Introduction: employment policy priority

By the end of the 1980s, the political and economic integration of Europe on a transnational basis was being driven by political decisions creating a Single European Market for goods, services and capital. Labour, however, was the exception. Despite the guarantees of free movement, the economic and political framework for labour markets continued to be national, not European.

The foundations of the post-1945 labour market settlements in the Member States included the overlapping elements of basic labour standards, full employment and a welfare state. The regulation of labour markets in the context of these settlements was undertaken by political authorities and the social partners, organisations of employers and trade unions, to varying degrees in different Member States. Confronted with the emergence of the Single European Market, these foundations of the post-1945 settlements were threatened, and national political authorities and social partners appeared inadequate. The European Union belatedly began to address the question of the legal and institutional architecture required to re-establish these foundations on a European basis: the European ‘social model’.

The emerging legal and institutional architecture included the European social dialogue, embodied in the historic Agreement on Social Policy annexed to the Protocol on Social Policy of the Maastricht Treaty on European Union (TEU), now incorporated into Articles 136–9 of the EC Treaty by the Treaty of Amsterdam. A second major strategy was the adoption of a new Title in the EC Treaty, the Employment Title (Articles 125–30), inserted by the Amsterdam Treaty of 1997.