While the welfare state, as a modern social institution taking responsibility for the fair re-distribution of life chances, as well as for creating an inclusive society, is regarded as a European invention, and while the existence of an encompassing welfare state has oft en been depicted as one of the defining criteria of Europe, the concept of the European welfare state and its concrete manifestations in specific social policies became substantially challenged in the past two decades. In this period European welfare states were, and at present still are, challenged by intensified international economic competition threatening their redistributive capacity; by social developments as demographic aging and the rise of new family arrangements confronting them with a series of ‘new social risks’ associated with postindustrial society; by increasing labour market flexibility and inflow of cheap migrant labour having consequences for the structure of the wages and benefits system of countries; and by the European Union becoming a critical intervening level in domestic processes of welfare state change leading to an era of semi-sovereign welfare states. The combination of these challenges results in a precarious social-political context marked by intensified discussions about the generosity, universalism and scope of European welfare states. As a result, substantial welfare reforms are visible in European countries, taking various forms (of retrenchment, recalibration, and partly extension as well), and leading to new perspectives on the welfare state goals and approaches governments should adopt. Clearly, welfare states are changing all over Europe, but in different speeds and directions. However, the European welfare state is not only challenged by structural economic and social processes, increasingly it is subjected to more ideologically grounded accusations of undermining individual responsibility, of damaging traditional social ties and of weakening private forms of mutual solidarity and self-help. Ideas of collective, public responsibilities for the contingencies of modern life, which are at the base of the solidaristic welfare state ‘European style’, are giving in to a perspective that emphasizes the value of individual responsibility and, related to this, of private and informal welfare arrangements. All this contributes to rising concerns on the future sustainability of the European welfare state, in economic and political terms, as well as in terms of social legitimacy.