The first social investment welfare state (SIWS) strategy in the 1990s marked a constructive compromise between social democracy and neoliberalism, but it left too many social democratic needs unfulfilled. But any attempt at its renegotiation must deal with the fact that neoliberals today are more aggressive than in the late 1990s. However, the rise of xenophobic populism and its threat to the neoliberal project might persuade policymakers of the relative attractiveness of a positive relationship with social democracy. A reformulated version of SIWS along Hemerijck’s lines would be a fundamental part of such a relationship, and this is what is discussed throughout this chapter.
