Since the beginning of the 1990s, the promotion of employment has been recognised as one of the necessary conditions for a stable European Union (EU) economy. Subsequently, EU member states have been trying to define an integrated and innovative approach in the fight against unemployment. The perceived need for such an approach arises from two sources. First, member states have increasingly recognised the structural nature of unemployment. Second, member states’ national policies have failed to overcome the evolving but persistent problem of unemployment and respond to new social demands.

The European Employment Strategy comprises initiatives and events promoting efforts to decrease or even eradicate the causes of unemployment as well as its negative consequences (Hespanha and Valadas, 2001). This chapter concentrates on one of these initiatives, called Territorial Employment Pacts (TEPs). Territorial Employment Pacts form a pilot measure developed in specific geographical areas and their main objective is to solve problems of unemployment by utilising and enhancing the social, political and economic resources of a given area. The initiative recognises the complex and problematic character of employment and unemployment situations in European countries. Significantly, it seeks to highlight the usefulness of a local/regional intervention as a particular method of solving problems (in this case unemployment) that have a global/international dimension. As demonstrated in this chapter, TEPs have the potential to reconstruct national and international initiatives into plans of action at the local level, according to the specificities of local conditions (Greffe, 1998).

It is argued here that the importance accorded to this (local) level of intervention is stimulated by a broader context characterised by profound changes in the role of the state. At the same time that the state, a central actor, seems less capable of effectively responding to the fast and unexpected transformations in the economic and social spheres of our lives, the benefits of local and regional approaches are stressed.

Since the mid-1970s, the role played by the state in the achievement of social rights has changed. Facing new internal and external pressures, the state has increasingly had to negotiate and articulate its actions with other international organisations, such as the EU, the Organisation for Economic Co-operation and Development and the World Trade Organisation. Some authors (for example, Deacon et al, 1997) subsequently emphasise the supranational and transnational character of social policies.