National social spaces as adjustment variables in the EMU: A critical legal appraisal

• Author: Francesco Costamagna
• Published date: 01 May 2018
• DOI: http://doi.org/10.1111/eulj.12278
• Date: 01 May 2018

ORIGINAL ARTICLE

National social spaces as adjustment variables in

the EMU: A critical legal appraisal

Francesco Costamagna*

Abstract

The article critically engages with the reconfiguration of the role and status of national social spaces

within the EU constitutional fabric after the reform of European economic governance. Its main

contention is that these reforms have converted national social spaces into adjustment variables

whose main function is to contribute to the pursuit of EMU‐related objectives. This transformation

alters the balance between the economic and the social dimension in the EU legal order, deforming

one of the defining traits of its constitutional identity.

1|INTRODUCTION

National social spaces are the ensemble of national welfare systems and labour market policies characterised by

distinct endowments of schemes and institutions, as well as by different logics and backgrounds.

1

They are a key

component of the European socio‐economic architecture. Due to the lack of legal competences, financial resources,

and democratic credentials at supranational level to elaborate a substantive social policy, they are the only loci to

ideate and carry out meaningful redistributive activities to “combat social exclusion and discrimination, […] promote

social justice”and “social cohesion”, as provided for by Article 3 TEU.

However, one of the most visible, and troubling, consequences of the Eurocrisis is the increasing inability of

national social spaces to cope with the dramatic rise in poverty, social exclusion, and economic inequality

2

all over

Europe and, in particular, in a number of southern States.

3

This has negatively affected the general public's percep-

tion of the European integration process, as the EU is often singled out as the main culprit responsible for the

situation. On the one hand, this account, which has been eagerly embraced by blame‐avoiding national politicians,

offers a skewed picture of the reality, overemphasising the role played by supranational institutions in the process.

*

University of Turin and Collegio Carlo Alberto. I would like to thank Matthias Goldmann, Agustin Menéndez, Alberto Miglio, Stefano

Montaldo, Stefano Saluzzo, Harm Schepel, Andrea Spagnolo and Anna Viterbo for their insightful comm ents on earlier versions of this

work. The article has been written in the context of the REScEU project (Reconciling Economic and Social Europe, www.resceu.eu),

funded by the European Research Council (grant no. 340534).

1

The notion and the definition are borrowed from M. Ferrera, ‘Social Europe and its Components in the Midst of the Crisis’, (2014) 37

West European Politics, 825, 827–828.

2

See the staggering data published in the World Inequality Report 2018 (available at http://wir2018.wid.world/files/download/

wir2018‐full‐report‐english.pdf).

3

See recently, OECD, The Socio‐Economic Divide in Europe. Background Report, 26 January 2017, 7–11. It is worth highlighting that,

especially in peripheral countries, the crisis just deteriorated an economic situation that has been mostly characterized by slow, or

even negative, economic growth and high unemployment rates since the 1980s.

Received: 15 January 2018 Accepted: 18 April 2018

DOI: 10.1111/eulj.12278

Eur Law J. 2018;24:163–190. © 2018 John Wiley & Sons Ltd.wileyonlinelibrary.com/journal/eulj 163

On the other hand, it is hard to deny that the response to the crisis, and the ensuing reform of surveillance and finan-

cial assistance mechanisms, has had a bearing on the situation. Indeed, these mechanisms have been mostly modelled

around certain core neoliberal policy prescriptions, such as budgetary austerity or the flexibilisation of labour markets

and the repression of wage demands, which severely reduce the capacity of national social spaces to perform their

redistributive functions.

This article critically engages with the reconfiguration of the role and status of national social spaces within the

EU constitutional fabric after the reform of European economic governance. Its main contention is that these reforms

have converted national social spaces into adjustment variables whose main function is to contribute to the pursuit of

EMU‐related objectives. This transformation alters the balance between the economic and the social dimension in

the EU legal order, deforming one of the defining traits of its constitutional identity.

4

The analysis builds upon the

burgeoning legal literature

5

—and even meta‐literature

6

—on EU constitutional transformations in the aftermath of

the Eurozone crisis. It does so by focusing on one aspect—the status of national social spaces in the EMU—which

is still under‐researched, and by connecting it with other lines of inquiry, such as the one on the demise of the rule

of law in Europe, which have received far more attention. Moreover, the analysis draws on political science works

concerned with the role of national social spaces in the EU building process, as well as with the tensions generated

by the encounter between the two.

7

In more detail, the article first tracks the trajectory of the role and status of national social spaces within the

European integration process, from the so‐called “original compromise”, enshrined in the Treaty of Rome, to the

Lisbon Treaty's attempt to reconcile the “economic”and the “social”within the supranational legal framework.

The analysis then focuses on the early steps of the EMU and their potential impact upon the scope and functions

of national social spaces. The third part of the article looks at the reform of European economic governance,

starting from the strengthening of economic and social policies coordination mechanisms. The main point here is

that, at least in its early cycles, the European Semester contributed much to the subordination of national social

spaces to the strengthening of the EMU, paying scant attention to safeguarding their capacity to pursue core

social objectives. This part of the analysis also considers the efforts to imbue the Semester with greater social

sensitivity, claiming that the attempts to move away from the original one‐sided approach are certainly promising,

but still too limited. Lastly, the analysis turns to financial assistance programmes and the use of the conditionality

policy therein. The analysis shows that, in this context, the above‐described transformative process reached its

apex, treating national social spaces just as a cost to be reduced or as a factor that must contribute to making

the State concerned more competitive. The article takes a critical stance towards this approach and its

implementing strategy centred on the creation of “empty constitutional spaces”

8

in order to insulate technocratic

governance from political and legal responsibility. Likewise, the article criticises some recent attempts to inject

greater social sensitivity into both the procedure and the substance of structural adjustment programmes, showing

their manifest inadequacy in restoring balance between the pursuit of EMU‐related objectives and the

safeguarding of national social spaces.

4

Claire Kilpatrick described this drift as a form of “displacement of Social Europe”. See C. Kilpatrick, ‘The Displacement of Social

Europe: A Productive Lens of Inquiry’, (2018) 14 European Constitutional Law Review, 62.

5

See, ex multis, M. Ioannidis, ‘Europe's New Transformations: How the EU Economic Constitution Changed During the Eurozone Cri-

sis’,(2016) 53 Common Market Law Review, 1237 ; F. De Witte and M. Dawson, ‘From Balance to Conflict: A New Constitution for the

EU’, (2015) 22 European Law Journal, 204.

6

T. Beuker, ‘Legal Writing(s) on the Eurozone Crisis’,EUI Working Paper 2015/11; G. Martinico, ‘EU Crisis and Constitutional Muta-

tions: A Review Article’, (2014) STALS Research paper No. 3.

7

See, recently, M. Ferrera, ‘The JCMS Annual Lecture: National Welfare States and European Integration: In Search of a “Virtuous

Nesting”’, (2009) 47 Journal of Common Market Studies, 219.

8

A.J. Menéndez, ‘The Crisis and the European Crises: From Social and Democratic Rechtsstaat to the Consolidating State of (Pseudo‐)

technocratic Governance’, (2017) 44 Journal of Law and Society, 56, 75.

164 COSTAMAGNA