The Italian Welfare System in the European Context

The deep changes that have taken place over the past twenty years in the labor market, demographics, and social disparities have led European countries to reorganize their welfare systems in order to respond more effectively to these challenges. Although several of the European Union's core documents affirm social protection as a fundamental component of European society since it ensures political stability, social cohesion and economic progress, there is significant evidence that today's European countries will follow a United States approach of “minimal social protection” especially in the current climate of liberal ideologies and global market pressures. The erosion of historical commitments to social protection is aided by the fact that a significant number of European voters appear to favor tax reductions and don't seem to make the connection between low taxes and low social services and infrastructure spending. After a brief description of the Italian welfare system, this paper discusses Italy's reforms of the 1990s and reaches the conclusion that actual and planned reforms are paving the way for a residual model of welfare and social protection. It is further argued that a constant re-examination and restructuring of the welfare system is necessary in order to improve its effectiveness in reaching defined goals while at the same time responding to changing economic conditions. However, restructuring efforts should focus on improvements in internal efficiency, rather than on a general reductions of social expenditures. In fact, it is argued that the reduction of social expenditure in itself is neither a necessary consequence of globalization and European unification nor a necessary strategy to remain competitive. It is instead a reflection of cultural leanings and political choices.