The social agenda of the European Union is shifting towards broad social initiatives that align social and economic objectives with the promotion of employment. This calls for an action framework that allows social dialogue and political deliberation to inform and complement legislative action at all levels. The debate however has been dominated by advocates of market-based solutions and their opponents, the supporters of traditional welfare states. This book, to break with this sterile stalemate, demonstrates how an employment-oriented social policy in Europe can develop from a new, different set of policy principles, specifically 'a capability approach'. Taking inspiration from the work of Amartya Sen, this book focuses on the effective freedom people need to achieve their goals in life and work. The result of ongoing collaboration between researchers and social actors, it will appeal to social scientists, students, policy makers and all those concerned with the building of Europe.