EMU and Labour Market Reform
What has the financial crisis taught us?
Dr. Vassilis Monastiriotis, Senior Lecturer, European Institute, London School of Economics and Political Science
1st April 2009
12.45 - 2.00pm
The Function Room (JS1-41)
London Metropolitan University
31 Jewry Street
London EC3N 2EY
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Vassilis Monastiriotis & Sotiris Zartaloudis
A widespread perception exists that EMU carries one-way pressures for enhanced flexibility in the labour market. We discuss the theoretical basis of this by examining four mechanisms through which the establishment of the common currency and the functioning of EMU impact on the labour markets of the Eurozone and of the New Member States. We argue that the theory and empirics of the link between EMU and labour market flexibility are not conclusive, leaving room for varying degrees of, and directions for, the (de)regulation of national labour markets. This discretion is partly reflected in the experience of labour market reforms of the Eurozone. An examination of the institutional framework of employment policies in the EU further corroborates the conclusion that EMU does not restrict, but rather puts on the agenda, the active exploration of policy options aimed at strengthening the resilience and adaptability of the European economy as well as its quality, fairness and competitiveness. This effect is only rei forced under the present global economic crisis.
Dr Vassilis Monastiriotis is Senior Lecturer in the Political Economy of Southeast Europe at the European Institute of the London School of Economics and Political Science. His research interests are on labour market flexibility and labour relations, regional labour markets, regional and local socio-economic disparities, and economic development in Greece and Southeast Europe. He is co-editor of Spatial Economic Analysis (Taylor&Frances) and editor of the GreeSE Papers series (LSE). He has published widely in international economics and regional science journals. In 2008 he was awarded the Moss Madden Memorial Medal for his paper on 'Union retreat and regional economic performance in the UK'.
