DYNAMO DYNAMICS OF NATIONAL EMPLOYMENT MODELS:

1. Main structural challenges in the context of the Lisbon strategy In 2005 Tony Blair as the new president of the European Union called upon the European Union to engage in a major debate on ‘modernising ’ the European social model and implicitly provided the UK as a potential future model for European economic and social development. The UK government is happy to present the UK model as almost an unalloyed success story, combining stable and high growth with high employment rates and high public spending on public services to boost productivity and to reduce child poverty. This virtuous combination is seen as facilitated by flexible labour and product markets, not only in the private but also in the public sector. Against this evidence of apparent economic success significant problems still remain in the UK economy, particularly those of low productivity and skill shortage on the one hand and inequality and social exclusion on the other. The Lisbon strategy requires Europe to strive towards developing comparative advantage in knowledge society or high value-added activities and to achieve the employment goals of a high employment rate coupled with job quality. While the U