KN,
Remember the US airlines didn't have to use contracting because of liberal US labor laws. The Europeans had tough laws on hiring, but especially on firing; expensive tax systems; until EU, labor could mostly only work within their own country, that is, national airlines. With integration, any line can hire among the Continent, hence far more competition amongst labor and more opprtunitity for labor to get into aviation. Ryan Air, Easy Jet could never have operated prior to EU integration. Contracting is, as much as anything, a way around the restrictive labor laws.
GF