The Role of Social Policy in the European Union

This report discusses the role of social policy in the European Union and its impact on the single market. It explores the views of the UK and Germany on social policy and discusses possible future reforms. Find relevant study material on Desklib.

Running head: REPORT 0
ECONOMICS
FEBRUARY 21, 2019
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REPORT 1
Introduction
The European Union has a major role in stating the social policies. Its role comes from
primary value based objectives of providing the financial corporation the meaning, targeting
at welfare of the residents, and from requirement of stating the different condition addressed
by the EU. The following parts state the arguments in the European Union regarding whether
or not social policy is in the inherent essential part of the single market. The report states
European Union capability to administer the service relations, protection at workplace,
fairness, justice and the social security. It deals with cooperation between state members over
the social issues such as social security, promotion in job, and facts related to labour market
(Daley, 2006). This report suggests the method of enhancing the European Union capability
in the field since the Treaty of Rome. These parts reflect the occurrence of European Union
commands on social issues (Scharph, 2002).
Economic integration narrative of Europe-
The past backgrounds of European Social Policy may be tracked to TOR developing the
European Economic Community. As per the Treaty of Rome (1957), the social policy
capabilities were to continue in the regulation of MS and new created community must have
partial interference in the field of policies. From the TOR (1958) to the Maastricht Treaty
(1990), Europe moved progressively however definitely to close financial incorporation such
as the inner marketplace. The internal marketplace was the requirement for intra-field
interchange rates constancy. The concept of separate money, first discovered by report of
Werner of 1970, was unrestrained. Further, in late 1980 and early 1990, while local
incorporation made significant paces, this concept emerged again. The separate financial
policy was regarded as the rational accompaniment to the requirement for fixed exchange rate
and new rule of movement of capital, which were applied by inner marketplace (Sapir, 2006).

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Developments in future, specifically in single market-
The European single market very aspiring portion of European project. The European single
market targets at the breaking down of obstacles to dealing through five hundred people field
by making sure the four freedoms like free movement of products, capital, service and
employment (Threlfall, 2003). Being the portion of single market provides the businesses of
United Kingdom unconstrained entree to five hundred million consumers in every state in it
and permits the corporations and customers to buy the products and service through the
landmass.
There is difference between single market and custom union that makes sure every nation
charges the equal import duty to the states, who are not member, however do not say
anything in respect of free movement of workforce. The single market is regulated by the
amount of legislature, which targets to match regulations on whole thing from extreme
working hours to what confronting the changes in climate. In this way, without adopting the
united norms, the single market finishes to be the single market by way of any one nation
may apply their personal regulations. This is conceivable to stop in single market however be
out of the custom union, as European financial field nations do (Martin, 1998).
The question is that what can be influence of leaving the single market. The forty four per
cent of export of Britain go to European Union, two hundred twenty billion pounds out of
five hundred ten billion pounds, according to the National Statistics office. In the case where
United Kingdom did not negotiate the positive trading deals with the European Union, this
export will be subject to import additional managerial cost and tariff. In the time before new
dealings were applied, United Kingdom will possibly have to deal on standard tariff as per
WTO rules. However, the major changes will be that the United Kingdom will not have to
sign up to unrestricted movement of workforce. Out of the European Union, the nation will
have the powers to restrict the numbers of asylum seekers to take entry in the nation. United

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Kingdom would also not have to adopt certain laws of European Union, however this would
have to sign up to various norms in case it desires entree to the single market through the
trading contract.
UK view Vs. German view-
In the year 1990, single market of Europe and strong European opposition approaches have
given the substitute structure of the ruling and protected the level playing area across the
United Kingdom and European Union as whole. Subsequent to Brexit, it would evaporate.
The government of United Kingdom has been asking for the requirement for the methods to
protect the individual single market of United Kingdom. Germany as well as to certain extent,
Belgium and Holland were the promoters of the European marketplace. The main ones
concern delegated labour, skilled labour and some other factors to enhance competitiveness.
In this way, from starting, resistance to Europeanize social methods was obvious in a position
considered by the Germany that favoured the neo-liberal, free-market approach, or European
market to the public associations of the communities. The top industry legislatives of
Germany have made warn that they would not lobby for special entree in the single market
for United Kingdom (Liebfried and Peirson, 1995).
In the case, where the wages or non-wages labour costs decrease, or in the case where
workers consider this simple to discharge undesirable employees (either jointly or
independently), employment level must be anticipated to increase, rendering high
employment level in the comparison of the nations, where workers in post have protect the
rights, social privileges and level of wages, however great numbers remain without works.
The question is that whether the central governments are capable to address the proper
employment rights that enhance the labour price in internationally organised sphere. The
membership of European Union need state to address the stages of security, and financially
solid state members are not obstructed from awarding high levels employment rights. The

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state members may also establish coordination of the policies to ignore the down twists. EU
can develop the principle of minimum wages. These principles will not be binding, but the
permit the coordination and in this way encourage high minimum wages.
As per the United Kingdom’s View in relation to social policy, it understood that the
interference of SP in labour market would enhance the average cost. It may be indirect
average cost or it may be direct average cost. The direct cost includes holiday cost. On the
other hand, the indirect average cost includes the pension benefit and social tax that goes to
being without a job. However, ever since year 1999 the governments of United Kingdom
have enhanced the national minimum wages from 3.60 £ to 7.83 £. In June 2018, UK
unemployment is near record low-levels. In this way, it is suggested to the government to set
the minimum wages without affecting the redundancy. It can be seen that United Kingdom
makes the payment of thirteen per cent of wages on behalf of social tax. By way of cost
enhance the flexibility reduce and demand would go down. The wage decrease to W1 and
numbers of reduced workforce.

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Source: www.economicshelp.org
Further, on the other hand it can be seen that the German view is not as the same as United
Kingdom view in relation to the social policy. The SP enhance the suppleness, for an
example the employers are well guided and qualified, then it is a possibility that the
employers may change the job. The workers can be highly encouraged. In the opposite of the
United Kingdom view, as according the German view, the relations between workers and
companies or managers run for long term. Hence, in the contradiction of United Kingdom
view, in German view, the labour is highly useful and efficient, then demand will enhance. In
this way, the real wages will go up.
Employment market or labour market-
The flexible employment market refers to the employment market that rapidly changes
according to a competitive equilibrium. The employment market is significant because they
W
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S
D1
D 2
L1 L 2
W1
W 2

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are dynamic to the effectiveness of the economy of the European Union, in the present time
or in the upcoming period. The employment market flexibility has been increased because the
globalization has opened Unite Kingdom to more struggle at international level. The other
reasons include changes in technologies, changes in social atmosphere, privatisation and
decreasing powers of Trade Union. They majorly focus on the problems of labour market
such as employment tax, and wages, reform related to employment market, specifically
evaluation of complete influence on the labour market reform on macroeconomic enactment
(Atkinson, et. al, 2004).
Impact of flexible employment market
The flexible employment market helps in reducing the unemployment, in decreasing the
wage rate and in increasing the uncertainty of job. Besides this, the flexible employment
market helps to decrease the cost of firm. They may hire the employees for few hours. The
United Kingdom has comparatively light employment market regulations in the comparison

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of European nations like Germany and France. It can be seen that United Kingdom has also
the fall in authorized unemployment rate (Wilthagen, Tros and Van Lieshout, 2004).
Source: CER
The working of the employment market, and tax and benefit system is main fact of the
financial policies. Globalisation, the growing flexibility of the aspects like products and
capital, old people and funding the wellbeing system, set new issues for the procedures
(Feldman, 2002).
The taxation and benefit systems are assessed by the European Commission from the point of
view of how they make contribution to financial progress and high occupation, when securing
reasonable social security. Specific interest is committed to the problems of creating job pay,
how to funding the welfare state, and process of application of tax and benefit system that is
motivating to progress and occupation (Alber and Standim, 2000).
Further, there are certain nations, which are trying to attain flexibility with the protection for
the employees like in Denmark. The flexicurity is viewed by the Denmark Government as

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requiring the golden triangle the three sides such as flexibility in employment market mixed
with, social protection and proper employment marketplace policy with powers and duties for
the jobless person. This expression means the mixture of employment market flexibility in
the active economy and protection for the employees. The flexicurity is considered by
European Commission as combined approach to concurrently increase the flexibility and
protection in the employment marketplace. The Flexicurity is created and applied through 4
policy elements such as consistent arrangement, inclusive long-term knowledgeable
approaches, proper policies in relation to the employment market, and new system of social
protection to provide proper income sustenance throughout the labour transitions (Bekker and
Mailand, 2019).
Source: Real world Economics Review Blog
Social policy and productivity
The European single market was considered as organisational reaction to the Euro sclerosis
of the early 80s. The constraint’s release targeted to supply significant achievements through
the union regarding the high productivity level and low cost and price. The single market

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enhanced the competition in the European Union. The influence of the single market over the
productivity has less care and this is still open problem. There are various technologies to
debate the single European market importantly enhanced efficiency in various European
nations (Holland, Mossialos and Merkel, 2018).
Possible future reforms
There are some suggestions to change the relations between United Kingdom and European
Union, which were achieved as portion of social policy reviews. These reviews involved
decreasing the difficulty and enhancing the transparency of legal procedure of European
Union, more reliable implementation of the principle of good administration by EU,
improvement in procedure of social partner’s participation to make sure representativeness
and transparency. The reviews also include the organisational changes to provide the tool to
react to ruling of ECJ, which go afar the intention of European Union legislation, making
sure that United Kingdom is the positive and involved member in European Union
negotiation (Cini and Borragán, 2016).
Conclusion
As per the above analysis, it can be concluded that the important part of economy of Europe
is expected to create profit for persons in the place of depositors and holders. It is social
economy. This involves the mutual society, NPO, and social companies. The mutual
societies, NPO, and social companies run a wide range of trading activities, render the broad
variety of the services and goods through the single market of Europe, and make various jobs.
The founders of EU have various targets described at the formation of what is familiar in the
present day as European Union, were the settlement among the opposing European countries
(Kauppi, 2018).

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References
Alber and Standim, (2000) ‘Social dumping: catch up or convergence?, Journal OF
European social policy.
Atkinson, A., et al, (2004) ‘Indicators and targets for social inclusion in the EU’, Journal Of
Common Market Studies.
Bekker, S., and Mailand, M. (2019) The European flexicurity concept and the Dutch and
Danish flexicurity models: How have they managed the Great Recession?. Social Policy &
Administration, 53(1), pp. 142-155.
Cini M., and Borragán, N.P.S. (2016) European Union politics. Oxford: Oxford University
Press.
Daley, M., (2006) ‘EU social; policy after Lisbon’, Journal Of Common Market diversity’,
Journal Of Common Market Studies.
Feldman, H. (2002) ‘How social is European social policy?’, International Journal of
Social Economics.
Holland, W., Mossialos, E., and Merkel, B. (2018) Public health policies in the European
Union. New York: Routledge.
Hoskyns, C. (2018) Democratizing the European Union: issues for the twenty-first century.
New York: Routledge.
Kauppi, N. (2018) Democracy, social resources and political power in the European Union.
Oxford: Oxford University press

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Liebfried and Peirson (eds), (1995)’European Social Policy: Between fragmentation and
integration’, Brookings Institution Press.
Martin, J. (1998)‘What works among active labour market policies: Evidence of OECD
countries experiences’, OECD papers.
Sapir, A., (2006) ‘Globalisation and the Reform of European Social Models,
Scharph, T. (2002) ’The European social model: Coping with challenges and
Studies, Journal Of Common Market Studies.
Threlfall, M. (2003) ‘European Social Integration’, Journal of European Social
Wilthagen, T., Tros, F., and Van Lieshout, H. (2004) Towards ‘flexicurity’? Balancing
flexibility and security in EU Member States. European journal of social security, 6(2), pp.
113-136.