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Social Europe

Social Europe, but how? A view from Sweden

06 Jul 2016 - 13:08
Source: By Hedman - Wikipedia
In the aftermath of the outcome of the UK referendum, Swedish Prime Minister Stefan Löfven declared that the way forward for the EU is to place more emphasis on the creation of a “social Europe”. To this end, Löfven has called for a European Summit in Sweden in 2017 in order to give more impetus to this process.

However, it remains relatively unclear what exactly the notion of a social Europe refers to in a Swedish context. The Swedish red-green minority government is faced with a reluctance to yield any more sovereignty in favour of more European commitments on national social policies and has to cope with distinct left-right conflicts between the pro-European parties as to if a more social Europe is indeed desirable.

Limited social convergence by the Open Method of Coordination
From the perspective of Swedish left-of-center, the possible race to the bottom which emerges when countries start competing for investment by lowering the level of labour market protection, tax rates and so on is deeply worrying. However – and here is the paradox – Sweden, along with many other Member States, has been very reluctant to delegate any further authority over these issues to the supranational level. Therefore, the Open Method of Coordination has been the preferred method for coordinating these policy areas in an attempt to turn the race to the bottom to a race to the top.

The Swedish expectation has been that the other member states would converge towards a Nordic model of high levels of social protection, active labour market policies and investment in education. However, many have pointed to the limited impact of softer modes of governance, such as learning by or exchange of best practices, and more specifically to the lack of sanctions if member states do not meet targets.   

Protecting the Swedish model
A specific Swedish concern is that any European level initiatives should take into account the specificities of the Swedish labour market model, with strong emphasis on collective bargaining and a major role for the social partners. The Swedish trade union confederation and social democrats are working actively for the inclusion of a Social protocol in any future major EU-treaty revision. The idea behind the protocol is to rebalance the concerns which came out of the European Court of Justice verdict on Laval.

The conflict emerged when Swedish trade unions made a blockade at a construction site in Vaxholm where a Latvian company with posted workers did not have a Swedish collective agreement. The ECJ ruling in favour of the Latvian company came as a big surprise to the Swedish trade unions and was perceived as a threat to the Swedish collective agreement model and the right to take actions in the labour market. The labour market models of member states and the fundamental rights of unions to take action should in their view be seen as more fundamental than the rights stemming from the principles of free movement.
 
From Treaty change to a revision to the Posted Workers Directive
In the post-Brexit debate, the Eurosceptic Left party has urged the government to make demands for a treaty revision in order to have a social protocol. But Prime Minister Löfven has argued that this precise moment is not right for opening a treaty debate. Rather, the government prefers to work in favour of a reformed Posted Workers’ Directive that can effectively secure the quest for the principle of “same salary for same work” and to develop a European Social Pillar (a work led by the former Swedish minister of finance, Allan Larsson).
 
Social lessons from Brexit?
Thus far, there has been low unemployment in Sweden in sectors where most of the other EU nationals are employed and that has probably contributed to making tensions less visible than could have been the case. But if the government decides not to give priority to a social protocol, there will be expectations of delivering some other initiatives to safeguard the Swedish model of labour market regulations, not least during the Social Europe Summit next year. If not, this could  feed into creating further tensions similar to the ones intensely debated in the UK during the referendum, which could be used politically by parties such as the nationalist, Eurosceptic party of the Sweden Democrats.
 
What type of initiatives we can expect from Sweden is currently quite unknown, which makes the rather heated political debate in Sweden about social Europe slightly confusing. On the one hand, the concept is strongly emphasised by the government, while on the other hand we do not exactly know what the concept refers to (besides finding a way of safeguarding the compatibility of the Swedish labour market model with European integration). For sure this topic will continue to be at front of the European debate in Sweden in the future.
 
The uncertainties of a non-Eurozone country
With Brexit, Sweden loses a close ally in the EU. But on matters relating to social affairs and the labour market, an EU without the UK may actually be more in line with Swedish preferences. However, there is a major uncertainty about the future balance between what is done exclusively in the Eurozone on the hand and policies that should apply to all EU-members on the other hand. When proposals about a “Social Pillar for the EMU” were floated, Sweden as a non-Euro-member responded that these initiatives need to be dealt with in a EU of 28 (soon to be 27) format. When the UK leaves, the balance in the EU shifts and being a non-Euro country, Swedish requests of addressing social issues in the EU-format might be harder to convey to the Eurozone-countries. The risk of marginalisation becomes more visible. How to deal with these issues will be a central theme in Swedish European policies in the near future.

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Göran von Sydow is Deputy Director and Senior Researcher at the Swedish Institute for European Policy Studies in Stockholm
 

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