Seminar paper from the year 2002 in the subject Business economics - Personnel and Organisation, grade: 1,3, Ashcroft International Business School Cambridge, course: European Union - Industrial Policy, 10 entries in the bibliography, language: English, abstract: Nowadays, 'unemployment is [...] regarded as Europe's foremost economic and social problem' (Artis and Weaver, 1997:52); and employment regulations as part of European social policy are a topic of ever-increasing importance. Social policy does not only seek to provide services and redistribute income, but also regulates and influences the labour market (see Purdy, 1997:270). The concept and understanding of social policy has changed significantly over time. Although the historical development is beyond the scope of this essay, it should be noted that before the 1980s, economic objectives clearly dominated social dimensions, whereas today a more balanced approach is taken to economics and social aspects (see Hantrais, 2000:221). Here, emphasis will be given to the current situation; nevertheless, the discussion should be perceived in the context of social policy evolution. Furthermore, social policy-making is closely linked to structural changes within the European labour market (see Mercado et al., 2001:204) and is, therefore, an on-going process rather than a static picture. The first section of this essay will give a short explanation of the statement in discussion. Afterwards, the necessity of European social policy and its benefits to business shall be examined. In the following, potential drawbacks and obstacles to competitiveness will be highlighted. The final part summarises the line of argument and provides a future outlook on the subject.