ABSTRACT
This chapter shows that the triangle of incompatibility in the Economic and Monetary Union ultimately means a trade-off between employment and social protection. It examines how this three-way trade-off leads to difficulties, by testing the hypotheses of T. Iversen and A. Wren in the context of European integration. The chapter explores how employment objectives put pressure on the redistribution of resources by tracing the progress of the Community agenda. It aims to try to ascertain whether or not the “trilemma” referred to earlier actually exists using an econometric study of the 14 Member states of the European Union. The scale of unemployment in Europe during the 1990s compared with the other parts of the “Triad” partly explains the priority given at Community level to employment and the construction of an employment strategy. The chapter addresses the question of whether a triangle of incompatibility exists between the objectives of increased growth, income equality and budgetary restraint.
