Structural reforms and macro-economic policy - ETUC

PART I:
introduction
Reiner Hoffmann
‘Reforms, reforms, reforms’, that is the conventional
wisdom of many European policy makers
when discussing the dismal growth performance of
the European economy. In this view, Europe’s main
problem is labour markets institutions which would
prevent the economy from adapting fast enough to
the realities of globalisation and technological
change.
However, two key questions are rarely addressed by
this conventional wisdom. The first one is how the
agenda of structural reform of European labour
market should exactly look like. Will any reform of
labour market regulation do the job? Or do we need
to distinguish between reforms that are conducive
to productivity and innovation and between reforms
that destroy the knowledge basis by subjecting
workers to precarious working conditions? The
second question is whether labour market reforms
are enough. Will labour market reforms produce
higher growth and more and better jobs all out of
their own? Or is the helping hand of growth- friendly
macro-economic policy necessary?
To address these questions and to raise more awareness
amongst policy makers of the importance of
these issues, the ETUC organised on 20and 21 March
2006 a conference on structural reform of labour
markets and macro-economic policy making in
Europe. The papers collected in this book are a selec-
tion of the different interventions that were made at
this conference.
A first part focuses on the state of play concerning
structural reform in Europe. Is it really the case that
Europe and its member states have been sitting idle
in the face of globalisation? On the basis of data
from the OECD, the IMF and the European
Commission, a first paper from Ronald Janssen
(ETUC) finds that many European member states
have implemented reforms of key labour market
institutions since the mid-nineties. Employment
protection for specific groups has been loosened up;
taxes on labour have been cut, while unemployment
benefits systems have been eroded.This sheds doubt
on the claim that Europe is facing a slump in growth
because of its perceived irresponsiveness to structural
change.
Sandrine Cazes and Alena Nesporova (International
Labour Office) complements the picture by looking
at the central and eastern European countries in
particular. The transition from a planned to a market
economy has implied major transformations for
these countries and they now have loose employment
protection and low unemployment benefits
which cover only a relative small part of registered
unemployed. However, this increase in labour market
flexibility for business was not matched by an
increase in workers’ security: Access to active labour
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