The Recalibration of EU Welfare States after the Eurocrisis: Which Road (if any) Towards Social Investment?

The economic and financial crisis has cast a shadow on the future of the European Social Model(s). Nevertheless, the European Commission has recently endorsed the “social investment strategy” as a way to relaunch the social dimension of the EU. To wit, European welfare states are urged to find their way out of the crisis through investing in preventative social services aimed at enhancing human capital rather than just providing “curative” cash benefits to those in needs. However, not all member states have policy legacies which favours this blueprint. Furthermore, austerity is constraining the fiscal space available for welfare recalibration. Needless to say, those countries in which welfare recalibration is most compelling are also those hit hardest by the crisis. Multiple paths materialize in front of the variety of EU welfare states. Which ones have they taken so far? Which road (if any) towards social investment? Re-aggregating Eurostat-ESSPROS data on social expenditure in a way compatible with the social investment perspective, this article looks at how welfare spending has been recalibrated after the outbreak of the crisis. Have resources been actually shifted from “old” social programmes to new, preventative ones? Drawing four possible scenarios based on the existing literature, I look at how member states place themselves into these. Are their different starting blocks conducive to further divergence? This will serve to clarify whether the social investment strategy can be pursued throughout a multi-tiered EU. Important implications arise for social investment as both policy strategy and new analytical framework.