Social Policy in Europe in the Run-Up to the IGC: The Medium-Term Social Action Programme 1995-97

The Community is rapidly approaching a dramatic stage in its evolution - monetary union, a stage with powerful technical, fiscal and social ramifications for each member state. Member states will loose their control over exchange rates and be obliged to meet stringent fiscal and monetary policy targets. Yet there has been limited analysis of the social consequences of EMU. This paper examines the state of Social policy in Europe in the mid-1990s and suggests that not only social protection but also the issue of social participation and governance needs to be addressed in developing the EU’s social dimension. The IGC, therefore, should carefully examine this issue, particularly in light of the difficulties already being felt in some member states. Without this, the concept of a ‘European social model’ could stagnate or even be viewed as a shibboleth, while the ground once gained for the social dimension at the national level is threatened rather than consolidated by European integration. The legitimacy of the EU itself is at stake if it is perceived in this way by the citizens of the member states. This points to the central importance of values and norms of social justice and social cohesion in shaping the future of Europe. Just as important as creating the market is the task of correcting it and generating solidarity. Market correction is a key purpose of social policy which has as yet remained largely a matter for member states. However, against a further and potentially major loss of sovereignty following monetary union, the issue of market correcting social policy may be propelled to the fore at European level