The future of Europe’s social systems in the aftermath of the crisis and responses by the EU
Institute of European Studies, Facultés universitaires Saint-Louis, Brussels, 12-13 May 2011
The consequences of the current economic crisis challenge the functioning of Europe’s social systems. Facing the constraints imposed by the global deregulated financial markets, the EU member states’ governments consider that the only viable option is to adopt very strict austerity programs. These policies question the sustainability of some of the main characteristics of the various social models existing across various EU member states (pension systems, access to education, health coverage, universal public services).
According to various analysts, one of the root causes of the current crisis has been weak public regulation of financial markets. Notable indications of this include, the possibility to circumvent sound rules by means of securitization and the CDS risk insurance system thanks to the complacency of rating agencies, and the new accounting standards that have reinforced the cyclical nature of financial risks (i.e. mark to market). Combined with this weak regulatory framework, the rising debt of US households, generated partly by the fall of real wages of low qualified workers and by the weak development of public goods (notably financially accessible higher education and health services), is one of the main factor behind the emergence of international macroeconomic disequilibrium that led to the current crisis. In order to maintain a high level of growth despite the relative stagnation of US real wages over the last three decades, the US economy had to develop international credit facilities to fuel domestic demand. These credit facilities were extended to the poorest households, generating the notorious subprimes that ultimately led to the bursting of the real estate bubble.
In the light of the analysis of the origins of the crisis, the current European responses in terms of economic policy might prove paradoxical. Austerity packages adopted by most EU governments could have the effect of dismantling a significant share of public goods and services. The EU member states could then experience a similar evolution than the US economy in the 1970s and 1980s, transforming their national economic and social models into something closer to their US counterpart, despite the fact that it might have been the inherent weaknesses of that very model that have contributed to generate the crisis.
Some analysts have already expressed the view that the EU responses have been too limited regarding financial regulation. Indeed, the EU and the member states did not fundamentally question securitization or CDS mechanisms. No real supranational tool has been set up to regulate the trans-European activities of financial intermediaries. Few member states have expressed the need to control short-term speculative financial flows despite the uncertainties and serious disruptions generated by their very high volatility. The only major proposed innovation by member states in terms of economic and social governance seems to be the principle of an ex-ante supranational control of the public finances of the member states in order to contain budget deficit and to enforce austerity programs at the European level.
In the global economic context characterized by a combination of the slowdown of the developed economies, the accentuation of the international competition and the strong growth of some emerging economies, can the current responses of the EU and its member states preserve the essential specificities of the European social models? What are the political, social and economic consequences of such choices? Are they other possible options to insure the sustainability of Europe’s social models?
Submitted papers in English or in French will cover one of the following items:
The prospects of economic growth in the aftermath of the crisis and their effects on the financing of European social systems
The European responses to the crisis regarding public services
The European responses to the crisis regarding labor markets, industrial relations and migration flows.
Which alternative economic policies to address the crisis and to preserve European social models?
Deadline for paper proposals: 15 December, 2010
Notification of acceptance: 15 January, 2011
Submission of full papers to chairs and discussants: 15 April, 2011
Please submit your paper abstract (300 words max., text only) with
- Name and Title
- Email address
Abstracts will be subject to the standard peer-review process. The organizers reserve the right to adapt and amend panels to the conference programme if necessary.