The Europeanization literature has extensively examined the influence of the European employment strategy (EES) on Member States' employment policies. However, two least‐likely cases – Greece and Portugal – have been neglected in the literature. This article focuses on the activation of public employment services (PES), which has been one of the key elements of the EES. Based on a sample of 44 semi‐structured interviews and primary and secondary document research on seven reform episodes during 1995–2009, it finds that the EES altered Greek and Portuguese employment policies by empowering policy entrepreneurs and, when the latter were absent, through European Social Fund financial conditionality. While the literature considers policy learning as the chief EES‐Europeanization mechanism, little evidence is found herein to support such an explanation. The findings may be relevant for a number of EU policies based on voluntarism and EU funds, such as the new flagship EU initiative Europe 2020.