With the international crisis and the launching of the strategy Europe 2020 a cycle of European policy has come to an end. The purpose of this article is to conduct an empirical analysis of the Lisbon Strategy’s capacity to reshape the European Social Model (ESM) in the period 2000-10. In this paper, we argue that the ESM has been reshaped over the past decades towards an emphasis on activation policies rather than in income redistribution policies. This shift resulted from an attempt to match four dimensions: the deepening of the internal market, the Europeanization of employment and social policies, the European diversity regarding employment relations and social policies, and the goal of sustaining the core of European identity. During the period 2000-10, social cohesion has declined slightly, but a convergence process occurred in terms of the main social indicators. Econometric results indicate that activation policies and education levels play an important role in reducing inequality, whereas passive measures and the expenditure on social protection are more prone to fight poverty. The expenditure on R&D is important both to tackle poverty and to decrease inequality. Therefore, we conclude that a combination of passive and active measures is crucial both to maintain high levels of social cohesion and to modernize the ESM.

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Lisbon Strategy; Europe 2020; European Social Model; Activation; Social Cohesion