If the European Union is going to accomplish its goal—announced in the 2000 Lisbon summit—to become the “most competitive economy in the world” by 2010, Europe needs to strip away the red-tape and regulation which strangles job creation. Labour market flexibility promises to reduce unemployment and boost productivity and job creation. Labour market rigidity, as seen in disincentives to recruit new workers, and policies that subsidize long-term unemployment, result in chronically high unemployment. Increased labour flexibility plays a large role in improved economic competitiveness and euro-zone budgetary rigour will create increasing pressure to address labour market inflexibility.

Professor Juan José Dolado is Professor in the Department of Economics, Universidad Carlos III de Madrid and a member of the European Commission Group of Policy Advisers (GEA). He received his Ph.D. in Economics from the University of Oxford, his M. Sc. from the London School of Economics, and his B.A. in economics from the Universidad Complutense de Madrid.

Professor Dolado is also a member of the Council of the European Economic Association and is currently the managing editor of the Spanish Economic Review. Professor Dolado has authored or co-authored Unemployment: Choices for Europe; "The Influence of Demand and Capital Constraints on Spanish Unemployment" in Europe's Employment Problem (MIT Press); "Mismatch and Regional Labour Mobility: The Case of Spain" in Mismatch and Labour Mobilility (Cambridge University Press); and "A Tale of Two Neighbour Economies: Labor Market Dymanics in Spain and Portugal" in The Portuguese Labour Market from an International Perpective (MIT Press).

Two recent articles he has co-authored are available online: "Drawing Lessons from the Boom of Temporary Jobs in Spain" and "Explaining Youth Labour Market Problems in Spain: Crowding-Out, Institutions or Technology Shifts?"

Professor Gilles Saint-Paul is professor of economics at the Université des Sciences Sociales de Toulouse and Programme Director of Labour Economics at the Center for Economic Policy Research. Professor Saint-Paul is also a Fellow of IZA (Bonn) and of CES (Munich). He has also been a member of the Commission Economique de la Nation, French Ministry of Finance; the Strategic Report Team on Eastern Enlargement of the European Union, European Commission; and the CESIfo Council of Economic Advisors.

He received his Ph.D. from the Massachusetts Institute of Technology where his advisors were Olivier Blanchard and Michael Piore; his D.E.A from the Université de Paris-IX (Mathématiques appliquées aux sciences économiques.); and was educated at the Ecole Polytechnique.

Professor Saint-Paul is the co-author of The political economy of labour market institutions (Oxford U. Press). He has also written numerous articles for publication, including: ''Is labour rigidity harming Europe's competitiveness? The effect of job protection on the pattern of trade and welfare'' in the European Economic Review; ''Do Labor Rigidities fulfill redistributive roles? Searching for the Virtues of the European Model'', IMF Staff Papers; "Labour rigidities and the performance of the French economy'' in Sectoral Structural Change and Labor Market Flexibility: Experience in Selected OECD Economies.

Professor Saint-Paul has also been published in Libération; Le Monde; Expansión; Les Echos; La Vanguardi; and The Independent.