The Welfare State in Transition Economies and Accession to the EU

Welfare state reform in East-Central Europe can be divided into two phases: in the first phase, when liberalisation, stabilisation and privatisation were of primary importance, only minor or absolutely necessary reform steps were taken. This soon led many countries into fiscal problems that triggered the second phase of substantial pension and health system reforms. Having been already part of the European welfare state tradition in the pre-communist period, the countries of East-Central Europe were not prepared to take over the essentially private three pillar model of the World Bank. Instead the forerunners of reform, such as Hungary, Poland and Latvia, are developing, together with some incumbent EU members, a new European four pillar model with a specific public-private mix. Even if the social acquis communautaire is not very restrictive for the candidate states, they seem keen to join the European welfare state culture.