Trade competition due to the increased capital and labour flows ultimately causes the ‘acceptance of erosion of standards in the country with the higher social regulation, or some degree of harmonisation or convergence’ (Kleinman 2002: 67) as the countries compete with each other to create the most attractive environment for foreign investment and to keep their own industries happy at home. Although creating low production costs could lead to some degree of specialisation, it also opens up the possibility of exploitation and acceptance of low health and safety standards and protection.
Therefore it is ‘argued that common labour standards and/or wage rates need to be imposed to prevent unfair competition from low-wage countries’ (Kleinman 2002: 66). However, Kleinman presents the counter-argument that foreign investment is ‘not highly responsive to weak labour standards’ (2002: 68) and the image of the global system could be badly tarnished if continually associated with exploitation and oppression. Also, Europe has maintained a reputation for distinction in certain industries and sectors, illustrated by the relatively low levels of labour mobility.
The majority of the labour migration that has occurred has come from outside into the EU; this will be and remain a major welfare challenge for the EU only resolved with ‘some kind of a harmonized European social minimum income and welfare scheme, perhaps adjusted for some national or regional economic standard’ (Kuhnle 2000). The EU response to the challenges created and presented by globalisation is varied and uneven. However there is a clear social dimension to much of EU behaviour.
For example, policies on regional, agricultural or developmental structural funds demonstrate the EU awareness of a need for certain universal standards. This can also be seen in the protection of social rights for EU citizen movement between states and in the ‘directives imposing minimum standards for health and security at work places, working hours, and minimum standards for maternity leave and benefits’ (Kuhnle 2000).
Although taxation and welfare issues are unofficially outside the agenda of the EU, it seems a natural progression to predict an ‘actual harmonization or for an equalization of benefit levels in welfare schemes to a European average’ (Kuhnle 2000) due to the movement of peoples throughout the EU. It is claimed that the installation of a monetary union implicitly will result in constraints on the social aspects of Europe, namely the welfare institutions and labour market regulations; ‘The EMU represents a tightening of the macroeconomic background to `Social Europe’.
Social Europe – advanced national welfare states – has prevented the EU (EEA) from widespread poverty and inequality’ (Kuhnle 2000) It is only with the creation of a full and co-operating democratic political federation that the EU citizen’s social and welfare rights will be truly protected and no longer subject to the constraints of standing alone in a global market economy. Although, for many, the importance of the EU is restricted and it’s behaviour inadequate regarding the necessity of welfare issues, the EU has a history of intense change.
It also upholds a reputation for decisive movement forward and, although the public would need clear assurances of the motivations for welfare reform, the European track record of collective endeavours does not inspire scepticism. Using the same models of development as were used for further economic integration, i. e. creation of institutions and full transparency, the EU should be able, if it’s historic legitimacy is of any worth, to create and sustain a European model for social protection and welfare.
The EU has developed into a major economic superpower, with a successful, if partial, implementation of a single currency but its hesitancy to become an ‘all-rounder’ in the global circuit, significantly the void surrounding social issues, lessens it legitimacy and has adverse effects on the individual states struggling to keep afloat due to such intense global competition. If this is achieved, the void of welfare and social policy within the EU will be filled and the citizen can be reassured that all aspects of government, on a state or union level, are secure.
BIBLIOGRAPHY Geyer, RR. (2000) Exploring European Social Policy. Cambrideg: Polity Press Kleinman, M. (2002) A European Welfare State? London: Palgrave Kuhnle, S. (Ed) (2000) Survival of the European Welfare State. London: Routledge Rhodes, M. et al. (1996) “Globalisation and West European Welfare States: A Critical Review of Recent Debates”, Journal of European Social Policy 6 (4) pp 305 – 327 Sykes, R. , Palier, B. & Prior, PM. (Eds) (2001) Globalisation and European Welfare States: Challenges and Change. London: Palgrave 0232664 European Social Policy Essay 2.