Optimal Trade Union Responses to Expected Developments in European Industrial Relations

Table of Contents

List of Tables

Foreword

Bibliography and References

PART I
INTRODUCTION
1. Introduction
1.1 Problem Statement
1.2 Optimal Problem-Solving Perspectives
1.3 Thesis Set-Up
2. Economic Facts and Trends
2.1 The EMU Convergence Criteria
2.2 Unemployment in the European Union (EU)
2.3 Union Density in the European Union
2.4 Further Observations

PART II
ECONOMIC AND SOCIAL DEVELOPMENTS AND CHANGES IN THE INDUSTRIAL RELATIONS ENVIRONMENT
3. The European Union as a Global Competitor
3.1 Three Forms of Capitalism
3.2 How can the EU become Stronger?
4. Objectives and Preferences of the European Social Partners
4.1 The Social Partners
4.1.1 The UNICE
4.1.2 The ETUC
4.1.3 The EU and the National Governments
5. The Ideological Debate
5.1 Ideologies in Post-War Industrial Relations
5.2 Contemporary Thinking: The Rise of ‘Neo’-Ideologies
5.3 Neo-Liberalism and Neo-Pluralism Defined
5.3.1 Neo-Liberalism
5.3.2 Neo-Pluralism
5.4 Neo-Liberalism and Neo-Pluralism as Potentially Dominant Approaches
5.4.1 The Implications for Tomorrow’s Europe
5.5 The End of Ideologies in EU Industrial Relations?

PART III
THE STRATEGIC DEBATE
6. Planned versus Inevitable Trade Union Change
6.1 The Possible Convergence of Unions’ Actions and Interests
6.1.1 Must Alliances be formed?
6.1.1.1 Employees’ Fear of Future as Union Opportunity
6.1.2 Are Alliances a Long-Run Inevitability Concerning Strong Futures?
6.2 Decentralisation in Contemporary Industrial Relations
6.2.1 Collective Bargaining in Europe
6.2.1.1 The Agenda of Contemporary Collective Bargaining
6.3 Shaping the Agenda Today and Planning for Tomorrow
6.3.1 The Employers and the Employers Associations
6.3.2 The EU and the National Governments
6.3.3 The Unions
6.4 Implications and Expectations for the Future Agenda
7. Exogenous Economic Pressures and Variables
7.1 Multi-National Companies’ Effects on EU Industrial Relations
7.1.1 Effects on other Employers and EU Responses
7.2 Implications for the Advance of Decentralisation

PART IV
INSTITUTIONAL DEVELOPMENTS AND CHANGES IN THE INDUSTRIAL RELATIONS SYSTEM
8. The ‘Neo’-Roles of the European Social Partners
8.1 The EU,UNICE and the National Governments
8.2 The ETUC and the Trade Unions
8.2.1 Membership versus Representation: The Debate
8.3 New Roles and Functions for the Trade Unions
9. Culture and the Welfare State in Europe
9.1 Culture in Europe
9.1.1 Contemporary Economic Thought on Culture
9.1.2 Is Culture a Tool or an Obstacle in European Decentralisation
9.2 The Welfare State and Social Security in the EU
9.2.1 Searching For a Uniform European System
9.3 The Neo-Liberal Standpoint and Influence
9.4 Implications of System Search on Trade Unions
9.4.1 Trade Union Inclusion in the New System

PART V
CONCLUSION
10. Summary and Conclusion
10.1 Summary
10.2 Conclusion

TABLES

Table 1 Basic Economic and Monetary Indicators in the EU

Table 2 Unemployment Rates in the EU, 1989-1997 (%)

Table 3 An International Comparison of Union Members as a Percentage of all Employees, 1979-1985

Table 3.2 Union Density Rates, 1995

A. Abstract

While contemporary writings on industrial relations debate endlessly concerning possible national improvements or international convergences of unions and labour systems, few if any make the attempt to move on from a given expectation and debate optimal responses by the parties involved. Keeping the EMU convergence criteria and the increasing competitive pressure of a global market in mind, I make clear predictions about my expectations for the future of European industrial relations. As it stands, the trade unions throughout Europe are not in an optimal position regarding the future of collective bargaining at any level, as they are seen as main culprits in the stagnation of competitive advance. The ideological advance and economic implementation of neo-liberalism has clearly limited their negotiating power at the bargaining table, and dwindling membership rates are proof of decreased trust and confidence by employees everywhere. It therefore lies in the unions own hands to optimally adapt to the situation. Optimal response, in my opinion, is to converge interests and actions in a modern way. This modernity is reflected by not fighting the developments, but moving with them, and creating an optimal stance in future dialogue and representation. The unions cannot expect much support from the national governments in this transformation, so they must re-orientate their expectations and demands to a level both acceptable to the other social partners and beneficial for their own members. Implementing new kinds of services for the members and becoming involved in the development of a European system of social welfare are but two examples. The fundamental idea behind any such modernisation, however, is that unions must become potential representatives for all kinds of workers, whether unemployed or highly-skilled, and not only the traditional middle-class employed. Only then can the unions throughout Europe expect to remain respected as serious social partners and players, albeit in a different way than in the post-war decades.

PART I

INTRODUCTION

1. Introduction

Discussing contemporary industrial relations has become an economic matter and is no longer largely a political issue. While traditionally trade union strength was largely assessed through its political allies’ strength in government, trade unions no longer enjoy such protection. Harsh economic reality has caught up with them also, and they and their successes are now largely left to their own resources.

Labour economics is becoming a central issue in the debate of global competitiveness. The economic results obtained by a country’s economy strongly determine the negotiating and lobbying power of its trade unions also. Employee representatives have the best chance to be taken seriously when its governments are satisfied with domestic performance. In his ‘War of the Models’, Freeman^[1] agrees with the rising importance of labour economics, by noting that labour economists have become central players in economic policy. Labour economics and the institutions and rules that govern labour markets have moved from the periphery to the centre of contemporary global economics. So if we want to analyse Europe’s future as a global player, industrial relations is a vital subject to discuss. Wage differentials and earnings inequality, unemployment structure and insurance, collective bargaining, and modes of compensation all are issues that now lie at the heart of the matter.

1.1 Problem Statement

Europe’s trade unions have experienced continuous membership loss over the last two decades. Historical theories of industrial relations believed that labour organisations are particularly strong in times of economic downturn and resulting individuals’ fears of unemployment. However, the European Union (EU) experienced a notable economic recession in 1992, and unemployment rates increased heavily, while trade unions continuously lost members. This makes clear that European unions are experiencing a crisis of new dimensions and sorts.

This thesis will discuss the reasons behind such developments, and will discover that increased decentralisation in bargaining and negotiating have seemingly lessened the importance of labour unions. Neo-liberal economic advance typifies the roles that the employers and governments are playing. While the EU and national governments remain passive and are not aiding union revival, employers are discovering the benefits of decentralised bargaining and increased flexibility of the workforce due to decreased regulations. Neo-liberalism is creating an unfavourable playing field for the unions, and this thesis reasons that they must not fight it, but adapt to it.

The main problem statement in this thesis is:

- How can the ETUC (European Trade Union Confederation) and the individual trade unions optimally respond to likely industrial relation developments in a converging European Union.

1.2 Optimal Problem-Solving Perspectives

Dunleavy and O’Leary^[2] note the necessity to ‘update our intellectual toolkits’ to cope with the inherent complexity of modern social systems. This thesis will take the example of Europe and its convergence as the complex modern social system. It assumes that Europe is striving for an eventual single system of industrial relations, irrespective of present existing national differences. To do this, we must take a step back in order to rethink some of the prevailing ideas and images that have shaped the political understanding of most modern citizens in Western Europe^[3]. A number of elided terms which have conditioned our political culture require separation, especially state and nation, nationality, culture and political identity, democracy and sovereignty. In Curtin’s search for a ‘postnational democracy’, she stresses the need not to make a ‘bonfire of the certainties’ but rather to re-imagine different variables. Thus the reader of a thesis such as this should not make the mistake to dismiss the fundamental ideas only because he disagrees with specific arguments or assumptions made. Instead he must understand the variables, and re-imagine for himself what likely outcomes might be following sound economic reasoning, irrespective of personal political preferences.

In my opinion, many writers in this field of labour economics make the mistake of comparing individual unions or countries, while losing the overall picture of developments. The discussion is no longer about one union or the other, it is about the general state of affairs, and how the European union movement as an entity can optimally respond. As Freeman^[4] agrees, with various national differences like regulations, unionisation and centralised bargaining in play, the ability to make inferences from cross-country comparisons is extremely limited. The underlying problem is that institutions that work in one way in one country may work differently in another because the rest of the institutional structure differs. This thesis searches for the most likely future European structure, and finds it through the expected advance of neo-liberal economics and neo-liberal preferences. From that point on, implications for the trade unions can be made.

Trade unions across Europe have experienced disappointing times for the last two decades concerning membership and lobbying power, and while initial neo-liberal expectations makes their future look even bleaker, this thesis stresses that it could be a blessing in disguise. Trade unions might need a wake-up call to stay alert to economic, political and social progress, and use this alertness to regain power, even under seemingly unpreferable conditions.

This thesis will primarily discuss the trade unions’ optimal means of adaptation and accommodation to trends which they have seemingly little influence on. Some readers might want to explore whether these trends are optimal or whether they are even realistic, but this is another approach entirely. I take these trends as givens and relatively static as such and explore the resulting trade unions’ optimal modes of response. It is important to understand that I do not want to debate whether neo-liberalism is preferable or not. I expect it to continue its advance in economics and politics throughout Europe, and move on from that point by discussing how the social partners, especially the trade unions, can best adapt.

1.3 Thesis Set-Up

To analyse the situation as introduced above, a whole spectrum of issues will be discussed.

Part 1 of this thesis will continue with section 2 which notes important facts and trends concerning unemployment and EMU (European Monetary Union) convergence criteria in Europe as well as union membership rates. That these tables are important in contemporary European economic reasoning will become clear.

Part 2 of the thesis is concerned with economic and social developments and changes in the industrial relations environment.

Herein, section 3 will introduce careful predictions on how the European Union can become a stronger competitor on the international market, using initial examples of reforming the labour market compared to its Asian and American counterparts.

Section 4 introduces us more directly to the various social partners concerned. While the UNICE (Union of Industrial and Employers’ Confederations of Europe) represents the employers, the ETUC represents many interests of the unionised worker. Their and the government’s preferences are made clear concerning obtaining realistic goals in industrial relations and the economy. Section 5 opens the ideological debate. Post-war thinking and handling of industrial relations are discussed, while the contemporary rise of post-Fukuyama ‘neo-ideologies’ is introduced. What this means and what it might imply for the future of European labour relations is also discussed, coming to the conclusion that we might be heading in the direction of a ‘post-industrial’ society. The effects this could have on the trade unions becomes clear in the following sections.

Part 3 of this thesis opens the strategic debate.

Section 6 in this debate concludes that it is in unions’ best interests to form alliances with European counterparts. Supranational organisations have more lobbying power not only through increased membership numbers, but also through ‘Europeanisation’ of interests, like those ETUC represents at a European level in Brussels. The section discusses optimal and expected ways that such alliances might be formed. It will then discuss the terms decentralisation and collective bargaining more directly, following the conclusions it has made about possible future scenarios in European industrial relations. The employers’, employees’ and governments’ best interests are then reassessed, following section 4 but using these new arguments and expectations.

Section 7 discusses the important exogenous pressures on the European system. While the previous pages were solely concerned with purely European preferences, it must be noted that foreign companies and ideologies play a direct role in the formation of any new system, especially in the increasingly global market as discussed in section 3. Section 7 concludes with how these exogenous pressures might influence progress.

Part 4 of this thesis is concerned with the institutional developments and changes in the industrial relations system.

Section 8 discusses the ‘neo’-roles, following the ‘neo’-ideological expectations, of all the social partners. It will become clear that especially the trade unions are affected by this. It will turn out that the changes do not necessarily need to be a threat for them, but could be a chance for renewal and improvement as mentioned above.

Section 9 focuses on two aspects which may not be ignored; the first is culture and the second social security and welfare systems. Cultural differences and similarities throughout Europe will have large implications for any process of renewal, and how these could affect industrial relations will be discussed. The study of welfare systems is directly linked to this and follows Rein and Rainwater’s^[5] opinion that:

”The development of the welfare state must be understood in the context of the development of labour relations institutions more generally”.

The section will show that, especially here, lie opportunities for structural union renewal.

The thesis will summarise and conclude in section 10 of part 5 .

2. Economic Facts and Trends

2.1 The EMU Convergence Criteria

Modern economic thought concerning the present and the future in Europe is inseparably linked to the convergence criteria concerning the EMU (European Monetary Union). The 1997 Annual Review of Industrial Relations at EU level^[6] discusses the implications the EMU convergence criteria has on industrial relations in Europe and reminds us of the benchmarks:

- Inflation – an annual rate of 2.7%. This reference value was calculated by adding 1.5 percentage points to the simple arithmetic average of the rates of the 3 states with the lowest inflation levels – Austria, France and Ireland,
- Government debt – no more than 60% of GDP, or moving towards this benchmark,
- Government deficit – no more than 3% of GDP,
- Exchange rate and long-term interest rate stability.

Table 1 Basic Economic and Monetary Indicators in the EU^[7]

These results indicate that most countries are fully or close to satisfying the criteria. However, all countries have at least one index that they are close to failing or worse. The implication in context with this thesis is that all member states have few buffer zones and must continuously stay alert to fluctuations in results. That this leaves little space for relaxation concerning stringent rules and regulations in the economy is obvious. That this also affects the unions will become clear in this thesis.

2.2 Unemployment in the European Union (EU)

As 2.1 showed, most countries that have not yet met the criteria are sufficiently approaching the reference values at a satisfactory pace. However, it is no secret that much budgetary stringency has been necessary to achieve satisfactory results, and attention has increased concerning the impact all this has on industrial relations. Improvement of economic parameters has had adverse effects on employment throughout the member states, and the unions are blaming tight public budgets, among other things, for these developments. The trend in table 2 clearly indicates that concern is in order.

Table 2 Unemployment Rates in the EU, 1989-97 (%)^[8]

Abbildung in dieser Leseprobe nicht enthalten

In the last years much social dialogue between the various social partners concerned has addressed how to tackle these developments. Employment creation, especially for the disadvantaged, is a central issue in contemporary European politics. Younger, female, disabled and low skilled workers are especially concerned.

2.3 Union Density in the European Union

This thesis is about the future of industrial relations in Europe. An objective reader would expect the trade unions to be doing very well under these circumstances of increasing unemployment and worker concerns, but they are not. The reasons for this will be sought and tackled later in the thesis. Table 3.1 and 3.2 below give figures for union density in 1995, as calculated in the International Labour Organisation’s 1997-98 ‘Working Labour Report’. Table 3.1 give us some developmental statistics concerning European trade union membership from 1970-1985. It is clear that especially after 1980, membership began to drop.

Table 3.1 An International Comparison of Union Membership as a Percentage of all Employees, 1970-1985^[9]

Country 1970 1975 1980 1985

France 23 23 19 na

Germany (FR) 37 39 39 37

Ireland 52 53 55 46

Italy 33 42 43 40

Netherlands 38 39 37 29

Norway 62 61 65 na

Sweden 74 79 88 na

United Kingdom 49 51 53 44

Only the Scandinavian countries experienced a membership increase during the 1980’s, but this is not surprising due to the expansionist welfare and social security politics implemented during that time

Table 3.2 indicates that for most countries, union membership decreased further from 1985-1995.

Table 3.2 Union Density Rates, 1995^[10]

Abbildung in dieser Leseprobe nicht enthalten

* Calculated as union membership as % of wage and salary earners

2.4 Further Observations

In the context of this thesis, many other issues are important also, such as the ideologies and preferences of the dominant parties throughout Europe, for example, or the various systems of social security and characteristics of the welfare states. These issues will come into focus later. In the context of space and what this thesis is about, it is important to observe the general picture, but scrutinise only those aspects that seem central to the debate.

PART II

ECONOMIC AND SOCIAL DEVELOPMENTS AND CHANGES IN THE INDUSTRIAL RELATIONS ENVIRONMENT

3. The European Union as a Global Competitor

Europe must constantly assess its trading power and competitiveness. Economic success or failure is no longer an estimation of own performance. The global market has created a comparative and competitive stage, where own performance is dependant on the other players. Vilrokx^[11] uses the phrase:

“Think Globally, act locally”

which refers to a macro-level reconceptualisation of dependency relations. Europe is dependent on the other global players; all its economic decisions, also those of industrial relations, must keep this in mind. And thus we should not ignore the apparent differences.

3.1 Three forms of Capitalism

I will identify three basic models of capitalism. Belous (1992) presupposes a different set of institutional relationships and market dynamics for each of these three, and uses Japan, the USA and Europe as the prime representatives for each model.

The USA represents ‘Contingent Capitalism’. Under this very classical liberal mode of organising an economy, government intervention is at a minimum, and ‘laissez-faire’ is the preferred state of affairs. For the labour unions, this provides a difficult setting. The focus is on the quantity of jobs, not the quality of them. Part-and fixed-time employment contracts are no rarity, and worker representation is thus hampered. On the other hand, we see the Japanese ‘Keiretsu’ capitalism. Here, large power distance and group identification determine the daily work. Organisations are run like families, and employees feel a great sense of loyalty to these. Of course labour unions are generally not strong nationally under these conditions. Employee interests are organised on the firm level, but with limited worker lobbying power compared to Europe.

Now the European labour market is called the representative of so-called ‘Compassionate or Command Capitalism’. Belous classifies this as a system where the government has much regulating power, and social equity, community norms and values are a central issue. Social partners accept and respect each other, tripartite negotiating is an accepted form of mediation, and generally the unions should have a strong influence. An overriding classification for this system would be to call it a form of institutional rather than a neoclassical industrial relation system.

Now, the superiority debate concerning the various models of capitalism is an issue apart, but in the realm of industrial relations and global competition, the European model has had to endure much critique over the last years, especially during the 1992 slump, when inflation and unemployment increased drastically. Unemployment has been and continues to be lower in the USA and Japan than in Europe. US labour flexibility and employment-at-will doctrines allow their labour market to adapt to changes much quicker and better than in Europe, where employees are protected by a network of rules and regulations concerning employment and dismissal.

The point here is that the future of a successful European economy lies in its ability to compete internationally. How it can achieve this is a fundamental economic issue and one which also affects the economics of industrial relations as mentioned in the introduction.

3.2 How Can the EU become Stronger?

If the European Union remains the main representative of compassionate capitalism, it is clear by now that it lies on a very different foundation of economics than its US or Japanese counterparts. But it is clear that each system has its downsides. Japan and especially the other ‘Tiger’-economies in Asia have been economically struggling over the last years, Europe has a comparatively very high rate of unemployment, and the USA struggles with great income and wealth inequalities. So, if the EU manages to decrease unemployment, does this mean that they will adopt wealth inequality and so forth? Questions like this make the whole issue quite metaphysical in that we do not know what the lesser evil is in contemporary labour economics. Following the title and introduction of this thesis, the issue here is whether decentralisation of the labour markets, guided or not, will improve the situation. Now whether the EU must become economically stronger, while obviously being preferable, depends largely on its global counterparts and their economic performance, and is not the main issue here. We must find the optimal system to see how to improve the European situation, and in the context of this thesis whether decentralisation in industrial relations is a part of this possible improvement.

Freeman, whose ‘War of the Models’ was mentioned in the introduction, comes to the conclusion that labour market analysts must still learn much more before they can decide the winner of his ‘War’. An interesting fact is, however, that he states that we can learn from the small economies as much as from the large economies. A thorough analysis of institutions, elasticities and policies put together can lead the way to improved conclusions. Thus all models of industrial relations in Europe or throughout the world can and must be used as potentially ideal models of functioning. In the context of what should be the EU’s preferred model of capitalism to become competitively stronger, I can observe whether a movement towards contingency or keiretsuism might be wiser in the realm of strengthening this global position.

It is no secret that the strong labour unions and their centralised decision-making in various European countries have often been cited a black sheep in Europe’s economic progress. That this had to change seemed inevitable, especially to the neo-liberal thinkers. Already in the 1980’s, predictions in this direction were made. Baglioni went as far as to calling this a ‘return to normalcy’^[12]. He recognised that reactions were taking place to the extensive post-war period of union advance in bargaining demands and work rules. Changes in the economic and political climate ended this excess to be succeeded by a range of adjustments and experiments concerning the future. So, in the 1980’s, Baglioni and many others began to recognise the trend towards decentralisation, but it ultimately took the 1992 economic depression to create full-scale awareness of the need for a successive revision of the criteria for the use and valuation of labour. The depression clearly proved the limitations of a rigid labour market with too low flexibility and adaptability; the lobbying power of labour unions were given the blame for this by many, especially the more liberal thinkers.

Not all will agree that this thinking should be included under the heading of how Europe can become stronger, but it shall remain the underlying thought throughout this thesis because I believe in the credibility and importance of decentralisation in European industrial relations. This thesis will thus continue to both analyse why this preference exists and how the trade unions can respond optimally.

4. Objectives and Preferences of the European Social Partners

While the previous sections have introduced the frameworks and outlines of the situation, I shall continue by introducing the partners involved in this scenario of European industrial relations. Only a full understanding of how these groups function and think can help the reader make analytical expectations for himself.

4.1 The Social Partners

Traditionally, when we talk about tripartite decision-making in industrial relations, we mean the three ‘social partners’ government, employers’ organisations and employees’ associations. Concerning the future of industrial relations in the EU, we must increase the scale somewhat and redetermine the social partners at times. The three main players in this context are the ETUC (European Trade Union Confederation), the UNICE (Union of Industrial and Employers’ Confederations of Europe) and the EU representing and co-operating with the national governments.

The social partners are adapting to the new political, economic and social challenges presented by the future of the EU and the EMU, and the negotiating between them represents this. While the UNICE continuously argues for decentralisation in the labour market and increased flexibility of the workforce, ETUC is hoping not to follow suit of many national trade unions and lose power as a representative and negotiator for workers on the European level. The EU and the national governments are either still coming to terms with the new climate of negotiation and have not fully determined their stance in the debate yet, or are remaining diplomatically passive for the time being.

The main difference at the moment is that two of the three social partners, the UNICE and the EU, can make their preferences become their objectives due to a stronger starting point. The ETUC, however, seems to accept its weaker position as social partner, and is making amends to fasten its stance and not lose power. Some might not agree with this but this thesis will tackle this point.

4.1.1 The UNICE

Shifts in the industrial relations environment have resulted in a change in employers’ preferences over employee relations. This preference for flexibility is accompanied by a tendency towards unilateral job regulation within the firm or establishment. The extent to which a pattern of decentralisation and unilateralism has emerged differs, since the institutional features of the industrial relations systems mediate the process.

The UNICE in Brussels has a rather passive role insofar that it can represent a set of interests with which most if not all employers throughout Europe can identify and agree with. A trend towards decentralisation of an increasing multitude of aspects of the employment relationship will be applauded by the UNICE, and if this trend is in motion they will do their best to aid it and hinder counter-productive pressures from the employee representatives, notably the ETUC. So the objectives of the UNICE is to guide and prolong this trend and their preferences are along the same lines.

An example of this comes from Eironline^[13], which reported on the ETUC and UNICE responses to new employment guidelines put forward by the commission in October 1998. While there was general consensus on emphasising the importance to pursue economic, social and labour market policies which are mutually re-enforcing, the UNICE made its preferences clear. It emphasised the need for a continuance and strengthening of the structural reforms implemented in many member states in the run up to the deadline for the EMU convergence criteria. In its eyes, it is vital that employment and employability is to be encouraged through greater labour market flexibility and the lowering of indirect labour costs without setting quantitative targets.

So when analysing the UNICE objectives for the future, it becomes clear that it wants employment to be created by encouraging business formation with bureaucratic, fiscal and legislative hurdles removed. This liberal stance means that in the context of industrial relations, it advocates a lesser role for the trade unions concerning lobbying power, especially concerning quantitative issues such as wages or working hours. It was thus no surprise that in the UNICE paper on the European Commission Communication on ‘Adapting and promoting the social dialogue at Community level’^[14], it applauded the fact that the Commission underlines the autonomy of the social partners in developing their own structures with the participants of their own choosing. This represents a further shift towards decentralisation in negotiations and thus is an extension of the employers’ preferences in general.

4.1.2 The ETUC

The ETUC’s stance on the issues mentioned above is that it supports the development of a co-ordinated growth and employment-friendly macroeconomic strategies, where verbal commitments in relation to job creation are backed up by financial commitments. Its general objective is to increase employment throughout Europe by financial backing and government intervention if necessary, whereby income inequality and further social inefficiencies must be tackled directly. That these preferences cannot be ignored becomes clear upon the realisation that the ETUC represents approximately 95% of the organised working population in western Europe, equal to about 40% of the total number of European employees^[15], however diverse these groups of employees may be. Over the years, national diversity manifested itself essentially through the multiplication and fragmentation of bargaining levels, and new arrangements regarding the relative importance of legal versus negotiated rules had their effects also. Adding continuously changing patterns in the relationship between political parties and trade unions brings us to the conclusion that concerning objectives and preferences, the ETUC has attached greater importance to contractual rather than legalistic rule-making procedures at the European level.

The ETUC has learned to adapt to modern times and difficulties in a Europe that is experiencing increasing decentralisation in its industrial relations but remains the guardian and promoter of Keynesian economic policies favourable to employment and the welfare state model. Many Keynesians fear that the diversity of industrial relations systems throughout Europe means that the trade unions will become increasingly weak due to employers’ interests being set and promoted at the European level and the fact that it is easier to destroy and undermine small and segmented unions than a large supranational one. The ETUC recognises this danger and often plays a sort of catching-up role on behalf of its affiliates by expressing its standpoint on issues on the Commission’s agenda. Although such standpoints were not always considered fully, the ETUC felt bound to act this way in order to offset the influence on the Commission from other social and political actors at Community level^[16]. A main objective of the ETUC for the future is thus to represent its interests as a supranational body, with consensus by its affiliates, and as a serious social partner in tripartite agreements. Its preferences are clear, and will be further discussed later in this thesis, but a continuing creation of employment through employment-friendly macroeconomic strategies remains the core of its thinking.

4.1.3 The EU and the National Governments

When talking of the objectives and preferences of the social partners, it is striking that the interests of the EU and its affiliates are difficult to classify. The EU wants to represent all its inhabitants wisely and justly but must remain precautious about its competitiveness and economic future, as section 2.1 showed. So there is a clash of interests. To gain popular support, the EU should work in the interest of employees throughout Europe, but at the same time it recognises that decentralisation in its industrial relations could have beneficial effects on its economy.

This is clearly the reason why for the time being the EU remains relatively passive in its function, being a negotiator, advisor and a promoter of social dialogue between the employers and the employees. It is momentarily content with the national governments keeping control with regard to national juridical decisions in industrial relations. While there is a clear increase in social dialogue on the European level concerning a number of issues, the political and relational frameworks concerning all levels of industrial relations remain the individual members’ obligation.

However, looking at Europe more generally, the usurping of national legislative power by the European Community is often direct and striking. Even putatively ‘intergovernmental’ decisions increasingly impose requirements that come very close to harmonisation obligations and leave virtually no discretion to national authorities. Keeping this in mind, the EU probably does well to remain relatively passive and not pass direct judgements about their preferences, as they expect no benefits from direct interference for the time being. Curtin (1998) notes that in Europe a serious re-evaluation of our ‘shared understandings’ must take place^[17]. The political re organisation of European space must build on the history of European modernity but go beyond the now exposed limits of the nation-state and the principle of national sovereignty. And in the context of industrial relations, the EU recognises that this is best done without their interference but with their aid and guidance when necessary. To prove this point of passiveness, Guéry (1992) noted that although the social partners have clearly received the green light to proceed towards Community-level collective bargaining, the fact remains that no treaty nor any other kind of text can make it an obligation to negotiate, let alone conclude an agreement^[18]. The fact made is that flexible wording in a number of Maastricht Treaty articles is proof of the wish to give management and labour the greatest possible freedom in this respect. The EU and the national governments thus clearly had and still have their preferences in this respect. As a final example, the European Commission White Paper of 1994 concerning wage negotiations makes clear that the role of the trade unions in discussions on such issues should be a quite limited one^[19]

[...]

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^[1] Freeman, p.3

^[2] Dunleavy and O’Leary p.272

^[3] Curtin, p.5-6

^[4] Freeman,p.6

^[5] Rein and Rainwater in Esping-Andersen et al. (eds.), p.152

^[6] Eironline, December 1997

^[7] Source, * Eurostat (1998), ** European Commission Convergence Report (1998)

^[8] Source, *Eurostat, **National Statistical Data

^[9] Source, Booth, p.4

^[10] Source, ILO

^[11] Vilrokx in Leisink et al. (eds.), p.37

^[12] Baglioni, p.33

^[13] Eironline, December 1998

^[14] Euronline, June 1998

^[15] Nagelkerke, p.347

^[16] Goetschy in Leisink et al., ch.15

^[17] Curtin, p.5

^[18] Guéry, p.583

^[19] Leisink et al., p. 5