Foundation for European Progressive Studies

Although the EU is fundamentally an economic integration project, its social dimension has been important from the outset and has been further strengthened since 2017. However, during the EU’s eastern enlargements since 2004, social policy ambitions did not receive the attention they arguably merited. This partly explains why the subsequent two decades have been characterized by economic convergence alongside social divergence. This chapter demonstrates that employment and social policy constitute one of the areas where Hungarian domestic trends are most likely to diverge from broader European patterns. This divergence is evident in the weakening of social dialogue, the dismantling of the social safety net, prolonged wage restraint, and state redistribution policies that have tended to exacerbate rather than reduce inequalities. Additionally, insufficient investment in public education and public health starkly contrasts with the approaches adopted by most other Eastern member states. These developments not only reflect the policy priorities and performance of Hungarian governments but also underscore the limited effectiveness of the European Social Fund. Furthermore, the chapter shows that Fidesz-led Hungary has impeded common EU ambitions regarding labour and social affairs by not only attempting to thwart existing EU legislation but also actively obstructing most new EU initiatives, thereby slowing down or even derailing joint legislative efforts.

The need for the European Union to get involved in unemployment insurance has frequently been debated in the past decade, starting from exploratory discussions and eventually becoming a political commitment by the European Commission President. This article looks back at the origins of the idea of an EU-level unemployment benefit scheme and explains the political dynamics of the concept’s evolution. Following the 2009 Great Recession and the subsequent eurozone debt crisis, a new movement for a reinforced social dimension has been pushing the EU beyond its previous red lines. The case for counter-cyclical social stabilisation at EU level is now a touchstone for a materially meaningful EU social dimension. The COVID-19 crisis triggered a giant leap to a greater EU budgetary capacity, including financial support for job-saving schemes. This article argues that these new instruments will not suffice without also creating an EU safety net for those whose jobs cannot be saved in a period of economic downturn.