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148-587: In countries with a social market economy , the role of trade associations is often taken by employers' organizations , which also take a role in social dialogue . One of the primary purposes of trade groups, particularly in the United States, is to attempt to influence public policy in a direction favorable to the group's members. It can take the form of contributions to the campaigns of political candidates and parties through political action committees (PACs); contributions to "issue" campaigns not tied to

296-526: A mélange of socio-political ideas rather than a precisely outlined theoretical order, the conception possessed an effective slogan, which facilitated its communication to both politics and the public. However, the eventual implementation required not only communication but also political backup. Müller-Armack's concept soon met with the conception of the then Chairman of the Sonderstelle Geld und Kredit (Special Bureau for Money and Credit) within

444-523: A "Civitas Humana", the ordoliberal competitive order was further developed by the Cologne school around the economist and anthropologist Alfred Müller-Armack , who therefore coined the term Soziale Marktwirtschaft ("social market economy") in a publication in December 1946. Although it evolved from ordoliberalism as a new variant of neoliberalism , this concept was not identical with the conception of

592-508: A European citizen has become 20% poorer with respect to a US citizen, over the period 1996-2020. During the 24 years between 1996 and 2020 it has become relatively cheaper for a US citizen to stay in the EU, and it has become relatively more expensive for a EU citizen to stay in the US. Over this period of 24 years, from 1996 to 2020, the consumer price index has increased by 65% in the US, and by 51% in

740-603: A European ship, prompted the commission to look into legislation against toxic waste. at that time did not even have a crime against shipping toxic waste; this led the Commissioners Franco Frattini and Stavros Dimas to put forward the idea of "ecological crimes". Their right to propose criminal law was challenged in the European Court of Justice but upheld. As of 2007, the only other criminal law proposals which have been brought forward are on

888-419: A balance between a high rate of economic growth , low inflation , low levels of unemployment , good working conditions, social welfare and public services . The term "social" was established by Adenauer to prevent further reference to Christian socialism , which was used in the early party agenda Ahlener Programm in 1947. Although the social market economy model evolved from ordoliberalism , this concept

1036-582: A candidate or party; and lobbying legislators to support or oppose particular legislation. In addition, trade groups attempt to influence the activities of regulatory bodies . In the United States, direct contributions by PACs to candidates are required to be disclosed to the Federal Election Commission or state and local election overseers; are considered public information; and have registration requirements for lobbyists (FEC: Lobbyist). Even so, it can sometimes be difficult to trace

1184-557: A coherent and unifying economic programme enabling a more consistent public front, the oldest German political party, the Social Democratic Party (SPD), led by the advocate of economic planning and extensive socialisation Kurt Schumacher , did not introduce its own economic concept. This not only complicated the parliamentary work of the party in the Economic Council but also limited the public relations of

1332-537: A commissioner. A commissioner's portfolio can be supported by numerous DGs; they prepare proposals for them and if approved by a majority of commissioners proposals go forward to the Parliament and Council for consideration. The Commission's civil service is headed by a Secretary General . The position is currently held by Ilze Juhansone . The rules of procedure of the European Commission set out

1480-450: A decorative fig leaf or conversely as a gateway for antiliberal interventionism, it meant more than simply distinguishing the concept from that of laissez-faire capitalism on the one side and of ordoliberal conceptions on the other. In drawing on Wilhelm Röpke 's anthropo-sociological approach of an economic humanism leading to a Civitas Humana , Müller-Armack pursued a "Social Humanism" or "Social Irenics"—the notion irenics derives from

1628-539: A dedicated Directorate-General . The European Parliament can dissolve the College of Commissioners as a whole following a vote of no-confidence , which requires a two-thirds vote. Only the President can request the resignation of an individual Commissioner. However, individual Commissioners, by request of the council or Commission, can be compelled to retire on account of a breach of obligation(s) and if so ruled by

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1776-694: A duty to ensure the treaties and law are upheld, potentially by taking member states or other institutions to the Court of Justice in a dispute. In this role it is known informally as the "Guardian of the Treaties". Finally, the Commission provides some external representation for the Union, alongside the member states and the Common Foreign and Security Policy , representing the Union in bodies such as

1924-400: A greater degree of politicisation within the Commission . The commission is divided into departments known as Directorates-General (DGs) that can be likened to departments or ministries . Each covers a specific policy area such as agriculture or justice and citizens' rights or internal services such as human resources and translation and is headed by a director-general who is responsible to

2072-527: A large middle class, capital market participation is enlarged. Social market economies also posit that government regulation and even sponsorship of markets can lead to superior economic outcomes as evidenced in government sponsorship of the Internet or basic securities regulation. The main elements of the social market economy in Germany are the following: Defunct Defunct The social market economy

2220-635: A likely candidate (in general, the elected candidate is determined, according to the results of the European election , as winner of the internal election into the dominant European party known as " spitzenkandidat "). While the European People's Party had won the European Parliament election, they had performed worse than expected and therefore nominated von der Leyen instead of Manfred Weber , their original candidate. On 9 September,

2368-613: A majority (17,664) of staff being based in the country. Communication with the press is handled by the Directorate-General Communication . The commission's chief spokesperson is Eric Mamer who holds the midday press briefings, commonly known as the "Midday Presser". It takes place every weekday in the commission's press room at the Berlaymont where journalists may ask questions to the Commission officials on any topic and legitimately expect to get an "on

2516-903: A market. In September 2007, the German trade association for Fachverband Verbindungs- und Befestigungstechnik (VBT) and five fastener companies were fined 303 million euros by the European Commission for operating cartels in the markets for fasteners and attaching machines in Europe and worldwide. In one of the cartels, the YKK Group , Coats plc , the Prym group, the Scovill group, A. Raymond, and Berning & Söhne "agreed [...] on coordinated price increases in annual 'price rounds' with respect to 'other fasteners' and their attaching machines, in

2664-637: A more market-oriented economy. Konrad Adenauer , the chairman of the CDU in the British zone of occupation, invited Erhard to also inform the party members about his socio-economic conception at the party convention in Recklinghausen, Germany on 28 August 1948. In a visionary and stirring speech, entitled Marktwirtschaft im Streit der Meinungen ("Market Economy in Dispute"), Erhard defended his concept of

2812-616: A number of Vice-presidents from among the commissioners. Vice-presidents manage policy areas involving multiple Commissioners. One of these includes the High Representative , who is automatically one of the Vice-presidents ex officio rather than by appointment and confirmation. Commonly referred to as the 'HR/VP' position, the High Representative also coordinates commissioners' activities involving

2960-438: A political economy characterized by greater economic equality. The essence of the social market economy is the view that private markets are the most effective allocation mechanism, but that output is maximized through sound state macroeconomic management of the economy. Social market economies posit that a strong social support network for the less affluent enhances capital output. By decreasing poverty and broadening prosperity to

3108-537: A prolonged illness, he is then completely helpless, left to his own devices, and society does not currently recognize any real obligation towards him beyond the usual help for the poor, even if he has been working all the time ever so faithfully and diligently. The usual help for the poor, however, leaves a lot to be desired, especially in large cities, where it is very much worse than in the country. Bismarck's program centered squarely on providing universal social insurance programs designed to increase productivity and focus

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3256-420: A regulatory policy idea aiming to combine free enterprise with a social program that is underpinned by market economic performance. In putting social policy on par with economic policy, Müller-Armack's concept was more emphatic regarding socio-political aims than the ordoliberal economic concept. This dual principle also appeared in the name of the model. Although the adjective "social" often attracted criticism as

3404-601: A result. In 2008, Paul van Buitenen (the former auditor known from the Santer Commission scandal) accused the European Anti-Fraud Office (OLAF) of a lack of independence and effectiveness. Barroso's first Commission term expired on 31 October 2009. Under the Treaty of Nice, the first Commission to be appointed after the number of member states reached 27 would have to be reduced to "less than

3552-597: A similar concept, "Rhine capitalism". He compared the so-called "neo-American model" of a capitalistic market economy introduced by the administrations of Ronald Reagan and Margaret Thatcher with what he called Rhine capitalism, present in Germany, France and in some of the Northern European economies. While the neo-American model builds largely on the ideas of Friedrich von Hayek and Milton Friedman , Rhine capitalism according to Albert has its foundations on publicly organized social security . Albert analyzes

3700-502: A social market economy include Austria, the Czech Republic, Croatia, Germany, Poland, and Japan. Social market economies aim to combine free initiative and social welfare on the basis of a competitive economy. The social market economy is opposed to laissez-faire policies and to socialist economic systems, and combines private enterprise with regulation and state intervention to establish fair competition, maintaining

3848-473: A source of competition between areas of the Commission and Commissioners themselves. This also leads to an unusually high number of press releases, and is seen as a unique product of the EU's political set-up. There is a larger press corps in Brussels than Washington, D.C.; in 2020, media outlets in every Union member-state had a Brussels correspondent . Although there has been a worldwide cut in journalists,

3996-451: A specific corporate product, such as a specific brand of cheese or toilet paper, industry trade groups advertisements generally are targeted to promote the views of an entire industry. These ads mention only the industry's products as a whole, painting them in a positive light in order to have the public form positive associations with that industry and its products. For example, in the US the advertising campaign "Beef. It's what's for dinner"

4144-418: A strong state—in contrast to the ordoliberal minimal state solely safeguarding the economic order —is often labelled by the ambiguous but historical term Der Dritte Weg ("The Third Way"). The concept of the social market economy received fundamental impulses from reflection and critique of historical economic and social orders, namely Smithian laissez-faire liberalism on the one hand and Marxian socialism on

4292-484: A whole. If the European Parliament submits a negative opinion of a candidate, the President must either reshuffle them or request a new candidate from the member state to avoid the college's outright rejection by the European Parliament. Once the college is approved by parliament, it is formally appointed following a QMV vote by the European Council . Following the college's appointment, the President appoints

4440-437: Is divided into departments known as Directorates-General (DGs) that can be likened to departments or ministries each headed by a Director-General who is responsible to a Commissioner. Currently, there is one member per member state , but members are bound by their oath of office to represent the general interest of the EU as a whole rather than their home state. The Commission President (currently Ursula von der Leyen )

4588-495: Is not binding. The commission's powers in proposing law have usually centred on economic regulation. It has put forward a large number of regulations based on a " precautionary principle ". This means that pre-emptive regulation takes place if there is a credible hazard to the environment or human health: for example on tackling climate change and restricting genetically modified organisms . The European Commission has committed EU member states to carbon neutrality by 2050. This

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4736-593: Is not such a mirror in creating a European civil society . The Treaty of Lisbon may go some way to resolving the perceived deficit in creating greater democratic controls on the commission, including enshrining the procedure of linking elections to the selection of the Commission president. Historically, the commission had indeed been seen as a technocratic expert body which, akin with institutions such as independent central banks , deals with technical areas of policy and therefore ought to be removed from party politics. From this viewpoint, electoral pressures would undermine

4884-519: Is often an important reason why companies join a trade association in the first place. Examples of larger trade associations that publish a comprehensive range of media include European Wind Energy Association (EWEA), Association of British Travel Agents (ABTA) and the Confederation of British Industry (CBI). Industry trade groups sometimes produce advertisements, just as normal corporations do. However, whereas typical advertisements are for

5032-437: Is often wrongly confused with socialism by right-wing critics. Although aspects were inspired by democratic socialism and social democracy , the social market approach rejects the communist ideas of replacing private property and markets with social ownership and economic planning . The social element of the model instead refers to support for the provision of equal opportunity and protection of those unable to enter

5180-671: Is opposed to weighting regulations for their effect on the economy. Thus, the Commission often proposes stricter legislation than other countries. Owing to the size of the European market, this has made EU legislation an important influence in the global market. On February 23, 2022, the European Commission published the Corporate Sustainability Due Diligence Directive which establishes a framework of due diligence for companies to identify actual or potential risks and harm to human rights and

5328-630: Is proposed by the European Council (the 27 heads of state/governments) and elected by the European Parliament . The Council of the European Union then nominates the other members of the Commission in agreement with the nominated President, and the 27 members as a team are then subject to a vote of approval by the European Parliament. The current Commission is the Von der Leyen Commission , which took office in December 2019, following

5476-655: Is still the common economic basis of major political parties in Germany including the CDU, FDP, and SPD, and a commitment to some form of social market economy is present in Article 3 of the Treaty on European Union . In the United Kingdom , the concept of the social market economy was first introduced by the Conservative politician Keith Joseph . Following World War II , the main political parties agreed on

5624-635: Is the primary executive arm of the European Union (EU). It operates as a cabinet government , with a number of members of the Commission ( directorial system , informally known as "Commissioners") corresponding to two thirds of the number of Member States, unless the European Council, acting unanimously, decides to alter this number. The current number of Commissioners is 27, including the President. It includes an administrative body of about 32,000 European civil servants. The commission

5772-790: Is used by the National Cattlemen's Beef Association to promote a positive image of beef in the public consciousness. These are adverts targeted at specific issues. For example, in the US in the early 2000s the Motion Picture Association of America (MPAA) began running advertisements before films that advocate against movie piracy over the Internet. Trade associations have faced frequent criticism due to allegations that they operate not as profit-making organizations, but rather as fronts for cartels involved in anti-competitive practices . Critics contend that these associations engage in activities such as price-fixing ,

5920-470: The Bizone and thus increasingly identified with the economic recovery and the improving economic conditions. Although the implementation of the social market economy benefited also from other crucial factors, including the east–west conflict and a favourable political and social climate within Germany and abroad, the stabilising alliance between the conservative and liberal parties, the pro-market composition of

6068-740: The Council of the European Union declared a list of candidate-commissioners, which are sent to Brussels by the governments of each member state and which had to be officially approved by the parliament. In September 2024, Von der Leyen revealed her new team of European Commissioners, marking a shift to a "leaner" and more interconnected structure. The lineup featured six executive vice-presidents (EVPs) from France, Finland, Estonia, Italy, Romania, and Spain. These EVPs, including Teresa Ribera and Stéphane Séjourné , were tasked with overseeing various clusters of Commissioners and steering key policy areas such as prosperity, security, and democracy. Raffaele Fitto

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6216-643: The European Atomic Energy Community (Euratom). However, their executives were called "Commissions" rather than "High Authorities". The reason for the change in name was the new relationship between the executives and the Council . Some states, such as France, expressed reservations over the power of the High Authority and wished to limit it by giving more power to the Council rather than the new executives. Louis Armand led

6364-643: The European Parliament elections in May of the same year . The European Commission derives from one of the five key institutions created in the supranational European Community system, following the proposal of Robert Schuman , French Foreign Minister, on 9 May 1950. Originating in 1951 as the High Authority in the European Coal and Steel Community , the commission has undergone numerous changes in power and composition under various presidents, involving three Communities. The first Commission originated in 1951 as

6512-554: The High Representative by the European Council, each Commissioner is proposed by their member state (except for those states who provided the President and High Representative) in consultation with the Commission President and the Council of the European Union , who formally adopts the list of candidates. The President's proposed College of Commissioners is then subject to hearings at the European Parliament which will question them and then vote on their suitability as

6660-611: The World Trade Organization . It is also usual for the President to attend meetings of the G7 . The commission is composed of a "College of Commissioners " of 27 members, including the President and vice-presidents. Even though each member is nominated on the basis of the suggestions made by the national governments, one per state, they do not represent their state in the commission. In practice, however, they do occasionally press for their national interest. Once proposed,

6808-401: The environment as well as establishing processes and standards to diminish these risks. The Directive is expected to be officially adopted in 2024 and then be incorporated into domestic laws within two years by all of the European Union member states. Recently the commission has moved into creating European criminal law . In 2006, a toxic waste spill off the coast of Côte d'Ivoire , from

6956-614: The first Commission of Euratom . Walter Hallstein led the first Commission of the EEC , holding the first formal meeting on 16 January 1958 at the Château of Val-Duchesse . It achieved agreement on a contentious cereal price accord, as well as making a positive impression upon third countries when it made its international debut at the Kennedy Round of General Agreement on Tariffs and Trade (GATT) negotiations. Hallstein notably began

7104-418: The intellectual property rights directive , and on an amendment to the 2002 counter-terrorism framework decision, outlawing terrorism‑related incitement, recruitment (especially via the internet) and training. Once legislation is passed by the Council and Parliament, it is the commission's responsibility to ensure it is implemented. It does this through the member states or through its agencies . In adopting

7252-403: The " conservative – corporatist welfare state" (arising from the German social market economy) and the "labor-led social democratic welfare state". The concept of the model has since been expanded upon into the idea of an eco-social market economy as not only taking into account the social responsibility of humanity but also the sustainable use and protection of natural resources. Countries with

7400-544: The Administration for Economics in the Bizonal Economic Council on 2 March 1948, the social market economy entered the political sphere. Soon after on 21 April 1948, Erhard informed the parliament about his economic policy and introduced the concept of the social market economy. Although there was no unanimous applause, both the liberal democrats and conservatives widely welcomed the transition to

7548-460: The Administration for Finance, i.e. an expert commission preparing the currency reform in the then Anglo-American Bizone , Ludwig Erhard . Although Erhard was rather inclined to Eucken's ordoliberal competitive market order and even considered himself an ordoliberal, he was strongly impressed by Müller-Armack most of all not as a theorist but as one who wanted to transfer theory into practice. When Erhard succeeded Johannes Semmler as Director of

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7696-647: The Anglo-American model with social democracy. The German model is contrasted and compared with other economic models, some of which are also described as middle ways or regional forms of capitalism, including Tony Blair 's Third Way , French dirigisme , the Dutch polder model , the Nordic model , Japanese corporate East Asian model of capitalism , and the contemporary Chinese socialist market economy . A 2012 comparative politics textbook distinguishes between

7844-741: The CSU's party convention in Straubing in May 1949, the economic principles elaborated by the Working Committee of the CDU/CSU as liaison body and information centre of the two political parties commonly referred to as the "Union", centred the social market economy. Finally, these principles were adopted as party platform and manifesto for the upcoming federal elections at the CDU's party conference in Düsseldorf on 15 July 1949. In contrast to

7992-455: The Council decided otherwise. Membership would rotate equally and no member state would have more than one Commissioner. However, the treaty was rejected by voters in Ireland in 2008 with one main concern being the loss of their Commissioner. Hence a guarantee given for a rerun of the vote was that the council would use its power to amend the number of Commissioners upwards. However, according to

8140-457: The EC and into the dispirited Brussels Commission. In his first term, from 1985 to 1988, he rallied Europe to the call of the single market, and when appointed to a second term he began urging Europeans toward the far more ambitious goals of economic, monetary, and political union". The successor to Delors was Jacques Santer . As a result of a fraud and corruption scandal, the entire Santer Commission

8288-416: The EU (the European Council also holds individual national executive powers). However, it is the Commission that currently holds most of the executive power over the European Union . The Commission differs from the other institutions in that it alone has legislative initiative in the EU. Only the commission can make formal proposals for legislation: they cannot originate in the legislative branches. Under

8436-405: The EU, the legitimacy of the commission is mainly drawn from the vote of approval that is required from the European Parliament, along with its power to dismiss the body. Eurosceptics have therefore raised the concern of the relatively low turnout (often less than 50%) in elections for the European Parliament since 1999 . While that figure may be higher than that of some national elections, including

8584-473: The EU. According to the consumer price index then, despite livelihood expenses have grown 14% less for a EU citizen compared to a US one, in the period 1996-2020, the EU citizen has become, nominally, 20% poorer. This might however be partly explained by a number of poorer countries joining the EU in the 2000s,and does not account for vastly greater wealth inequality in the USA vs the EU. The World Bank Group wrote

8732-565: The Economic Council and even the Federal Republic's own Grundgesetz (Basic Law), which stressed individual freedom, human dignity and the subsidiarity of societal organisation, it was also the consistent efforts at political communication of the cooperative and corporate model that led to the implementation and eventual electoral validation of the social market economy in post-war West Germany. At first controversial,

8880-600: The European Commission. Juncker appointed his previous campaign director and head of the transition team, Martin Selmayr , as his chief of cabinet. During the Juncker presidency Selmayr has been described as "the most powerful EU chief of staff ever." In 2019, Ursula von der Leyen was appointed as President of the European Commission. She submitted the guidelines of her policy to the European Parliament on 16 July 2019, following her confirmation. She had not been considered

9028-589: The European Court of Justice (Art. 245 and 247, Treaty on the Functioning of the European Union). The Barroso Commission took office in late 2004 after being delayed by objections from the Parliament, which forced a reshuffle. In 2007 the Commission increased from 25 to 27 members with the accession of Romania and Bulgaria who each appointed their own Commissioners. With the increasing size of

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9176-607: The European Union, which represents governments, the European Parliament, which represents citizens , the Economic and Social Committee , which represents organised civil society, and the Committee of the Regions , which represents local and regional authorities. Through Article 17 of the Treaty on European Union the commission has several responsibilities: to develop medium-term strategies; to draft legislation and arbitrate in

9324-421: The European growth model achieved economic convergence effectively, helped poorer European nations reach the standard of their richer neighbors and become high-income economies. Indermit Gill says: "One can say without exaggeration that Europe invented a ‘convergence machine’, taking in poor countries and helping them become high income economies." European Commission The European Commission ( EC )

9472-523: The Freiburg school only the founders Walter Eucken and Franz Böhm belonged to the Freiburg Circles and conversely no member of the Freiburg Circles can be attributed to the Freiburg school, which partly advocated different economic objectives. Both schools of economic thought considered that a certain form of planning was necessary for a transitional period following the war. However, whereas

9620-442: The Freiburg school. In contrast to Eucken, who favoured a strictly procedural or rule-oriented liberalism in which the state solely sets the institutional framework and abstains generally from interference in the market, Müller-Armack emphasised the state's responsibility actively to improve the market condition and simultaneously to pursue a social balance. In putting social policy on a par with economic policy, Müller-Armack's concept

9768-532: The Greek eirēnē (εἰρήνη), which means being conducive to or working toward peace, moderation or conciliation—to overcome existing differences in society. The social market economy as an extension of neoliberal thought was not a defined economic order but a holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives, namely economic freedom and social security . This socio-economic imperative actively managed by

9916-405: The Parliament once again asserted itself in objecting to the proposed membership of the Barroso Commission. Owing to this opposition, Barroso was forced to reshuffle his College before taking office. The Barroso Commission was also the first full Commission since the enlargement in 2004 to 25 members; hence, the number of Commissioners at the end of the Prodi Commission had reached 30. As a result of

10064-434: The President delegates portfolios among each of the members. The power of a Commissioner largely depends upon their portfolio, and can vary over time. For example, the Education Commissioner has been growing in importance, in line with the rise in the importance of education and culture in European policy-making. Another example is the Competition Commissioner , who holds a highly visible position with global reach. Before

10212-403: The President of the European Commission, and although they are still proposed by the European Council; the European Parliament " elects " candidates to the office, rather than " approves " them as under the Treaty of Nice. The Barroso Commission is, in reaction to Euroscepticism , said to have toned down enforcement to increase integration. In 2014, Jean-Claude Juncker became President of

10360-421: The President of the European Commission. It has been noted by one researcher that the press releases issued by the commission are uniquely political. A release often goes through several stages of drafting which emphasises the role of the commission and is used "for justifying the EU and the Commission" increasing their length and complexity. Where there are multiple departments involved a press release can also be

10508-418: The Rhenish model as the more equitable, efficient and less violent one. However, according to Albert complex psychological phenomena and the functioning of the press lets the American model appear more attractive and dynamic to the general public. Social capitalism as a theory or political or philosophical stance challenges the idea that the capitalist system is inherently antagonistic to social goals or to

10656-493: The SPD. However, in fact both Volksparteien had suffered large percentage losses over their previous Land election totals by failing to capture a comparable share of the enlarged electorate. The most remarkable advance by winning over a million extra votes and achieving 11.9 per cent of the total votes was that made by the liberal Free Democratic Party (FDP) led by the chairman Theodor Heuss . The economically liberal FDP were in fact

10804-423: The Treaty of Lisbon, no legislative act is allowed in the field of the Common Foreign and Security Policy . In the other fields, the Council and Parliament can request legislation; in most cases the Commission initiates on the basis of these proposals. This monopoly is designed to ensure coordinated and coherent drafting of EU law . This monopoly has been challenged by some who claim the Parliament should also have

10952-410: The US nominal GDP per capita was $ 29,968, the EU nominal GDP per capita was $ 19,752. Twenty four years later, in 2020, the US nominal GDP per capita was $ 63,544 while the EU nominal GDP per capita was $ 33,928. The EU nominal GDP per capita was about two thirds (66%) of the US one, in 1996. In 2020, the EU nominal GDP per capita dropped from two thirds to about a half (53%) of the US one. In nominal terms,

11100-770: The United States, outlined the potentially anti-competitive nature of some trade association activity in a speech to the American Bar Association in Washington, DC , in March 2005 called "The Good, the Bad and the Ugly: Trade Associations and Antitrust ". For instance, he said that under the guise of "standard setting", trade associations representing the established players in an industry can set rules that make it harder for new companies to enter

11248-538: The University of Freiburg im Breisgau in Germany advocated a neoliberal or new liberal and socio-economic order. In this context, it is important to distinguish between the ordoliberal Freiburg school (or Freiburg school of law and economics) and the Freiburg Circles . Frequently, the two schools of thought were believed to be the same, although the first emerged from the latter and among the members of

11396-411: The coal and steel industry, the system of employee property formation, the equalization of burdens, the creation of subsidized housing, child benefits, the agricultural Green Plan and the dynamism of pensions. On 20 June 1948, the principles of the social market economy espoused by the CDU became the foundation of modern German economic policy: The "social market economy" is the socially anchored law for

11544-581: The commission (66%) and concerning lack of transparency (36%). In 2010 the commission was sued for blocking access to documents on EU biofuel policy. This happened after media accused the Commission of blocking scientific evidence against biofuel subsidies. Lack of transparency, unclear lobbyist relations, conflicts of interests and excessive spending of the commission was highlighted in a number of reports by internal and independent auditing organisations. It has also been criticised on IT-related issues, particularly with regard to Microsoft . In September 2020,

11692-521: The commission can assume office, the college as a whole must be approved by the Parliament. Commissioners are supported by their personal cabinet who give them political guidance, while the Civil Service (the DGs, see below) deal with technical preparation. The President of the Commission is first proposed by the European Council , following a Qualified Majority Vote (QMV), taking into account

11840-420: The commission's lack of power over areas like foreign policy  – that power is held by the Council of the European Union and the European Council, which some analysts have described as another executive. Considering that under the Treaty of Lisbon, the European Council has become a formal institution with the power of appointing the commission, it could be said that the two bodies hold the executive power of

11988-520: The commission's operation and organisation. There has been criticism from a number of people that the highly fragmented DG structure wastes a considerable amount of time in turf wars as the different departments and Commissioners compete with each other. Furthermore, the DGs can exercise considerable control over a Commissioner with the Commissioner having little time to learn to assert control over their staff. According to figures published by

12136-510: The commission's role as an independent regulator. Defenders of the Commission point out that legislation must be approved by the Council in all areas (the ministers of member states) and the European Parliament in most areas before it can be adopted, thus the amount of legislation which is adopted in any one country without the approval of its government is limited. In 2009 the European ombudsman published statistics of citizens' complaints against EU institutions, with most of them filed against

12284-555: The commission, 23,803 persons were employed by the commission as officials and temporary agents in September 2012. In addition to these, 9230 "external staff" (e.g. Contractual agents, detached national experts, young experts, trainees etc.) were employed. The single largest DG is the Directorate-General for Translation , with a 2309-strong staff, while the largest group by nationality is Belgian (18.7%), probably due to

12432-522: The commission, Barroso adopted a more presidential style of control over the college, which earned him some criticism. However, under Barroso, the commission began to lose ground to the larger member states as countries such as France, the UK and Germany sought to sideline its role. This has increased with the creation of the President of the European Council under the Treaty of Lisbon . There has also been

12580-526: The concept as a "socially committed market economy". Whereas most neoliberal economists viewed the concept not only as an economic path between the Scylla of an untamed pure laissez-faire capitalism and the Charybdis of a collectivist planned economy but also as a holistic and democratic social order, Erhard and in particular Müller-Armack emphasised public acceptance and civic engagement as prerequisites for

12728-412: The considerable press releases and operations such as Europe by Satellite and EuroparlTV leads many news organisations to believe they can cover the EU from these source and news agencies . The Commission shut down Presseurop on 20 December 2013, though the decision was criticised. As the commission is the executive branch, candidates are chosen individually by the 27 national governments. Within

12876-465: The consolidation of European law and started to have a notable impact on national legislation. Little heed was taken of his administration at first but, with help from the European Court of Justice , his Commission stamped its authority solidly enough to allow future Commissions to be taken more seriously. In 1965, however, accumulating differences between the French government of Charles de Gaulle and

13024-477: The creation and maintenance of barriers to entry in the industry, and other subtle self-serving actions that are detrimental to the public interest. These criticisms raise concerns about the true nature and intentions of trade associations, questioning their commitment to fair competition and the welfare of the broader economy. Jon Leibowitz , a commissioner at the Federal Trade Commission in

13172-544: The early 20th century, the Frankfurt sociologist and economist Franz Oppenheimer postulated a so-called liberal socialism (i.e. socialism achieved via liberalism) as the pursuit of a societal order in which economic self-interest preserves its power and persists in free competition. This desirable order of freedom and equality was labelled by a later programmatic publication entitled Weder so – noch so. Der dritte Weg ( Neither thus, nor thus. The third way ). This position

13320-568: The economic process. Throughout his political career, Joseph used his position to restate the principles of the social market economy and re-direct Conservative policy in Britain. Joseph eventually set up a think tank in 1974 to study the model and initially called it the Ludwig Erhard Foundation and Institute for a Social Market Economy before settling on the name Centre for Policy Studies . The Treaty on European Union set

13468-512: The economist a brother in spirit. On 17 August 1948, Erhard referred to Müller-Armack by whom he was strongly impressed most of all not as a theorist but as one who wanted to transfer theory into practice, as well as his concept of the social market economy. Soon after, at the second party congress of the Christian Democratic Union of Germany (CDU) in the British zone in Recklinghausen on 28 August 1948, Erhard circumscribed

13616-408: The economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies. Combining monetary, credit, trade, tax, customs, investment, and social policies, as well as other measures, this type of economic policy aims to create an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal. The social segment

13764-617: The euro. In response to the scandal, the European Anti-Fraud Office (OLAF) was created. Following Santer, Romano Prodi took office. The Amsterdam Treaty had increased the commission's powers and Prodi was dubbed by the press as something akin to a Prime Minister. Powers were strengthened again; the Treaty of Nice , signed in 2001, gave the Presidents more power over the composition of the College of Commissioners. José Manuel Barroso became president in 2004:

13912-444: The executive power of the EU was held by the council: it conferred on the Commission such powers for it to exercise. However, the council was allowed to withdraw these powers, exercise them directly, or impose conditions on their use. This aspect has been changed by the Treaty of Lisbon, after which the Commission exercises its powers just by virtue of the treaties. Powers are more restricted than most national executives, in part due to

14060-490: The experiences of the Third Reich . These led to the eventual development of the social market economy as a viable socio-political and economic alternative between the extremes of laissez-faire capitalism and the collectivist planned economy not as a compromise but as a combination of seemingly conflicting objectives namely greater state provision for social security and the preservation of individual freedom. One of

14208-410: The external relations and defence cooperation of the European Union. The von der Leyen Commission also created the position of more senior Executive Vice-presidents , appointed from the three largest political groups in the European Parliament. Unlike the other vice-presidents, their mission is to manage the incumbent Commission's top priority policy areas, for which they receive additional support from

14356-630: The first enlargement to the north in 1973. With that enlargement, the College of Commissioners membership increased to thirteen under the Ortoli Commission (the United Kingdom as a large member was granted two Commissioners), which dealt with the enlarged community during economic and international instability at that time. The external representation of the Community took a step forward when President Roy Jenkins , recruited to

14504-545: The first German Bundestag and to decide between the social market economy and a controlled economy advocated by the SPD. Of those eligible to vote, 25 million or 78.5 per cent actually went to the ballot boxes and showed a clear commitment to the emerging post-war democracy. Although the SPD turned out to be the most successful single party by gaining 29.12 per cent of the votes, the CDU/CSU combined attracted more votes, totalling 31 per cent and 139 mandates compared to 131 for

14652-457: The following goals in Article 3(3): The Union shall establish an internal market . It shall work for the sustainable development of Europe based on balanced economic growth and price stability , a highly competitive social market economy, aiming at full employment and social progress , and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance. Although one of

14800-435: The formula of one member for small states and two for larger states. The Rey Commission completed the Community's customs union in 1968 and campaigned for a more powerful, elected, European Parliament . Despite Rey being the first President of the combined communities, Hallstein is seen as the first President of the modern Commission. The Malfatti and Mansholt Commissions followed with work on monetary co-operation and

14948-496: The framework of work circles organised by VBT". Social market economy The social market economy ( SOME ; German : soziale Marktwirtschaft ), also called Rhine capitalism , Rhine-Alpine capitalism , the Rhenish model , and social capitalism , is a socioeconomic model combining a free-market capitalist economic system alongside social policies and enough regulation to establish both fair competition within

15096-450: The funding for issue and non-electoral campaigns. In Slovenia , the government 's approach to consulting business associations has been noted by the European Commission as a good practice example. Almost all trade associations are heavily involved in publishing activities in print and online. The main media published by trade associations are as follows: The opportunity to be promoted in such media (whether by editorial or advertising)

15244-476: The increase in the number of states, the Amsterdam Treaty triggered a reduction in the number of Commissioners to one per state, rather than two for the larger states. Allegations of fraud and corruption were again raised in 2004 by former chief auditor Jules Muis. A Commission officer, Guido Strack , reported alleged fraud and abuses in his department in the years 2002–2004 to OLAF, and was fired as

15392-443: The industrial economy, according to which the achievements of free and able individuals are integrated into a system that produces the highest level of economic benefit and social justice for all. This system is created by freedom and responsibility, which find expression in the "social market economy" through genuine performance-based competition and the independent control of monopolies. Genuine performance-based competition exists when

15540-442: The interwar Freiburg school of economic thought. The social market economy was designed to be a middle way between laissez-faire forms of capitalism and socialist economics . It was strongly inspired by ordoliberalism , which was influenced by the political ideology of Christian democracy . Social market refrains from attempts to plan and guide production, the workforce, or sales but support planned efforts to influence

15688-400: The latest parliamentary elections (any person from the largest party can be picked ); that candidate then faces a formal election in the European Parliament . Thus this serves as a form of indirect election . If the European Parliament fails to elect the candidate, the European Council shall propose another within one month. Following the selection of the President, and the appointment of

15836-404: The legislative process; to represent the EU in trade negotiations; to make rules and regulations, for example in competition policy; to draw up the budget of the European Union ; and to scrutinise the implementation of the treaties and legislation. The rules of procedure of the European Commission set out the commission's operation and organisation. Before the Treaty of Lisbon came into force,

15984-401: The main factors for the emergence of the European model of capitalism was the attempt to ameliorate the conditions of workers under capitalism and thus stave off the emergence of socialism or socialist revolution, American critics and Eurosceptics identify the social market model with the notions of the welfare state and sometimes mistakenly identify it as being socialist. In 1996, while

16132-528: The major factors for the emergence of the German model of capitalism was to ameliorate the conditions of workers under capitalism and thus to stave off the threat of Karl Marx 's militant socialist movement. Germany implemented the world's first welfare state and universal healthcare program in the 1880s. Chancellor Otto von Bismarck developed a program in which industry and state work closely to stimulate economic growth by giving workers greater security. To trump

16280-472: The market and generally a welfare state . It is sometimes classified as a regulated market economy . The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union under Chancellor Konrad Adenauer in 1949 and today it is used by ordoliberals , social liberals and modern (non- Marxist ) social democrats alike. Its origins can be traced to

16428-459: The market labor force because of old-age, disability, or unemployment. Some authors use the term social capitalism with roughly the same meaning as social market economy. It is also called "Rhine capitalism", typically when contrasting it with the Anglo-Saxon model of capitalism. Rather than see it as an antithesis, some authors describe Rhine capitalism as a successful synthesis of

16576-498: The militant socialists, Bismarck gave workers a corporate status in the legal and political structures of the German Empire . In March 1884, Bismarck declared: The real grievance of the worker is the insecurity of his existence; he is not sure that he will always have work, he is not sure that he will always be healthy, and he foresees that he will one day be old and unfit to work. If he falls into poverty, even if only through

16724-570: The model became increasingly popular in West Germany and Austria since in both states economic success ( Wirtschaftswunder ) was identified with it. From the 1960s, the social market economy was the main economic model in mainland Western Europe, pursued by administrations of both the centre-right (led by the CDU/CSU) and the centre-left (led by the SPD). The concept of the social market economy

16872-610: The most 'dynamic' leader until Jacques Delors . The three bodies, collectively named the European Executives , co-existed until 1 July 1967 when, under the Merger Treaty , they were combined into a single administration under President Jean Rey . Owing to the merger, the Rey Commission saw a temporary increase to 14 members—although subsequent Commissions were reduced back to nine, following

17020-470: The nationalization of industry and close economic regulation. In the 1970s, Joseph introduced the idea as an alternative to the post-war consensus allowing free markets for competition and innovation whilst the role of government was to help hold the ring, provide infrastructure, maintain a stable currency, a framework of laws, implementation of law and order, provision of a safety net (welfare state), defence of property rights and all other rights involved in

17168-456: The necessary technical measures, the commission is assisted by committees made up of representatives of member states and of the public and private lobbies (a process known in jargon as " comitology "). Furthermore, the commission is responsible for the implementation of the EU budget , ensuring, along with the Court of Auditors , that EU funds are correctly spent. In particular the commission has

17316-651: The nine-member " High Authority " under President Jean Monnet (see Monnet Authority ). The High Authority was the supranational administrative executive of the new European Coal and Steel Community (ECSC). It took office first on 10 August 1952 in Luxembourg City. In 1958, the Treaties of Rome had established two new communities alongside the ECSC: the European Economic Community (EEC) and

17464-523: The number of Member States". The exact number of Commissioners was to be decided by a unanimous vote of the European Council , and membership would rotate equally between member states. Following the accession of Romania and Bulgaria in January 2007, this clause took effect for the next Commission. The Treaty of Lisbon, which came into force on 1 December 2009, mandated a reduction of the number of commissioners to two-thirds of member-states from 2014 unless

17612-594: The off-year elections of the United States Congress , the fact that there are no direct elections for the position of Commission President calls the position's legitimacy into question in the eyes of some Eurosceptics. The fact that the commission can directly decide (albeit with oversight from specially formed 'comitology committees' ) on the shape and character of implementing legislation further raises concerns about democratic legitimacy. Even though democratic structures and methods are changing there

17760-429: The only political party consistently gaining percentage of votes between 1946 and 1949. While these results affirmed the then general pro-market trend in public opinion, eventually, the electorate made its decision contingent on the satisfaction of its practical needs rather than on any particular theoretical economic system. The advantage of the CDU and the CSU lay precisely in the fact that they were quasi-governing across

17908-570: The other member states on various subjects (British entry, direct elections to Parliament, the Fouchet Plan and the budget) triggered the "empty chair" crisis , ostensibly over proposals for the Common Agricultural Policy . Although the institutional crisis was solved the following year, it cost Étienne Hirsch his presidency of Euratom and later Walter Hallstein the EEC presidency, despite his otherwise being viewed as

18056-602: The other. Furthermore, various Third Way conceptions prepared the ground for the socio-economic concept. Already in the late 19th century, the Kathedersozialisten ("Catheder Socialists") engaged in social reforms in the Verein für Socialpolitik , turning away from pure liberalism to demand a purposive state policy designed to regulate economic life and advocating a middle course between anarchic individualism, traditionalistic corporatism and bureaucratic statism . In

18204-492: The party as a whole, especially in times of campaigning where the partially complex political programmes were simplified and popularised. In the run-up to the federal elections in August 1949, the CDU/CSU consequently aligned their party platforms, policies and manifestos and campaigned with the social market economy. In particular, the former advertising manager for consumer goods Ludwig Erhard, who affirmed that he would "go into

18352-400: The pivotal members of the Freiburg Circles, Erwin von Beckerath , Adolf Lampe and Jens Jessen , favoured productive governmental intervention, i.e. an economy regulated by a relatively strong state, Eucken, Böhm and Constantin von Dietze believed in self-regulating market forces and limited indirect state interference. According to Eucken and his competitive order labelled ordoliberalism,

18500-448: The political attentions of the German workers on supporting Kaiser Wilhelm I . The program included universal healthcare, compulsory education, sickness insurance, accident insurance, disability insurance and a retirement pension, none of which were then in existence to any great degree anywhere else in the world. After the collapse of the totalitarian Third Reich with its statist and corporatist economic policy, economists and academics at

18648-509: The posts of European Commissioner for External Relations with the council's High Representative for the Common Foreign and Security Policy . This post, also a Vice-president of the Commission , would chair the Council of the European Union's foreign affairs meetings as well as the commission's external relations duties. The treaty further provides that the most recent European elections should be " taken into account " when appointing

18796-547: The presidency in January 1977 from his role as Home Secretary of the United Kingdom's Labour government, became the first President to attend a G8 summit on behalf of the Community. Following the Jenkins Commission , Gaston Thorn 's Commission oversaw the Community's enlargement to the south, in addition to beginning work on the Single European Act . The Commission headed by Jacques Delors

18944-462: The previous ideological Ahlener Programm suggesting a rather abstract and anti-materialist Gemeinwirtschaft , these Düsseldorfer Leitsätze not only provided a concrete, pragmatic and materialist economic programme but also an attractive slogan to reach consensus within the party and the public. While eventually the union of the two recently established political parties (i.e. the CDU and the CSU) possessed

19092-635: The record" answer for live TV. Such a situation is unique in the world. As an integral part of the Directorate-General for Communication, the Spokesperson's Service, in coordination with the Executive Communication Adviser in the President's Cabinet, supports the President and Commissioners so that they can communicate effectively. On political communication matters, the chief spokesperson reports directly to

19240-510: The right, with most national parliaments holding the right in some respects. However, the Council and Parliament may request the commission to draft legislation, though the Commission does have the power to refuse to do so as it did in 2008 over transnational collective conventions. Under the Lisbon Treaty, EU citizens are also able to request the commission to legislate in an area via a petition carrying one million signatures , but this

19388-602: The rules of competition ensure that, under conditions of fair competition and equal opportunity, the better performance is rewarded. Market-driven prices regulate the interaction between all market participants. After the Christian Social Union in Bavaria (CSU) also expressed its commitment to a market economy with social balance and the then newly elected Bavarian Minister for Economic Affairs Hanns Seidel advocated Erhard's liberal and social economic model at

19536-405: The social market economy alluding to the dualism between a controlled economy and a market economy. In view of the upcoming regional and federal elections, Adenauer, who was initially sceptical about Erhard, was not only impressed by the polarising slogan, such as "Controlled or Market Economy", but also by the efficacy of Erhard and his programme. The foundation for a successful political alliance

19684-413: The state must solely create a proper legal environment for the economy and maintain a healthy level of competition through measures that follow market principles. Thus, the paramount means by which economic policy can seek to improve the economy is by improving the institutional framework or "ordo". In drawing on both Eucken's ordoliberal competitive order and Wilhelm Röpke 's economic humanism leading to

19832-510: The success of the socio-economic model. For instance, Müller-Armack stressed that by "more socialism" he meant the social engagement for and with the people. Equally, Erhard pointed out that the principles of the social market economy could only be achieved if the public was determined to give them priority. Important figures in the development of the concept include Eucken, Röpke, Alexander Rüstow , Franz Böhm , Oppenheimer, Erhard, Constantin von Dietze and Müller-Armack, who originally coined

19980-511: The term Soziale Marktwirtschaft . They share an involvement in the Anti-Nazi Opposition, whose search for a post-Nazi order for Germany is an important background for the development of this concept. Early protagonists had close contacts to the oppositional church-movement Bekennende Kirche and Dietrich Bonhoeffer and emphasized the reference of their concept to Catholic and Protestant social ethics. Michel Albert described

20128-483: The treaties it still has to be fewer than the total number of members, thus it was proposed that the member state that does not get a Commissioner would get the post of High Representative – the so-called 26+1 formula. This guarantee (which may find its way into the next treaty amendment, probably in an accession treaty) contributed to the Irish approving the treaty in a second referendum in 2009. Lisbon also combined

20276-400: The upcoming political party clashes with particular energy for the CDU", realised the potential of subtle and systematic marketing to transform the concept from an economic theory, or even abstract economic policy, into the basis of a political party's propaganda and public image that held broad appeal. Eventually, on Sunday 14 August 1949 around 31 million Germans were called to cast a vote for

20424-411: The view that models were converging. Further in contrast to Müller-Armack who emphasised the social aspect, for Erhard the social market economy was always first and foremost a market economic system. By proclaiming "the freer an economy is, the more social it is", Erhard once told Friedrich Hayek that the freemarket economy did not need to be made social but that it was social in its origin. Erhard

20572-469: Was appointed despite criticism from European socialists over his hard-right affiliations. Other notable appointments included Kaja Kallas as EVP for Foreign and Security Policy, and Henna Virkkunen as EVP for Tech Sovereignty and Digital Technologies. The Commission also introduced new roles like the Commissioner for Defence and Security and the Commissioner for the Mediterranean. The commission

20720-438: Was born and formed in times of severe economic but equally socio-political crises. Its conceptual architecture was set by particular historical experiences and political prerequisites: Germany's preoccupation with the social question since the late 19th century, the criticism of liberal capitalism triggered by the world economic crisis of the early 1930s and a pronounced anti- totalitarianism as well as anti- collectivism formed by

20868-399: Was forced by the Parliament to resign in 1999; a central role was played by Édith Cresson . These frauds were revealed by an internal auditor, Paul van Buitenen . That was the first time a College of Commissioners had been forced to resign en masse , and represented a shift of power towards the Parliament. However, the Santer Commission did carry out work on the Treaty of Amsterdam and

21016-406: Was laid. Chancellor Adenauer of the ruling CDU implemented a new novel economic order amalgamating the promotion of free competition with the responsibility of the social government. The Wirtschaftswunder or economic miracle of West Germany could not have been brought about without secure social peace in the country. Adenauer's program centered on legislation establishing co-determination in

21164-411: Was more emphatic regarding socio-political aims than the ordoliberal economic concept. As an extension of neoliberal thought, the social market economy was deliberately not a defined economic order but an adjustable holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives, namely economic freedom and social security. Although it is often viewed as

21312-478: Was not identical with the conception of the Freiburg school as it emphasized the state's responsibility to work actively to improve the market condition and simultaneously to pursue a social balance. In contrast to Walter Eucken , who sought an answer to the social question by establishing a functioning competitive order within a constitutional framework, Alfred Müller-Armack conceived the social market economy as

21460-412: Was rather inclined to Walter Eucken's ordoliberal competitive market order. Although he even considered himself an ordoliberal, Erhard based his economic conception neither on Eucken nor on Müller-Armack. In fact, his doctoral supervisor Oppenheimer and especially Röpke, like Erhard a student of Oppenheimer, was his source of inspiration. Erhard perceived Röpke's books as works of revelation and considered

21608-529: Was seen as giving the Community a sense of direction and dynamism. Delors and his College are also considered as the " founding fathers of the euro ". The International Herald Tribune noted the work of Delors at the end of his second term in 1992: "Mr. Delors rescued the European Community from the doldrums. He arrived when Europessimism was at its worst. Although he was a little-known former French finance minister, he breathed life and hope into

21756-407: Was set up from the start to act as an independent supranational authority separate from governments; it has been described as "the only body paid to think European". The members are proposed by their member state governments, one from each. However, they are bound to act independently – free from other influences such as those governments which appointed them. This is in contrast to the Council of

21904-415: Was widely shared by Oppenheimer's doctoral student and friend Ludwig Erhard , though the latter displaced adjective and subject by promoting a social liberalism , and he never liked the expression Third Way. In his opinion, the term was tainted, reminding him too much about ideas of a mixed economy , somewhere between a market economy and central planning . He vehemently and consistently argued against

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