Solidarity, sustainability and well-being at the heart of the EU mission

Protecting EU citizens cannot be assured by hard security alone. Security also encompasses food and energy, climate and health, the cost-of-living crisis and the changing labour market. But security in these domains will only be achieved and maintained by a wholesale transformation of our economic model to one which fully respects planetary limits and prioritises societal resilience and well-being.

Reasons to be fearful

The last decade has witnessed many instances of public anger directed at democratic institutions. Much of this frustration is underpinned by fear. Threats feel severe, varied and relentless. In recent years the EU faced a series of significant crises: the 2008 financial crisis, the euro crisis, the so-called migration crisis, the populism crisis, Brexit, the climate crisis and COVID-19. These events exposed the vulnerabilities and lack of resilience across our health, economic, social and political systems. The multifaceted crises triggered by Russia’s invasion of Ukraine in February – the looming global food crisis, the energy crisis, the cost-of-living crisis, the security crisis, the refugee crisis – are the latest additions. The EU has entered the age of permacrisis, whereby the world we live in is “characterised by high levels of uncertainty, fragility and unpredictability.”

Permacrisis alludes to the ongoing nature of crises. The climate and environmental crises will accelerate, while societal and economic risks arising from emergent public health emergencies and a changing demographic will intensify. Intra-societal inequalities and divisions could widen, especially if the current failures in integrating migrants into the labour market and society more broadly persist. The cost-of-living crisis is unlikely to be temporary, exacerbated by the Ukraine war. Rising inflation due to higher energy, food and other commodity prices puts the EU’s post-pandemic economic recovery and successful implementation of the European Green Deal and UN Sustainable Development Goals at risk. Russia remains a threat, and tensions will continue, particularly now that the Finnish and Swedish governments seek NATO membership.

None of these crises are short-term. They will continue to present the EU with ongoing urgent challenges to address simultaneously. In this era of permacrisis, strengthening resilience and well-being is vital to ensure EU solidarity; protect against populist backlash; and better protect citizens against the constant challenges, threats and shocks to the EU’s economic, social and political order. Individuals can better withstand crises if they are resilient and have the capacity to deal with and adapt to shocks and long-term structural change without compromising or undermining their well-being or that of their societies. And if citizens and our societies are resilient, so are our economies.

A self-fulfilling prophecy

Building such human and societal resilience means designing ‘preventative’ EU policies, actions and frameworks that address the root causes of many of our vulnerabilities and deep-seated threats and challenges. Critically, it requires recognising that the economic model predicated on maximising growth is fundamentally flawed and contributing to crises but also that the redistributive elements of that model (i.e. ‘Social Europe’) can no longer maintain societal well-being and stability. 

An approach that regards maximising GDP growth as the key aim of economic and social policies gradually hollows out societal resilience across a range of facets: public health, climate action, socio-economic equality, well-being and social cohesion. Indeed, the rise of populism and the challenge to the liberal political order in Europe can also be identified as an outcome of the relentless drive for growth.

A growing number of academics, thought leaders and policymakers are now convinced that it is high time to seek an alternative approach to economic and social policy.

The well-being economy model

The well-being economy policy agenda is becoming ever more important. It addresses people’s needs and protects them against current and future threats in a way the conventional economic and social model fails to do. It recalibrates the current model to prevent crises from arising in the first place – or at least ensures that people and societies are better prepared – rather than constantly reacting to and repairing the damage with short-term sticking plasters.

Building a well-being economy will involve a shift – a recalibration – in EU priorities and goals and how the economy is managed. The aim is to reconcile outcomes in the economic and social sphere with people and the environment by embedding well-being and resilience objectives at the heart of economic and social policies.

A well-being economy is a more resilient one in which policy levers are developed and utilised to maximise societal resilience and well-being at the local, national and international levels. This need not equate to a ‘zero-growth’ model but rather one that fundamentally shifts the emphasis of policy away from GDP growth as an overriding metric of societal welfare.

Several governments have already begun building well-being economies. A new alliance of countries has formed the Wellbeing Economy Governments partnership (WEGo).[1] By applying new thinking, these pioneering countries point to an alternative development pathway to GDP growth and prove that such a paradigm shift is possible. They embrace holistic well-being economic models and develop and implement policies and indicators that capture broader well-being and attach greater value to social and environmental outcomes.

The need for political and public consensus

Moving this transformative agenda forward at such an uncertain time requires broad political and societal consensus with more political will, bolder leadership and greater public buy-in so that people feel they have a stake in this transformation. A more politically informed intervention is required to show citizens the opportunities and long-term benefits of this positive agenda, which can deliver multiple objectives simultaneously. This protective agenda will also address people’s needs and fears by protecting them better and more fairly against current and future threats (e.g. climate change, conflicts, pandemics, unemployment, precarious jobs, rising inequalities). There is also a political need for open and honest discussion over the winners and losers, costs, trade-offs and choices to be made.

Breaking the vicious cycle of crises

Transforming the EU economic and social model at a time of great urgency, crisis and war is clearly problematic. The challenge now is for politicians to manage the process of building toward a long-term, sustainable and resilient future in a socially just and fair way. At the same time, the failures and crises caused by the current system must also be managed in the short to medium term. Moving from decisions driven by maximising GDP growth to ones driven by holistic metrics across the economy, society and the environment is complex. Given the multidimensional nature of well-being, this will require action across all sectors and collaboration across and within different policy areas, government ministries and levels of governance.

It is precisely this challenge that the EPC’s new Well-being Economy Policy Lab will address. The Lab will translate the well-being economy approach into a concrete policy agenda that policymakers can use to turn it into reality. It will explore questions like what kind of economic growth is needed to deliver well-being outcomes within environmental limits, and for whom? What are the choices and trade-offs? How can well-being measures steer economic policies to support the green transition to an economy focused on enhancing well-being outcomes? What is the role of the European Pillar of Social Rights? How can short-term pressures and priorities be reconciled against the need for longer-term planning and horizons? How do we ensure that this approach is underpinned by political and public support, especially during a crisis?

As European leaders meet next week, the space and time must be found for discussions on Europe’s path to a new social and economic model which prioritises the well-being of people and the planet and puts solidarity back at the heart of the EU’s mission. This conversation cannot wait. Indefinitely feigning ignorance of the consequences of pursuing an economic model predicated on achieving ever faster rates of GDP growth is not an option. Despite the inevitable challenges of implementing a well-being economy policy agenda, they pale in comparison to the social, political and economic consequences of not doing so.

Aileen McLeod is a Senior Adviser to the European Policy Centre.

Laura Rayner is a Policy Analyst in the Social Europe and Well-Being programme at the European Policy Centre.

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[1] The partnership consists of Iceland, New Zealand, Scotland, Wales and Finland. Canada is due to join this year.