Beyond the European Social Model

The Open Europe think tank has released a new book of essays by leading thinkers from across the EU. “Beyond the European Social Model” argues that the high-tax and highly regulated “social model” is not working, and that the time has come for the EU and its member states to take a different approach – away from the Scandinavian model and towards the Irish one. The study shows, for example, that the poorest 10% in Ireland saw their incomes rise six times faster than the poorest 10% in Britain or Sweden over the past decade.
In his essay “The Myth of the Scandinavian Model”, Martin De Vlieghere argues that in 1970, Sweden’s level of prosperity was one quarter above Belgium’s. But by 2003 Sweden had fallen to 14th place from 5th in the prosperity index, two places behind Belgium. From 1989 to 2003, while Ireland rose from 21st to 4th place, Finland fell from 9th to 15th place. Together with Italy, the three Scandinavian countries are the worst performing
economies in the entire European Union.

“Rather than taking them as an example, Europe’s politicians should shun the Scandinavian recipes,” he says.

Fraser Nelson says in a piece in the Scotsman that, despite the economic evidence, the UK seems to be drifting towards the Scandinavian way.

“Our tax burden is now higher than Germany’s (for the first time in history) and in Scotland the spending, as a share of the economy, is at Scandinavian levels,” he says.

“In the UK there are a scandalous 5.3 million adults – 14.7% of the workforce – out of work and on welfare of some kind or another, including incapacity benefit and lone-parent unemployment. In Scotland it’s 18% – just under one in five adults.”

According to Nelson, it’s all a question of what sort of society Britain wants to become. The Fabian Society in its ‘Narrowing the gap’ paper recommends expanding welfare for low-income mothers (and from pregnancy, not just childbirth), longer parental leave, more subsidised childcare, greater benefit rates for children, a higher minimum wage and higher tax.

“Its logic is, essentially, that if Britain taxed as much as Sweden, things would be a lot better. The Fabian pamphlet title was ‘Narrowing the gap’. It should have been ‘Tax is the answer’.”

But, as Nelson points out, between 1981 and 2003, Ireland managed to lift employment by 56% while Sweden achieved no jobs growth – and was literally overtaken by half of the European Union member states in the prosperity leagues.

“You would not expect to find many aspiring Brownite ministers near the OpenEurope document launch: they have already chosen the Fabian way.”

There are also warnings for Ireland with Doctor Constantin Gurdgiev writing that Taoiseach Bertie Ahern “should walk away from the partnership table once and for all.

“To achieve conditions required for robust growth, entrepreneurship, efficient investment and betterment of taxpayers’ lives throughout Europe, the Continental model of serial surrenders to the blackmail of the militant trade unions must be chugged into the dustbin of history.”