The paper reviews recent changes in the institutional conditions of Eu
ropean social policy, especially the new codecision rights of the 'soc
ial partners' under the Maastricht Social Protocol. To assess the pote
ntial of the new institutional framework to add a meaningful social di
mension to the integrated European market, the paper places Maastricht
and its aftermath in the context of both the history of social policy
as well as the overall institutional structure of the European Commun
ity. Drawing on theory derived from the study of neo-corporatism, the
paper argues that the key for a productive 'social dialogue' rests wit
h business; that business has no incentives to promote an activist, ma
rket-correcting social policy at Community level and will therefore li
kely use its codecision rights to delay or prevent legislation; and th
at neither the unions nor the European Commission, the incipient Europ
ean Community executive, have a capacity to make business change its s
trategic calculation.