Analytical dilemmas related to what has been established over time to be the European Social Model and its reverberations at public policies level, especially in the context of European economic integration process, were revived amid the great and deep challenges facing all societal actors by the economic and financial crisis whose magnitude has increased since the second half of 2008. The severe recession and structural problems of member states led to a significant deepening of economic and social imbalances. In this article I analyse the functions and the role of social policy in European context. Also, the article presents the main pillars of European Social Model and its definitions resulting from literature review. Last part of the paper aims to investigate the effectiveness of the tax and benefits schemes applied in the European Union based on indicators used at European level (unemployment trap, inactivity trap, low wage trap, net increase in disposable income, net replacement rate and tax burden).