Social policy in the EMU area: between a dream and a nightmare

The creation of Economic and Monetary Union is an essential stage in the construction of a European economic entity. Its introduction is inherent in a general rationale of the development of trade and markets but the economic growth which EMU sets out to guarantee is frustrated by the increase in unemployment in several European countries. The traditional boundary between the economic policy sphere and the political sphere is fading. One of the fundamental draw-backs of the creation of EMU is that virtually all possibility of economic adjustment becomes confined to the labour market and social protection. The benefits of social protection are regar-ded exclusively from the standpoint of costs which have to be reduced, no account being taken of the long-term economic and social effects of such a policy. Protection of the nation states (i.e. the principle of subsidiarity) and the international logic of the market block European political integration at a pre-federalist stage and curtail its social dimension. The shortcomings asso-ciated with such political choices have now become obvious and politically unacceptable, com-pelling governments to embark on new national and/or European employment polices and to reconsider the instruments currently used by the EU in the social policy field (subsidiarity prin-ciple, coordination of social security systems, convergence of targets)