Abstract

This article examines recent developments in three key policy areas, namely labour market regulation, wage bargaining, and social security. By focusing on changes in these policies in ten European countries, it shows that they have moved in different directions, though not in a consistent manner across the three policy areas. In fact, the new challenges of globalization, monetary unification and unemployment require European economies to strike some sort of balance between the opposing needs for deregulation of labour markets, industrial relations and welfare systems, on the one hand, and for concertation able to provide social pacts for national competitiveness, on the other. However, given the different points of departure, power relations, capacity for institutional learning, and country position in the monetary convergence process, the shared requirement to strike such a balance leads actors to adopt divergent strategies: decentralization vs. coordination, generalized vs. selective flexibility, a search for cooperation and involvement vs. unilateral action. Also, the more closely these countries approach what may be considered an intermediate model of regulation, or a reasonable point of convergence between opposing requirements, the more each relevant actor is likely to display uncertainties, ambiguities and difficulties in setting collective priorities.