The Hidden European welfare state. A socio-economic assessment of the EU-rules on social security coordination

While social security falls under the competency of Member States and each Member State remains free to determine the details of its own social security system, the European Union has a subsidiary role in the area of social security. The European Union has the task to coordinate the social security systems of Member States. This EU competency is regulated by the ‘Basic’ Regulation (EC) No 883/2004 and the ‘Implementing’ Regulation (EC) No 987/2009. The main objective of the coordination rules is to ensure that persons moving within the EU do not suffer any loss of social security rights in the context of intra EU-mobility. This objective is guaranteed by four main principles: the determination of a single applicable law, equal treatment or non-discrimination, aggregation of periods and the exportability of benefits. Moreover, the personal scope of Regulation (EC) No 883/2004 is not limited to migrant workers but covers all nationals, active or non active persons. It would be wrong to assert that the EU has no social dimension today. Instruments such as the Open Method of Coordination, common European standards, directives but especially the European Semester will influence national social policy. The importance of the coordination of social security systems as social instrument is less known and it was for a long time an unexplored area for social scientists, perhaps from the idea ‘no statistics, no problems’. We call it the ‘hidden European welfare state’. There is therefore a need to reveal the number of persons covered by the application of the coordination rules and the budgetary consequences on national social expenses. Moreover, issues of ‘social dumping’ and ‘welfare tourism’ have become heavily politicised. It also proves the necessity of more and better statistics as this should allow the Member States and the European Commission to be more aware about the impact of the coordination of social security systems and if necessary to take measures for further improving the current rules.