At the end of the 1990s the debate about developments in European welfare states looks distinctly different compared with the 1980s, or even the early 1990s. Attempts to explain welfare state change, prominent until the end of the 1980s, gave way to a better understanding of cross-national welfare state diversity, influenced not least by Gösta Esping-Andersen’s notion of ‘three worlds of welfare capitalism’. 1 The latter was followed by an ongoing debate about the impact of current and potential external pressures on national welfare states, such as European integration, globalisation, demographic shifts and changes in family formation and labour markets. For some time it seemed that commentators were too preoccupied with identifying the degree and direction of potential change to notice actual and significant reforms in some countries, such as the Netherlands, the UK or Denmark. With notable exceptions, the interest in welfare reforms in those countries grew only when policy success began to appear in the form of employment growth and a gradual but significant drop of previously high levels of unemployment without increases in poverty or inequality, excluding the UK. Of course, these outcomes cannot solely be attributed to welfare restructuring, but also have to be related to other changes introduced in macro-economic, fiscal, industrial relation and labour market policy. 2