Learning from adversity: towards a European Union of social investment welfare states

Abstract

This policy brief reconstructs the process of welfare recalibration across EU welfare states in response to the Great Recession and the COVID-19 health shocks. It brings out four important lessons. The first is that generous and inclusive social protection buffered the Great Recession and the COVID-19 health shock well. Second, among European political economies, the more active welfare states were best able to bounce back with in terms of employment recovery. Third, the ECB vow ‘to do whatever it takes’ to save the euro was a key to breaking the spell of mass unemployment in the Southern eurozone. Finally, the NextGenerationEU policy response to the pandemic augured in an investment led recovery for the EU at large. The chapter concludes on a policy proposal to fast forward childhood social investment on EU fiscal support.