Introduction: Social policy pathways, twenty years after the fall of the Berlin wall

Abstract

The year 2009 marks the fifth anniversary of the accession of eight formerly communist states in Central and Eastern Europe to the European Union,1 and the twentieth anniversary of the fall of the Berlin Wall. This latter event ushered in a new post-Cold War era and a new wave of democratization and free markets in the heart of the European continent. Twenty years on from that eventful autumn day on 9 November 1989, the institutions and procedures of liberal democracy and the predominant role for free markets in economic life are well established as the only game in town in most though not all of the post-communist region, and they are solidly established in every one of the new EU member countries. But many challenges remain even in this latter group of eight (plus two, since 20072), not least in the domain of welfare states. The long-term social consequences of transition still have to be ascertained, and already population ageing looms large as the next big threat in the decades ahead. Economic crises have repeatedly materialized in all countries of the region since 1989, most recently and severely in October 2008 in Bulgaria, Hungary, Latvia, Lithuania, Estonia and Romania. As Claus Offe notes in this volume, compared to the EU-153 member states, after 1989 even post-communist reform leaders, on average, were nevertheless confronted with generally higher levels of unemployment, poverty, social exclusion and income inequality and with lower levels of economic wellbeing and social justice.4 These social ills are now likely to increase still further, widely across post-communist Europe. In addition, the export-led economic model embraced by Central and Eastern European (CEE) countries based on liberalized trade and capital markets and a high dependence on foreign direct investments has now turned into a possible impediment (Barysch, 2009). Whether the impact and extent of the global financial crisis are still unknown for Western European countries, their potential negative consequences for the less developed CEE countries are more obvious precisely because of their larger social ills and their particular economic models.