Legal Structure of the EU Social Market Economy

Austrian Science Fund

Twenty years of debate about a Social Europe has circled around the `structural social deficit of the EU Treaties¿ argument: the application of the EU market rules to the Member States¿ welfare systems results in the destabilisation of Member States' social policies. Against this background the research project has in its core analysed whether the application of the EU market rules (competition law, state aid law, free movement rules and the public procurement regime) in the social policy arena indeed necessarily leads to a destabilisation of the Member States¿ welfare systems. It has done this through a legal analysis and the example of the Austrian welfare state (particularly by referring to the case studies of health care, higher education and social housing in Austria) and by comparing the EU integration processes in the welfare areas with the EU induced liberalisation and integration processes in the public utilities.
The analysis has shown that the EU market rules have been so far by the CJEU in relation to the Member States¿ welfare regimes essentially interpreted as social market rules, which allow for an inclusion of the Member States¿ welfare systems in the EU internal market and therefore for the establishment of a social market economy in the EU. The Lisbon Treaty revisions safeguard these developments in various ways. The analysis further concludes that beyond establishing an EU social market economy the EU has evolved a genuine EU social dimension for the redistributive social policies also through the extension of cross-border access to the Member States¿ welfare systems principally for all Union citizens irrespective of their economic or financial status ¿ this though so far only in a very limited version.