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As European integration deepens, the future of work has become a critical issue. Unemployment threatens the future of monetary union. Labour markets are changing. The liberalization of the economies of member states of the EU and the forces of globalization emphasize the need for greater labour market flexibility. Are these trends compatible with the social model which has been central to Europe's prosperity and the cohesion of its society? This Federal Trust Report analyzes these trends and makes proposals. It looks at the effects of European capital market integration on labour and at the institutional, fiscal, cultural and legal obstacles to job creation, and asks whether the divide between the Rhineland and Anglo-Saxon social methods can be bridged.