Date of publication in the: 23.9.2004

This paper looks at the introduction of the Open Method of Coordination (OMC) to EU policy-making. This new mode of governance has been developed over the last decade and has received considerable attention in the literature. However, much of this writing fails to put the OMC into the broader context of EMU; in contrast, this paper links the Amsterdam employment title to the prior Maastricht decision to form a monetary union. It seeks to contribute to the literature on European integration in two ways: First, this paper offers three refinements to Pierson's historical institutionalist account of European integration. Second, it thus provides an alternative to functional explanations of the OMC. In brief the argument is that a conservative-liberal coalition at Maastricht created hard law in fiscal and monetary policy to constrain its successors, while the social democratic majority at Amsterdam relied on soft law to promote its goals in employment and social policy. While the former effectively limited later policy-choices, the latter largely avoids sovereignty losses for national governments. The contents of the Employment Title were determined by EMU, its form – the OMC – by social democratic reluctance to transfer power to the EU