Europeans Go Back To Work

That's the main reason Boeri estimates that more than half of the 21 million jobs created since 1994 have been fixed-term or other nonpermanent work.

The question now is whether politicians will have the courage to finish the job. Unions and their lobbyists in Brussels are pushing for further reform rollbacks. But there are some signs that leaders are willing to move forward. In France, President Nicolas Sarkozy has taken up labor-market reform again after a failed start last year. Germany, though it has stalled for now on labor reform, is finally starting to get serious about improving an education system that has dramatically failed to provide lower-class kids with even the most basic employable skills.

The risks of not continuing on the path with reform are clear. Unemployment has not fallen as much in the big Continental economies as in star performers like Denmark, Britain or the Netherlands. That means fewer people contributing to the economy, and unemployment spending that could better be used for pro-growth programs like education. As the economic picture darkens, economists say, unfinished reforms put the continent at a higher risk of wage-price spirals and even stagflation. Reregulating back to the 1990s, as the anti-reformers want, is even less of an option. In today's era of global competition, the fallout would make 1994 look kind by comparison.

© 2008