Introduction

Attempts by the European Union to create the social dimension have undergone major revisions over the last twenty years or so. From reliance on directives and regulations it has shifted, since the late 1980s, towards a focus on negotiation, social dialogue and other ‘soft’ forms of regulation. At the same time, policy priorities have also shifted, from workers' rights and issues in industrial relations towards employment creation and active labour market policies. The context for these changes included a growing build-up of rigidities on the supply side across the European Union since the 1970s, the increasing share of public expenditure in gross national product (GNP), the rise in real labour costs and worsening unemployment, amongst other factors, all of which were seen as unsustainable in the long term (OECD, 1988).

The European Commission's White Paper on growth, competitiveness and employment, adopted at the Brussels summit in December 1993, focused on training, flexibility in the labour market and work reorganisation amongst other means of reducing the level of unemployment across the European Union (European Commission, 1993). The Essen summit in December 1994 also focused on combating unemployment as the main plank in social policy. It advocated measures to promote training, increase the job intensity of growth, reduce non-wage labour costs, move from passive to active labour market policies and target groups particularly hard hit by unemployment (European Commission, 1994: 8–9).