European integration: Current problems and future scenarios

Abstract

Since the Second World War social security systems in most Western European countries have expanded dramatically. Besides the classical contingencies of old age, unemployment and ill health, other contingencies fell successively under the coverage of social security. Moreover, social security was extended to more and more categories of the population. Economic growth paid for it all. However, since the economic recession of the mid-1970s the days of relatively carefree and optimistic expansion of social security have ended. Everywhere governments have been under pressure to cut back on their social expenditure and to reform their national social security system. However, from the national contributions one gathers that this pressure has seldom resulted in anything which resembles a wholesale reform. Fear of the unknown, politicians’ vacillations, and numerous vested interests probably prevented this. As a result, real reform was postponed until well into the 1980s and, in some cases, the 1990s. Even then, change has often been the sum of numerous partial reforms instead of the result of wholesale reform. In a sense, therefore, the current debate and controversy on social security is a belated result of the reversal of the 1970s. Most issues, especially the financial ramifications of social security, have been debated at a national level. But in the last decade of the twentieth century, European developments, in particular the impending introduction of the Economic and Monetary Union (EMU), have begun to loom over national issues.