The open method of co-ordination: Some remarks regarding old-age security within an enlarged European Union



1. European integration and social policy

From its very beginning the European Economic Community (EEC) has been confronted with the
problem of social protection.4 During the preparatory stages prior to signing the Treaty of Rome in
1956/57, the question was raised as to whether or not
harmonisation of social protection systems
is necessary.5 One side, at that time especially the French government and trade unions, claimed
that, once the barriers fall, free competition of social security systems might lead to market disad-
vantages for countries with a high level of social security and, therefore, with higher contributions
in comparison with their competitors with a lower level of social security, and consequently lower
contributions as well. Furthermore, these disparities should not lead to market distortions. There-
fore, they supported a progressive harmonisation of social security systems (and especially their
funding), while at the same time custom barriers should be removed.6 The opposing side, particu-
larly the German government and employers' associations, stated that the Common Market could
accommodate existing differences. The argument was that social charges are an element of labour
cost, but only one factor among others affecting the competitiveness.7 The overall result was that
problems raised of harmonisation of social security systems within the Community are extremely
complex.8 Therefore, during the European integration harmonisation of social security remained a
big issue but has never been put into practice.9

Today the systems of social security - and especially these of old-age security - within EU mem-
ber states and in candidate countries still differ not only in organisation but also in their concep-
tion.10 Nevertheless, in view of the European Commission, on closer examination this diversity

4

The European Economic Community (EEC) was renamed into European Community (EC) in 1993 with
the Treaty of Maastricht. Since then the latter is the ‘first pillar’ of the European Union (EU). The term
so-
cial protection
is widely similar to the term social security. The former is usually used in a Community
context, whereas the latter is used in a national context, particularly in the German one.

5

This issue was raised already in June 1955 at the conference of the foreign ministries in Messina. For the
final communiqué see Auβenminister (1955: 7974) as well as the comments in Kuhn (1995: 34 ff.) and
Gobel (2002: 3 ff.).

6

For extensive comments see Europaische Wirtschaftsgemeinschaft, et al. (1962) as well as Hankel / Zweig
(1957: 548 ff.); Heise (1963) and Heise (1964).

7

See again the comments in Europaische Wirtschaftsgemeinschaft, et al. (1962) as well as Knolle (1963)
and Erdmann (1963).

8

Cf. Hug (1962); Lell (1966); Heise (1966); Mayer (1989) and Schmahl (1990: 32 ff.). For the economic
consequences of harmonisation see Schmahl (1993: 325 ff.).

9

For a historic view over the development stages of European social policy, see Henningsen (1992); Berié
(1993); Kuhn (1995) and Kowalsky (1999).

10

The main catchwords that describe the consisting differences are Bismarck and Beveridge. In the Bismarck
social security systems the financing is borne by both employees and employers. Benefits are salary-linked,
for the aim was to guarantee that all workers could maintain their living standard if particular risks would
appear. The Bismarck system is a form of solidarity between the workers. The
Beveridge concept stated
that not only the workers, but also the total population was entitled to subsistence security. Regardless of
the type of employment, it provides - by means of taxes - the same lump sum benefit for every citizen, in
case of unemployment, sickness and old-age security. Still the various social security systems existing



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