Abstract The open method of co-ordination (OMC) can contribute to the co-ordinated modernization of the national systems of employment and social protection in Europe, if it is institutionalized in a relatively stable way at the European level and if the European processes can influence effectively the national reform strategies. The first challenge was met successfully by the bureaucratization, codification and formalization of some co-ordination processes at the European level. These processes can be interpreted as the institutionalization of a social field. The second challenge refers to the need for an effective coupling between the European and the national arenas. Currently, the most important way of coupling these two social fields is based on mutual learning. Given the limitations of such a predominantly cognitive coupling, the Commission can either enforce the 'national ownership' of the co-ordination processes, improve the mutual learning processes or strengthen the strategic ('financial incentives') and normative ('legal obligations') forms of coupling between the European and national social fields.