European integration and the welfare state

Abstract.

It is vividly debated how the ongoing process of European integration will affect the need and scope for welfare state activities. To some this process signals that welfare state activities have to be rolled back, while others stress that international integration may increase the need for (explicit or implicit) social insurance arrangements. This paper discusses these issues by first considering the possibilities of maintaining social welfare systems which are collectively financed through taxes and social security contributions, and the need for welfare state activities which provide social insurance when economies integrate. The paper ends by discussing some policy options.