Economic and Monetary Union (EMU), on the one hand, and existing models of labor market regulation and welfare provision within the European Union (EU), on the other, have often been assumed to stand in contradiction to one another. The re-appearance of EMU on the European agenda in the late 1980s, following the de-regulation paradigm of the Single European Market (SEM), raised widespread concern that it might serve as a “Trojan horse” for a neo-liberal policy shift across EU states. The “sound money, sound finances” principles underlying the particular design of EMU, strengthened in the Stability and Growth Pact (SGP) of 1997, seemed to threaten traditional social models and the scope for national differentiation. By the time the new Euro currency was launched in 1999, the evidence to confirm or remove such fears was, in reality, limited and varied. As in other spheres, it has been hazardous to judge the relationship between endogenous and exogenous pressures for reform. External pressures are mediated within distinct institutional settings, with different roles and interests on the part of actors. Moreover, pressures of “Europeanization” and of “globalization” may be difficult to distinguish. Indeed, some equate the two (Wylie 2002). Case study investigations, such as those presented in this volume, are needed to assesscausation rather than incidental correlation.

The argument of this chapter is that progress may be made by examining the more limited issue of how EMU has been used within different institutional settings: that is, how it has been deployed as a strategic lever for reform and as a stimulus to a shift of norms and beliefs affecting policy in contingent areas.