Challenges to European Welfare Systems

Across Europe, the economic and fiscal crisis has deeply shaken the economy and created enormous challenges lasting up until today. Austria is no exception, but that did not lead to fundamental changes in social policies. The development of the Austrian welfare system in the past two decades is characterised by continuity rather than paradigmatic change—despite economic, fiscal and demographic challenges. Concepts that moved to the centre of welfare debates in many other countries, such as a stronger workfare orientation or the social investment state, had a smaller impact in this country than in many others. Also, welfare retrenchment played a weaker role. This is the consequence of multiple factors including a comparatively favourable economic development up until 2013, a relatively strong consensus orientation in the Austrian political system (and the population), or the complex mix of national and provincial roles in social policy making, i.e. circumstances that also tend to limit scope for more innovative or even path-breaking changes to the Austria welfare system.

Belgium’s trajectory during the period of crisis turned out to be special and even intriguing. The country was remarkably resilient and stable in the face of the crisis. Some observers have attributed this to the fact that Belgium went without a government for 15 months, causing it not to introduce austerity packages as happened in many other countries. We argue that what made Belgium so resilient during the crisis was not the lack of a government per se, nor the absence of budget cuts as such. The main reason was that Belgium’s welfare system contains many automatic stabilizers. Looking beyond the crisis period, we argue that the past decades were marked by a transition towards a welfare state with a stronger emphasis on activation, minimum income protection and attention to new social risks such as lone parenthood and long-term unemployment. Social policy in Belgium has not remained inert in the face of a number of new social challenges but reforms have not been radical enough. Belgium’s structural performance on key dimensions of welfare state outcomes has deteriorated to a level that at best can be labelled as mediocre.

This chapter describes the implications of the global crisis in Bulgaria seen in the frozen economic situation and great political turbulences. The achieved financial stability and the low tax levels did not lead to the expected increase in foreign investments and to more stability of the labour market for the most vulnerable groups—for the youngest and the oldest parts of the labour force, especially for individuals with low education, among them with Roma ethnic background. For whole regions of the country—like the North Western region—the infrastructure investments could not immediately create better job opportunities. In times of crisis, disagreement between the political parties on sensitive reforms prevents them being carried out. Three lessons to be learned from the political instability caused by the global financial and economic crisis in Bulgaria are described. The first lesson is connected with the crisis government (2009–2013), which did not pay sufficient attention to achieving a proper balance between investments in infrastructure and social protection of vulnerable groups. The second lesson has to do with the government (2013–2014), which in a short period of time became unpopular because of the non-transparent way of making decisions, although it did raise the social payments for the minimum wage and childcare allowances. The third lesson concerns civil society itself and the ability of citizens to effectively control the government when making unpopular and non-transparent decisions.

The present contribution presents data backing up the thesis that the welfare state in Cyprus has deteriorated significantly since 2008, placing the blame on the policies implemented by the 2008–2013 government, as well as the economic crisis and the resulting Memorandum of Understanding that was signed between Cyprus and its international lenders. Following a detailed presentation of lead-up to the signing of the MoU and of its main provisions, goals and effects on economic indicators, as well as of other measures taken to alleviate the effects of the economic crisis, it is argued that the ageing and increase of the population as a result of low fertility rates will put a further strain on the welfare state. The labour market policy and its aims are presented, whilst the situation and MoU provisions as regards pensions, health policing and the tackling of social exclusion are analysed. It is argued that the rollback of the welfare state and the switch towards targeted rather than universal policies is a risk given the lack of trust in the state and the general feeling of uncertainty. It is concluded that these latter feelings of lack of trust and the accompanying uncertainty, which are partly the effects of the economic crisis and the MoU, but also reflect structural weaknesses of Cypriot society, significantly delegitimise the welfare state in Cyprus.

From 2007, the Czech public considered changes and shifts in the domestic welfare system as the most radical turn since the loss of dynamics of the post-communist developments. Paradoxically, a gradual and generally modest neo-liberal drive did not even significantly reduce the effectiveness of the results of redistributive measures in reducing poverty (arguably the most successful one in this sense in the EU). This modesty in putting forward meritocratic principles executing relatively mild cuts, with most pronounced in health and family policy domains, sharply contrasts with the strength of the protest movement that brought radical as well as traditional leftist groups and parties together with trade unions. Keys used here to understand this paradox, do not consist just of largely exogenous stimulus of the global economic crisis, but mostly in politics of welfare and their historical roots.We examine the specific shape of challenges, responses within the most dynamic policy domains, but also the larger social context. While seemingly not paired with a matching cause, the domestic dynamics of politics of welfare finally indicate some answers to accommodate the paradoxical awakening. This includes low attention to welfare state without any pronounced leitmotif in the preceding decade and parallel process of rise of new actors and reconfiguration of the older ones in the welfare arena. Finally, the conjunction of neo-liberal drive (though mild) and the relatively longer economic crisis made the politics of welfare of the Czech Republic more sensitive and thus alert in the last 7 years.

Crisis—What crisis? With the benefit of hindsight, it is easy to state that the fiscal and economic crisis since 2007 has not shown an extensive influence on the German welfare system. It has to be kept in mind that the main crisis of the German welfare state lay already in the late 1990s and early 2000s, when the country was internationally portrayed as a ‘conservative welfare state’ par excellence, being particularly struck by challenges such as new social risks and at the same time incapable of constitutive reforms. Then, however, path-shifting reforms in different social policy fields have been conducted, and it has partly been traced back to these reforms that Germany has turned from the “sick man of Europe” into an “economic model country”. In the chapter, we study which further pathways were taken in different areas of the German welfare system over the last years, in face of its major challenges—demographic change and restructuring the balance between policies providing for risks and policies enhancing opportunities. We find that overall the ‘new habits’ of the German welfare system have been continued, but that recently a stronger focus on risk prevention is re-emerging.

This article presents as a case analysis, mainly by using official Danish documents and national and Eurostat data, a picture of and reasons for the development in the Danish welfare state in recent years with the core focus after the start of the financial crisis in 2008. The analysis points to the fact that changes have taken place including more of a work-first approach and increasing pressure on those receiving social benefits, whereas with regard to investments in social services and social capital, this is still high on the agenda and continues, despite the crisis, to have a universal approach and focus.The expected change in demography has particularly been used to explain some of the reasons for the changes, although the fiscal constraints on the welfare state have also played a role.The Danish welfare state has seemingly also, in a gradual way, moved away from its strong focus on equality and generosity regarding welfare benefits, with the exception of pensions. At the same time the focus on core social services such as for children, the elderly and health care still seems to prevail. Increasing inequality has been part of the changes in the Danish welfare states in recent years.

The chapter analyses political and policy processes during the last economic recession (2008–2011) in Estonia. The authors reconstruct the events in policy process concentrating on the family, health, pensions, and unemployment policies.The authors conclude, that the economic crisis passed quite peaceably in the country although in objective terms Estonia suffered from one of the worst economic downturns and one of the harshest increases in unemployment in Europe. Although the government followed a rather inflexible budgetary policy, the same political coalition retained position also after elections in 2011. It might be explained by the goals achieved during the period—Estonian managed to use the recession to fulfil the accession criteria to the Euro zone—a long-term and publicly acknowledged development goal of a country. Another surprising fact is that the objective cutbacks in social protection were rather marginal. There were no substantial increases either. The policy makers managed to find a balanced way between cuts and protection, supported by the general public in order to enter the Euro zone.

When Spain had not yet fully achieved a welfare state comparable to other European countries, but it was still a work in progress, the economic and financial crisis has forced a restructuring process. But paradoxically, the implementation of recent years’ reforms is not only pointing out emerging challenges but also the need to agree on a long term strategy in order to redefine the nature of the Welfare State. The authors consider that the sustainability of the Spanish welfare system, according to the previous standards, is under risk. A precarious labour market, dramatic levels of unemployment and limited social policies, coupled with increasing numbers of people living in poverty, the privatization of public services and the questioning of the territorial and political legitimacy, are some of the main concerns emerging out of the reforms and the economic difficulties. Additionally, with the neoliberal discourse firmly guiding the reforms since late 2011, and the widespread belief that the welfare state is no longer suitable, the academic debate is now focused on whether Spain will be able to change the direction of the current reforms, pull the handbrake and reinforce the welfare state or, by contrast, demolish an unfinished work.

Life had never been as good in Finland as it was in 2008. Finland was regularly shortlisted as the best country in the world by various international agencies, numerous comparative and historical studies on the quality of life and life satisfaction scored all time highs and the standard of living was higher than ever. Since 2008, however, the FWS has been experiencing significant transitions in all major risk governance systems, including family policy, pensions, and social and health services. In many fields, however, reforms are still to be implemented. The article provides up to date information on those changes, analyses key factors behind them, and points out several strengths and challenges. Detailed attention will be paid to various endogenous and exogenous factors. It is also pointed out that the politics of the 2008 crisis have significantly benefited from the experiences of the early 1990s recessions; furthermore, the reforms made then have made it easier to adjust the institutions of the welfare state to the changing circumstances.

If the crisis reinforced the pressure to reform the French Welfare State under the scrutiny of the European Commission, these reforms were difficult to decide (and to implement) because of their political costs and more generally the low legitimacy of political actors (especially the current socialist government and the President François Hollande). The legitimacy issue is crucial because since the institutional reform of 1996 (plan Juppé) the French state is more directly accountable for welfare reforms in health care and unemployment where traditionally non-state actors (social partners, doctors …) played a key role. In the context of the crisis, the French authorities tried to negotiate reforms with non-state actors in these two sectors in order to avoid the political blame. The French Welfare State is also challenged by demographic evolutions. Although France has a rather high level of fertility, ageing affects the population as in other European countries. However, the impact of demographic evolutions seems weaker than the financial impact of the crisis on the French Welfare State which has not, however, changed its reform path which began in the mid 1990s.

This chapter examines the Greek social protection system by focusing on the dismantling effects of the economic crisis and the neo-liberal austerity measures. Despite sound empirical findings on pre-existing inadequacies of the Greek social protection system, the austerity measures introduced within the framework of the Memoranda signed with Troika (EU, ECB and IMF) further weakened the capacity of the system to address social risks such as unemployment, inequality and poverty. Against the background of an ageing society, Greece faces a number of challenges in all social policy fields. In the labour market, sky rocketing unemployment levels followed the economic crisis and the deregulation measures imposed while wages were drastically reduced. Pensions, one of the main tenets of the social protection system accounting for more than half of social protection benefits, were drastically reduced affecting the living standards of the elderly. The quasi-universal character of the health system was seriously compromised by drastic cuts leaving public hospitals to manage increased admission rates with reduced budgets and an increasing part of the population uninsured. The other historically underdeveloped social policy areas (i.e. housing, family-child care, long-term care) impose significant burdens on families, the traditional providers of welfare in Southern European countries, in a context of shrinking incomes from work and pensions and imposed flat-rate taxes on house property. These developments taken together resulted in unprecedented levels of poverty and inequality for the Greek population.

The chapter starts with a short overview of recent socio-demographic and socio-economic trends and how they challenge the Croatian welfare state, the severity of the crisis and the main crisis-related reforms. The reforms in the main social policy areas (labour market, pensions, healthcare, family policy, social assistance and eldercare) are explored in more detail afterwards, putting an additional focus on arguments behind the reforms and the way the welfare programmes were (re)balanced and (re)orientated in the crisis period.Many of the challenges the social systems are facing in Croatia have their roots in the pre-crisis period. The high politicization of social issues reflected in inadvisable reforms around elections, as well as ad-hoc, uncoordinated and ill-advised reforms in general brought numerous side-effects resulting in additional difficulties mostly related to financial sustainability, but also an adequacy and efficiency of social systems. Structural difficulties and already existing institutional deficits become thus only additionally aggravated with the crisis putting a new burden on the welfare state, particularly as the crisis progressed and the need for consolidation of public finances grew. The earliest government’s response in the area of welfare state was indeterminate and absent, while further reform efforts were often vague and did not follow a clear anti-crisis strategy. They resulted in inadvisable, ad-hoc reforms predominantly aimed at savings. The reform processes in some areas became closely connected to the “deservingness” discourse, making strong arguments against the welfare state.

The paper describes welfare state developments in Hungary during and after the financial crisis. As the logic of changes having taken place in the field of welfare issues cannot be separated from the constitutional and political transformation a strong emphasis is put on the wider political context and the radically transformed political map which were set as a background to these changes. As for welfare related issues the course of changes are indicated by the diminishing legal guarantees, decreasing rights and state guarantees while increasing state control also, perverted redistribution, increasing burdens of the low-income population, care support only under certain conditions, and the promoting of discretionary decisions. Before the right wing turn in 2010 it looked as if the hybrid nature of the Hungarian welfare system would finally show up, i.e. different social-political trends would follow one another or they would appear simultaneously even. However nowadays workfare is taking over welfare; even ‘prisonfare’ was blown in by the ‘public security tornado’. The Hungarian welfare regime shows not only eclectic characteristics, but de-emphasizing of the rule of law, the attraction to social hierarchy and state-centred solutions, the pursuit of strengthening traditional family values and historical churches, the phrase “anti-liberal paternalistic conservativism” would define Hungary’s shift from post-communist hybrid welfare regime to a new atypical workfare regime.

Ireland’s hybrid welfare state always faced significant underlying challenges; these challenges are exacerbated by the recent and continuing crises—economic, financial, and fiscal. In the context of its populist politics, these challenges and crises have prompted austerity measures. The Irish experience will show whether small, vulnerable welfare states invariably adopt path-departing policy changes. On the one hand, the chapter records evidence of a crisis-driven shift towards a decisively liberal welfare regime, and on the other it notes the hybrid nature of the Irish welfare regime and hence the multiple and varied pressures for change. Therefore, as the chapter argues, it may be that the drift towards a social investment state in European states will also take root in Ireland.The chapter suggests that the current crises in some European welfare states reveal the similarities between Ireland and so-called ‘southern European’ states. In turn, these similarities imply that the ‘peripheral’ welfare states in Ireland and southern Europe are underpinned by deep-seated structural attributes that generate both economic vulnerability and social underdevelopment.

The chapter aims at investigating how the Icelandic welfare system was used to tackle the effects of the financial and economic crisis in 2007/2008. The chapter asks what main challenges the Icelandic welfare system had to face and how they have been met during the aftermath of the crisis that started in the autumn of 2008. The main challenges that Iceland faced in the aftermath of the financial collapse was increased unemployment, reduced real earnings, higher debt burden of households and businesses and collapsed governmental finances. The chapter primarily focuses on the welfare strategy part of the responses to the crisis and explains how Iceland managed to promote a welfare strategy despite the serious financial constraints. That strategy was primarily characterized by redistribution of welfare expenditures, with increased transfers to households and cuts in expenditures on services (healthcare and education) and on administration. Targeting of transfers on lower income groups was also increased and that helped to avert a significant increase in severe poverty during the crisis years.

The Italian welfare state has experienced a huge reform trend in the last two decades. This has been consistent with a lengthy (and still limited) transition towards a more financially viable system of social policies; and a more effective labour market regulation. These trends have been confirmed in the last few years, when the Italian social and employment policies saw further reforms to address short- and long-term challenges.The chapter shows the huge reform record (both before and after the recent economic crisis) has not led to paradigmatic changes: the Italian system is still heavily based on transfers, with limited social services, while active labour market policies and social investment measures in general are still of minor importance. All this confirms the Italian welfare system is still part of the Southern European model, with open questions about its future sustainability and adequacy.

This chapter is designed to shed some light on the challenges and changes in the welfare system of Lithuania during and after the recent financial and economic crisis, which was felt most in Lithuania during the years of 2009 and 2010. The major questions are: Which reforms were implemented during the global crisis and what consequences have they generated for the future development of the welfare system in Lithuania? What are the major challenges for the Lithuanian welfare system in the twenty-first century?The findings of this paper show that the crisis has had a remarkable impact on the well-being of the Lithuanian population (poverty and unemployment have increased) and on the social policy design: important cutbacks were implemented in pension insurance, short-term and family benefits and unemployment insurance.The Lithuanian welfare state is facing many challenges of the twenty-first century: increasing outward migration, ageing of the population, youth unemployment and long-term unemployment. As a consequence of all these challenges the fiscal sustainability of the social protection system is threatened. The fiscal and economic crisis has intensified the fiscal problems of the social protection and social security was reformed in reducing the state’s responsibility but increasing the individual/family’s responsibility in meeting demands of the increasing social risks. This paper suggests that the liberal approach is taking strong root in the Lithuanian welfare state system.

The chapter on Luxembourg demonstrates that the financial and economic crisis from 2008 onwards had little impact on a very generous welfare state. The Luxembourg government opted for a pragmatic approach to resolve the immediate effects of the crisis. Moreover, major reforms, which were underway before the crisis, were speeded up because of it. For example, the pension system was adapted to demographic changes in an ageing society. Primary health care strategies were introduced to improve management and to control the financial system. Regarding family policy, a new approach ‘investment in children' based on the United Nations Convention on the rights of the child was implemented. Last but not least, Luxembourg’s Public Employment Service underwent major changes linked to developments in the economic situation.But this success story also showed a darker side. On the one hand, the crisis altered the Luxembourg social model based on confidence between the public authorities, the employers and the trade-unions and on consensus building (the famous ‘Tripartite'). On the other hand, case-law from the Court of Justice of the European Union regarding rights of the frontier workers, a major component of the Luxembourg labour market, showed the limits of the autonomy of public authorities to shape the Luxembourg Welfare State.

Latvian social policy is close to the neoliberal model of the welfare state based on macroeconomic indicators of low welfare state spending, high income inequality, low minimum wage and low degree of decommodification. Latvia was among the first countries to be stung by the crisis in 2008. Key words became: austerity, fiscal consolidation and structural adjustment measures. A minimum social safety network was introduced to improve targeted social support. Funding from the European Social Fund was instrumental in mitigating unemployment, facilitating a large temporary works programme. Latvia joined the Euro zone in 2014 and is quite successfully returning loans. Such is one side of the success story. However the effect of crisis on Latvia’s population was and still is one of the hardest in the European Union. Depopulation, continuous negative increase of population since 1991 in combination with outmigration and rapid ageing—such are the main challenges of the country. Unemployment remains high with large share of long-term unemployed. Emigration is ongoing due to an inadequate level of wages. A very high level of pension sustainability is possible due to the low level of solidarity and redistribution that is immanent to a notional defined contribution pension scheme. Active support of family policy during the crisis and post-crisis time is a good example of social investment, but not sufficient to improve the situation in general. The crisis has greatly contributed to the already existing distrust in public institutions and policies which can become a threat to legitimacy at some point.

The paper discusses social policy legacies and provides information on current trends and perspectives regarding the most pressing demographic, economic and social challenges in Macedonia. The socialist legacies have largely been reformed since the 1990s, with the introduction of: the principles of conditionality, of individual responsibility, as well as of pluralisation. All these, accompanied by the particular ethnic composition of the country, continual low economic growth and the falling number of jobs in the country, add to the challenge of demystifying the particularities of the social welfare model and its viability in times of economic and demographic pressure. Also, the analysis indicates current risks faced by the social protection system, and suggests they may be overcome by strengthening some positive achievements, such as: targeting the accuracy of the social assistance benefits, a greater degree of welfare pluralism as well as greater use of EU pre-accession funds. Most importantly, a precondition of any improvement of the Macedonian welfare systems is to overcome the current political practice of reactionary tactics and manoeuvres and instead to incorporate strategic and evidence based approaches to develop a sustainable system of social policy.

Despite initial concerns, employment levels in Malta have actually risen since the onset of the global crisis in 2007. This was due in part to early and decisive action to prevent job loss but also to an ongoing rise in female employment and to multifaceted strategies to improve both flexibility and security in the Maltese labour market. The crisis has not, therefore, affected the provision of welfare as such, and no austerity measures are evident during this period. The major policy changes have related to pension reform, with higher retirement ages and longer contributory periods, and to stronger activation requirements for the unemployed. However, levels of poverty and social exclusion have risen, in the context of higher living costs, and these levels continue to cause concern. Broadly, Malta’s challenges include ongoing control of the public debt and deficit, as well as further increases to the labour supply and arresting and reducing the increase in poverty. The inexorable progress towards greater gender equality also means that timely strategies are required to address the care needs of children and the elderly, traditionally provided for by women within the family. Malta’s accession to the EU in 2004 has made a considerable contribution towards meeting these challenges, in terms of knowledge transfer and the employment and inclusion effects of its Structural Funds.

This chapter explores how the Dutch welfare system has evolved in the last decade(s). It shows that the economic crisis and the process of demographic change have put the Dutch welfare system to the test. The surmounting pressures from 2007 onwards have revealed structural problems of the Dutch welfare system, such as sustainability of pensions and health care systems, increasing dualisation in the labour market and challenges in reconciliation of care responsibilities and (full-time) employment. Although the Dutch corporatist consensus-driven policy-making has been able to take some action in reforming social security and social services towards the needs of the ‘participatory society’, the paradigmatic policy changes remain unpopular and (still) few in actual numbers. In conclusion, the legitimacy of the welfare state in the Netherlands remains strong, but the actual consequences of the ‘great recession’ are yet to materialize.

The social policy model evolving in Poland for the last 25 years is certainly still a model in the making and best characterized as “mixed”. Both the decentralisation of public administration and changes in the economic system aimed at strengthening the market economy, resulted in the creation of the “welfare blend” where the conservative and corporate tradition coexists with the elements of a liberal model. While dominated by partly privatised social insurance, which provides employment-related benefits, it is also supplemented by the universal, means-tested benefits. On top of that, the underdevelopment of the social services sector charges families with many social tasks connected with care and social support.This duality becomes even more visible during the times of crisis. The state seems to be reluctant to introduce effective measures strengthening citizens’ capacity to be responsible for their welfare and social security. Despite several attempts to substantially limit the leading role of the state, public authorities, and not citizens, are still held responsible for the resolution of social problems and for the satisfaction of social needs. The preference for paternalistic state was clearly visible from the consecutive public opinion polls in the years 1992–2010. The clear majority considered public responsibility for the fulfilment of social needs as one of the major features of democracy.

The purpose of this chapter is to provide an overview of the main challenges and risks the Portuguese welfare system has faced since the onset of the financial crisis of 2008, and of the reforms that have been implemented, particularly after the signature of the Memorandum of Understanding (MoU), in May 2011, with the European Commission, the European Central Bank and the International Monetary Fund.First, we examine demographic trends in Portugal, often mentioned as a primary challenge to economic policy that calls for social security reform, emphasizing their relationship with the working of the economy and social policy. Next, we discuss the diagnosis of the present crisis adopted by the European Union institutions, which considers that the public debt crisis was the outcome of government fiscal indiscipline and current account imbalances were due to “structural rigidities”. This diagnosis has helped to legitimate fiscal consolidation and “internal devaluation” policies imposed on Portugal and on other peripheral countries of the Eurozone. We argue that the origin of the present crisis is better explained by macroeconomic imbalances prevailing within the Eurozone. Then, we outline the adverse consequences of austerity policies pursued as regards the functioning of the economy, the aggravation of demographic trends, the financial imbalances of social security, and the shaping of social policy. Finally, we analyze with more detail the main challenges, risks and policy responses undertaken in the period under analysis in the fields of labour market, pensions, health, long-term care, family and children.

The chapter discusses the evolution of Romanian labour-market and welfare policies within the context of the global financial crisis, investigating the demographic, macroeconomic, and political dimensions that shaped this evolution. High labour migration from Romania amplified the sensitivity of domestic markets to developments in other European economies and augmented the problem of population ageing. Child poverty, severe deprivation and marginalization among ethnic Roma remained serious social problems, but they neither became policy priorities nor inspired adequate welfare measures.Romania reacted to the crisis by scaling-back the state and deregulating the labour market. Salaries in the state sector were uniformly cut by 25 % and the VAT was increased from 19 to 24 % in June 2010. The democrat-liberal government of 2008–2012 sought to diminish the political costs of austerity by fuelling already-existing contestations of state redistribution and public services (as being ineffective) and de-legitimizing claimants. New regulations denied social benefits to all those having debts of taxes or public fees, and controls over local welfare authorities intensified. Eligibility for the means-tested family allowance and the guaranteed minimum income tightened, and their values froze at 2009 levels. Middle-class pressures safeguarded the generosity of earnings-related childcare leave benefits, which nonetheless hardly reach out to the large segment of precarious workers and long-term unemployed. Overall, social spending fluctuated around 16–17 % of the GDP, the lowest in the EU. The political crisis of January 2012 imposed a change of discourse on social matters, and incremental adjustments were performed by the subsequent social-liberal cabinet. However, no paradigmatic shift could be observed in strengthening the welfare state towards greater decommodification.

The welfare provision in Serbia is one of the areas of public policies determined to the largest extent by economic decisions and it has been facing fundamental demographic and economic challenges. The author first depicts the context of current welfare state reforms, from the period of socialism to transition and today. The main characteristic of demographic changes, as presented in Chap. 2, is ageing of the population. Along with demographic changes, another, even larger challenge to the national welfare state, is the economic situation in the national context. Chapter 3 explores the basic indicators of the labour market in the period of the crisis and focuses primarily on the anti-crisis measures directed towards the welfare system. The national welfare state is traditionally designed along the so-called old social risks, with negligible orientation of its policies toward the new ones. Therefore, in Chap. 4, pension, labour market, health, social care, family, as well as long-term care policies are taken into consideration. The concluding chapter points to possible trajectories of the welfare state reforms in Serbia.

This paper examines the challenges to the Swedish welfare state after the credit crunch of 2008 focusing on several major challenges: the government’s reaction to the fiscal and economic crisis and its outcomes, the (re)balance of welfare policies addressing risks and opportunities. While the situation is almost excellent from a purely fiscal point of view, the outstanding private debt, unemployment, especially among youth, pressures on the pension, health and education systems are prominent concerns. They have led to the revitalization of the social investment paradigm, strict budgetary policies, increased number of welfare-to-work programmes and focus on using tax reductions as a means of stimulating the labour market. In this context, the main demographic concerns and social integration have come to the fore to an unprecedented extent.

In Slovenia development of the welfare system started from a state socialist welfare system and was marked with gradualism. A dual model of the welfare system has formed, with the compulsory social insurance systems and the strong public/state sector as the main service provider of all types of services. Due to the deep economic crisis, ageing population and lack of structural reforms in the previous decade the pressure on the existing welfare system has been growing in Slovenia. The current economic and financial crisis set Slovenia back in to the situation of the mid-1990s regarding the low activity rate and high unemployment rates. This has stimulated several of the changes that were introduced in the last few years. The changes in the labour market went in the direction of higher flexibility and loss of some of the established rights. Also significant were the changes in the pension system, as well as social assistance schemes and family policy. The new legal framework has according to evaluations increased vulnerabilities of several groups. On the other hand the necessary health care reform and long-term care policy have not been adopted. An additional issue in Slovenia is the problem of low trust among social partners as well as the rising distrust of people and the increasing perception of injustice, which makes the adoption of reforms and finding consensus on their direction even more difficult. This is reflected in high political instability and civil protests.

This chapter focuses on the main reforms in the social security and social assistance systems of Turkey in the post-2002 period. This has been a period in which the immature welfare regime of the country has gone through significant restructuring under the neo-liberal and conservative aims of the Justice and Development Party. The chapter analyzes the main challenges plaguing the Turkish welfare regime in this era. While looking into the areas of labor market policy, pensions, health, social assistance, and long-term and childcare, the main questions the chapter focuses on are: (i) What were the main reforms implemented in the specific policy fields during the last decade? (ii) What were the effects (if any) of the 2007–2008 economic crises on specific social policy fields?

This chapter analyses the UK coalition government’s two over-arching social policy strategies: deep spending cuts and organisational restructuring. It argues that these represent a new and distinctive ideologically-driven way forward for the UK. The Conservatives in coalition government have been remarkably successful in persuading the public that increases in government spending caused a crisis in public finances that preceded the financial crisis. By a strategy of what Pierson (Dismantling the welfare state? Reagan, Thatcher, and the politics of retrenchment. Cambridge University Press, 1994) has termed ‘blame avoidance’ for welfare state cutbacks, it has been to be able to push through its austerity agenda. In this vision pressures on the welfare state are to be contained through a shift of responsibility in many areas away from government to a web of semi-independent private providers, citizens or the community. Market principles will permeate social welfare to a greater extent. It is argued in this chapter that the coalition government’s cut-backs and restructuring go beyond piecemeal responses to deficit reduction and amount to a coherent programme that is part of a larger strategy to set the UK political economy on an entirely new path. Its approach contributes to the Conservatives’ long-term ideological goal to shrink the state, free up the market and set the UK political economy on a trajectory of permanently lower spending, lower debt and market-led growth. In contending that the financial crisis and austerity have been ‘game-changers’ as far as social policy is concerned, this chapter discusses the following policy fields: labour market, pensions, health, long-term adult social care, family and children, and housing.

Based on the country chapters in the present volume, this contribution has two objectives: First, it gives a structured overview on the diversity of policy responses that have been adopted since 2007 in European Welfare Systems (EWS). Thereby, we cover the policy areas of labour market, pensions, health, long-term care, family policy and social assistance. Second, on this basis, the chapter identifies three major tendencies of change: To begin with, retrenchment of universal risk prevention turns out to be an important driver of reform during the crisis, but also activation policies and extended choices are getting increasingly important. In addition, we identify a growing number or extensity of measures that are targeted towards special (vulnerable) groups.

Demographic challenges are increasingly becoming part of the political agenda in Europe. Using data from 31 European countries the chapter provides an overview of how changes in population structure and demographic processes are linked to political views and rhetoric about social policy at the start of the twenty-first century in Europe. Population development is analysed alongside views of governments on population growth and population policies. The chapter looks at the key population processes from three main angles: the objective situation; official views on the situation; and how European countries differ in their social policy reactions.The results show that the consensus on the need for family policy in Europe is widespread. We found also clear evidence that attitudes towards population growth and respective policies tend to concur with the demographic situation. Concern about the population situation and the willingness to support population growth policies have developed simultaneously and become stronger in Europe. However we also saw that political rhetoric is not always tied to actual higher spending on families with children. An alternative solution to improve the structure of the population and increase population growth would be to increase immigration. We observed some liberalization of European political attitudes towards immigration from 2001 to 2011.

The concept of “politically limited pluralism” (PLP) was developed well before the onset of the fiscal and economic crisis for describing the common denominator of the “European” Welfare Systems [Hegelich and Schubert (The handbook of European welfare systems. Routledge, 2009)]. This contribution examines to what extent the concept is fruitful also in times of severe crisis. The following considerations are based on the Eurostat COFOG-dataset. The results show that and how far PLP is a convincing theoretical concept. Moreover, parallels to punctuated equilibrium theory (PET) can be discovered.

This chapter relates to the development of the European social integration, which has been put on hold since the economic and financial crisis. From 2008 on, the European institutions focused on the economic coordination to respond to the crisis and postponed the European social model construction.The chances of the European social integration lie in the social objectives set in the European treaties. Objectives such as full employment and social progress, fighting social exclusion and discrimination, promoting social justice became part of the European law. Multilevel governance on coordination of employment and social policies of the Member States was put in place alongside economic policies. The European institutions developed means to make the Member States’ policies comply with social objectives. The Court of Justice of the European Union recognized those objectives as social fundamental rights to which the Member States had to abide to. The Court initiated constructive case-law regarding especially European citizenship and social integration.However, the economic and financial crisis showed the limits to the European social integration. Firstly, focusing on economic issues, social policies have been put to the back. New instruments, such as the European Semester, hardened the economic governance, which had tremendous consequences on welfare and widened the gap between the Member States (‘variable geometry’). Secondly, the focus on the public expenditure entailed a new shift in case-law. Since the Dano case, the Member States can refuse to grant a social advantage to non-worker European migrants on the mere argument of its public cost. Previously, such an argument would have been dismissed in consideration of European citizen’s rights and social integration.