Globalization and the Reform of European Social Models. Bruegel policy brief 2005/01, November 2005

Sapir, Andre. (2005) Globalization and the Reform of European Social Models. Bruegel policy brief 2005/01, November 2005.

Abstract

Summary. Europe’s labour and social institutions need urgent reform if we are to grasp the opportunities offered by globalisation and avoid the threats. But the notion of a single "European Social Model" is largely unhelpful for thinking about reforms. Of the four main models operating, the “Nordic” and the "Anglo-Saxon" models are both efficient, but only the former manages to combine both equity and efficiency. Critically, the "Continental" and "Mediterranean" models, which together account for two-thirds of the GDP of the entire EU-25 and 90 per cent of the GDP of the 12-member eurozone, are inefficient and unsustainable. These models must therefore be reformed, probably by adopting features of the two more efficient models. These reforms may also involve changes towards more or less equity.