The name is absent

Aliki Mouriki

The policies suggested above entail, of course, a substantial economic cost. Labour market poli-
cies in particular- both active and passive- require a lot of extra government spending, in terms of
more efficient public employment services, updating of skills, job creation and adequate levels of
unemployment benefits; the same is true for improved welfare services (social benefits, maternity and
parental leave, childcare and elderly care, early retirement schemes, etc.). The financial dimension is
a source of major concern particularly in periods of recession and in countries that simply lack the
extra resources required to fund these policies.

4.3. Compensating mechanisms and trade-offs

A major feature of the flexicurity policies is the need to strike a balance between the conflicting
interests of business and labour and to compensate the latter for accepting more uncertainty, in the
form of more flexibility, to the benefit of the former. This is, by no means, an easy endeavour as it
involves accommodating diverging and often conflicting interests, both between as well as within
the social partners’ organizations. The diagram below illustrates the potential “give-and-take” be-
tween business and labour. Companies are eager to increase the numerical flexibility of their work-
force, i.e. to fluctuate the number of workers and of hours worked according to demand, through
easy hiring and firing procedures, whilst workers are willing to accept some form of uncertainty if
they are backed up by efficient labour market policies, both active and passive. Functional flexibility
(i.e. multi-skilling, professional mobility, etc.) would be more acceptable by workers, but only firms

with the appropriate work organization could offer it.

LABOUR

external numerical flexibility
(weak EPL)

- income security
(UB, social benefits,
minimum wage)

Trade-offs
between
flexibility and
security

- internal
numerical
flexibility

- functional
flexibility

- wage flexibility

- employment security
(active labour market
policies, LLL)

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