European social model

The Commission’s 1994 White Paper on social policy (COM (94) 333) described a ‘European social model’ in terms of values that include democracy and individual rights, free collective bargaining, the market economy, equal opportunities for all, and social protection and solidarity. The model is based on the conviction that economic progress and social progress are inseparable: ‘Competitiveness and solidarity have both been taken into account in building a successful Europe for the future.’

The former EC Treaty, the Charter of Fundamental Rights of the European Union and European labour law have established the foundation of legitimacy for the European social model.

The main pillar of the European social model features in the Treaty of the functioning of the European union (TFEU). For example, Article 8 of the TFEU states that the Union, in all its activities ‘shall aim to eliminate inequalities, and to promote equality, between men and women’. Further, it states that the Union, in defining and implementing its policies and activities, ‘shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health’ (Article 9), and that the Union ‘shall aim to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation’ (Article 10).

The Treaty fully recognises the role of the social dialogue and the social partners in its Article 152, which states that ‘The Union recognises and promotes the role of the social partners at its level, taking into account the diversity of national systems. It shall facilitate dialogue between the social partners, respecting their autonomy’. The TFEU also contains the legal framework for the European social dialogue in Articles 154-155 TFEU. The Treaty’s employment title embodies the ‘open method of coordination’ for the European Employment Strategy (Article 145 to 150 TFEU).

The EU Charter, which has now been given legal force by Article 6(1) of the Treaty establishing the European Union (TEU, enshrines the fundamental rights of association, information and consultation, and collective bargaining and action, anchors the role of the social partners in EU social policy, and ascribes legitimacy to collective bargaining and collective action, and to information and consultation at the level of the enterprise.

Finally, European labour law has established a general framework for improving information and consultation rights in the Member States, representing a crucial dimension of the European social model (Council Directive 2002/14), and in transnational companies with European Works Councils (Council Directives 94/45 and 2009/38).

In its strategy ‘Europe 2020’, adopted in 2010, the European Union reiterated its commitment to the European social model by stating that it seeks to create more and better jobs throughout the EU. To reach these objectives, the European Employment Strategy encourages measures to meet three headline targets by 2020:

75% of people aged 20-64 in work; school drop-out rates below 10% at least 40% of 30-34–year-olds completing third level education; at least 20 million fewer people in or at risk of poverty and social exclusion. The actions outlined in the flagship initiative ‘An Agenda for new skills and jobs’ are essential to meet these targets.

The European social model is considered to be unique in its dual focus on economic and social principles. For example, in a Communication on ‘Employment and social policies: A framework for investing in quality’ (COM (2001) 313), the Commission contrasts the ‘European social model’ of public social spending with the ‘US model’, which relies on private expenditure, highlighting the fact that 40% of the US population lacks access to primary health care, although per capita expenditure as a proportion of GDP is higher in the US than in Europe. The Commission goes on to emphasise that it is not only the existence of jobs but also the characteristics of employment that are important to the European social model. The EU’s commitment to inclusion is reiterated in the European Platform against Poverty and Social Exclusion, which forms part of the Europe 2020 Strategy, stating that combating social exclusion, promoting social justice and fundamental rights have long been core objectives of the European Union, which is founded on the values of respect for human dignity and solidarity.

The European Commission’s Industrial Relations in 2010 Report highlights the fact that industrial relations at European, national, cross-industry, sectoral and company level, is crucial to the success and stability of the European social model. It also states that one of the key challenges for the European social at present is the search for the right balance between, on the one hand, efficiency and, on the other hand, equity and solidarity .

A further defining feature of the European social model, when contrasted with that of the US, is the important role attributed to organisations of workers (trade unions) and employers in Europe. Although a report from Eurofound in 2008 points to a steady decline in union membership across the European Union, it shows that the weighted average union density in EU Member States remains comparatively high, at just under 24%, according to figures contained in the Commission’s Industrial Relations in Europe 2010 report, which states that over the past few years, earlier trends towards declining union density, decentralisation of collective bargaining and greater employee participation have continued, and the company level has become more prominent in terms of bargaining.

This contrasts with trade union density of 12% in the US and of 18,2% in Japan, according to the Eurofound 2008 report. The US figure is lower than any EU country with the exception of France.

The European social model is also characterised by a high coverage rate of collective agreements. The Commission’s Industrial Relations in Europe 2010 Report notes that voluntary collective bargaining plays a key role in industrial relations and is a defining element in social partnership within and beyond the EU.Although, according to the Commission’s report, there are large differences in the role, coverage and effectiveness of collective bargaining around the EU.

Overall, according to the report, an estimated 121.5 million of the 184 million employees in employment in the EU were covered by a collective agreement in 2008, which translates into an adjusted bargaining coverage rate of 66 %, or two-thirds of all EU employees. Over the past decade, the number of employees covered increased by more than eight million, but since employment increased much faster, the coverage has rate slipped by two percentage points. There are wide variations in coverage rates, however, ranging from virtually 100 % in Austria to less than 20 % in Lithuania.

See also: EU system of industrial relations; fundamental rights; information and consultation; employee representation; social dialogue; solidarity principle; tripartite concertation; European works councils.