Social Europe: One for All? Monitoring European Integration 8

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Many blame structural rigidities for the poor performance of European labour markets. With the onset of monetary union, it is vital to understand how labour market institutions will interact with other structural changes taking place in the EU economies. Efficiency (both absolute and relative) is likely to become more important within the monetary union, since increased specialization and more intense competition should lead to increased opportunities for labour reallocation, and free mobility of capital will penalize more harshly those countries and regions which are relatively inefficient. But, if labour demand becomes more turbulent, there may be calls within the EU for measures to protect employment, especially since there will be little scope for the use of monetary and fiscal policies to offset asymmetric shocks. The eighth Monitoring European Integration Report will not only provide a detailed analysis of European labour markets, but will also set out specific recommendations for the design and implementation of social policies within the EU. The Report will address many of the issues surrounding the Social Chapter of the Maastricht Treaty. Can member states continue to implement their own social policies at the national level or must responsibility pass to the EU level? Is ?social dumping? inevitable in the absence of a common EU social policy? If provisions are needed, should they take the form of minimal agreements, or should there be exceptions for particular countries? How should the circumstances of the potential new members from Central and Eastern Europe be taken into account when designing current EU directives concerning social policy? Is social dumping to be welcomed, as a healthy force which will oblige countries to lighten the excessive and damaging regulations they impose on their labour markets?