At the moment lower social standards/tax rates are the only ways in which poorer, smaller, more peripheral members can compete even marginally with the big boys - it is not so much a matter of political choice as of economic necessity.
On the larger point I would expect increased divergence or enhanced cooperation to develop as the EU becomes bigger and more unwieldy as a whole. The Euro/Schengen and various national derogations shows this can be compatible with the development of the EU as a whole. The best way to promote some progressive policies is to show that they work to the advantage of those member states which have embraced them.
I have no difficulty, for instance, with the French public healthcare system being promulgated as the standard for an emerging European model for healthcare provision - to be adopted on a member by member basis or the slow development of minimal EU standards. In fact we should be actively looking for examples of "Best practice" in members states with a view to promoting them at an EU level. But lets not be under any illusions about this - unless the EU competencies, budget, and wealth equalisation programmes are dramatically upscaled none of this is feasible across gross national differentials of income and wealth.
It ill-behoves the wealthy members to lecture the poorer on lower social standards if the one thing they will not agree to is the wealth transfers that would be required to make the equalisation of social standards possible... notes from no w here
Virtually the entire programme of the New Deal in the US and what followed through the 1960's involved just such a thing, rural electrification, investments in a national transportation grid leaving no region out, schools in poor areas, public housing pretty much everywhere, energy generation grid. And those parts of the US which were far behind in wealth, particularly the south, caught up. Overall wealth also went up, as previously poor southerners could now plug into the national economy and buy goods they couldn't afford before, just like Latvians and Poles should be able to afford more German and Frnehc goods as their prosperity increases, thereby increasing our own.
The thing is, you don't get your return on investment in such a scheme when you simultaneously employ neo-liberal trade policies, because there is no guarantee that the fruits of those investments be re-invested in or consumed of one's own goods. IF the Poles prosper only to turn around and buy American goods, what's the use in that?
And, what's more, the neo-liberal extremism that we've seen in trade and capital flow agreements and proposals ever since GATT accentuate not only this fact, but also drives migrations which otherwise would not have happened, further stressing solidartiy mechanisms. And, of course, those who profit from such arrangements are the last to want to pay for the consequences, and the parties they bankroll tend to play the anti-immigrant card to great effect, one need not look further than today's UK to see the end result.
We clearly need more coordinated investments, financed by the richer countries, and yes, I think debt-financing is in order. But...we need to change other rules of the game, too. The US made out like bandits from the Marshall plan, not least because the aid was required to be spent on US capital ando ther goods. When we do the same thing, the trade rules need to be similar. Else, there's really no sense in it. Fai de bèn a Bertrand, te lou rendra en cagant
