The politics of austerity in Europe has thrown traditional processes of policymaking between economic interest groups, governments and the democratic state into turmoil. This panel examines the implications for labour market outcomes, trade union legitimacy, government tenure, and welfare state redistribution.  The first paper examines how concessionary corporatism in three of Europe’s crisis states led to labour market dualisation, which eroded public trust in social partnership.  As unions displayed themselves as insiders during negotiations, they gradually lost legitimacy as political actors, whose traditional forms of concertation were perceived as inadequate by the public in managing the crisis.  The second paper examines union and government exchange via the rise of austerity related general strikes in Europe. Though unions have witnessed less success in securing reform concessions from governments after these types of strikes, their emergence also damages the electoral prospects of government.  The third paper examines the relative power of collective actors – unions and employers – in conditioning whether governments adopt a concerted or unilateral response to the crisis, and finds evidence to support a continuation of distinct national varieties of capitalism. The fourth paper examines the impact of the Eurozone crisis on welfare state redistribution. The paper argues that preferences towards austerity are more likely in labour markets with large segments of permanent workers, while preferences towards fiscal expansion are more likely in labour markets with large segments of temporary workers. Each paper examines the political consequence of crises for the democratic state in the study of comparative capitalism.