Between Deregulation and Social Pacts: The Responses of European Economies to Globalization

In the 1990s, the “challenges” raised against the traditional forms of regulation of the European economies have dramatically increased and have seemingly grown ever more threatening. In the opinion of some scholars, and even more so in the platitudes of the mass media, the greatest threat seems to be raised by the globalization of markets and the intensification of international competition. These phenomena compel national economies to adjust prices, products, technologies, and human resources more rapidly and more extensively than their regulatory systems allow. Also, the process of European monetary unification— which precludes recourse to many traditional economic policy instruments such as currency devaluation and covert protectionism—has imposed similar exigencies of increased competitiveness on national economies and has compelled them to reform their regulatory systems. Demographic trends are no less disruptive for welfare systems, and so is the persistence of structurally high levels of unemployment for labor market institutions. These processes exert largely similar pressures for change on all the economies of the European Union. But are the responses to these pressures equally uniform (or at least are they bound to become so to be effective)? Or are the European countries responding (and will presumably continue to do so) to the common