Friday, October 28, 2005

Europe's four models - Christian Science Monitor /

There is no single European social benefits model. According to Brussels Free University economics professor André Sapir, there are four models.
In a briefing paper prepared for EU finance ministers prior to Thursday's Hampton Court summit, Mr. Sapir outlined the models, and argued that only the Anglo-Saxon and Nordic models are economically sustainable.

Anglo-Saxon - (Britain, Portugal, Ireland) This model features social assistance as a last resort. It's characterized by free markets, relatively less protection from firing, but vigorous measures to help unemployed find work. Health and other benefits are attached to employment, even for low-income jobs.
Many analysts say Britain has moved to an "Anglo-social" model, a hybrid of the Anglo-Saxon and Nordic models.

Nordic - (Finland, Sweden, Denmark, Austria, and the Netherlands) This model is marked by high taxes, and high spending on education, research, universal healthcare, child care, maternity leave, and welfare. It features less job protection, but higher employment rates than Continental and Mediterranean models. A strong social safety net lowers the risk of poverty.

Continental - (France, Germany, Belgium, Luxemburg). This social support model relies on state insurance-based benefits and pensions. Poverty is fought by protecting workers from being fired. Unemployment benefits are less generous than the Nordic model. Labor union membership is declining but still influential.

Mediterranean - (Italy, Spain, Greece) This model concentrates social spending on old-age pensions. It's characterized by strong protections against firing workers and generous early retirement plans. Unemployment and poverty rates are higher than other models.
Source: Bruegel, an EU-funded think tank in Brussels.


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