“The high quality of life in Europe is becoming more and more unaffordable. Just ask the French,” said the editor on October 6th, the day of Le Cornu’s sudden resignation, the Washington Post said the political crisis in France has further highlighted the unsustainable nature of Europe’s welfare system. It follows warnings from leading European politicians such as Merz, the German chancellor, that the welfare system at home or in Europe was unsustainable. The welfare state is seen as an important part of the “European dream” and a pillar of the EU, but because of problems such as high government debt, there is a view that “The sun is setting on the European Welfarism”. Many countries in Europe have proposed welfare reform measures, but they face a dilemma: reform, growing popular opposition, and thus the far right to influence governance; no reform, economic Development and the competitiveness of enterprises are limited. As for the future of Europe’s welfare state, the Washington Post bluntly argues that change seems inevitable.
“The welfare system may collapse in your lifetime.”
On the same day Mr Le Corny’s quip, the Washington Post reported that, in France, with public debt soaring, credit ratings falling, incomes stagnating, the prime minister stepping down and the country in an ungovernable state, the public is asking two questions: will the lives of the younger generation be worse than those of their parents? If not, who will pay for their comfort? The article argues that Le Cornu’s resignation makes these issues more urgent. Notably, the difficulty of getting an austerity budget through the national assembly was one of the main reasons that Le Cornu and his predecessors, Beyroux and Barnier, stepped down in quick succession.
The latest to issue a similar warning was Merz, the German chancellor. According to the “Deutsche Welle” and other media reports, Merz on August 23 bluntly, the German welfare system has been financially unsustainable. At the end of the 2024 year, German public debt was about $2,510 bn, or about 60 per cent of gross domestic product. By 2030, it is forecast to reach 74 per cent.
The same problem has arisen in several European countries. According to the BBC and other media reports, by the end of the first quarter of this year, the French public debt has reached 3.345 trillion euros, equivalent to 114% of GDP. The UK’s total public debt is now about # 2.9 TN, or 96.3 per cent of GDP. According to Politico, six countries in the European Union, including France, Italy, Greece, Belgium, Spain and Portugal, have debts that exceed their annual economic output. On average, European Union countries have a debt-to-GDP ratio of 81% , Colombatto, an emeritus professor of economics at the University of Turin, Italy, wrote in June. Historically, government public debt of 60 per cent of GDP, the average debt-to-GDP ratio in the more fiscally prudent EU countries such as Poland, Hungary and the Czech Republic, could spiral out of control and cause a crisis.
“Europe is on the brink of another financial crisis,” Merz warned in February, according to Politico, because European Union governments had too much debt, “The next financial crisis will definitely come, it will be a sovereign debt crisis. We don’t know when it will come, we don’t know where it will come from, but it will come.”.
“Without a change in policy, the welfare system will collapse, not in my lifetime, but in Yours,” the Brussels Times said, the warning came in a Ghent University speech delivered by the Prime Minister on 7 October. He stresses that the Base that underpins European benefits such as pensions and healthcare is no longer sustainable. In November, the The Daily Telegraph published an article entitled “Why the Sun is setting on European Welfarism”, in which Lagarde, president of the European Central Bank, said: Unless European countries can reverse decades of relative decline and, like the United States, achieve great success in science and technology, their weak and uncompetitive economies risk running out of money, unable to fund their vast welfare state.
As the The Daily Telegraph recently reported, productivity in the US has grown twice as fast as in the eurozone over the past two decades. Output per hour rose by more than a quarter in the US and by less than 13 per cent in the eurozone. Meanwhile, Europe’s pension burden is rising. In Spain, Germany and France, more than a fifth of the population is over 65. In Italy, almost a quarter of people reach that age.
“The welfare trap is engulfing the European economy.”
Europe’s broad welfare state emerged after the Second World War as a middle way between communism and unregulated capitalism, the Brussels Times said. According to NPR, EU countries usually provide free medical care, long-term unemployment support and other benefits to their citizens. The common belief of these countries is that the state has a responsibility to take care of its citizens, it has become a common culture and one of the pillars of the European Union and unites people from more than 20 different countries.
“The welfare trap is eating away at the European economy,” The The Daily Telegraph recently declared. Britain is not alone in living beyond its means, and its reliance on welfare has been devastating for the French and Germans. According to the German business daily, the country’s welfare spending reached 1.3 trillion euros last year, with a sharp increase in social security costs shared by employers and employees, as well as high energy costs, all this is limiting the competitiveness of companies.
The The Daily Telegraph welfare system is huge and expensive and is designed to provide a “Safety net” to ensure that no one falls below the subsistence minimum, according to media reports such as the UK, yet the system has been distorted. About one in 10 people in the country receives individual independence benefits, which are used to support people with long-term health restrictions, according to a study by the taxpayers’ Union, but mental health problems such as anxiety and depression are becoming the main reasons for applying. If the trend continues, annual spending on health and disability benefits alone will soar to # 100BN by 2030. About 11m of the country’s 16-64 working-age population are unemployed, with only 1.67 m unemployed and the remaining 9.12 m defined as“Economically inactive”, according to government figures, many of these people are unable to work for“Health reasons.”. The decline in the labour force has a knock-on effect: government tax revenues fall, welfare spending rises, spending by recipients is limited and business activity suffers, which in turn discourages companies from hiring, creating a vicious circle.
Many countries in Europe have proposed welfare reform measures. According to reports by the BBC, the Brussels times and other media, Britain previously planned to reduce welfare spending by raising the threshold for certain benefits claims, in order to encourage the unemployed to return to the labour market, “Make Britain work again”. Die deutschen Allianz (CDU/CSU) Wollte mit der vergangenen SPD in einem“Reformfrühjahr” kommen, in denen die bürger-und Bürger-stiftung zu einer der Zentrale der reformen steht, this is social welfare funding for vulnerable groups such as the unemployed, the poor and the disabled. In the future, recipients will face stiffer penalties if they refuse to work or fail to do their best to find work. About 5.4 m 2024 were paid out last year, according to the German government, for a total of about $47bn. Belgian prime minister de Weaver’s proposals include longer working years, higher employment rates and cuts in public spending. However, he believes the real challenge lies at the European level, calling on the EU to unleash its full economic potential, particularly through the completion of the single market.
At the EU level, the Commission President had wanted to raise taxes on companies with revenues of more than $100M to fund EU projects and pay off covid-19 debt. U. S. “Political News Network,” said the plan was not dry ink against the European Union many countries. Hormell, a European People’s Party MP, said the tax “Contrasts with our efforts to strengthen the competitiveness of European companies, especially medium-sized ones”. She said the EU was actively supporting these companies through a large competitiveness fund to promote innovation and strengthen the EU’s position as an“Attractive global investment centre”.
“Spending cuts are reinforcing right-wing populism.”
Many governments in Europe have encountered considerable resistance to welfare reform. The German Social Welfare Federation criticised MS Mertz after she called for changes to Die Zeit allowances, according to media reports including the European times, The Guardian and the German Social Welfare Association, this is undermining the foundations of social cohesion. The SPD, which has traditionally seen itself as the defender of the welfare state, is likely to be reluctant to countenance big cuts. Türmer, head of the party’s youth organisation, told the German Stuttgarter Zeitung that “The SPD will not budge” if the core idea of reform is simply to cut benefits.
The reform of the British government met with strong opposition within the Labour Party. In June, more than 100 Labour mps introduced amendments calling for a suspension of benefit cuts, in particular measures to tighten individual independent pay eligibility. Under intense party pressure, Stamer, the prime minister, was forced to back down and announce that the tough new eligibility criteria would apply only to new applicants. This action has greatly weakened the originally anticipated austerity effect of fiscal spending, the government in the welfare system reform on the dilemma.
While many European governments see an urgent need to reform the welfare state, many citizens see cuts in public spending as making their already tight lives even more difficult. The us-based Eurasia Review News Network and other media said recently that Germany’s 10 million pensioners are living on less than 1,100 euros a month, below the poverty line, and have been told to tighten their belts. Wolkeri, a sociologist at a university in Berlin, told the Global Times’ German correspondent that welfare cuts have become common in Europe amid multiple crises. In the past, even German university students can apply for housing subsidies, as well as a variety of materials and other subsidies, and now basically no. Laura Handy, a 57-year-old British writer who has been a strong Labour supporter, told the guardian she would no longer support the party. “I’m worried that the Labour government is making unnecessary welfare cuts. People are really suffering,” she said, adding that some of her friends with disabilities were devastated when the government announced cuts to their individual independence payments.
Many European political forces, social groups and citizens believe that taxes on corporations or the rich should be increased to raise government revenue. However, Eurasia Review News Network, said that many governments refused to impose new taxes on the rich or companies, some countries also continue to provide aid to Ukraine. The media warned that extremist movements thrive when policies adopted by mainstream political parties worsen the situation of ordinary people. Far-right parties like afd have gained support, especially in eastern Germany. Their message was simple: stop funding foreign wars, restore domestic welfare and put the Germans first.
The German Frankfurter Rundschau also said planned cuts in social benefits were reinforcing rightwing populism. Fratzschel, director of the German Institute for Economic Research, said the reforms should focus on better coordination of welfare spending and reducing bureaucracy, rather than across-the-board cuts in public spending or stigmatizing affected populations, otherwise the reforms could fail and generate more support for far-right parties. A recent study by the Institute for Economic and Social Sciences, part of the hans-berkler Foundation in Germany, also showed that, cuts in public spending are reinforcing rightwing populism: the afd has made good progress in its 2025 Bundestag elections, especially in areas where people feel left behind.