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Since the early 2000s, the German labour market has undergone a sweeping institutional transformation. While during the 1990s and early 2000s, Germany was usually regarded as the ‘sick man of Europe’, the country's economy has recently been described in many respects as an international role model. Around a decade ago, a reform package was introduced that resulted in the unemployment rate being almost cut in half, in spite of the difficult economic climate due to the financial crisis and the succeeding and still ongoing problems in the Eurozone. However, the success has also been challenged due to its alleged internal and external unpleasant side-effects by critics. After having explained the essence of the German social market economy and its development prior to the deep downswing of 2008/2009 which was coined the ‘Great Recession’ by leading US economists, the paper summarises the key aspects of the rather unexpected German labour market successes since 2009 and addresses claims of related distributional injustice of these reforms within the country as well as assertions that the German success of ongoing high exports and current account surpluses is based on beggar-thy-neighbour policies. Finally, the paper briefly asks whether Germany has faced up to its responsibilities during the crisis in the Eurozone since the end of 2009. [ABSTRACT FROM PUBLISHER]

Throughout the 1990s, international organisations, such as the International Monetary Fund mainly based their policy proposals for transition economies and the high unemployment, low growth countries in Western Europe, on economic "orthodoxy". This approach predominantly followed neoclassical economics in which market liberal solutions predominate. These suggestions were controversial; the early results of these policies appeared to be disappointing. Policymakers sought alternative reform proposals and the idea of "flexicurity" has gradually emerged to the political buzzword. Flexicurity combines flexibility with security and suggests that rather generous unemployment benefits and spending on active labour market policies can be aligned with a flexible, employment-friendly labour market. Originating in Denmark, the European Commission and the International Labour Organisation have promoted flexicurity more or less independent of specific single country cases, and based their approach on more abstract, generalised relationships between flexibility and security. These bodies argue for an alternative policy to pure orthodox deregulation and liberalisation for the member states of the European Union (EU) and the former transition economies that joined the EU since 2004. After a review of common labour market-related characteristics and problems of the EU's central and eastern European members, the article summarises and critically evaluates the main elements of flexicurity suggestions. It further compares them to the relevant policy proposals based primarily on more orthodox economic analysis. The analysis shows that several preconditions for a successful flexicurity strategy are still lacking across the new member states. Moreover, the article demonstrates that current proposals by the critics of a single-minded flexicurity approach by no means always disregard potentially positive effects of improving the supposed trade-offs between flexibility and security. At least a limited convergence between flexicurity and a renewed orthodoxy in the economic mainstream can be detected. [ABSTRACT FROM AUTHOR]

The article discusses issues concerning the flexicurity policies in Europe. It examines the performance of the European labor market as well as different labor market experience. It also outlines the different varieties of social models, such as the European Social Model (ESM). Moreover, it discusses the amendments on the European Employment Strategy (EES) in 2008, which was based on the opportunities and risks of the flexicurity strategy. It emphasizes that the flexicurity model, if implemented correctly, could be used as a resolution to the unemployment problem in the region.

In general, the 'mega-trends' represented by, for example, globalisation, the shift to a service economy coupled with high levels of technological change and a long-term shrinkage in the working population all make a more adaptable and skilled workforce in high income countries necessary. The pervasive effects of these mega-trends are often interpreted as suggesting that there is only one optimal institutional configuration to achieve good employment outcomes, which therefore needs to be adopted by all countries. As Britain seems closer to this ideal type than Germany, one would expect a better labour market performance in the former than in the latter, as well as a convergence in labour market policies and outcomes in Germany towards the British model. Taking into account the different starting positions of Germany and Britain, particularly with regard to important differences in monetary policy contexts, the paper evaluates whether and to what extent national public policy patterns are actually converging towards a higher level of flexibility. [ABSTRACT FROM AUTHOR]

Presents an international comparison of different approaches to reducing unemployment and increasing job creation with the objective of isolating a policy prescription for Germany. Remedy for high levels of structural unemployment; Effect on economic growth brought about by the introduction of a systematic employment-enhancing reform; Elements of a successful employment policy; Characteristics of alternative labor market strategies.

Summarizes the institutional arrangements and prerequisites for a different social partnership, necessary for the successful completion of labor market reform in western Germany. Importance of the labor market and its institutions in the German social market economy before turning to the case for reform; Employment and social policies that constitute a package of complementary instruments to fight high unemployment; Implications of the reform of the German labor market.