Structural Adjustment and Neoliberal Convergence in Labour Markets and Welfare: The Impact of the Crisis and Austerity Measures on European Economic and Social Models

Abstract

Varieties of capitalism (VoC) scholars assume that countries tend to respond differently to common challenges such as globalization and economic crisis. In this view the responses largely reflect institutional complementarities and new compromises reached by rationally acting political and economic actors. This article challenges this view. Based on a review of national responses to the current crisis in 11 EU member states, it argues that structural adjustments in welfare and labour markets amount to a convergence of national economic and social models along the lines of neoliberal policy prescriptions. Furthermore, it argues that VoC scholars have ignored the role of (neoliberal) ideology and class interests in imposing a particular solution on an economic problem even if it causes widespread misery and fails to generate growth. This is underpinned by the impact of European integration, and the introduction of the euro in particular.