Socio-economic Rights and the Single Market

October 18, 2009

There are two differing perspectives regarding European integration in the context of social and economic rights. On one hand, some view it simply as a triumph of economic freedom and competition. “In this light, the Treaty of Rome is conceived as an economic neo-liberal constitution whose aim is to protect market freedom from public power and whose underpinning legitimacy lies in voluntary market transactions and enhanced economic efficiency.”[1] The process of European economic integration is seen as one which poses a challenge to national social rights while an equally adequate European social rights system has not been developed. The other view looks at market integration in Europe as a means of securing the welfare state with positive implications for social rights.[2] Thus, it can be argued that the EU gives the protection of social rights a new dimension, since economic competition between states poses a threat to social rights that would be insufficiently protected on the national level alone. The question remains whether the process of economic integration in Europe serves only market freedom and competition or presents a framework in which the need for the protection socio-economic rights can be emphasized and developed.

As we have already mentioned before, the development of the EC had as its main goal the market integration of Europe. Yet, over the years it became evident that the EU is not a purely market oriented organization, but one concerned with the protection of human rights, democracy and the rule of law. In its case law, concerning the rules of market integration, the ECJ has usually resorted to a neo-liberal approach, which often had undesirable implications for national social policy. However, the ECJ has also ruled on a number of cases in favour of a certain social policy and thus justified some forms of restriction on trade. This has occurred when the regulation, which imposes certain restrictions on trade, is to be found in the majority of Member States. In this light, the rulings of the ECJ can be said to have focused more on the harmonization of national laws than on deregulation.[3] Although the ECJ has stressed that Community law does not strip the Member States of power to maintain their own social security systems, those Member States who had more protective social policies, which the majority of Member States did not subscribe to, were found to have regulations which do not conform to Community law and rules of market integration. Yet, even if the aim is identified in the judicial harmonization of national legislation, there have often been negative implications for national social rights. While the protective national social regulations have been tackled in order to eliminate restrictions on trade, there has not been an equally effective promotion of common social rights.[4] A set of common regulations on the EU level, it is believed, would also imply the primacy of social rights over the market.[5]

Therefore, whether social rights or market integration seem to be of primary importance depends on whether the integration of the market is positive or negative. Judicial review of national regulation constitutes negative integration in so far as that regulation is found to be inconsistent with Community law. Positive integration would constitute the creation of a common European social model. The creation of such a model in the EU context seems difficult keeping in mind differing national interests and ideologies.[6] It is the method of negative integration that is conducive to negative implications for national social rights, even though both methods ultimately result in the harmonization of national regulations.

Miguel Poiares Maduro rightly argues that the model of European citizenship is incomplete without the inclusion of fundamental social rights. By identifying the free movement provisions as fundamental freedoms the ECJ has affirmed the evident fact that the EU is primarily an economic organization where the citizenship model corresponds to that of a “market citizen”. What is lacking in the notion of European citizenship, “the idea of European social rights as European social entitlements arising from a criterion of distributive justice agreed among all citizens of the EU is rarely, if ever, discussed.”[7] However, the inclusion of social rights is a necessary step that must be made if European integration is to be complete. As Maduro claims, European citizenship cannot only be available to wealthy, elitist citizens who have the privilege to enjoy the free movement provisions. The creation of a European social model is perhaps also necessary as a legitimizing factor for European market integration and the EU itself.

When speaking of a lack of a common European social model, we should acknowledge that many EU “policies already have broad redistributive effects and what appears to be lacking is an overall criterion of distributive justice to assess and coordinate those redistributive effects.”[8] That absence of that overall criterion constitutes the lack of the legitimizing factor in EU policies which have unpredictable redistributive effects. It also constitutes the lack of the European social self, a prerequisite for a complete European citizenship. The EU’s majoritarian character and its policies can only be legitimized in the existence of a social contract on which they are based.

One of the defenders of European integration, Jürgen Habermas, holds that European integration offers a better chance of achieving social justice than can ever be possible within the confines of the nation-state. Habermas argues that the justifications which once pushed the process of European integration, namely the preventing of another war and controlling German power, are no longer satisfactory. What is needed is a new set of justifications if the project is to continue successfully. During the process of integration it is necessary to preserve the achievements of the European nation-state, of which the most positive Habermas considers to be the welfare state. The welfare state provides the individual citizen “with a set of social rights and also ensures that the capitalist economy operates in accordance with the public interest.”[9] He believes that this positive achievement of the nation-state, which is today threatened by effects of globalization, can be preserved in a Federal Europe while simultaneously rejecting the nation-state’s negative aspect of nationalism.

The social-democratic rights once protected within the confines of the nation-state are today threatened by the negative effects of globalization. In this scenario, the nation-state is no longer an adequate protector of these rights, the result of which is the impotence of ordinary citizens to be the creators of their own laws. Citizens must be able to control economic forces and this can, according to Habermas, be done only on the European level. Europe has already an established commitment to social, political and cultural inclusion and therefore the basis for a common set of values is not hard to find; it rests in social justice. In this commitment Europe is unique and quite different from the United States.[10] A Federal Europe can retain the idea of solidarity as opposed to purely neo-liberal values.

The view of Habermas depicts a positive version of European integration. Nevertheless, it too stresses the need for social justice on the EU level as a legitimizing factor for the project. Whether in the process of European integration economic freedom will be supplemented by adequate social rights will depend on the model adhered to and whether to the ideal of efficiency will be attached the ideal of distributive justice.[11] It also depends on how far the economic integration of Europe moves in the direction of political integration. The fact remains that a common social rights model for the EU seems difficult to agree on due to the fact that Member States have different views on whether such rights constitute fundamental rights all. The EU Charter of Fundamental Rights, through its inclusion of socio-economic rights acknowledges that the respect for these rights constitutes part of the European identity. However, the difficulty on agreement is evident in the subjecting of some of those rights to national laws and policies. Therefore, the debate on the future of a social Europe still largely rests in the ideological notions of European integration.

[1] Miguel Poiares Maduro, ‘Striking the Elusive Balance Between Economic Freedom and Social Rights in the EU’, in Philip Alston (ed.), The EU and Human Rights, 449.
[2] Ibid.
[3] Ibid., 451.
[4] Ibid.
[5] Miguel Poiares Maduro, ‘Europe’s Social Self: ‘The Sickness Unto Death’’, in Jo Shaw (ed.), Social Law and Policy in an Evolving European Union (Portland: Hart Publishing c/o, 2000), 328.
[6] Ibid., 327.
[7] Ibid., 340-341.
[8] Ibid., 343.
[9] Glyn Morgan, ‘Hayek, Habermas and European Integration’, [online]
[10] Ibid.
[11] Miguel Poiares Maduro, ‘Striking the Elusive Balance Between Economic Freedom and Social Rights in the EU’, 465.

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