Introduction: Crisis, Policy Responses and Widening Inequalities in the EU

Abstract. Introducing the contributions to this special issue of the International Labour Review, this article reviews the broad phases of the economic crisis in the EU since 2008 and highlights the critical role of social policy in mitigating its initial impact on Europeans. However, the crisis and governments' policy responses have also been widening labour market inequalities between different groups within countries, the authors argue, as illustrated by the disproportionate growth of youth employment and their specific focus on gender inequality. Cross-national variations in the content and structure of stimulus and austerity countermeasures are also found to be exacerbating divergence between EU countries.The economic slowdown of 2007, followed by the September 2008 crash after the Lehman Brothers' bankruptcy, unleashed a worldwide financial crisis that caused global trade to grind to a halt. The impact was swift, deep and global: credit was frozen, orders cancelled, and stock started to pile up in factories. Governments reacted quickly, though with varying force, to counter the adverse effects of the crisis. The EU Member States coordinated a response of countercyclical macroeconomic measures and started bailing out their ailing banks. Typically, stimulus measures supported low-income families and hardhit industries, such as construction and manufacturing, and extended social protection to groups that had previously been excluded or only partially covered. This rapid, Keynesian-style reaction was welcomed by most academics and politicians, although many qualified it as excessively timid given the scale of the crisis. Nonetheless, it is likely to have prevented Europe and the rest of the world from entering a great depression (IMF, 2009). Yet, while the symptoms of the crisis were temporarily addressed, its root causes were not, and this failure of will and vision has dogged the recovery process in Europe ever since.What started as a financial crisis quickly became an economic crisis, then a debt crisis and finally a social crisis. As EU Member States stimulated their economies, activated automatic stabilizers and bailed out banks, the financial markets began to lose confidence in the Governments' ability to honour their burgeoning debts. Doubts were cast, in particular, on the ability of European politicians to agree upon a viable overarching solution for Europe. From mid2010, the response of European Governments, no longer coordinated, changed course: austerity measures were adopted to reduce debt and deficits. A host of European Council meetings generated an impressive stream of agreements and legislative initiatives aimed at reinforcing the European Economic Governance structure. Thus, after stimulating the economy and expanding social security in late 2008 and 2009, in 2010 countries began to cut budgets and make structural reforms in an attempt to stimulate economic growth without increasing public spending. In 2012, this policy of austerity is still ongoing, with no sign whatsoever that it will soon be phased out.Against this background, this introductory article considers whether recent and current efforts at crisis management are widening divisions between both individuals and countries in the EU. As Rahm Emanuel famously urged in 2008, "Never let a crisis go to waste!"; the question asked here is who wasted it and who did not?The remainder of the article is organized into four main sections. The first gives a general overview of how the crisis was handled in the EU, by identifying its different phases and the countermeasures adopted. The second section discusses the impact these developments had on the labour market and social policy. The third focuses specifically on their consequences for gender equality. The fourth section concludes.Waves of crisis and countermeasuresIt is not possible to pinpoint the different waves of the crisis exactly. Whereas the majority of European countries entered recession in the second quarter of 2008, some countries (e. …