Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

of the Financial Services Action Plan. The dominant spirit of the times was
anti-regulatory, with the Commission stressing its commitment to “better
regulation” and the legislative simplification agenda. Experts pointed to
weaknesses in the EU’s system of cross-border financial regulation but
there was little political appetite for doing much about it.
There also appeared to be a lack of radical ambition for future budget reform.
After the dramas of the horse-trading in 2005 to achieve an agreement on
the EU Budget, over 70% of the funds are still devoted to the Common
Agricultural Policy and Structural Funds. This is despite the emergence
of major new EU policy priorities such as climate change and the need to
facilitate the transition to a low-carbon economy; strengthening controls
on migration at the common EU border; research and higher education in
light of Europe clearly falling behind the US; a more active and effective
EU neighbourhood and external policy; not to mention new social policy
initiatives. True, agriculture subsidies have largely been decoupled from
production and more funds switched to rural economic development.
The Structural Funds are now also supposed to be aligned with “Lisbon”
policy objectives. Yet, even within fields covered by the EU Budget, the
Commission still has little ability to direct spending towards its agreed
policy priorities – for instance, labour market adjustment, “flexicurity”,
skills, social innovation and programmes to integrate “migrants” and
ethnic minorities. The Commission’s political accountability is centred
instead on bureaucratic processes and financial procedures rather than
better policy outcomes.
Partly as a result, “Social Europe” remained largely a rhetorical construct.
Debate was polarised between on the one hand, those who interpreted
anything with the label “social” on it as a burden on business and on
the other, those who advocated a traditional “social agenda” centred on
labour market regulation. The battles over the Working Time Directive
were the best examples of this trench warfare, though the long deadlock
demonstrated the difficulty of legislating across a diversity of practice
in 27 member states and the substance of the issue seemed out of sync
with new economic times where employees, just as much as employers,
demanded greater flexibility in hours worked through the life course.
As an alternative to this old debate on “Social Europe”, the Commission
tried to focus attention on the “new social challenges” facing Europe – but
was less clear about what new policies at EU level might flow from this.
However, some political space for future European action was created by
the establishment of a pale version of the Globalisation Adjustment Fund
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After the crisis: A new socio-economic settlement for the EU