The EU is trying to become a welfare superstate

EUROPE IS TO the welfare state what Canada is to ice hockey: the birthplace and the summit of the art. The European Union boasts a “unique social market economy” that “protects us against the great risks of life”, Ursula von der Leyen, president of the European Commission, told a summit of EU leaders on May 7th. They had met in Porto, Portugal’s second city, to approve a plan for turning the union into a bulwark of social protection, with targets for raising employment, improving job training and reducing poverty, as well as looser goals such as fighting gender inequality and regulating the gig economy.

Yet Europe’s welfare states are administered by national governments, not by the EU. The European Commission’s powerful regulatory authority rarely extends to social policy. As for EU spending, even with a new €750bn ($910bn) covid-19 recovery fund added to its regular €1.1tn seven-year budget, it amounts to less than 2% of the bloc’s GDP over the period. That pales in comparison to members’ social spending alone, which runs from 13% of GDP (Ireland) to 31% (France). Pensions, unemployment, health care, minimum wages and collective bargaining are national affairs.