[2] The European Commission considers flexicurity as an integrated strategy to simultaneously enhance flexibility and security in the labour market.
It is important to recognize that the flexicurity concept has been developed in countries with high wages, besides clear progressive taxation, as in for example, Denmark.
The Danish flexicurity model has its roots in the nineteenth century, when negotiations among employers and trade unions during the so-called September Compromise of 1899 (also called Labour Market Constitution) laid the ground for a mutually beneficial (profitable and secure) state.
It settled the freedom of trade union association as well as the managerial prerogative to manage and divide the work including the right to hire and dismiss the labour force at any time necessary.
"It is thus important to understand that the Danish model of labour market regulation, including the right to form associations, is based on these voluntaristic principles and that legislation or interference of the state is kept on a minimum.
[5] Although some believed that the natural unemployment rate had simply increased, the Danish government sought to improve the situation by implementing what came to be called the flexicurity model.
[10] The unemployment benefits and training provision that this system entail place a higher burden of taxation upon the higher-earning members of the Danish society.
In recent years, Danes have been consistently ranked as the happiest nation on Earth, which has in part been attributed to aspects of Denmark's flexicurity model.
In 1998, significant changes were made to the country's labor laws with the aim of proactively supporting the workforce with benefits for sickness and workplace hazards.
Furthermore, flexicurity is seen as a strategy to make labour markets significantly more inclusive in some of the European countries, by tackling labour market segmentation between insiders (workers well-established in stable, quality jobs) and outsiders (unemployed persons or in precarious employment who do not benefit from other advantages linked to a permanent contract, frequently youth, migrants, etc.).
Most recently, the European Council of June 2009 concluded that "in the current situation [of crisis], 'flexicurity' is an important means by which to modernise and foster the adaptability of labour markets.
(2) Flexicurity involves the deliberate combination of flexible and reliable contractual arrangements, comprehensive lifelong learning strategies, effective active labour market policies, and modern, adequate and sustainable social protection systems.
(7) Flexicurity requires a climate of trust and broadly-based dialogue among all stakeholders, where all are prepared to take the responsibility for change with a view to socially balanced policies.
(8) Flexicurity requires a cost-effective allocation of resources and should remain fully compatible with sound and financially sustainable public budgets.
It should also aim at a fair distribution of costs and benefits, especially between businesses, public authorities and individuals, with particular attention to the specific situation of SMEs.