Be it common principles for old-age system reforms, a mutualising of parts of the unemployment insurance or binding indicators to prevent poverty: the German answer will mostly be No. Citing the Treaties, it is argued that social policies are unmistakably in the hands of the Member States. While in theory Social Europe is welcomed, the discussion on a concrete transfer of sovereignty is a dead end street.
This split in the German public debate goes through many political parties, trade unions and NGOs. The background is less the lacking imagination how to draw a common social strategy for 28 institutionally and economically different welfare states. It is more an ever growing discontent with the process of European integration as a whole, which is currently blocking all efforts for a more socially balanced Europe.
Germany as role model
But isn’t Germany the prominent example of a main beneficiary of the single market as well as of the single currency? Impressed by the ongoing euro crisis the public debate in Germany is a different one, however. Chancellor Angela Merkel was very successful to let a majority of Germans believe in a Euro Crisis narrative, which is quite different to the international crisis perception.
Accordingly, EMU has primarily a severe non-compliance problem with common budget and stability criteria by some southern European member states. Following these lines, Germany is the good pupil in class who brought with its crisis management of austerity these countries back on track and who helped them with credit lines in an altruistic solidarity approach. Attempts from the Juncker Commission to reform EMU in a holistic way, casually progressing towards Social Europe, are discussed in two different ways.
Preserving the status quo
Firstly, the centre-right, including the social democrats in government, wants to preserve the status quo. The sentiment is that Germany has done enough to assist the countries in crisis and that there is no need to open the Pandora’s box of more fiscal and social coordination in Europe. Germanys model, stressing exports, strong budget rules and a merger of labour market flexibility and corporative co-determination is perceived as a best practice example. This is why all European initiatives fostering labour market mobility and Social Dialogue are welcomed.
Naturally the advocates of strong fiscal budget discipline fear the erosion of EMU budget surveillance rules. This explains Germanys strong opposition against a fiscal capacity, a European unemployment insurance or a social pillar with binding indicators. Even the ESIF was eyeballed critically: The accompanying new flexible interpretation of the Stability and Growth Pact was a nasty shock for the German government.
Disappointment with European integration
Secondly, the centre-left is deeply disappointed on the path European integration has taken the last two decades. The austerity management is interpreted as the tip of the iceberg, showing best the dominance of neoliberal thinking in the EU. Single Market and EMU architecture follow a market-driven integration scheme, which steadily hollows out the national welfare state arrangements.
Competition and budget rules are deemed to be more important than social standards and workers’ rights. The hopes to establish a transnational tie of solidarity in a market-correcting manner seem to be nothing more than an utopian reminiscence of the Delors era. The argument against new forms of common economic and social governance is the practical experience that all plans to build a true European Social Model vanished away, while market integration was implemented at the same time.
German trade unions object the idea of competitiveness councils to monitor wage developments and productivity in the Member States as well as a common unemployment insurance scheme. They do not trust these ideas spelt out in the Five Presidents Report and fear losing to shape social and economic processes as soon as politics are raised on a supranational level.
In defence of the traditional welfare model
Both camps argue in defence of the traditional welfare model, however from different angles. It is foreseeable that German politics will focus increasingly on the red lines of giving up national sovereignty in economic and social affairs. The multiplicity of crises in Europe let people sceptically question the positive returns of transnational integration. This can be seen in the public indignation on TTIP as well as in the growing pressure from a new populist right-wing party, which openly claims the ‘back to the nation state’ as the best solution to all nowadays problems.
Accepting more integration as a tool for better tackling global risks and therewith gaining even more sovereignty on a higher level compared to the embattled nation-state is a solely intellectual debate. A way for boosting Social Europe without awaking fears of another fated to die one-size-fits-all approach still needs to be found.
Björn Hacker is Professor at the Hochschule für Technik und Wirtschaft Berlin.