During a recession, as tax receipts fall, European countries simultaneously spend more on welfare. This process, known as automatic stabilizers, forms part of the debate about whether Europe should stimulate its economy as much as countries with lower outlays, like the United States and China.

“Governments need to take quick and decisive action to avoid the financial crisis becoming a fully-blown social crisis,” the secretary general of the Organization of Economic Cooperation and Development, Ángel Gurría, said this week.

Demographics, too, are a challenge. On the one hand, workers fear that as they age, they will be at a disadvantage when competing for scarce jobs against younger, less expensive workers. Experts also fear a shortage of skilled workers, as Europe’s population ages and becomes more of a burden on budgets.

Despite the advent of the single market, the labor market in Europe is fragmented. In Spain, the jobless rate runs as high as 25 percent in some regions, according to the country’s National Statistics Institute. And unemployment has spread from the construction sector to broader industry and services as domestic demand shrinks and global demand for automobiles drops.

Carlos Martín, an economist with the Workers Commissions, the biggest Spanish trade union, said that government projections that the country would begin to pull out of the crisis next year were unrealistic and that hundreds of thousands of jobs would be lost in hotels, restaurants and retailing. “Six months from now, we’ll be looking at five million unemployed,” he said. “This is going to be a deep, broad crisis that is going to last a lot longer than two years.”

The German imperial chancellor, Otto von Bismarck, had something more generous in mind when he designed the world’s first social insurance program — initiated in the 1880s — on the assumption that the welfare state should help smooth economic cycles.

“In Germany, there was this class system, with the richer classes feeling guilty and frightened of the working classes, creating this paternalism,” said Richard Layard, a professor at the London School of Economics. “In the U.S. and the U.K. it was the belief that all have the same opportunities, and if you don’t succeed it’s your fault. Now, it’s the belief that the more people you mobilize, the shorter the recession will be.”