Are we still good Europeans?

Jürgen Habermas and the search for a new social contract

At the time of Trump, the European Union needs an insurance-based solidarity contract. The great German philosopher had seen it already eight years ago. With wars raging, it is time for European leaders to pay attention

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In an article in Social Europe, Jürgen Habermas, the great German philosopher who passed away this past March 14, asked himself: are we still good Europeans?

Habermas was writing in 2018, during the first Trump presidency, reflecting on the management of the sovereign debt crisis, the migratory shock of 2015, and the debate relating to Grexit.

To assess the policies of the European Union (EU), he proposed a radical redefinition of the concept of solidarity:

“Solidarity is a term that describes the mutually trusting relationship between two actors who have become part of a joint political project of their own free will. Solidarity is not charity, and it certainly isn’t a form of conditioning for the advantage of one of the actors.

Those who engage in solidarity are willing to accept short-term disadvantage in the service of their long-term self-interest and in the knowledge that the other will behave the same way in a similar situation.”

This quotation shows that Habermas privileges an “insurance-based solidarity” that does not relegate the concept of solidarity to an altruistic sphere where the strongest (or luckiest) runs to the rescue of the weakest – be they individuals or, as in the case of the EU, member states.

Using the taxonomy introduced by Musgrave in the Fifties of the last century, Habermas’s solidarity concerns not only equity but also – if not above all – efficiency and stabilization. As such, it can be at the foundation of a new “social contract” that benefits all participants.

There are two conditions for making Habermas’ contract feasible in the EU.

The first is that the contracting parties make their choices under a “veil of ignorance” with respect to the relative starting position. In the original formulation by John Rawls (1971), this condition ensures that every actor is incapable of formulating hypotheses (even probabilistic ones) about their own future social position and opts – therefore – to reduce overall inequalities.

In the case of Habermas’s EU, this is equivalent to assuming the impossibility for each member state to anticipate future “states of the world” and hence to calculate its own interests, thus pushing toward the protection of collective interests.

Given the impossibility to anticipate future shocks, strong countries may be on the receiving end of solidarity: an example is the migratory crisis of 2015 which hit Germany much more than traditionally weak countries.

The second condition is the mutual trust which, again with reference to Habermas’s EU, induces every member state to adopt current non-punitive behaviours toward the contracting parties in the expectation that the same strategy will be followed (today and in the future) by the other parties toward it.

Game theory has proven long ago that, in the presence of repeated interactions, the adoption of cooperative behaviours produces general advantages even in initially non-cooperative contexts (Nash, 1950; Axelrod, 1981).

Habermas emphasises that trust is the glue capable of legitimizing the choices assumed in conditions of uncertainty, because it acts as an intertemporal connection between the short and long term: “Reciprocal trust – in our case, trust across national borders – is just as important a variable as long-term self-interest. Trust bridges the time span until a service in return is due, though it is unsure when or if it will ever come due”.

The conditions of feasibility of Habermas’s “social contract” had failed during the sovereign debt crisis of 2010-15.

In the EU, the opposition between creditor and debtor member states had been sharp and had torn the “veil of ignorance”; the attribution of the origin of the insolvency of the weakest countries to past policy errors had undermined trust among member states.

Thus, the principle of ‘moral hazard’ established itself, which led to a delay in European aid plans and imposed punitive conditions of austerity.

The foundations of a new “social contract” had not, however, been demolished by the crisis of 2010-2013.

A “social contract” had peeked out again thanks to the unconventional monetary policies implemented from 2012, albeit in non-transparent forms (that is, through the ECB balance sheet).

It then re-imposed itself, but in explicit form, during the pandemic crisis (2020-2021) which was triggered by an exogenous and symmetrical shock. Next Generation–EU (NGEU) and other European initiatives were based precisely on principles of “insurance-based solidarity” capable of benefiting, in the short term, fragile countries but – at the same time – guaranteeing the growth also of strong economies more dependent on foreign demand.

Once the emergency was overcome, European economic policies did not however aim to consolidate the courageous initiatives taken, sanctioning their temporariness. The oxymoron of NGEU as a ‘temporary Hamiltonian moment’ expresses, in an emblematic way, this paradox.

The legacy of Habermas becomes even more compelling if referred to today. The failure of his “social contract” after 2021 highlights, in fact, the gravity of the problems that the EU is forced to face.

The crisis linked to the Russian aggression of Ukraine and to the wars in the Middle East, on the geo-political level, and to the destruction of the international order by the Trump administration, on the economic-institutional level, has restarted processes of European integration that would benefit from the acceptance of the “veil of ignorance” by the member states of the EU and from the investment in mutual trust.

However, the signals are not positive. It is enough to consider the dominance of nationalist policies in several EU countries and the political majorities with variable geometry in the European Parliament (where the pro-European coalition has been replaced by the alliance between the European People’s Party and the extreme right on fundamental issues such as immigration and the ‘green’ transition).

Such considerations bring to light the crucial question that derives from Habermas’s analysis: how can an insurance-based solidarity contract be restored in the EU today?

We believe that it is necessary to reaffirm that “gradual and pragmatic federalism” which was evoked by Mario Draghi (2024, 2026) and which – already in October 2023 – we proposed in the “Manifesto on Europe at the time of the new cold war”.

In this regard, seven priorities impose themselves:

1) a radical reform of the community budget, based on the creation of a central fiscal capacity to produce European Public Goods and to complete the construction of the Single Market;

2) an autonomous EU policy for security and defence, which takes its move from the construction of a European industry in the sector;

3) a European industrial policy that favours the passage to a new “business model” of the EU, capable of combining technological transition and ‘green’ transition;

4) tangible progress for the construction of integrated and ‘thick’ European financial markets, which should be accompanied by the emission of a European ‘safe’ asset;

5) a greater attention to the macroeconomic impact of the new fiscal rules, approved in April 2024;

6) a common strategy for education and training, which also activates concrete programs for the inclusion of migrants in European labour markets;

7) a migration policy that manages the European demographic decline and the pressure induced by climate changes and geo-political divide.

The response to the existential challenges, posed by the seven listed points and made dramatic by the damage produced by the unstoppable policy of international aggressions pursued by Trump, finds an EU still uncertain.

Partial progress has been recorded (for example, in the field of defence) and repeated commitments to progress in various areas (for example, the Single Market and financial integration) has been taken.

However, effective initiatives are lacking to incentivise EU-specific technological innovations, compatible with the strengthening of sustainable energy sources, and to define a new “social contract”.

Polls (for example those by Eurobarometer) indicate that the majority of European citizens, even in countries traditionally lukewarm toward European integration, is in favour of a more decisive role for the EU in the supply of various types of European public goods (aimed at supporting innovations or the welfare state).

As the outcome of the recent constitutional referendum in Italy suggests, the deadly embrace of Trump can trigger changes in the internal policies of member states.

The construction of a new European production model and of a new “social contract” cannot, however, rely on sporadic national political jolts. It is necessary to lower the ‘political discount rate’ in the EU: the medium term cannot be assimilated to a succession of very short periods; and each of these periods cannot be treated as separate to privilege established interests.

In his 2018 article Habermas grasped the problem:

“The cause of the Trumpian dissolution of Europe is the increasing – and, God knows, realistic – awareness among the European population that the credible political will to break out of this destructive spiral is lacking. Instead, the political elites are being sucked into the timid, pollster-driven opportunism of short-term power maintenance.

The lack of courage to form even a single idea of one’s own for which a majority must first be wonis all the more ironic because a majority prepared to demonstrate solidarity already exists as a fleet in being.”

The uncertainty, endemic and radical, caused by Trump’s policies, imposes with urgency on the EU to create the conditions for a new, insurance-based “social contract”. Habermas had grasped the problem in 2018.

Are European leaders capable of giving an effective answer eight years later?

Marco Buti

Since April 2023, Marco Buti has held the Tommaso Padoa Schioppa chair at the Robert Schuman Centre. Before joining the EUI, Buti was Chief of Staff of the Commissioner for the economy, Paolo Gentiloni. Between 2008 and 2019, he was Director-General for Economic and Financial Affairs at the European Commission. Moreover, he has been the Commission Finance Deputy at G7 and G20. He is an IEP Bocconi Fellow.

Marcello Messori

Marcello Messori is a part-time professor at the Schuman Centre, European University Institute (EUI), and a member of the EMU-Lab at the same Centre. He is a non-resident Fellow at the Institute for European Policy Making (IEP), Bocconi University. He is co-coordinator of the ‘Gruppo Europa’ at Astrid Foundation.

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