Introduction On 12 June 1985, following six years of intense negotiation, Spain signed the Accession Treaty to join the European Economic Community (EEC). The event took place just a few months before the tenth anniversary of Francisco Franco’s death and was an important turning point in Spain’s contemporary political history. It served as proof of the international recognition of Spain’s new democratic political regime and signalled that the country was ready to leave the tumultuous twentieth century behind as a legitimate and internationally acknowledged liberal democracy. It also represented an opportunity to consolidate the electoral success of the Spanish Socialist Party (PSOE), or what has been termed by Holman (1996) as the hegemonic project of the Spanish socialists. The Spanish democratic transition, which has been held up as exemplary by many, cannot be understood without bearing in mind the stability provided by 14 consecutive years of government by the PSOE (1982-1996). The period following Spain’s EEC/EU entry was characterized by a contradiction between ‘societal corporatism at the national level and economic liberalism at the European level [which] was resolved to the benefit of the neo-liberals in government’ (Holman, 1996, p. 77). This contradiction manifested itself in a specific concern with ‘competitiveness’, which continued throughout the period considered in this chapter and beyond. Specifically, this chapter argues that during the period of Spain’s political and economic integration with the EU, the term ‘competitiveness’ was used by successive Spanish governments to justify profound changes in the spheres of welfare and labour market policy; it was also one of the main drivers of social dumping practices undertaken by both local and foreign businesses. This does not mean that all policy changes carried out under the ‘competitiveness-enhancing’ label entailed the lowering of social standards or encouraged rule-bending practices. It has to be remembered, however, that the expansion of the European market to the Southern European countries coincided with the launch of the EU Internal Market agenda, which was dominated by a thrust towards deregulation and liberalization. The subsequent emphasis placed by the EEC/EU and national-level actors on the removal of regulatory ‘constraints’ gave the green
light to business interests to pursue social dumping. At the same time, with the removal of barriers to capital flows in Europe, competition between the peripheral EU countries intensified, leading them to launch ‘competitivenessboosting’ social dumping policies in order to attract foreign investors (also see Šćepanović, Chapter 10, this volume). In order to substantiate the above argument, this chapter shows how competitive pressures that were inherent to Spain’s European integration process were translated into a narrative of competitiveness, and it examines how this narrative was used by state actors to rationalize their attacks on the existing social norms. Focusing on the first 22 years of the country’s EEC/EU membership – i.e. the period from 1986 to 2008 – it observes the use of the competitiveness rhetoric by the country’s successive prime ministers, and confronts the discursive use of the term with the social and labour market reforms implemented during their respective terms of office. The chapter identifies a double-track policy approach, showing how social policies were sometimes used strategically to pacify society and to obtain its consent for regressive labour market reforms by compensating the ‘losers’ of labour market deregulation. For instance, the maintenance of unemployment insurance schemes based on previous contributions preserved the material well-being of certain groups of unemployed workers, but it did so at the expense of labour market activation policies. This resulted in a conflicting development of welfare and labour policies in modern Spain: the preservation of certain social protections was accompanied by retrenchment in many other policy areas. On closer examination, the developments in Spain seem to reflect policy contradictions at the EU level, where efforts to incorporate a ‘social dimension’ into wider EU integration projects clash with the need to boost the ‘competitiveness’ of the European economy or with the goal of macroeconomic convergence (Bailey, 2008). The chapter is structured as follows. It first offers a brief discussion of the concept of social dumping in line with this volume’s theoretical concerns, highlighting the difficulties of applying it to the Southern European context. It then traces the development of competitiveness discourses in Spain and matches them with the welfare and labour market reforms implemented during the period between the country’s EU accession in 1986 and the outbreak of the economic crisis in 2008. The final section discusses the empirical evidence and links it to the theoretical discussion developed in the first part of the chapter.