Flexibilization of labour in the European Union

Labour market flexibilization has been at the heart of the ‘extended relaunch’ of European integration (the completion of the Single Market and the introduction of the euro in 2002) from the start in the 1980s. Yet the parallel Europeanization of labour market policies, via the European Employment Strategy and the Lisbon strategy, has been non-binding, which has contributed to its partial failure. This chapter argues that the 2008 banking crisis, turned into a sovereign debt crisis, has triggered structural reforms at the member state level which otherwise would have been impossible. In what is best understood as a Kaleckian political business cycle, the austerity crisis today is being used to impose further neoliberal reform, euphemistically referred to as a ‘Europe 2020 Growth Strategy’. The dominant explanation of structural unemployment has long been one in terms of a lack of labour market flexibility. However, this has been contested time and again, even by mainstream commentators.