This paper assesses the recent progress and future direction of labor policy in the European Community, now the European Union. The authors show that most of the mandates foreshadowed under the December 1989 Community Social Charter have now been enacted into law. They analyze the possible costs, as well as the benefits, of these firstphase mandates and show the link between these adjustment costs and the Community's policy of providing subsidies to its poorer member states. They also demonstrate how the new Treaty on European Union, agreed to at Maastricht in December 1991, has increased the scope for Community-level labor market regulation.
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