Europe entered the 1990s with high unemployment but high expectations. Unemployment, which had nearly doubled to 10 percent in the European Union (EU) in 1978-88, was abating, falling back to 8.1 percent by 1991. Maastricht, the Single European Act and currency union promised to create a true continental market and help reduce unemployment further. And while most economies were sliding into recession at the beginning of the 1990s, the usual business cycle could not but help revive employment and growth over the coming decade.

Indeed, during the 1990s European economies revived unevenly, the euro was launched despite the EMS crises...

Of all the ‘models’ discussed in this volume, the Dutch one is the most famous one – possibly because the Netherlands is not as small as Ireland and Denmark, because it came from far behind, and because it managed to combine spectacular employment growth with competitiveness and the maintenance of a generous, though somewhat retrenched, welfare system. The Netherlands has witnessed a rapid decline in the unemployment rate that brought it to one of the lowest levels of all OECD countries. At the same time, the country’s job growth was about the highest in the OECD area (see Chart 2.1); within...

During the 1970s and 1980s, Sweden became a model country for foreign observers. At times when unemployment in many other countries reached a level of more than 10 percent, Sweden kept its unemployment at golden age levels. In the beginning of the 1990s, the Swedish model collapsed. Unemployment sky-rocketed to almost 10 percent, and foreign observers lost some of their interest in the Swedish model. Denmark has experienced a reverse development. In the 1980s, the country was plagued by high unemployment. However in the 1990s, Denmark became a new model country as unemployment decreased to around 5 percent. Today, a...

Finland has recently been much admired due to economic success. Finland has been in the news because of high rankings in competitiveness, technology, education and economic growth.¹ The success has largely been embodied in the growth of the Nokia group and ICT sector. Yet the economic boom and the success of the Finnish high tech industries are a relatively new phenomenon, starting from the mid-1990s. In fact, the years of good economic performance were preceded by an exceptionally deep recession in the beginning of the 1990s. At that time, the Finnish GDP shrank by 10 percent in 1991-93 , and...

Switzerland does not occupy a prominent place in comparative political economy. One reason is probably that this proudly independent country is not part of the EU and therefore missing from many comparative statistical sets. This relative neglect leads to a generally rather superficial knowledge about the peculiarities of the Swiss form of capitalism and the development of its welfare system. It also obscures a specific interesting question: how did Switzerland in the 1990s maintain its very high employment rate in the context of the lowest productivity and GDP growth in the OECD? Switzerland’s employment rate was essentially stable at 78.2...

Only at one’s peril would one underestimate the extent and pace of change occurring in Ireland. Over the space of just six years in the 1990s, the country saw phenomenal growth in jobs, output and incomes as well as significant changes in consumption, lifestyles, values and patterns of political and social organisation. Indeed, it may not be unreasonable to claim that Ireland changed as much in the last decade as in the preceding century. Gainsaying many predictions and the experience of most other countries, ‘Ireland.plc’ prospered hugely as trade and markets became more globalised and supranational political and economic blocs...

During the 1990s “economic miracles” in Ireland, Denmark and the Netherlands attracted considerable attention. All three countries reduced measured unemployment and reversed deleterious fiscal and current account deficits dating from the 1970s to a greater extent than their larger European neighbours. Analysts looking for policy lessons that might be applicable to the employment and growth malaise in those larger European economies were particularly drawn to the two “nice”, that is, more social democratic, examples of change, or to the superficially high-tech dynamism of Ireland. All this attention obscured another equally interesting miracle story playing simultaneously in the southern hemisphere: Australia....

Throughout the 1990s (and before the economic tribulations of 2001 and 2002) the American economy was a source of adulation and envy. The stock market demonstrated unprecedented growth, corporate profits surged to double digits as a percentage of national income, and unemployment fell to its lowest point in 24 years (Business Week, September 29, 1997, p.3546; Bernstein, September 1, 1997; Commission of the European Communities, 6/93, pp. 11, 40). These features of economic life prompted all sorts of congratulatory self-adulation in the business press; for example,Business Week(May 19, 1997) described it as the “wonder economy” These successes also...

‘Europe has a problem – and its name is Germany,’ according toThe Economistof January 19, 2002, in a leader titled ‘Germany isn’t working’. Why? In the decade up to 2000, German economic growth was below OECD average, and in 2001, as the world economy slowed down, German growth slowed to just over half a percent per year, the lowest rate in the EU. By 2002, Germany hardly grew, and growth forecasts were gloomy. Unemployment had risen past the politically important level of 4 million, business as well as consumer confidence was at record lows, and the popular economic outlook...

What are the main results of the previous chapters? Did the small countries discussed in this volume develop new ways of generating employment and particularly of dealing with the issue of work and welfare that is often supposed to be a dilemma? Are they ‘models’ other countries can learn from, did they establish a specific form of competitiveness? How important has been deliberate policy? What about luck? These questions have guided the contributions to this volume, and they will be addressed again in this final chapter. Furthermore, we briefly consider the latest developments and the prospects of the political economies...