Addressing Global Inequality: Is the EU Part of the Equation?

If globalization leads to increasing inequality in the economically most advanced nation states, and if we want to reverse this trend, is the EU then part of the solution? Or, is the EU part of the problem? I argue that our discussion of these questions can be impaired by intellectual amalgamation and determinism in our understanding of globalization and Europeanisation. I signal these pitfalls in the work of Milanovic, Rodrik and other influential scholars: however thought-provoking their accounts of globalization and Europeanisation are, our discussion of the potential role of the EU should move beyond such accounts.
International competition, technological and demographic changes and sociological and ideational shifts all put pressure on welfare states. But the difference between the trajectory of most continental European welfare states on one hand and the US and the UK on the other hand shows that, so far, national institutions and policies played a crucial role in mitigating the impact of these changes.
Sixty years ago, European integration was premised on a neat division of labour: important aspects of economic policy would become supranational, social policy could be safely left in national hands. Prima facie, that neat division of labour seemed to work tolerably well for many years, notwithstanding a number of early, critical observations about the EU’s impact on the social fabric in Member States. But, in today’s EU, this division of labour is no longer sustainable: one reason is monetary unification, another reason is the economic heterogeneity after enlargement. Revising that division of labour requires a political contract at the European level that sustains risk-sharing and common social objectives. Agreeing on such a political contract raises issues of sovereignty, solidarity and shared values, but is possible without getting trapped in and paralyzed by a trilemma of democracy, sovereignty and integrated markets. However, to indicate the way forward, we need a coherent conception of a ‘European Social Union’.