Business

Europe's social model set to change

There are four flights of stairs to the attic flat of Francois Chandelle, a young Belgian freelance film director.

It seems like the typical struggling artist's garret - only once inside it is very much the 21st century version.

Armed with a laptop and some editing software, Francois is busy building a career.

He is putting the finishing touches to a short film he has made for the United Nations refugee agency UNHCR. It is another project to add to his impressive show-reel of work.

Helpful assistance

But at this early stage it is hard for Francois to predict when the phone will ring with an offer of a job.

So on the days he does not work he can claim a small amount of money from the Belgian state.

It is a vital safety net for when times get tough.

"I'm a working person," Mr Chandelle says.

"But I receive a little pot of money that helps sustain me through the months when I don't have that much work.

"It's a really big help. It keeps you balanced in a way."

There are other benefits Mr Chandelle could claim.

He could apply for free training courses, including language lessons. He gets reduced fares on public transport and even cheap entry to museums.

The European social model - or the Belgian version at least - also includes a largely free education at school and university and heavily subsidised health care.

Belgians pay a price for their system - taxes are high and people may not be willing to pay so much tax if the services they value are cut.

Economist Marc Stocker from the Brussels-based lobby group Business Europe admits the European social model is an asset.

"Now it needs to be reformed," he says.

"What the business community calls for is a reform of social systems in order to make sure they are in tune with the challenges of tomorrow; demographic ageing, increasing competition globally and the need to adapt or change."

'Banks to blame'

Standing on a busy Brussels shopping street on a weekday lunchtime and there is not much sign of an economic crisis.

The nearby office blocks have emptied and the street is crowded with workers browsing, lunching and gossiping.

But Belgium does have a growing debt problem.

The country has the third largest debt-to-national-output ratio in Europe, after Greece and Italy.

And as the pressure grows on public finances, so too do the calls for reforms to Europe's social model.

That could mean the lunchtime shoppers have to work for longer before they retire and with less government support.

But there are those who say the burden of change should not be borne by the workers.

Rather, it is the banks and financial institutions that should carry the can for getting us into this mess in the first place.

"The crisis was caused by the banks and the financial markets," says Ronald Janssen of the European Trade Union Confederation.

"It is governments that have stepped in and, using the European social model, saved the economy and thereby saved the banks from total collapse.

"And now it's the same banks and the same financial markets that are telling the governments, 'Now you have saved us, present the bill to workers and to ordinary citizens'. And that's a model that can't work."

Back in his attic flat, Mr Chandelle finishes his editing.

The kind of help he has been given by the Belgian state may not exist for much longer.

Across Europe, governments are facing tough choices.