European Integration as Marketization

More than any other domain, the developments which have affected welfare services epitomize the ways in which capitalism in Europe has changed over the past three decades. This involves not only the functioning of the market but also the institutions regulating the economy and the underpinning values thereof. Insofar, we are dealing here with dynamic processes which have brought about slow yet deep structural transformations. On the capitalism side, the developments affecting the provision of welfare services reflect the moving boundaries between the State and the market, a process which has been widely understood as the neoliberalization of European economies (Hay and Wincott 2012; Schmidt and Thatcher 2013a). While states had been, in the post-war era, responsible for the funding and the provision of welfare services, an increasing number of tasks have been transferred to markets thus leading to a recommodification of services which have shifted from the realm of welfare services to the realm of competitive markets. On the EU integration side, policy making affecting welfare services has raised debates about the respective prerogatives of the EU and its constitutive Member

© The Editor(s) (if applicable) and The Author(s) 2016 A. Crespy, Welfare Markets in Europe, Palgrave Studies in European Political Sociology, DOI 10.1057/978-1-137-57104-5_2

States for regulating the economy. At first sight, welfare services have remained a competence of the Member States for at least two reasons. First, the EU lacks the budgetary means for conducting distributive welfare policies; second, this is so because there is a consensus on the fact that welfare policies have a strong social and cultural dimension and should therefore be decided by local and national authorities which, unlike the EU, enjoy deeply historically rooted legitimacy (Barbier 2008). However, there has been a ‘spill over’ of EU policy making towards the realm of welfare (Haas 1958). This well-known concept used by scholars to describe the functional dynamics of EU integration implies that economic policy and social policy are bound to remain closely intertwined. Because the EU has historically developed as an economic community, the EU institutions, in particular the EU Commission, were attributed strong competences for achieving the building of a common unified European market. The gradual extension of the scope of the market to areas which were formerly managed by public authorities has implied increasing encroachment of EU internal market and competition rules over national traditions pertaining to the provision of welfare services. This has concerned not only regulatory but also distributive aspects as the EU competition policy monitors public funding (i.e. state aids) of services activities in the Single Market. Politically, this has been possible not because there was an ideological consensus on the liberalization—and subsequent privatization—of welfare services but because, as Jabko has argued, in the 1980s and 1990s the ‘market’ became the overarching and multi-faceted idea used by the various political players in order to pursue actually contrasting projects of EU integration (Jabko 2006). Insofar, the far-reaching liberalization and privatization of welfare services can be seen as a more or less unintended consequence of integration through the market. By focusing on welfare services, this chapter echoes and substantiates F. Scharpf’s argument that negative integration has prevailed due to an overlap of integration through the market and integration through law, notably through a combination of ‘judicial deregulation and legislative liberalization’ (Scharpf 2010, p. 11).

This chapter starts with a presentation of the ways in which the provision of welfare services has been affected by the neoliberal restructuring in

Europe, mainly through a process of recommodification or marketization. Then, it is explained in greater detail how EU integration has shaped this process through the efforts to build a common market based on competition as its main underpinning principle and through versatile legal controversies and arrangements settled through constitutional law, legislation and the jurisprudence of the ECJ. Finally, the chapter offers an account of what we know about the consequences of marketization and ends with going back to the broader debate as to whether EU integration equals neoliberalization.

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