The sovereign debt crisis, the EU and welfare state reform

Abstract

This Special Issue examines the EU’s monetary, fiscal, and social responses to the sovereign debt crisis and analyses how the European Union (EU) has affected welfare state reforms in the Member States most severely hit by the crisis. This editorial introduction presents the severe crisis context in which the EU altered existing tools and developed new ones in the governance of the EMU and of social policy. The findings of the Special Issue show that the nature of EU intervention into domestic welfare states has changed, with an enhanced focus on fiscal consolidation, increased surveillance and enforcement of EU measures. Overall, this represents a radical alteration of EU integration, whereby the EU is involved in domestic affairs to an unprecedented degree, particularly with regard to national budgets, of which welfare state spending is an important component. Since these changes are highly institutionalized, particularly the requirement of balanced budgets, it is necessary that the EU encourages social investment much more than it does presently.