Southern European Welfare Model: Characteristics and Policy Challenges
The Southern European Welfare Model
The Southern European countries must reconcile the demands of the economy with their current systems of social protection. The Southern Model faces several critical challenges:
- Population Aging: This involves the rising demand for specific services and an increasing dependency ratio.
- Labor Market Issues: Low employment rates and persistently high unemployment.
- Changing Family Structures: The rise of single-person households and single parents, compounded by the challenges of incorporating women into the workplace. Traditionally, many services provided by women within the family unit have not received financial compensation.
Bismarckian Roots and Dual Characteristics
The Welfare States (WS) in Spain and Italy are rooted in the Bismarckian tradition and share characteristics with conservative German systems. Cultural traditions, including religious views regarding the allocation of familial gender roles, have been highly influential in the development of these WS.
The Southern Model combines services based on the social democratic tradition with income derived from workforce remittances. This system integrates two characteristics proposed by sociologist Esping-Andersen, leading it to be classified as “dual.”
Service Provision and Funding Structure
Universal services are provided in areas such as health and education. In Spain, for example, coverage areas primarily include:
- Disability benefits
- Pensions for seniors
- Sickness insurance
- Unemployment insurance
The system is primarily targeted at workers and is supported through contributions to the Social Security (SS), although private contributions also exist.
This model tends to protect the domestic labor market and prioritizes the protection of retirees over the active labor force, more so than more liberal states. Pensions constitute a large proportion of public expenditure, often exceeding spending on unemployment benefits, family allowances, and tax exemptions.
Distinction from Pure Bismarckian Systems
The Southern Welfare State model possesses specific characteristics that differentiate it from the purely conservative Bismarckian model. Social services, particularly education and health, operate within social welfare systems where services reach the entire population, and social rights are financed by the state.
The Influence of the European Union (EU)
The EU plays a significant role in shaping social policy in these countries, contributing to integration within the European context and driving reforms. This influence manifests in two ways:
- Decentralization: Initiatives adopted in one European region often spread to others.
- Policy Adoption: Social policies initially adopted as a result of regional settings were subsequently implemented at the national level.
This situation has sometimes led to comparative grievances, growing inequalities, and complex negotiation processes regarding regional financing.
The Spanish Case: Traditional Actors and Globalization
In the Spanish context, rather than identifying entirely new players, it is more accurate to observe the evolution of action models adopted by traditional actors. Trade unions and employers, for instance, have maintained an important role in shaping social policies, reaching significant agreements with successive governments during the 1990s. The most prominent example is the signing and subsequent renewals of the Toledo Pact.
Since the transition period, numerous social policy measures have been implemented in Spain, consolidating the Welfare State. These measures have been influenced by globalization and the external actor, the EU, since Spain’s integration.
Globalization within EU countries necessitates new approaches to macroeconomic restructuring, which is an essential pillar of the Economic and Monetary Union (EMU). These changes have enabled Spain to become an integral part of a solid and strong economic area, achieving a high degree of compatibility with other European economies. Becoming ‘European’ also mandates that levels of social protection cannot be compromised, and that inequalities must be eliminated through the rational and efficient use of resources.