Any employment makes no great effect on the quality of
lifestyle, depending on other circumstances as well, but more is needed. Leaving the field to
individual choice makes the race for positions available on the market too harsh and
unstimulating measures from the state make no contribution to more positive outcomes.
Competitiveness plays the key role and institutions tend to play marginal role, therefore putting
all of the responsibility on citizens (Lundvall & Lorenz, 2009).
The major problem of both models is that they do not provide solutions on the long run.
They provide measures that do not make contributions effective on longer periods of time, so
that both citizens and the state contribute to the positive outcomes. Redistribution vs. freedom is
the outdated reference today, due to several reasons: unsustainability, inflexibility,
irresponsibility, with mixed relationship in each of these of both the state and citizens (Boskovic,
2015).
4. What is the Social Model in Europe and how is it conceptualised?
European Social Model is based on economic growth and social cohesion. Coupling the
two appears to be difficult during and after the crisis and the EU needs to improve its social
model significantly. But speaking of what the European Social Model is and how it is
conceptualised, there are differences which point to the fact that it has several meanings.
Historically, it has been conceptualised in different ways. Hay, Watson and Wincott say that
“there is, as yet, no commonly agreed definition. Indeed, a number of different senses have been
used interchangeably and, as such, frequently conflated” (Hay, Watson & Wincott, 1999, p. 14).

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One of the first definitions of the European Social Model (ESM) was presented in the
Commission’s White Paper on social policy and it was defined as: “a set of common values,
namely the commitment to democracy, personal freedom, social dialogue, equal opportunities for
all, adequate social security and solidarity towards the weaker individuals in the society” (Jepson
& Serrano Pascual, 2006, p.26). In 2000, it was emphasised that the ESM must be redefined and
its modernisation included: the need for education and training, lifelong learning, reforms of the
social security systems and promotion of social inclusion (Jepson & Serrano Pascal, 2006).
Therefore, risk became more individualised and it is the individual that now has to bear the risk
and deal with it (Ibid.). Accordingly, the social model of the specific state is based on specific
policies and aims which are based in the welfare and social policy and it is often shaped by
historical and cultural surrounding.
Conceptually speaking, Hay, Watson & Wincott (1999) made a four-fold division of the
European social models. Firstly, the ESM comprised common institutional architecture in
Europe. Secondly, it means a complex of different national models which are identified in
Europe. In the third sense the transnational aspect of the ESM is emphasized, meaning that
national social policies are no longer tenable but it is rather the transnational level that dominates
in formulating the social system. The fourth type comprehends the social model into wider
political processes and integrations as the most productive means of developing the social
policies (Hay, Watson & Wincott, 1999). It is inevitable to have a certain overlapping in
previous definitions but these are the conceptual meanings of what ESM actually embraces and
how much it is linked to already mention wider social circumstances.
Epping Andersen made a three-fold division of welfare models, on the basis of “degree of
de-commodification and modes of stratification, or if you wish, solidarities” (Epping-Andersen,
1999, p. 74). The first are liberal welfare regime, commonly connected with the United
Kingdom and the USA and are characterized by the minimal state, individualized risks and
market solutions (Ibid.). Distinctive for this type of a welfare state are: social guarantees mostly
restricted to “bad risks”, narrowly defined “social risks”, encouragement of market (Ibid.). The
second clusters of regimes are social-democratic. These are Nordic states. “Here, the historical
corporatist-statist legacy was upgraded to cater to the new ‘post-industrial’ class structure”
(Epping-Andersen, 1990, p. 27). Crucial characteristics of this welfare type are extensive social

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coverage, state domination, and egalitarianism, de-commodification of the state, national health
care and full employment. Finally, the Continental Europe is dominated by the Conservative
welfare regime. “The essence of a conservative regime lies in its blend of status segmentation
and familiarise” (Epping-Andersen, 1999, p.81). Epping-Andersen finds family relations one of
the key aspects of these regimes and it is “the security of the chief (male) breadwinner [that]
assumes fundamental importance. The familiarise bias is additionally reinforced by the
dominance of social insurance” (Epping-Andersen, 2002, p. 16). Due to the number of systems
that fall under this regime, there are many differences but these are mostly characterized by
corporatism, compulsory social insurance and wide health insurance, strong influence of family
and family relations on the welfare.
Giddens adds the fourth type to Esping-Andersen cluster and it is “the Mediterranean one
(Spain, Portugal, Greece), which also has a fairly low tax base and depends heavily upon
provision from the family” (Giddens, 1999, p.15). Besides, he adds, even fifth model could be
included today and these would be the post-Communist states which are trying to develop the
Western European welfare model (Giddens, 2007). Adnett and Hardy (2005) also recognize the
four models but label them differently, still defining each by the similar patterns as in the
previous passages: traditional-rudimentary model (present in Southern Europe), liberal-
individualist (Anglo-Irish), Romano-Germanic (conservative-corporatist) and Social democratic
(Nordic states).
5. How is European Social Model changing?
The new European social democracy should be based on different principles so the ESM
gains on strength and effectiveness so Giddiness adds that “[a] healthy economy needs well-
functioning markets, but it also needs a well-developed public domain, in which the state retains
its essential role” (Giddiness, 2003, p. 7). Relationship between the state and market is being
altered, but what is more important, it is the relationship between the state and citizens that is
changing as well. The new welfare state can come into effect only if both are aware of its
responsibility so they can act. Defining relationship between family, community, state and
market has to be not only solid but more stable as well, so the responsibility and importance of
all the segments is adequately defined, especially concerning the role of individual in all of those

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(Jenson, 2009). Uncareful positioning of any of these may result in worsening living conditions
on the sort but as well on the long run.
Also, Epping-Andersen (2000) stresses the need of coming to common grounds,
especially in accounting and measuring of incomes and expenditures, so the statistics can have a
full effect. The Commission’s Social Policy Agenda “seeks to ensure the positive and dynamic
interaction economic, employment and social policy, and … [a]t the heart of the agenda is the
modernisation of European social model” (European Commission, 2000, p. 2).
The new social model for Europe must combine the three strategic components: the state,
market and family. The interaction of each of them will result in specific social model. But the
key outcome of the new social model has to be the politics that creates sustainable and effective
welfare state, which means having social policy that prepares citizens for the future, rather than
helping them in the situation that has already happened. Therefore, it is the social investment
state that should be the model upon which the future social policy should be based. Social
investment state is an activating or enabling state (Giddiness, 2007) which provides services to
its citizens but on the other hand put more responsibility on them. It is based on the turn in social
politics which implies changing directions and relationships between the labour market, family
structures, needs and risks and all of this through modernising public and social politics (Palme,
2009). New welfare means modernisation of the model of classic politics and should be more
business oriented. Therefore, as Jenson and Saint-Martin (2003) emphasise, it is not only more
business oriented but also market friendly and more dynamic in character.
6. Social Investment State as a model for the future
Classic welfare state was more organized to remedy the risk which would imply that is
was formed to act after the risk or the “bad” has already happened. This was the concept of the
static welfare which does not act in advance but rather provide means for curing the problem.
The consequence of such an approach was the passive citizenry, not willing to invest in
themselves in their human capital. Also, responsibility is in this manner transferred to the state
and citizens do not feel the need to improve their position because it is the state that will provide
and satisfy their vital needs. Moreover, citizens can sometimes be better off living this way
(Giddens, 2007), due to certainty of financial inflows and possibility of being inactive and still

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having secure financial means, not considering its amount and contingency of using it. The main
principles, among others, of the social investment state are: activism and responsibility,
investment in education, knowledge economy and creating sustainable social environment
(Giddens, 1999).
The new welfare state must be activating and generate active and responsible citizenry.
Creating more equal and just society is possible only if the state has the means to act in advance
and prepare its citizens for life transitions. The two key transitions are from education system to
work and from work to retirement (Jacobsson, 2009; Lindth, 2009) and it is these moments that
prove to be the most dramatic. Giddens (2007) distinguishes two types of activism. The first
meaning is that “welfare services should be designed to help people help themselves” (Giddens,
2007, p. 100) and the second, being more community oriented and comprising social activism so
citizens turn more to local and civil society organizations which can help in delivering certain
welfare provisions (Ibid. p. 102). Social and human capital become the prime goal, so obtaining
good knowledge and skills that can be used in transitional phases especially represents the key
aim for each of the citizens. The state acts as provider of services, therefore encouraging citizens
to be active in search of workplace, thus stabilising their living conditions and escaping social
poverty traps. Giddens (2007) discusses the enabling state, but believes that it is the ensuring
state that is more encompassing and more acceptable term. Shuppert uses the term the ensuring
state to refer to the redefined welfare and for him “the ‘ensuring state’ emphasises the
responsibility of the state in areas where non-state agents play a dominant role in the provision of
public services” (Schuppert, 2003, 57). It is more encompassing model, aiming at further
obligations of the state and care for its citizens.
Education becomes one of the major objectives of the new welfare model. It is the case
because the early investment in children becomes the greatest capital in future. Cognitive skills
of children are most developed in early years and if it is not the case it cannot be amended as
strongly in the latter period of life (Giddens, 1991). Field (2003) discusses different opinions and
implications of the social capital and its necessity for the citizens today adding that social capital
often contributes to greater performance of citizens in both their private and working life. In the
context of the new welfare state, it means that schools with quality services should be available
to children, on one hand, but on the other, that quality care by their parents should be one the

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prime cores of social politics. It will provide good care for children but also enough time for
parents to spend time with their children, which in a way is investment of time. Longer parental
leaves are already the case in some parts of the EU, especially in Scandinavia (Lindth, 2009) and
children from these regions show the greatest potential in human and social capital (Lundvall &
Lorenz, 2009).
Epping-Andersen notes that young cohorts often do not have the smooth transition from
the school or faculty to work, especially in the Southern Europe (Esping-Andersen, 2000).
Young families as well tend to be worse off as they do not have stable jobs and can easily fall
into the trap of poverty and social exclusion. The EU feels strong about fighting social exclusion
(European Commission, 2000) because it is specifically related to the new social environment,
especially because it depicts the wider social environment of the person. “Social exclusion is …
defined as the state in which certain poor people feel obliged to live outside accepted social
norms in order to cope with poverty and to survive financially” (Walker, 2005, p. 79). It is the
result of exclusion from the wider society and inability to have successful inclusion and
acceptance either into the workplace but even more, into normal social life.
Certain social groups are more vulnerable than the others. Statistics (Eurostat, 2015)
show it is young and females that have suffered most during the years of the previous crisis.
Therefore, special attention must be paid to these groups and the new social model must be
especially friendly towards female employment and support conditions which are favourable to
women. Creating policies in this way contributes to future as “revised social model requires a
future-oriented perspective, and must therefore focus on those who will become tomorrow’s
adults” (Esping-Andersen, 2000, p. 31).
The new social environment must be job-friendly and make opportunities for adequate
jobs. Acquiring knowledge and skills enables a person to be more flexible in situations that are
transitory. The state acts here as provider of necessary reskilling or trainings that are needed if
the person is to be active on the labour market. Deregulation of labour market often implies
changing of jobs and security must be acquired by worker him/herself. One of the goals of the
EU is knowledge-based economy and the Commission’s Social Policy Agenda sets development
of human resources, upgrading skills, life-long learning, and access to quality education to be “of
utmost importance in providing people with real opportunities to prepare for rapidly changing

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working conditions and the requirements of the knowledge-based economy” (European
Commission, 2000, p. 31). Living longer, together with lower fertility rates significantly alters
the concept of retirement. Younger generations now will probably find it easier to adapt to
different circumstances because of several reasons: due to higher education and skills they will
be more adaptive and able to retrain, they will be more healthier and will live longer and
women’s employment will be more frequent and stable which will result in steady earnings and
higher earnings, inevitably leading to advantages after the retirement (Esping Andersen, 2000).
Different options for retirees will have to be developed due to flexibility of work and personal
life, resulting in different options that will be available for those who want to continue work even
after the age limit and those do not. On the other hand, private pension funds are already
becoming irreplaceable part of funding schemes that need to support sustainability of pension
systems (Natali, 2011).
7. Changing lifestyles and future welfare state
Contemporary family is changing, as has already been mentioned, this way altering
functioning of the welfare state and making the pressure towards the need for improvement and
creating new possibilities. Traditional family with the male breadwinner has been the model on
which the social politics was formed (Giddiness, 2007). As Epping Andersen notes (2002), one
of the most important alterations is changing social position and relevance of women, as part not
only of family and society but now of work force and decision making bodies. Women are
independent financially and able to choose their own lifestyles and way of creating their lives. It
is their independence that provides them with opportunities and enables them to be active
citizens. All of this results in shifting accepted and long dominating traditions of creating
lifestyles as regimen rather than chosen and created. Consequently, new ways of responding to
the new social relations are created and these differ among member states, but having not only
legal but also cultural traditions that define new social politics (Taylor-Gooby, 2001).
Another significant change in altering lifestyles is different family structuring which
results in more non-standard households and need of adapting social politics to the new
circumstances (Jenson, 2009). Whether it is non-working or one-income household, there is
serious threat here of the child poverty and one of the key aims of the EU is extermination of

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child poverty (European Commission, 2000). The social investment state is especially focused to
the children and their well-being and it is social politics towards children and child care that will
play especially important role in the future of the new model. Depending on the household type
and size, new measures will be necessary in this case as well, if we are to over all the
possibilities of negative outcomes for children. On the other hand, children today will be elders
soon and investment in them means brighter future and easier transitions in specific life phases.
The key concerns for the EU member states in the field of social policy comprise several
important concerns. First of all, there will have to be better planning so the sustainability can be
achieved at low costs, in the sense of cutting welfare programmes, what is happening now in
many of the member states. The state will have to provide quality services and look for
improving of living conditions of its citizens. The goals are set by the EU but are often escaped
and changed, so it becomes hard for member states to act jointly (Beck, 2013). Due to this, there
will have to be greater coordination among the states, but also between the states and the EU
institutions. Setting the agenda will have to be done with greater transparency and coordination
among the member states, due to high differences among them, economically, politically,
culturally etc. The crisis has shown that current divisions lower capacities of member states to
act quickly and jointly and that further cooperation is necessary. European Union will have to
undertake better coordination, either through further federalisation, as suggested by Giddens
(2013) or to expand current state of the art in specific ways to improve ability of the Union to act
in more unitary manner. All of this leads to the conclusion that the new European social model
will have to be reconsidered, not because it is not good or unacceptable, but rather because it has
to be adjusted to new conditions.
8. Conclusion
Thinking about the future of the European Union will largely depend on the ways it
responds to major social trends. Immigration issues have not been discussed due to the space
here, but together will all else that has been implied, the European states will have to act quickly
and effectively. If it is not the case, disintegration might become the future principle with
unforeseeable consequences. The welfare state can be a good starting point due to the fact that
citizens of different member states can find themselves closer to each other depending on their

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similar social problems rather than by their nationality. Therefore, creating sustainable social
model, on the basis of the social investment state can be the principle of creating equal and just
societies under the roof of the European Union. Adapting social policy to social changes is
supposed to have positive effects in the future, consequently meaning that current affairs are
being redeveloped in order that future generations can live in better living conditions and in more
equal society. In order to have this happen there will have to closer cooperation of citizens,
member states and the EU institutions as well.
The European Social Model should be based on principles of the social investment state
as the mode that should create sustainable development and equal opportunities for all. It has to
be planned carefully and in advance, taking into consideration all the above mentioned social
changes that have been taking place in the recent decades. Changing patterns of living and new
lifestyles, as well as different conceptions of family and individual statuses must be rethought as
the mould of new social relations that will shape the future of the citizenry. The European Union
has to take responsibility for its citizens and through investing in them, make them resistant to
possible crises that might occur, especially in the periods of life transitions. Welfare state must
be an active state which provides quality services to its citizens who need to be responsible, for
themselves and for the others as well. This way opens possibilities for new solidarities and new
ways of strengthening of social relations between citizens but above all, between citizens and
state and the European institutions, which are in need to stronger legitimacy and support.
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