The state and financialization: explaining recent European labor market policy

The financialized nature of current European political economy has pushed governments to pursue policies which are hostile to workers’ interests, even when these may disrupt stability and growth. Two policies in particular – punitive active labor market policies (i.e. workfare) and pan-European wage restraint – have both been unconvincing as drivers of growth and employment, and neither appear to contribute to institutional stability. But both have been aggressively implemented by many European states in spite of these failings.