ABSTRACT
'Euro-sclerosis' was a term widely used in the 1980s to characterise sluggish European economic and employment growth following the OPEC oil price shocks of the 1970s; slow economic adjustment and growth were attributed to labour market regulation and inflexibility in the European countries, and West Germany was held up as an exemplar of the malaise. The Washington Consensus reflects a static conception in which there are two alternative states—a worker is either employed or unemployed; by 'making work pay', policy can encourage the former over the latter. In contrast, the flexicurity conception is of 'transitions' through a multiplicity of alternative states. The neoliberal argument in support of flexible labour markets is that they facilitate structural change in the economy over time by enabling firms to reset production systems in response to competitive pressures in the markets for their output.
