Introducción

This second phase begins where the first phase concluded, in a “mood of crisis” (Cini, 2007: 24). After successive crises, namely the ‘snake’ failing and quadrupling oil prices, creating periods of ‘eurosclerosis’, for both economic and social policy, social policy came to the fore as member states experienced significant social difficulties (Hantrais, 2000: 218). This subsequently fostered a favourable environment in which social policy could develop. The oil crisis was “met by recourse to nationally oriented policy programmes and not by EC-sponsored projects for economic recovery” (Rosamond, 2000: 98). The crisis underscored “the extent to which EC integration could be undermined by turbulence in the international economic system” (Laffan, 1992: 53). As Kühnhardt (2009) claimed and Kurzer and Cooper (2011) demonstrated in Chapter 3, the international and EU level were inextricably connected.

Following on from the impact of the ‘empty chair crisis’, the Commission’s role as being the motor force of EI was non-existent (Laffan, 1992: 10). Respectively, out of threat came an opportunity not only for EU social policy but for a concerted European policy response to a crisis. A series of Social Action Plans (SAP) over a four year period were established to monitor national social problems and aimed to achieve: full employment; improve living and working conditions; vocational training; equality between men and women in accessing employment; and, equal rights in the workplace (McCormick, 2008: 179; 181-183). While ‘crisis progression’ spread meaning the recession hampered the success of the SAPs, the equal pay directive (1975) and equal treatment directive (1976) were delivered.

127 The Commission’s proposal for a European regional policy coupled with a European Regional Development Fund (ERDF) had fallen on unsupportive member state ears as only Italy experienced a regional crisis. However, an economic crisis and the entry of member states Britain and Ireland led to further economic concerns over implementing the Werner Proposal. Concerns centred over inflicting further adverse economic effects on underdeveloped regions through establishing a fixed exchange rate. Subsequently, Italy’s request for a European regional policy bore fruits in 1975 as it became “galvanized into a new European Regional Development Fund” (Marks, 1992: 194). Such funds supplemented rather than replaced national regional policy spending and were assigned on a regional basis, thereby embedding the dependency of EU social policy on the national level. Hence, this “regionalization of European social policy could preempt the Europeanization of social policy” (Anderson, 1995: 147-158).

Following this protracted period of ‘crisis progression’ wasa significant period of ‘crisis diversity’, with the lack of international competition conversely leading to the re-launch of the internal market (Buonanno and Nugent, 2013: 326). The concept of a social dimension, or ‘social space’ as first muted by Francois Mitterand (1981), was expanded by the new president of the Commission, Jacque Delors (1985). Delors ensured economic support for the European Single Market from member states and other various actors, such as the trade unions, workers and citizens, through social measures; the economic objectives were legitimised by social initiatives.

Thus, while social policy was economically contingent the SEA highlighted how economic policy was equally socially contingent, to the advantage of EU social policy. Delors emphasised this interdependence, claiming without the latter the former (single market) would fail. Accordingly, he aimed to (re)invigorate the process of EI and extend the EU’s social dimension, with employment policy at its centre. Through recognising the implicit social costs of the single market member states would commit to further EI. In accordance with Hagen’s (2009) analysis in Chapter 3, the EMU was being used to promote further, deeper social integration. Many workers and citizens felt overlooked by the EC who they believed favoured supporting the needs of businesses (Kleinman, 2002: 86) and attaining economic benefits.

The SEA instigated this process of social concessions for economic developments and objectives of the single market. The act, primarily aimed to revive the economy after significant recession and economic crisis, epitomised the social impetuous Delors espoused thus “greatly accelerate[ing] [both] the process of European integration” (Leibfried and

128 Pierson, 1992: 2) and social policy-making process (Hantrais, 2000: 6). Social policy issues were subsequently divided between QMV, namely those social issues connected to the establishment and functioning of the European Single Market such as freedom of movement, and unanimous voting for those issues not related to the European Single Market, such as workers’rights. Replacing harmonization, ‘mutual recognition’ and ‘subsidiarity’58 _{became the}

new strategy through which to proceed with social integration. Member states, workers and their trade unions concerns over ‘social dumping’ (Geyer, 2000) were subsequently resurrected and compounded with the entry of Greece (1981), Portugal and Spain (1986). Thus, even before the current euro crisis there was a north-south and/or core-periphery divide amongst member states (Rhodes, 2009).

In turn, the entry of these states raised fears over regional disparities obstructing the completion of the single market, leading to a two-fold increase in structural funds, an increased focus on poorer member states, and the EC acquiring significant control over regional policy in combination with its new competition regulations. Arguably, the increase in funds compensated for the differential economic costs of the single market, which constituted a “harsh test” on these poorer member states (Marks, 1992: 202-204). Once again, economic objectives were strengthening social policy. This strategy continued within the Community Charter of Fundamental Social Rights of Workers, or the ‘Social Charter’ (1989), which provided another “boost for social policy” (McCormick, 2011: 100) in response to economic concerns of ‘social dumping’.

Akin to the increase in structural funds, the charter provided social concessions for economic initiatives as a “trade-off [was made] between the acceptance of the Single Market and the promotion of a “social dimension”or “social dialogue” (Mullard, 1997: 1). The Social Charter, through establishing a “discourse of universal [social] rights” (ibid), transcended national boundaries, setting in motion a path towards a legal deepening of EU social policy. The charter declared that the social dimension should have the same importance as the economic dimension (Kleinman and Piachaud, 1993: 2) and was subsequently combined with the Commission’s SAP in the same year.

Despite the charter being a “solemn declaration” (Hantrais, 2000: 7) rather than binding by law, Britain voted against it. Nevertheless, the charter passed successfully, hence “with the single market on track and the economy booming, political support for an active

58 _{This meant policy should only be produced at the EU level if lower levels of governance could not do}

129 social policy began to gather speed” (Dinan, 2010a: 423). The Maastricht Treaty (1993) embodied both an economic milestone, with the final stage of the EMU and introduction of the euro, and a social landmark, epitomised by the introduction of EU citizenship through the extension of free movement to all EU citizens. The treaty was to incorporate the Social Charter under the ‘Social Chapter’. However, Britain’s persistent opposition led to the removal of the charter from the main body and the creation of a social protocol, thus condemning EU social policy as the “step child” (Leibfried and Pierson, 1992: 5) of EI.

The pace of progress for EU social policy significantly decelerated as difficulties in passing legislation ensued with only two directives accepted under the protocol (Dinan, 2010a: 425; Kenner in Lynch et al, 2000: 112). Arguably with economic concerns now abated and no economic crisis, social policy enjoyed no policy progress. However, as the Maastricht criteria resurrected concerns over regional disparities, social policy regained pace with a further expansion of the ESF and a new cohesion fund to help “the poor four”59 _{(Leibfried and Pierson,}

1995: 142), so to ensure member states met the conditions for the establishment of the EMU. Member states argued that with the option of devaluating their currency removed, the only instruments to regain competitiveness would be through wage reductions and tighter fiscal policies, all of which would create further unemployment (Leibfried and Pierson, 1995: 141).

However, the familiar conditions of crisis returned as an economic crisis emerged within the Exchange Rate Mechanism (ERM) with Italy and Britain forced to exit the ERM in September 1992. With concerns centred on the future of the EMU and the euro, once again EU social policy came to a standstill as ‘crisis progression’ embedded into the EU system.