A genuine „European Social Model” can be characterised by structures and processes of ordered diversity and social compensation. Since the mid-90’s European social democrats of the Third Way have argued that globalization, European integration, individualization and the knowledge-based society make welfare state reform a pressing issue. The European Social Model is identified as a severe hindrance to growth, competitiveness and employment. Notions of a new European Social Model include the functionality of income inequality and the market for a prosperous economy, conditionality for social benefits and workfare. The article takes the current German welfare state reforms as an example for the transition from the „old” to the „new” European Social Model. It focuses especially on reforms in health insurance, old age pensions and on labour market policies, namely the so-called „Hartz-reforms”. The results are disappointing, because neither unemployment has dropped nor social security finances have improved. Instead the reforms dismantle the very idea of solidarity and hence its legitimacy. Political alternatives to these changes are still vague. Fundamental problems such as the relation between wage work and care work or between the ideology of growth and the exploitation of natural resources remain unsolved.