Many European countries have experienced a significant increase of unemployment in recent years. This paper reviews several theoretical models that try to explain this phenomenon. Predominantly, these models claim a link between the poor performance of European labor markets and the high level...

• Adjustment does not necessarily increase poverty • Adjusting before a crisis reduces social costs • Refusal to adjust and the suspension of imports leads to self-centred underdevelopment, which is socially much more costly • The choice of macroeconomic stabilisation measures is...