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Timo Fleckenstein

By Timo Fleckenstein, associate professor of social policy at the London School of Economics

In the past 18 months or so, COVID-19 has dominated our lives. And its most significant challenge, without a doubt, is protecting lives from the deadly disease.

National lock-downs across Europe have prevented a greater catastrophe, but the death toll in Europe has still been devastating. The United Kingdom has recorded nearly 130,000 COVID-19 deaths, while France has counted more than 110,000 deaths. By European standards, this makes Germany's death toll of more than 90,000 deaths modest, but of course, it is still an unbelievably high number compared to South Korea's COVID-19 deaths of around 2,000.

European countries, however, were much more successful in keeping people afloat financially. The first wave of COVID-19 has thrown European countries into deep recessions. For instance, Germany lost more than one-tenth of its GDP, and the UK was hit twice as hard. According to the Bank of England data, the UK experienced the worst recession in more than 300 years.

Such economic crises would typically translate into a massive increase in unemployment. But this did not happen. Looking at yearly unemployment figures, we find that Germany's unemployment rates experienced a modest increase from 3.1 to 4.3%; and the UK, despite the much worse recession, saw only a slightly sharper rise of unemployment – from 3.8 to 5.4%. Comparing Europe to North America, we find much steeper increases of unemployment in the latter – from 3.7 to 8.9% in the US and 5.7 to 9.7% in Canada. But the US is experiencing a more modest economic downturn than Germany and Canada an only slightly worse recession.

The European societies coped much better with the challenge of unemployment in the face of the global pandemic with its unseen economic repercussions. Both European and North American countries put together rather sizeable fiscal packages and pumped enormous amounts of money into their economies to prevent a bigger economic and social catastrophe.

However, these fiscal measures should not downplay the critical role that social policies have played. For example, with their furlough schemes, European welfare states were much more successful in protecting livelihoods.

Germany could draw her well-established short-time working scheme, allowing employers to reduce staff's working hours down to zero, and workers to receive a benefit that corresponds to unemployment benefit. During the pandemic, the scheme's scope was made more comprehensive to cover a larger number of irregular and low-wage workers.

The UK did not have a similar scheme in place. Generally, the UK's liberal welfare state — not that different from that of the US and Canada — struggles with social protection and inclusion. However, the government established a job retention scheme, which shares key features with Germany's short-time working. At the peak during the first lock-down, approximately 9 million Brits were furloughed, while Germany saw more than 7 million employees on short-time working.

This is not to argue all has been fine for the UK and Germany. They have been struggling with existing and deep-rooted inequalities, which the pandemic has exacerbated. In Germany, proposals for better redistributive elements in short-time working were rejected by the government. Regarding the UK, I have previously written here about food poverty during the pandemic.

However, these remaining and indeed big problems should not downplay what European welfare states have achieved, especially compared to some of their counterparts across the OECD world. The European social model is an elusive concept — and it means different things to different people. But commentators could probably agree that it is different from the "American-style" social welfare policy.

The COVID-19 crisis has reminded us that the European social model presents a much better protective capacity. It is by no means perfect, and I have been critical of both German and UK welfare state reforms, but we should celebrate the welfare states' achievements during the pandemic. They protected the livelihoods of millions of people who would have suffered greater hardship in most other places. This experience advises others that Europe is a much better place to learn about social policy than North America.

By Timo Fleckenstein, associate professor of social policy at the London School of Economics

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