Economy & Business, Volume 9, 2015

Abstract: It is commonly believed that welfare state is the concept according to which the country protects its citizens from the life’s risks, such as senility, sickness or unemployment. Its introduction contributed to achieving prosperity by European countries but also, as time went by, to increasing budgetary spending. Due to the accelerating rate of socio-economic changes, the new questions have arisen – first one about the validity of assumptions from the mid-twentieth century and the second – about the effectiveness of the welfare state. On the one hand, there are voices expressing the need for the social system adjustments to the contemporary realities, while on the other hand, the idea of deregulation and complete state’s drawback from the social area is present. This article presents the most important challenges of EU welfare states and new proposal of a change in the ideology of welfare states which is basic income.