The Future of the Welfare State

Welfare state reforms –
mapping citizens’ opinion
An opinion survey
in eight European countries
Commissioned by the Vision Europe Summit
In brief
On behalf of the Vision Europe Summit, TNS Emnid conducted in July and August of 2015 a representative survey in the following eight EU member states: Belgium, Germany, Finland, France,
Italy, Poland, Portugal and the United Kingdom1.
Key findings
o
In each of the eight countries surveyed, more than half of the population supports the idea
that the EU set minimum standards for social protections in all EU member states.
Support for this is greatest in France.
o
In each country surveyed, a majority believes the EU should put pressure on the member
states to implement necessary reforms of their welfare systems.
o
In every country, with the exception of Finland, a majority advocates financial transfers
from rich to poor EU member states.
o
In each of the eight countries surveyed, citizens worry most about the state of pensions
and elderly care in the future.
o
Citizens in each country surveyed consider education and training a very important policy
area for the future of the welfare state.
o
In each country citizens are comparatively confident with regard to the future of child
care in their county.
o
Citizens in countries with comparatively lower levels of public debt are willing to contribute more in order to maintain the current level of public welfare benefits. Citizens in
financially weak countries prefer cuts in benefits over increases in taxes and contributions.
Conclusions
o
The survey results suggest that citizens are aware of the challenges and need for reform
in social welfare systems.
o
A social investment approach is in line with citizens’ view that education is an important
policy area for the future.
o
The survey data points to strong support for the EU taking on a more important role in calling for reforms to ensure the sustainability of individual social protection systems and to
guarantee a minimum level of social protection across the EU.
1
The survey was conducted via telephone. The sample size in each country was 1.000 respondents (with 1007 in
Germany).
2
The EU as guarantor of social protection floors
The EU was established with the goal of fostering economic prosperity in all member states
through increased economic integration. Its success as an economic project is a testament to
such integration. Over the years, as this economic project has prospered, the EU has also
developed itself as a social project, though with less vigor. The EU may intervene with regulations or by setting minimum standards (e.g., maximum weekly working hours, occupational
safety) only when doing so has relevance for the internal market. Decisions regarding social
protections, however, are a matter of national sovereignty.
Figure 1: The EU as a guarantor of minimum standards in social protections
The EU should set minimum standards of social protection for all
its member states
61%
France
25%
56%
Belgium
29%
50%
Poland
29%
32%
0%
10%
Strongly agree
20%
4%
31%
30%
Somewhat agree
40%
50%
Don't know, n/a
6%
4%
60%
8%
8%
7%
17%
7%
12%
11%
11%
15%
24%
70%
Somewhat disagree
80%
5%
7%
14%
3%
19%
41%
Finland
1%
31%
53%
Portugal
UK
4%
45%
41%
Italy
2% 6%
29%
32%
Germany
3% 6%
8%
90%
100%
Strongly disagree
Currently, EU member states with comparatively lower social standards can try to gain a
competitive advantage over other member states. Setting (relative) social standards for all
member states would ensure that a certain level of social protection is guaranteed in all
member states and a race to the bottom thus prevented.
Across the board, citizens in all of the surveyed countries expressed their support for social
standards being set (see figure 1). Even in Finland, where approval is lowest, 63 percent are
in favor of this proposal. The greatest approval is found in France (86%), followed by Belgium and Poland. Germany lies in the middle, with 75 percent of its citizens expressing approval. There is a geographical divide on this question: citizens in northern and western European countries (Finland and United Kingdom) are most likely to reject minimum standards,
followed by the southern European states (Italy and Portugal), whereas the greatest approval
is found among citizens in central European states (France, Belgium, Poland and Germany).
3
The EU as advocate for reforms
In addition to setting standards, citizens in the surveyed countries are in favor of the EU pressuring member states to implement necessary reforms.
Figure 2: The EU as a guarantor of necessary reforms
The EU shall put pressure on national states including your country to
implement reforms of the welfare system when they are necessary.
47%
Poland
31%
45%
Belgium
32%
43%
France
31%
41%
Portugal
0%
10%
Strongly agree
27%
20%
30%
Somewhat agree
40%
11%
9%
9%
2%
3%
50%
18%
Don't know, n/a
2%
6%
19%
17%
17%
60%
11%
19%
4%
39%
25%
UK
3%
2%
49%
28%
Italy
10%
6%
47%
20%
Finland
10%
6%
33%
25%
Germany
2%
9%
13%
29%
70%
Somewhat disagree
80%
90%
100%
Strongly disagree
Even in the United Kingdom, where support for this statement is lowest, 52 percent of citizens responded positively to the question as to whether the EU should pressure individual
member states to implement social welfare reforms where needed. Despite the overall support to this statement in the United Kingdom, an important part of the surveyed in this country
also strongly disagrees with the statement. Poles show the strongest support among the
eight states surveyed with more than two-thirds advocating a stronger EU role here. Belgian
and French citizens come second and third. In Portugal and Germany support is slightly
lower, but these countries are also those with the smallest percentage of citizens who
strongly disagree with his statement (only 2 percent in Portugal). The Finnish public, generally more eurosceptic on all other EU-related questions, is close behind the Germans with 69
percent expressing the desire to have the EU act as an advocate of reforms (see figure 2).
We can thus say that the EU is thus seen by many citizens as a support in getting national leaders to implement necessary reforms that ensure the long-term viability of
the welfare state but don’t win votes.
What these findings do not imply should also be noted here. Respondents do not expect the
EU to demand specific reforms (e.g., consistent liberalization, austerity plans, etc.). One cannot infer from the question whether or not consistency across the EU should be targeted or
4
whether stipulating specific requirements is enough. This may vary from state to state and
depends on the demographic, economic and social context in each. The EU is seen as a
catalyst for reforms necessary for a particular system, not as a guarantor of specific
reforms that should be identical in each state.
Financial solidarity
Figure 3: Financial solidarity among EU member states
The EU should ensure financial transfers from the rich to the
poor member states.
37%
Poland
37%
35%
Portugal
32%
24%
Italy
25%
Belgium
17%
Germany
31%
UK
30%
0%
10%
Strongly agree
3%
36%
5%
30%
20%
30%
Somewhat agree
40%
50%
Don't know, n/a
11%
16%
17%
28%
9%
17%
19%
19%
4%
24%
28%
60%
8%
24%
5%
4%
7%
20%
2%
28%
16%
Finland
39%
24%
17%
6%
45%
France
3%
21%
70%
Somewhat disagree
80%
90%
100%
Strongly disagree
Citizens ascribe an additional role to the European Union: Not only should it put pressure on
national governments that resist reform, it should also guarantee financial solidarity between
the member states. In answering this question, it is clear that citizens of countries that are
net contributors to the EU budget regard this requirement with more scepticism than do citizens from net recipients. Poland was not only the largest net recipient in 2013,2 it was also
the country (of the eight included in the survey) in which the largest share of respondents
agreed with the statement that the European Union should guarantee financial transfers from
rich to poor member states. Germany, the United Kingdom and France, the three biggest net
contributors to the EU (as of 2013), as well as Finland – which contributes only minimally
more to the EU budget than it receives in payments – show the greatest share of respondents rejecting financial solidarity (see figure 3). In Finland, only 46 percent of respondents
agree with the above-cited statement. In all other countries, however, agreement ex-
2
Last available data
5
ceeds the 50 percent mark. In Germany, the largest net contributor, 61 percent of respondents declare themselves to be in favor of financial solidarity with poorer member states.
Confidence in the welfare state of the year 2050
Citizens of the eight countries take a pessimistic forward-looking view when asked to assess whether the welfare state will still meet the population’s needs by the year 2050. Fears
dominated in all eight countries, particularly in policy areas significant to the elderly,
that is, pensions and elderly care. Germans show themselves to be the most worried in
this regard, with 70 percent of respondents fearing that pensions will no longer meet citizens’
needs, and 63 percent fearing the same when it comes to care for the elderly in 2050 (see
Appendix 1). In contract only 51 percent in the United Kingdom and 52 percent in Belgium
are pessimistic regarding pensions in 2050. The demographic profiles of both the United
Kingdom and Belgium are less worrisome than the German one.
Citizens were also asked about their assessment regarding the future of child care and of
education and training. In both of these policy areas, expectations for the future are optimistic across all eight countries. In Belgium, just 18 percent of the population is worried
about the future of education and training; with approximately on third of their citizens expressing concern, Germany, France and the United Kingdom fall into the middle ground in
this regard. In former PISA top achiever Finland, 39 percent of citizens do not expect the education and training system to cover the needs of future generations. Most people are pessimistic regarding this policy field in Portugal where 44 percent do not believe that it will cover
future needs.
Germany, Belgium and Poland – three very different countries – express the least amount of
worry regarding child care in 2050 (31%). While in Belgium, nearly 50 percent of children
under three years of age were in child care outside the home in 2013, the comparable figure
was barely 30 percent in Germany, and just 10 percent in Poland. It appears that at least in
Germany, the considerable financial resources devoted in recent years to the expansion of
care for sub-three-year-olds has convinced citizens that the necessary steps are being
taken in this policy area, even if needs are not yet being sufficiently met today.3
Only in Germany and the United Kingdom are fewer than 50 percent of citizens worried
about support for the unemployed in the year 2050. In fact, both countries today show low
unemployment rates in cross-European comparison. The situation is quite different in Italy
and Belgium, in each of which nearly 60 percent of respondents regard the future pessimistically. It appears as through the two countries that rebuilt and liberalized their labor markets
3
Since it must be assumed for this question that respondents are taking both the quantity and the quality of currently available
care places into consideration, we refrain from explaining this positive view solely through the expected decline in births in Germany and the associated decline in demand for child care places. Of course, the low rate of child care placement in Poland can
also be explained by a low level of demand. However, this issue cannot be further pursued here.
6
before the crisis are reaping the benefits of these reforms in 2015, in the form of a low unemployment rate and comparatively strong citizen confidence in the future of unemployment insurance.
Expectations of the welfare state
In addition to citizens’ concerns, the survey also addressed evaluations of how important various welfare state goals should be in the future.
One of the policy fields regarded as the source of comparatively little worry by citizens in
the surveyed countries was also placed near the top of the list in terms of future importance (see Appendix 2): the attainment of education.4 This result must be seen in the
context of the paradigm shift towards Social Investment policies in most European countries.
Social Investment can be summarized as social policy that (not only) offers support in times
of need, but instead uses targeted investments to place citizens in a position where they will
not fall into a state of need. Investments in (early childhood) education and training are one
of the pillars of social investment. The preventative welfare state is a quite promising approach, even if in the future goals such as solidarity and equality of opportunity should be
aligned with issues such as competitiveness and the fight against poverty.
The fact that the citizens surveyed see education as the welfare state’s most important goal
should be an incentive for politicians to invest in this political area so as to obtain votes not
only through short-term social spending programs, but instead by securing the long-term viability of our social system.
The selection of countries does not afford a comparison between the old and new EU member states; however, it is striking that Poland, a country of the former Eastern Bloc, is the only
country in which citizens identify child care as the most important goal of the future welfare
state. Germans, Italians, Belgians and Britons see ‘enabling all citizens to acquire education’
as the most important goal while in France, Portugal and Finland it should be the guarantee
of health care.
Reform options: Increase contributions or reduce benefits?
In all eight countries, welfare states are faced with the challenge of continuing to fulfil citizens’ expectations in the future without consistently allowing expenditures to exceed the
available resources. This problem has hit painfully home in some countries during the course
of the financial and economic crisis. Portugal was able to avoid national default in 2011 only
thanks to an EU bailout, which was conditional upon hard-driving reforms. When Italy was on
the verge of a credit downgrade, necessary reforms were systematically implemented under
the technocratic government of Mario Monti, for instance in the pension system. Reforms that
4
Respondents were asked about “enabling all citizens to acquire education, knowledge and skills.”
7
reduce (future) benefits enable a country to gain credibility with its creditors. But what about
with citizens themselves? To find this out, citizens of the eight countries were asked which of
the following options they would prefer if tax revenues and social contributions were no
longer sufficient to maintain the current level of benefits: a) increase taxes and social security
contributions in order to maintain the level of public welfare benefits Or: b) keep taxes and
social security contributions at the current level, but reduce social welfare benefits.
Figure 4: Future financing
If taxes and social security contributions were not sufficient to maintain the current
level of public welfare benefits and services in your country, which of the following
two options would you prefer:
Finland
55,9%
UK
15,5%
49,9%
Germany
10,3%
47,8%
Belgium
8,4%
45,1%
7,7%
28,6%
39,8%
43,8%
47,2%
France
36,8%
12,7%
50,5%
Poland
35,7%
15,0%
49,3%
Italy
35,7%
Portugal
29,5%
21,8%
23,8%
42,5%
46,8%
0%
25%
50%
75%
100%
Increase taxes and social security contributions in order to maintain the current level of public
welfare benefits and services
Don't know, n/a*, other**
Maintain taxes and social security contributions at current levels and reduce the current level
of public welfare benefits and services
The largest share advocating for the preservation of current benefit levels is in Finland, where 56 percent of respondents support an increase in taxes and contributions.
In the United Kingdom and Germany as well a majority declared their support for increased taxes and contributions in return for unchanged benefits. A comparison of
these results with those in Italy and Portugal – countries with high budget deficits – suggests
a conclusion: that majorities for higher taxes are found in these three countries because they
have been able to bring their public finances under control in recent years, and have not had
to burden citizens with significantly higher taxes. The contrary is true in Portugal in Italy,
countries in which taxes have increased in some cases drastically in the wake of the financial
crisis. Only 29 percent of Portuguese and 36 percent of Italians are in favor of increased
taxes in order to retain a constant level of services.
8
In France, an absolute majority (51%) is even in favor of a reduction in the current level of
benefits. This result should shake up French politicians; apparently, citizens support exactly
the important changes that politicians are afraid of.
9
Annex 1: What citizens expect of the welfare state in 2050
In the year 2050, do you think that the public welfare system in your country will cover the needs of citizens in the
following fields? Diagrammed is only the "No"-option.
80%
70%
67%
63%
63%
63%
62%
59%
60%
58%
52%
51%
51%
48%
37%37%
34%
33%
52%
52%
48%
36%
36%
57%
54%
48%
46%
44%
41%
40%
31%
51%
48%
47%
44%
40%
56%55%
55%
54%
40%
38%
33%
31%
32%
39%
34%
31%
32%
29%
18%
20%
0%
Germany
Health care
UK
Pensions
France
Italy
Support for the unemployed
Poland
Child care
Belgium
Care for elderly people
Portugal
Finland
Education and training
10
Annex 2: Importance of specific policy areas in the future
Thinking about the future public welfare system in your country, how important should the following aims be?
Diagrammed is only the "Extremely important"-option.
60%
57%
52%
55%
52%
51%
48%
47%
42%
40%
38%
36%
51%
50%
44%
43%
48%
47%
46%
42%
43%
53%
42%
40%
35%
35%
29%
29%
26%26%26%
30%
24%
49%
47%
37%
32%
52%
30%30%
29%
22%
20%
0%
Germany
UK
France
Italy
Poland
Belgium
Portugal
Guaranteeing health care
Guaranteeing income / appropriate living standards
Guaranteeing child care
Guaranteeing care for elderly people
Finland
Enabling all citizens to acquire education
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Contact
Vision Europe Summit
c/o Bertelsmann Stiftung
Carl-Bertelsmann-Straße 256
33311 Gütersloh
Germany
Katharina Barié
Program International Forums and Trends
Telephone +49 5241 8181485
[email protected]
www.vision-europe-summit.eu

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