Walker's World: Nightmare of social Europe


By Martin Walker
UPI Editor

Brussels, Belgium, Apr. 24 (UPI) -- Former Czech Prime Minister Vladimir Spidla thought he had timed his departure from the snake pit of his country's politics rather well. But now installed in Brussels as the European Union's Commissioner for social affairs, Spidla finds he has exchanged the frying pan for the fire.

Social affairs has become the most controversial issue of public policy all across Europe. Having defined itself for a generation by the generosity of their welfare states and an insistence of "social solidarity" rather than a robust clash of interests between labor and capital, Europe is grappling with three separate threats to its future. Any one of them could well prove fatal to the EU's social model. Combined, they are devastating.

The first has been the sharpening of competition, with its consequent pressure on wages and on employment, which helps explain why France and Germany are grappling with double-digit unemployment. The competition has been made more ferocious by Europe's enlargement. The EU was joined last year by 10 new member states, mostly from low-wage Central and Eastern Europe, where salaries are one-third to one half those of Western Europe and taxes even lower. So the new Volkswagen and Peugeot factories in the Czech Republic and Slovakia represent growth for them, but unemployment back in France and Germany.

The second threat to Europe's social model is the demographic disaster. This is far more serious than America's concern with the future of Social Security as the baby boomers retire. Europeans are about to start dying out. By the end of this decade, the populations of Italy and Germany will start to shrink because Europeans have almost stopped breeding. The Russian population is already shrinking by more than a million a year. Without some dramatic changes in the birth rate, Europeans will become in this century an endangered species.

To maintain a constant population requires an average 2.1 children from each woman of child-bearing age. In today's EU, the average woman bears 1.3 children. In Italy and Lithuania (both overwhelmingly Roman Catholic countries) the figure is down to 1.1. The only countries close to replacing themselves are France and Britain, thanks in part to the higher birthrates of immigrant mothers.

So while Americans might face some discomfort in paying for Social Security after the 2040s, disaster hits Europe in the next 10-15 years. By 2020, on current trends, there will be one German worker for every pensioner. So already German pensioners are paying the price as neither the state nor young workers can afford to keep them in the style to which they have become accustomed. For example, the health insurance payments of German pensioners now rise the older they get. The long-term unemployed no longer get state payments in generous proportion to their last working salary, but a standard $450 a month plus their rent.

The third threat to the European social model is immigration, which is ironic, because immigration was supposed to be part of the solution to the demographic disaster. Were Europe's immigrants solely young Arabs and Asians seeking work, and paying taxes while they did so, that would help Europe's problem. But many of those young workers then bring their parents, and marry a young woman from their home country, who brings her own parents and so on. The result is that in Belgium, for example, more than half the immigrants over the age of 40 are unemployed and dependent on social security payments.

But the deeper problem with immigration is political. Europe's home-grown population resents it. Three years ago, an extreme-right wing candidate, Jean-Marie le Pen, running on a pledge to send immigrants home, defeated the incumbent Socialist Prime Minister Lionel Jospin in France's Presidential elections (He eventually lost in a runoff to President Jacques Chirac). In Holland, the late Pim Fortuyn's anti-immigrant party came from nowhere three years ago to leap straight into government as a coalition partner.

In Britain's current election campaign, Prime Minister Tony Blair is fighting back against his Conservative opponents' charge he has lost control of the immigration system, accusing them of a "deliberate attempt to exploit people's fears." But Blair was visibly shaken by a tough TV interview when he refused 18 times in a row to give a figure when asked for the government's own estimate of the numbers of illegal migrants in Britain.

So the principle of solidarity that underpins Europe's social model is under attack on several fronts. The pension crisis strains the solidarity between young and old. The competition from low-wage Poles and Czechs strains Europe's solidarity across borders. The immigration problem strains the solidarity between races and religions.

"I know that the best social policy is a job and we need more jobs," Spidla told United Press International in Brussels. But what he cannot say is that Blair's Britain, with less than 5 percent unemployment, is therefore making a better job of it social system than France with 10 percent out of work -- and 24 percent among the young. To say that would breach the rules of protocol for EU Commissioners, so instead Spidla has to stress issues like job training and childcare facilities that could allow more women to return to the work force and might also help boost Europe's sagging birth rate.

And yet the real tension over Europe's social policy lies in that gap between Blair's Britain, where there is little shortage of jobs, where taxes are lower and businessmen face fewer regulations and bureaucratic obstacles, and President Jacques Chirac's France, where unemployment and taxes are high and businessmen find it so difficult to start a company that more than 300,000 French citizens now live and work in London and Southeast England. Many of them commute by the trains through the Channel tunnel.

Last week in a TV debate with 80 French students, in his bid to persuade them to vote "Yes" in next month's referendum on the EU Constitution, Chirac urged a vote "to protect social Europe" against the "ultra-liberalism of the Anglo-Saxons." This is not a fight that Spidla, a mild-mannered social democrat and former teacher, expected when he became the first Czech member of the EU Commission. But as Europe grapples with the iron laws of demographics and competition, Spidla is on the front line of a battle that probably cannot be won -- unless the women of Europe can somehow be persuaded to start having four and five babies again.