Introduction

A common feature of reform processes and discourse throughout Europe since the mid-1990s has been the shift from ‘passive’ towards ‘active’ policies for unemployed people. While in some countries the move towards activation implies the introduction of a comprehensive framework of active labour market policy, others have long-standing traditions in this respect. Germany belongs to the latter group, having a tradition of providing unemployed people with benefits, as well as offering measures to enhance individual employment prospects. However, an individual-oriented approach to active labour market policy has meant different things at different times in history. As part and parcel of a wider strategy of Keynesian economic policy making, the Labour Promotion Act (Arbeitsfoerderungsgesetz/AFG) introduced in Germany in 1969, which regulated both the provision of Unemployment Benefits and active measures, was geared to foster labour market mobility and to adapt the professional skills of workers to structural changes in the economy. Its main instruments were counselling, placement, vocational training and qualification. These instruments were aimed not only at unemployed people, but also at those who were threatened with unemployment or who wanted to work their way up the ladder within the employment structure. They were therefore not only meant to bring people back into the workforce, but also to safeguard occupational upward mobility. Unemployment was generally perceived as a structural problem – one that was best overcome by equipping unemployed people with qualifications and skills.

Today's policies of activation look profoundly different. Embedded within a supply-side-oriented paradigm of economic policy making, activation now seeks to insert unemployed people in areas of employment that do not necessarily correspond to their prior qualifications and status (Heinelt, 2003, p 125). Unemployment is no longer looked at as primarily a structural problem, but as a lack of individual employability. The relationship between the state and unemployed people is now guided by the idea of a reciprocal social contract (Chapter Two, this volume) in which obligations on the part of unemployed people to (re)gain employability are to be matched by obligations on the part of the state to provide effective support in helping unemployed people (re)integrate into the labour market.

In this chapter, we will describe the basic principles that underlie this new approach to activation in Germany, paying specific attention to the individualised measures and services that form an important part of the philosophy of a ‘new social contract’.