Social market rules for Europe

The central aim of the proposed research project is to examine, whether the establishment of a legal framework for a European multilevel welfare system - a system which leads to EU welfare integration in the required degree, while at the same time accommodating the existing diversity of the national welfare regimes in Europe - can be housed within the current structure of the EC treaty, in particular its institutional setting. To this end we will provide a legal analysis of the two following sets of research questions: First, to what extent does EU welfare integration, initiated through negative integration, on the basis of the core EC market rules (competition, state aid, free movement) and the union citizenship chapter in combination with the general non- discrimination rule already take place? On which legal norm and which legal reasoning exactly is this process founded and to which degree does it de facto transfer MS` decisions regarding the provision and the financing of a certain welfare service to the EC? Does the normative structure of the EC market rules allow for their further development (interpretation) to "social market rules", i.e. to rules which do not merely aim at an open market with free competition, but at a "social market economy"? How are the roles of the EU institutions (ECJ, Commission and EC legislator) within this policy and law making process interrelated; what is in particular the function of the European Court of Justice therein? How is the development of EU welfare integration to be assessed from a democratic legitimacy viewpoint? Secondly, anticipating the European Charta of Fundamental Rights enters into force, how could the fundamental social rights included in the Charta influence the current developments of EU welfare integration? The research will be conducted by the example of particular sectors providing welfare services. The term welfare services is thereby conceptualized broadly to comprise resource allocation outside the market at large, including in line with the concept of "services of general interest" both core welfare services and certain services provided by the public utilities. The major legal studies so far submitted in this field of research have typically only taken one of these categories into account. We therefore may expect new scientific findings from the broad approach taken in this study. The sectors we will include in the analysis are the electronic communications, public transportation and water industries, the public health care and the public higher education sector. The results of the sector specific analysis will be examined in a cross-sectoral way, which aims at a systematisation of the findings and the development of general categories and principles to comprehend the general ordering structures of the current EC treaty framework with regard to the provision of welfare services in Europe. This again shall provide the basis for an answer to the above listed central research questions of the work. Methodologically the project represents a work of basic research, but brings this in close relation to concrete practical legal problems of the European integration process. It comprises in-depth studies of ECJ case law and EC secondary legislation in the field of welfare provision as well as an analysis of the interaction of the EU institutions within the process of EU welfare integration. In this it follows a strong systematic approach. The most innovative aspect of the work lies in the idea to refine the EC market rules to social market rules, thereby revealing new ways of how to integrate the concept of a "social market economy" not only in the form of a basic value but in particular also in the form of "hard law legal instruments" in the EU legal order. Further innovative elements are in particular to be seen in the approach to relate the substantive problems of EU welfare integration to the institutional and procedural setting in which these developments takes place, as well as to analyse the possible scope of application and impact of the fundamental social rights in context with the EU welfare integration developments based on negative integration. The project constitutes the candidate`s post doctoral thesis for obtaining the permission to teach in the areas of public law and European law. It will be conducted mainly at the Legal Department for Public and Tax Law of the WU in close cooperation with the Salzburg Centre of European Union Studies (SCEUS) which specialises in interdisciplinary research on the European Social Model.

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 interferes with the Member States competences in these fields and reduces their capacity to control the provision of welfare services, without compensating for this loss of control at the EU level. This again results in the destabilisation of Member States' social policies. To overcome that social deficit some have argued in favour of granting the EU genuine competences for social policy in order to establish constitutional parity with the rules of European economic integration. The Euro area crisis (to stabilise the EMU), common challenges for the EU welfare states due to similar demographic and structural changes in the EU and the finality of Europe (beyond economic integration towards true political integration), have been further reasons brought up in the debate to strengthen the EU social dimension (particularly also within the redistributive social policies arena). 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, as essentially claimed by the structural social deficit argument. 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. This analysis has shown that the application of the EU market rules to the Member States welfare systems does not necessarily lead to a destabilisation of the latter, but 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. However, the EU has so far not evolved own redistributive functions. Until now, an EU social dimension of this extent has been generally considered as politically unrealistic to achieve and from a socio-political perspective also not desirable. However, in course of the Euro crisis in the last years claims have been increasingly made for a further development of an EU social dimension in exactly this direction. This will not be possible on the basis of the current EU treaties but will require important and very controversial reforms of them.