In view of high and persistent unemployment in the European industrialised countries there is growing consensus that more flexibility is needed with regard to both the legal and institutional conditions governing the labour market (external flexibility) and the management of human resources...

In 1999, “The Economist” referred to Germany with the meaningful headline “The sick man of the euro”. 15 years later, the world is talking about the “German Labour Market Miracle”. In the first part, this paper describes the characteristics of the traditional German labour market,...