Modern Social Democracy and European Welfare State Reform

Abstract

The European political landscape in the 1990s was characterised by centre-left parties returning to power in several countries after long periods in opposition. Following intensive internal debates over policy direction and policy revision, once back in power some centre-left governments in some countries have used terms such as the ‘third way’ and ‘new social democracy’, or the ‘Neue Mitte’ as an indication that contemporary policies should be seen as distinct from those pursued by both previous social democratic administrations and neo-liberal governments in the interim (e.g. Gamble and Wright, 1999; White, 2001). What, if anything, exactly constitutes the ‘third way’ has been a matter of considerable debate, as has been the question of how far traditional social democratic values and aspirations, such as solidarity and equality, are still relevant within ‘third way’ policies. More than previously, modern social democratic policy is geared towards reducing non-wage labour costs, fostering private forms of social protection, such as funded pensions, intensifying labour market integration and subsidising low-skilled jobs, but also incorporating new social risks and new social needs (Vandenbrouke, 2001).