A new era of European Integration? Governance of labour market and social policy since the sovereign debt crisis

Abstract

In this article we develop a typology of European Union (EU) integration to capture how, to what extent and according to which policy aims EU involvement in Member States has altered with respect to labour market and social policy and what it signifies in terms of institutional change. On this basis, we show first that new instruments – the Six-Pack, Fiscal Compact and Two-Pack – have been layered onto the existing institutional framework governing the Economic and Monetary Union (EMU). Furthermore, we show that the instruments strengthening budgetary discipline to improve the functioning of European Monetary Union have become more explicit in terms of policy objectives, particularly specifying new benchmarks to obtain fiscal discipline. They are also stricter in terms of surveillance and enforcement. Second, we show that there are initiatives to address and improve the social dimension of the EU – Europe 2020, the Social Investment Package and the Youth Guarantee – and that these have also emerged through a process of institutional layering. However, the aims around Europe 2020 and Social Investment continue to be based on the voluntary Open Method of Coordination, with comparatively weak surveillance and enforcement. In the current context, and in order to attain economic growth together with social cohesion and welfare, it is of utmost importance that EMU criteria should be altered to take account of social investments.

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Figure 1

Notes

  1. 1.

    In the framework developed by Hacker (2004) each type of change is associated with the types of political dynamics (coalitions and veto players) underlying possible type of change. In this article, we merely use the concepts to assess and to illustrate what types of changes have taken place in the European economic and social governance processes, without considering the political dynamics behind it.

  2. 2.

    Through the AGS, the EU Spring Council in March issues guidance covering fiscal, macroeconomic structural reform and growth enhancement for national policies on the basis of QMV. The policy priorities decided in the AGS should be included in Member States’ Stability or Convergence programmes (concerning monetary policy) devised within the SGP, and in National Reform Programmes concerning economic, employment and social policies devised within Europe 2020 that are to be submitted in April. Finally, the Commission proposes Country Specific Recommendations, which are then to be adopted/altered by the Council before the summer.

  3. 3.

    The legislation consists of these six parts: (i) strengthening surveillance of budgetary positions and coordination of economic policies, (ii) acceleration and clarification of the EDP through a Council regulation, (iii) enforcement of budgetary surveillance in the euro area through a regulation, (iv) definition of a budgetary framework of the MS through a Directive, (v) prevention and correction of macroeconomic imbalances through a regulation, (vi) enforcement of measures for correcting excessive macroeconomic imbalances in the euro area.

  4. 4.

    The Fiscal Compact was signed in March 2012 by all EU members except the United Kingdom and the Czech Republic and is the fiscal part of the Treaty on Stability, Coordination and Governance.

  5. 5.

    The difference between the actual ratio and SGP limit shall be reduced by an average rate of one-twentieth per year as a benchmark.

  6. 6.

    The Two-Pack consists of two regulations (based on Art 136 TFEU) complementing the Six-Pack in euro area countries to improve the transparency and coordination of Member States’ budgetary planning and decision-making processes (European Commission, 2013b).

  7. 7.

    Applicable to those countries that are not under a macroeconomic adjustment programme.

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Acknowledgements

We would like to thank many colleagues who have commented on different drafts of this article, including Susana Borrás, Jochen Clasen, Nathalie Morel, Joakim Palme, Maria João Rodrigues and Marion Schmid-Drüner.

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Correspondence to Caroline de la Porte.

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de la Porte, C., Heins, E. A new era of European Integration? Governance of labour market and social policy since the sovereign debt crisis. Comp Eur Polit 13, 8–28 (2015). https://doi.org/10.1057/cep.2014.39

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Keywords

  • European Integration
  • institutional change
  • governance
  • stability and growth pact
  • European social policy