The paper intends to argue that although globalisation has catalysed the process of shrinking of welfare state, it is not an adequate explanation for the grand scale reduction in spending on social security. For the purpose, it would examine the major turning points in the history welfare state in Europe such as the oil crisis, the abandoning of gold standard, erosion of post war consensus on welfare and so on. It concludes that globalisation does not actually lead to any specific set of economic policies which requires large scale spending cuts. Certainly, disciplining the welfare system in Europe was a real need sprouted out by the spread of globalised economic forces. But, the scale of spending cuts pint fingers at the underlying neoliberal consensus in the West than the actual forces of globalisation.