Full Employment in Europe

Full Employment in Europe

Managing Labour Market Transitions and Risks

Günther Schmid

Transitional Labour Markets (TLM) – defined as legitimate, negotiated and politically supported sets of various employment options in critical events over the life course – are an essential ingredient of modern full employment strategies. After assessing the European Employment Strategy, this book offers a detailed comparative analysis of employment performance for selected European member states and the United States. It suggests that successful employment systems arise from a new paradigm of flexibility and security (‘flexicurity’) the balance of which varies according to countries’ institutional paths. Whilst there is no ‘best practice’, TLM theory does provide normative and analytical principles that can be generalised for various institutional settings. The book also provides good practice examples for managing critical transitions over the life course – from education to employment, from one job to another, from unemployment to employment, from private activities to gainful work and from employment to retirement – and develops the contours for extending unemployment insurance to work–life insurance.

Chapter 2: The European Employment Strategy: How Far Away are we from the Lisbon Goals?

Günther Schmid

Subjects: economics and finance, labour economics, social policy and sociology, labour policy


Europe no longer inspires people to dream. (Jean-Claude Juncker)1 2.1 INTRODUCTION The sluggish dynamics of growth and employment experienced in most member states of the European Union (EU) for many years give reason to wonder whether the ambitious goals formulated by the Council in Lisbon in March 2000 can still be achieved by 2010. This concern is reinforced by the accession of ten additional states in May 2004 (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia, Slovak Republic – hereafter referred to as the EU 10) and of two others (Bulgaria, Romania) in January 2007, the majority of which lag further behind the goals than do the 15 ‘old’ EU member states (EU 15). Current negotiations with Turkey only intensify the reservations. Moreover, the key instrument for implementing the European Employment Strategy (EES) – the ‘open method of coordination’ – has come under mounting criticism. This method, originally known as the Luxembourg process when it was shaped at the EU summit in Luxembourg in November 1997, was agreed upon by the heads of government of the EU member states and declared official policy at the Lisbon summit in 2000. However, the open method of coordination allegedly lacks credible sanctions (Begg and Berghman 2002), dispenses with European-wide legal norms (Steinle 2001), does not really trigger the desired learning processes (Radaelli 2003) and aspires to onesided quantitative objectives on the cost of quality aspects (Salais 2003). As though that were not enough, it is also said to promote a bureaucratised form...

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