The establishment of the European Employment Strategy with its novel governance arrangements may represent the beginning of a substantial shift in both European social policymaking and in European Union governance. It has been touted as a "third way" in EU governance to be used when harmonization is unworkable but mutual recognition and the resulting regulatory competition may be too risky (Mosher, 2000; Larsson, 2000; Ferrara, Hemerijk, and Rhodes, 2001). At the Lisbon Summit the European Council recognized the EES as an important governance innovation and indicated that in the future similar "open methods of coordination" would be used in several domains of social policy and other area as well (Portugal Presidency, 2000). The EU's new White Paper on Governance recognizes the importance of the open method, albeit with some reservations.
In this paper, we have sought to explain how the EES came about, show how it is operating today, assess its major elements, and suggest ways in which it could contribute to progressive reform in the European Social Model. We suggest that the process can, under certain circumstances, make a difference in fundamental policy changes at the national level. But we have also made clear that in the end these changes must emerge from complex political processes involving real conflict among social groups and interests. The future of the European Social Model will be determined by the play of these complex forces. In this context, the EES may make a modest contribution by marking out progressive pathways, facilitating creative learning, encouraging reformers, and providing a modest amount of protection against efforts to roll-back the gains of the past.