MATJAŽ, Nahtigal. From Regressive Toward Progressive European Structural Reforms, FEPS working paper, August 2017

Abstract:

The purpose of this article is to analyze the concept of structural reforms, as defined by the European Commission and other European institutions. The article critically examines the content of structural reforms, which is not neutral and often leads to the deepening of economic and social inequalities. Structural reforms in the form of labor market flexibilization, reduction of social welfare support and weakening of the role of public sector frequently deny large segments of society access to entrepreneurial activities, access to funding, know-how, to new technologies and all other necessary resources to emancipate themselves. As a consequence, economic and social dualism is widening across the European union.

Alternatively, progressive demand side and progressive supply side public intervention to open opportunities for the excluded parts of population are presented in the second part of the article. An active role of the public sector, strategic partnership between the public and private sector, institutional innovations and participation of the excluded population in the decentralized form are discussed. It is argued that the progressively defined structural reforms carry equally if not more of the developmental potential than the more frequently mentioned proposal of the transfer Union in order to achieve socially inclusive and sustainable development for all the participants of the European Single market.