North Europe tries to turns back clock on welfare state
Bonn — Yes, there is life after welfare. This seems to be the political message as Europe's pioneers of social welfare gear down to recession.
Thus, while it is not surprising that conservative governments from Britain to West Germany to the Netherlands to Denmark are trimming welfare payments in their common budget squeeze, what is surprising is that voters are approving the trims.
Rising expectations, it seems, can be lowered again without domestic turmoil.
The latest example is Danish Prime Minister Poul Schluter's center-right coalition, which in elections Jan. 10 ended the Social Democrats' half-century ascendancy in Denmark. But in good Danish tradition, the coalition remains a minority government.
But his Conservative Party dramatically increased its own seats from 26 to 42 . The Social Democratic Party went down from 59 to 57, and in its policy positions has forfeited its chance to lead any coalition.
The issues were primarily economic - and the policy choice was clear. In the campaign, Schluter preached belt tightening, more individual self-reliance, and more business profits to get the economy moving again.
He asked voters to endorse his 16-month record of cutting inflation from 10 to 6 percent, interest rates from 22 to 13 percent, and the current deficit from 19 billion kroner to 9 billion kroner ($1,870 million to $880 million) - but at the cost of halting wage indexation and bumping already high unemployment up to 10.5 percent.
The voters said yes and turned down the Social Democrats' alternative of restoring welfare cuts and hiking corporation income tax from 40 to 50 percent.
The Danes' decision - which repeated the judgment of West German and British electorates last year - was all the more striking for coming in one of the Scandilux leaders in social welfare. (Scandilux refers to Scandinavia as well as the Benelux countries, Belgium, the Netherlands, and Luxembourg.)
Denmark has the second-highest per capita income (after Switzerland) in the industrialized world, and the Scandilux countries (other than Norway) are the only nations in which government spending exceeds 50 percent of gross domestic product.
Citizens in these countries are used to having the government pay generously for health and social benefits. But Danish voters became disgruntled by the negative growth in the economy between 1980 and 1982.
Denmark thus confirms the pattern of retrenchment in all the Scandilux countries except for Sweden. While Swedes brought the Social Democrats back into power at the end of 1982 on a platform of still more redistribution of wealth, Norway replaced a Social Democratic government with a conservative one two years ago. And the center-right Dutch government recently toughed out a landmark six-week strike to carry out welfare trims.
The Dutch turnaround is perhaps the most spectacular of all. Until last year, Holland had lived through a quarter century of ever-expanding social welfare funded by natural gas revenues and driven by a national conscience that deemed it inhumane to ask if a dole recipient really needed assistance. Several million - out of a population of 14 million - received welfare. The unemployed received 80 percent of their last wages for six months and 75 percent for 21/2 years thereafter.
The 1970s' oil crisis, a falling GDP and sharply falling investment in the 1980s, and the highest unemployment in the European Community (17.5 percent) jolted the Dutch out of this pattern, however. To their astonishment, the Christian Democrat Prime Minister Ruud Lubbers, said last fall that the country was living beyond its means and announced an austerity program.
He trimmed initial jobless benefits to 70 percent, dismissed 8,000 teachers and lecturers, reduced overall social security payments. Most dramatically - and uniquely in Europe - he went beyond the 1983 freeze of public sector incomes to real cuts of 3 percent as of Jan. 1 and announced cuts of 10 percent by 1986.
The confrontation which followed was unprecedented in a nation proud of its social harmony and generosity. Garbage workers, tram drivers, barge pilots, and other government employees struck or held go-slows for six weeks. But in the end they yielded.
Mr. Lubbers's toughness has not endeared him to all the Dutch. Polls suggest the Labor Party would gain in any election held soon. But there is no immediate prospect of an election - and in the highly factionalized Dutch politics, that itself is a sign of Lubbers's success.