European Trade Union Institute, ETUI.

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12 February 2015

EU intervention in national welfare state reforms

EU governance impact

On 3 February 2015, the ETUI held a symposium to examine several instances of EU intervention in social protection reforms in member states severely affected by the sovereign debt crisis.

The new institutional architecture developed since 2010 in an effort to remedy structural deficits and strengthen budgetary discipline (Six-Pack, Two-Pack and budgetary pact) has had a significant impact on social protection systems, said Caroline de la Porte, a researcher from the University of Roskilde (Denmark). Given that these new instruments seriously compromise implementation of the Europe 2020 strategy, she issued a plea for their relaxation so as to enable the states most severely affected by the crisis to embark on new social and welfare investment, in particular in the areas of education and training.

ETUI researcher Sotiria Theodoropoulou presented the results of her research conducted to evaluate the impact of the Memoranda of Understanding (PoU) on labour markets and on social policy in Greece and Portugal. She stressed the deeply intrusive nature of the Greek memorandum, in particular in relation to retirement pensions and wage bargaining, and explained that the pressure to implement conditionality measures had been stepped up whenever, for various reasons ranging from administrative difficulties to deeper-than-predicted recession, the stipulated measures had not been implemented or targets had been missed.

Emmanuele Pavolini, of the University of Macerata, compared the reforms of social protection systems conducted since 2010 in Italy and Spain. The Italian researcher drew attention to the different ways in which the drastic measures adopted in these two countries represented a threat to democracy: sidelining of parliaments and social partners, rise of populism, mistrust of elites, etc.

In Ireland, a country known before the crisis for its extremely favourable tax regime for foreign investment, the government had been keen to ensure that the conditions imposed by the Troika did not threaten its low-tax regime. This stance ensured that the already dominant neoliberal paradigm emerged strengthened, said Fiona Dukelow, a researcher from University College, Cork.

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