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Brussels, 02/02/2012

Solidarity: For Sale?

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Source: Bertelsmann Stiftung

Europe needs a collective effort to create a perspective of social cohesion, sustained growth and employment, in addition to the collective actions to reduce public debts and to reform financial markets.

This social dimension is needed to avoid divergence between and within EU countries, all the more so as “a highly competitive social market economy, aiming at full employment and social progress” has become one of the objectives of the Union in the Lisbon Treaty. This is the position of the Bertelsmann Stiftung, based upon the findings in their new Europe in Dialogue publication “Solidarity: For Sale?” (http://www.bertelsmann-stiftung.de/SolidarityForSale).

Such a balanced approach is needed to avoid collective paralyzing austerity with all its social and political risks. Economy and employment are not zero-sum games. The most effective way to increase growth and employment is to invest in human resources. This opens the perspective to move up in global value chains, to improve competitiveness and to create new jobs.

To achieve this, more integration within the European Union, i.e. economic and ultimately political union, is crucial. EU members need to overcome national interests in favor of European interests. It is a strong Europe and not the individual nation-state that will be able to assert itself in a global competition that has become even fiercer in times of economic crisis.

Yet a strong Europe also means a Europe that cares for the well-being of its citizens. And this requires a more long-term perspective on growth and social justice, going beyond the short-term requirements of fiscal and austerity policies just targeted at budgetary consolidation. Living up to the Lisbon Treaty objectives of a European social market economy is the key for the democratic legitimacy of the integration project. For that reason European decision-makers have to demonstrate strong political will and leadership qualities.

In "Solidarity: For Sale?" (Bertelsmann Stiftung Europe in Dialogue Series 2012) eight distinguished authors give their views on the social dimension of the new European economic governance. They argue that the current actions on financial markets and public debt need parallel action (a Social Investment Pact?) for social perspectives not only at national level but also at EU level. The case is made for a Gold Standard for Social Investment. At EU level the European Social Funds and the Erasmus Program can be instrumental for collective action. An investment of € 40-50 billion (0.3 percent of the EU total GDP), which is still far less than the costs of programs to support the financial sector or to support countries with high public debt, could increase growth with 0.5 percent  in five years time and could bring continuing gains thereafter. This investment would come with one million jobs in the education sector and 4-5 million cross-border placements each year.

"Solidarity: For Sale?" also contains an overview of the impulses given by leading European think tanks. This book is number five in the Bertelsmann Stiftung series Europe in Dialogue. Former volumes released in 2009 – 2011 included topics such as "Crisis Prevention and New Institutions," "The Future of the Mediterranean," "International Monetary System" and " The European Union and the South Caucasus."

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