4. Perspectives on the Evolution of European Social Policy

226. The health area is a first and crucial Europe-wide testing ground for the turf battlebetween national welfare states and the EU plus the market as represented byprivate insurance, producers etc.Liebfried (2005: 272-75) claims that these developments are testament to the emergenceof a unique multi-tiered system of social policy, with three distinctive characteristics.First there is a paucity of positive action given the limited capacity of the EU, the densityof existing national commitments and the desire of governments to preserve these.However member-states are also constrained by the EU’s legal rulings which constitutethe second important development. In adjudicating on matters of EU law, the ECJ cannothelp but take policy decisions. What may make matters difficult for member-statesrelates to the third pertinent development, namely that social policies have often beenseen as some sort of buffer or protection against the market, whereas the logic of EUsocial policy seems to be part of a process of market construction. The upshot of thesevarious developments is that some commentators have been prompted to ask to whatextent such developments represent a move from sovereign to semi-sovereign welfarestates (Ferrera, 2005, p. 119). The question is with what is the sovereignty of nationalsocial policy being shared. Whilst the obvious answer might be the EU, the fact thatthe agenda of the EU seems to be tied so closely to market-construction and economicmatters might lead some to suspect that national social policy is being suborned to aprocess of economic globalisation, facilitated by the EU.<strong>4.</strong>4 Globalisation and Social Policy in the EUWhat is globalisation and what are its implications for national social policy? Althoughit is a contested term, it is ‘perhaps most often used to denote profound transformationsto capitalism over the past several decades, including the opening up of non-capitalistcountries and markets to capitalist values, institutions, and social relations’ (Yeates2007). The last point is particularly important as globalization is thought to signify theimposition of an economic logic upon matters which would previously not have beenexposed to this logic. Two considerations in particular are important. These are the extentto which globalization triggers a ‘race to the bottom’, in which nation states continue toreduce welfare and regulatory costs in a competition with other states to attract foreigninvestors; and the extent to which comprehensive public provision is eschewed in favourof reliance on private provision, be it commercial, voluntary or informal, in meeting socialneeds (social dumping). Both entail a more minimalist role for the state in the provisionof public goods. These issues are assessed in the next section.