The Treaty of Rome: an 'ever closer union'

From 1948 until the middle of the 1960s, the founders of the European idea worked energetically to build an institutional framework for the European Community (Judt, 2005). The social dimension laid out in the Treaty of Rome, signed in March 1957, establishing 'an ever closer union among the European peoples', was the product of post-war optimism and the 'historical compromise' between the moderate representatives of labour and capital. In the preamble of the European Community Treaty, the founders of the European Economic Community expressed their commitment to 'lay the foundations of an ever closer union among the peoples of Europe, resolved to ensure the economic and social progress of their countries by common action to eliminate the barriers which divide Europe, affirming as the essential objective of their efforts the constant improvements of the living and working conditions of their peoples'. With the Treaty of Rome, the European Social Fund (ESF) was also established (Arts. 123-8), the importance of which increased with successive rounds of enlargement. It aimed to simplify the employment of workers, increase their geographical and occupational mobility within the Community, and facilitate adaptation to change, particularly through vocational training and retraining this—was aimed specifically at facilitating the smooth immigration of Italian workers to the other five countries.

In the course of the 1960s, the aspiration for a level playing field in the social domain, within a free internal market, began to emerge among European business elites. This wish was an important driving force behind the Commission's agenda concerning health and safety in the workplace, training, and the right to collective bargaining. With reference to the authority of the Community, as far as working conditions were concerned, the Treaty of Rome did little more than require the Member States to promote these goals (Art. 117). The Commission was given the task of coordinating the Member States' activities in the social sphere, including working conditions (Arts. 51 and 118). In the Treaty of Rome, it had already been determined in Article 42, which stipulated that, after the completion of the customs union, the free movement of employees was to be realized. Gender equality in wages and workers' freedom of movement was also mandated in the Treaty (Arts. 119 and 48-50; see respectively Leibfried and Pierson, 2000: 274; Barnard, 2000: chs. 1-3), stating that 'men and women should receive equal pay for equal work' (Art. 119). This implied the prohibition of discrimination of workers with respect to employment, remuneration, and working conditions. In a number of famous rulings (Van Gend 1963 (26/62); Costa 1964 (6/64)), the ECJ was able to affirm the principles of direct effect of EC law and its supremacy over national laws (Weiler, 1994). Later these articles proved extremely important in the expansive development of EU anti-discrimination policy (see below). The subsequent establishment of an EC-wide freedom to work and of a common labour market with no internal territorial borders was a revolutionary achievement (Ferrera, 2005a).

A crucial piece of legislation from this period was Regulation 1408/71, which built on regulation (EEC) No. 3 from 1958. While a majority of national policymakers at the time felt that the European social competences should be limited to creating the conditions for the free movement of workers and the equalization of rights in each Member State, Regulation 1408/71, nevertheless, established the social security rights of migrant workers, stripping away a degree of sovereignty over 'their' working citizens from national governments. This regulation reaffirmed the four basic principles: (a) non-discrimination and equality of treatment; (b) aggregation of all periods of insurance, in whatever country; (c) benefit exportability from one Member State to another; and (d) applicability of a single law, that of the country of work (Chalmers, Davies, and Monti, 2010).

By and large, however, national policymakers, with the exception of the French, believed that European social policy initiatives were best limited to establishing only the basic conditions of free movement of labour and coordination of social security rights. The fact that the treaty referred to 'closer collaboration between member states' in the areas of education, employment, labour conditions, labour relations, and social security is best understood in terms of a Franco-German compromise that materialized over the Treaty negotiations when the French proposal for increased harmonization of social legislation and regulation encountered resistance from Germany, Italy, and the Benelux states (Hantrais, 2000: 2-3). Nevertheless, the road towards harmonization was not blocked per se by this initial setback. On the contrary, considering that the first Member States, with the exception of Italy, all more or less belonged to the group of Continental welfare states, a process of 'spontaneous' convergence was not unthinkable. It was benignly expected that the harmonization of policy between national welfare states would foster qualitatively high standards of social protection in the long run. At a later stage, positive spill-over effects of this partial convergence could still lead to further harmonization (Haas, 1958; Lindberg, 1963). The belief was that, whatever happened, it would take the form of a 'race to the top' rather than a 'race to the bottom'. Both the expansion of the welfare state and the deepening of European integration received a formidable boost by unprecedented and unanticipated levels economic growth. With the success of its outwardly oriented economic policy of market expansion, European integration enabled the Member States to universalize their welfare systems. Prosperity progressively allowed for both international economic opening and national social closure to proceed side by side. Following Robert Gilpin, Maurizio Ferrera aptly captures the initial institutional form of European ‘nesting' and domestic social policy and European market ‘reconciliation' as 'Keynes at home, Smith abroad' (Gilpin, 1987: 355; Ferrera, 2010a: 49). Market integration did not threaten the national welfare state; on the contrary, growth stemming from market liberalization allowed for the ‘unencumbered' maturation of the national welfare state (Milward, 2000). Activist 'social space' building, aimed at creating a community of equals in terms of access, led by the ECJ, hardly triggered any form of domestic counter-mobilization in this epoch of permissive elite policymaking. EU social policy remained subsidiary to the greater prerogative of the Common Market, but was generally believed to become increasingly relevant as economic integration progressed (Geyer, 2000:11). On the other hand, the overall success of national welfare state expansion in this period made community-based social policy ambitions increasingly less relevant. A division of labour emerged based in an implicit agreement of ‘non-interference, whereby EU market making was not supposed to impinge on Member States' sovereignty in the social sphere (Guib- boni, 2006; Ferrera, 2009). As a consequence, the national-EU social policy nexus had marginal importance. Rather limited economic interdependence and EU-wide economic regulation put very little pressure on national welfare states (i.e. very little embedding in Ferrera's Space B). The one affected group of migrants/immigrants was relatively small and socially marginal and politically not very salient. Creating some EU social rights for this group was fairly straightforward, and was unlikely to be beset by unanticipated spill-overs to other, more politically salient social policy areas.