Abstract
There are no secrets behind Europe's high and persistent unemployment. It is not a question of competitiveness Europe is doing well on global markets. We cannot blame our main trading partners, or low-wage countries, for our shortcomings. And we should not blame fiscal policies, the convergence process. The reasons behind unemployment are internal to Europe. There are two distinct explanations.One has been our inability to tackle macroeconomic shocks in a coordinated way. As a consequence, downturns have been deeper and recoveries weaker than they need have been. The resultant low average rates of economic growth produced inadequate job creation relative to the growth of the potential workforce. The other explanation has been our inability to reform labour market policies and social protection systems to meet the labour market needs of today. Europe's policies were originally created for labour markets with one male breadwinner, working in manufacturing or construction. Labour market and social policies f...
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