Reconstructing the eurozone: the role of EU social policy

It is widely recognised that the institutional architecture housing monetary union in Europe is deeply flawed. Although there has been considerable discussion about how these shortcomings can be put right, relatively little has been said about the role EU social policy can play in making the eurozone more stable and sustainable. The purpose of this paper is to address this shortcoming. It is argued that that some form of EU 'social union' is urgent, for without it the immediate financial problems facing the members of the eurozone cannot be resolved. The paper seeks to explain what role EU social policies can play in the construction of an adequate federal framework for the monetary union. It is argued that a fully fledged social union is unlikely to emerge that involves massive transfers from the European core to the periphery. At the same time, it is envisaged that EU social policy will need to be strengthened considerably, with interventions focusing on employment creation and on the capacity of national governments to maintain domestic social safety nets. Copyright , Oxford University Press.