The Europeanisation of collective bargaining
It seems inevitable that increasing economic integration and competition within Europe will have some influence on national collective bargaining. The aim of this comparative study is to provide an assessment, as of summer 1999, of the extent to which the processes and outcomes of bargaining in the 15 Member States of the EU, plus Norway, are developing a cross-border, European dimension. The study outlines the diverse processes, both implicit and explicit, which can be said to be leading towards a "Europeanisation" of collective bargaining. Developments across the 16 countries concerned are examined at intersectoral, sectoral and enterprise levels, with a special focus on metalworking and financial services, and the views of the social partners are summarised.
Introduction
Since the adoption in 1985 of the proposal to create the Single European Market (SEM), the European Union has experienced ever-closer economic integration. This is particularly true at the level of multinational companies, which have often restructured their operations so as to create new management structures at European level able to integrate production, distribution and marketing across Europe. Nationally-based companies have also become more and more affected by the increasing international competition within the SEM. With the introduction of Economic and Monetary Union (EMU), most observers assume that the process of economic integration will accelerate further and intensify competitive pressure on national enterprises and economies.
Since wages, working time and employment and working practices are seen as important components of the "regime competition" between European countries, European economic integration is likely to have a clear influence on the processes and outcomes of national collective bargaining. So far such influence has been mainly implicit- when employers and trade unions use international comparisons or refer to industrial relations developments in other countries in the course of national and local negotiations. Recently, however, a small number of national collective agreements, concluded at either intersectoral, sectoral or enterprise level, have contained provisions which explicitly link certain bargaining outcomes to developments in other EU countries.
In response to these developments, European trade unions have started to discuss new strategies for improved cooperation on bargaining issues, as well as for European-level coordination of national bargaining agendas and outcomes. Amongst employers, there is less indication that employers' associations have undertaken any formal initiatives of the kind taken by trade unions, although a range of informal contacts does occur between associations in different countries. At the level of the individual employer, however, there is considerable evidence that some multinational companies are pursuing common or similar bargaining objectives in local negotiations over working and employment practices in their operations in different countries.
The aim of this comparative study - based on contributions from the national centres of the European Industrial Relations Observatory (EIRO) - is to provide an assessment of the extent to which the processes and outcomes of collective bargaining in the 15 Member States of the EU, plus Norway, are developing a cross-border, European dimension. Whilst developments at EU level, such as the European social dialogue, are an important part of the national-level context, these are not of central concern in this study. The objective is also to portray the diversity of the implicit and explicit processes which are leading towards a "Europeanisation" of collective bargaining. This is done by reviewing developments at each of three levels - intersectoral, sectoral and enterprise - across the 15 EU Member States plus Norway. In order to highlight specific developments at sector and enterprise levels, EIRO national centres were asked to pay particular attention in their reports to two sectors: metalworking and financial services. The perspectives of the social partners on possible trends and developments in national collective bargaining in the light of ever-deepening economic integration in the European Economic Area (EEA) are also examined.
Developments at national and/or intersectoral level
At national and/or intersectoral level, three forms of Europeanisation of collective bargaining can be identified:
- the conclusion of new tripartite "social pacts" at national level which create new constraints for collective bargaining in order to improve national competitiveness within the SEM and to contribute to the country's effort towards fulfilling the convergence criteria for EMU;
- the conclusion of new bipartite intersectoral agreements which explicitly link certain bargaining outcomes to either developments in other EU countries or to the new macroeconomic framework conditions of EMU; and
- unilateral initiatives by national social partner organisations aimed at cross-border coordination of collective bargaining.
Social pacts and collective bargaining
The 1990s have seen the conclusion of new tripartite agreements at national level in several European countries. Almost all of these national "social pacts" have been influenced to a greater or lesser extent by European integration. Typically, these agreements contain a commitment on the part of those involved in collective bargaining to follow a policy of wage restraint in order to improve national competitiveness. This has been seen as representing a new form of "competitive corporatism". Thus, in the Norwegian social pact covering the 1993-7 period, it was stated that wages should grow at a rate approximately 2% below that of Norway's main competitors.
More specifically, these social pacts have often been seen by the countries concerned as an important contribution towards fulfilling the convergence criteria for EMU and inclusion in the euro single currency, laid down in the Maastricht Treaty on European Union. A policy of wage restraint has aimed at helping to keep inflation rates down and reducing state deficits, in accordance with the convergence criteria. Three examples (Ireland, Italy and Portugal) are given in table 1.
| Ireland | The current national agreement, Partnership 2000 (1997-2000), makes an explicit reference to the Maastricht criteria and EMU (IE9702103F). Among other matters, the agreement specifies maximum limits for wage increases in the private and public sectors, with the express aim of improving competitiveness and fulfilling the EMU convergence criteria. |
| Italy | The July 1993 tripartite national agreement led to the introduction of a new two-tier bargaining structure based on national agreements at sector level, in which increases in pay are determined according to the projected inflation rate, and agreements at company level, in which movements in pay are linked to corporate performance. In 1997 a report commissioned by the Italian government came to the conclusion that the 1993 agreement had facilitated the curbing of inflation and the improvement of public finances to the extent that the criteria for membership of EMU could be met (IT9803223F). Subsequently, the new tripartite Social pact for development and employment of December 1998 paid particular attention to the consequences of EMU for economic policy choices and industrial relations (IT9901335F). In an explicit reference to conditions in other European economies, the new pact stipulates that the reference point for future national sector-level negotiations should be not the national, but the average European, inflation rate. |
| Portugal | The tripartite Strategic concertation pact of December 1996 (1996-9) "has as its goal the full integration of Portugal in the building of Europe, through improving competitiveness and promoting employment and social cohesion" (PT9808190F). The pact includes wage guidelines which recommend that increases should no be higher than one-half of the increase in productivity. The social pact was seen as an important factor in helping Portugal to become a member of EMU. Since, however, one of the major Portuguese trade union confederations (CGTP) did not sign the pact, in early 1998 the Portuguese government relaunched a "social dialogue on strategy for the euro", aiming to convince all trade unions of the need for an "EMU-compatible" collective bargaining policy (PT9803171N). |
Europeanisation of bargaining at intersectoral level
The clearest instance of Europeanisation of collective bargaining at intersectoral level is to be found in Belgium. After the Belgian social partners failed to reach an intersectoral agreement in 1996, the Belgian government enacted a "law on competitiveness" which included the introduction of a legal "wage norm" for the years 1997-8. Under this wage norm, increases in Belgian wages and salaries were not to exceed the average wage increases in Belgium's neighbouring countries France, Germany and the Netherlands. This law was very much inspired by the government's aim to fulfil the EMU convergence criteria. In December 1998, the Belgian social partners concluded a new intersectoral agreement for the years 1999-2000 which took on board the concept of a "wage norm" related to wage trends in Belgium's neighbouring countries as the key reference point for average wage increases within Belgium. According to the new intersectoral agreement, the maximum wage increase allowed for 1999-2000 may not exceed 5.9%, the limit calculated by the bipartite Central Economic Council (Conseil Central de l'Economie/Centrale Raad voor het Bedrijfsleven) on the basis of the assumed developments in France, Germany and the Netherlands (BE9811252F).
A striking example of the specific impact of EMU on collective bargaining is Finland, where in 1997 the social partners reached an agreement on the introduction of so-called "EMU buffers" (FI9711138F). In order to cushion the effects of any "asymmetric cyclical economic shocks" under EMU, stemming from the particular nature of the international exposure of the Finnish economy, the social partners agreed to establish two "buffer funds". One is related to the occupational pension scheme and the other to the unemployment insurance system. In periods of economic upturn, employers and employees will pay slightly higher social security contributions than necessary in order to build-up the buffer funds. As a result, during periods of recession the buffer funds can be drawn on for paying additional social security costs.
Unilateral social partner initiatives aimed at cross-border coordination of bargaining
National trade union confederations use various means to exchange information and to cooperate on collective bargaining matters, either through the European Trade Union Confederation (ETUC) or at a bi- or multilateral level. The so-called "Doorn initiative" by Belgian, German, Luxembourg and Dutch trade union confederations (DE9810278F), aims to go considerably beyond this and establish an explicit cross-border coordination of collective bargaining policy amongst the confederations concerned. In September 1998, these unions met in the Dutch city of Doorn and adopted a joint declaration. This emphasises the need for close cross-border coordination of collective bargaining under EMU in order to prevent possible competition on wages and working conditions, with the prospect it raises of a downward spiral. The core of the "Doorn declaration" is the definition of an "orientation formula" for national bargaining, according to which trade union negotiators should seek collective agreements which provide at least the equivalent of "the sum total of the evolution of prices and the increases in labour productivity". The confederations involved committed themselves to rejecting demands for any national policy of wage restraint aimed at securing cost advantages in competition with neighbouring countries. ETUC has welcomed the Doorn initiative, adding that these kind of initiatives "must be extended first to the entire euro zone and to all countries concerned" (Towards a European system of industrial relations, resolution adopted at the 9th ETUC congress in Helsinki, July 1999).
On the employer side, there exists no comparable initiative towards a cross-border coordination of collective bargaining policy. Contacts among national employers' associations on bargaining topics are almost exclusively confined to an exchange of information. However, there are a few examples of increased cross-border cooperation on wider industrial relations matters. In February 1998, for instance, French and Italian employers' confederations signed a common declaration outlining their disagreement with the legislative proposals in the two countries to reduce the working week to 35 hours (IT9802148N).
Developments at sectoral level
At sectoral level, two main types of Europeanisation of collective bargaining can be identified. The first type refers to the widespread use of cross-country comparisons in sectoral bargaining in order to justify bargaining demands. The second type could be described as social partner initiatives for cross-country coordination of collective bargaining. These initiatives, which come primarily from the trade union side, are taken at either European or bi- or multilateral level.
The role of cross-country comparisons in sectoral bargaining
At sectoral level, there exist only a very few collective agreements which make explicit references to pay and working conditions in other countries. The most explicit case identified is in the Italian banking sector, where the social partners in 1998 concluded an agreement on gradual labour cost reductions with the aim of reaching "the average level of other European countries" (IT9803321F). For many years the Italian Banking Association (Associazione bancaria italiana) has regularly published an annual report which compares pay and labour costs in Italian and European banks.
Apart from a few rather exceptional examples of agreements, however, the use of cross-country comparisons of pay and working conditions in the negotiation process is widespread in almost all European countries, since collective bargaining outcomes are seen more and more as a major aspect of international competitiveness. References to developments in other countries are made by both employers' associations and trade unions in order to strengthen and to justify their own bargaining demands.
The geographical dimension of these comparisons reflects to a great extent existing economic interdependencies and trade relations. Table 2 provides a number of examples.
| Denmark | Wage developments in Germany and Sweden play an important role at the pre-negotiation stage and in the negotiations themselves within Danish export-oriented sectors. |
| France | The use of cross-country comparisons is very common among both employers' associations and trade unions. In particular, the results of the German metalworking agreement are widely discussed in the French media and by the social partners. Currently, the negotiations over the introduction of the 35-hour week (FR9906190F) are accompanied by constant references by both parties to foreign experiences with working time reductions. |
| Netherlands | The sector-level bargaining parties (particularly in metalworking) make regular references to sectoral developments in Belgium and Germany. |
| Spain | The content of the joint trade union guidelines for the 1999 metalworking bargaining round was to a certain extent influenced by the result of recent bargaining in German metalworking. A particular role in this context is played by the close relationship between Spanish and German trade unionists in the automobile industry, especially through the cooperation of trade unions at Volkswagen and SEAT, which has reinforced sectoral cooperation. |
In southern European countries, debates on collective bargaining policy are often influenced by the question of a possible European harmonisation of wage and working conditions standards. In Spain, for instance, both collective bargaining parties use European references for different reasons: while trade unions stress the need to improve pay and conditions to correspond with European averages, employers' organisations reject the aim of rapid harmonisation and seek a bargaining policy which corresponds with Spanish productivity levels. A similar situation can be found in Portugal, where trade unions often demand an improvement of wages and working conditions in order to move towards the European average, while employers' associations reject such demands as a threat to Portuguese competitiveness.
By contrast, in high-wage countries such as Germany, cross-country comparisons are used especially by employers' associations in order to reject unions' wage claims and demand a policy of wage restraint. In response, the trade unions also make use of international comparisons in order to demonstrate Germany's high level of productivity and low level of industrial action. In defining its demands for the 1999 collective bargaining round, Germany's IG Metall metalworkers' union has argued for the first time that it has a special responsibility, considering the fact that the bargaining results in German metalworking might have a direct influence on collective bargaining in various neighbouring countries within the euro zone.
The meaning and extent of the implicit European dimension represented by cross-border comparisons in bargaining may vary between the different sectors. In both metalworking and financial services, the use of cross-border comparisons during sectoral bargaining rounds seems to be widespread in many European countries. In the case of metalworking, this obviously has to do with the highly internationalised structure of this sector, a high dependence on external markets and the relative dominance of multinational companies in various subsectors such as automobiles or electronics. The same is true for financial services, which is a rapidly internationalising sector dominated to a large extent by big transnational banking companies. A widespread use of cross-border comparisons can also be found in the construction industry, which probably has the most developed European labour market, creating a particular need for international comparisons. Although they are not the focus of this study, there is little evidence of the use of cross-border comparisons in more nationally-based sectors such as public services or some other private services.
Social partner initiatives for European coordination of bargaining at sectoral level
As members of European sectoral employers' or trade union organisations, most national employers' associations and trade unions take part in at least some form of information exchange on employment issues which are related to collective bargaining. Some European-level social partner organisations also provide more or less regular cross-border information for their national affiliates. On the employers' side, the Western European Metal Trades Employers' Organisation (WEM), for example, produces a monthly newsletter on "international social policy developments" which includes information on recent national developments in sectoral bargaining as well as international statistics comparing industrial relations trends in the European metalworking industry. With the introduction of EMU creating a greater cross-border transparency of wage and labour costs, WEM is trying to organise an even more systematic and continuous exchange of information between its member federations. Beyond the metalworking sector, it can be assumed that other European sectoral employers' organisations provide at least some form of comparative data on wages and working conditions for their national affiliates, although at the moment there is no further information available.
Initiatives for more systematic European cooperation on collective bargaining, however, are still rather exceptional and are almost exclusively found on the trade union side. Among the different initiatives of the European trade union industry federations affiliated to ETUC, the so-called "coordination approach" of the European Metalworkers' Federation (EMF) is probably the most advanced strategy for a Europeanisation of collective bargaining (DE9812283F) - for further details, see table 3. As the table indicates, trade union initiatives of various kinds towards a European coordination of collective bargaining also exist in a few other sectors, such as private services, textiles, the graphical industry and building and woodworking.
| Sector | Initiatives |
|---|---|
| Metalworking | Since collective agreements at a supranational European level are seen as being rather unlikely in the foreseeable future, the European Metalworkers' Federation (EMF) has adopted a "coordination approach", the basic idea of which is to achieve European coordination of national bargaining policy through the definition of cross-European trade union bargaining guidelines and minimum standards. With the aim of preventing possible downward competition on wages and working conditions, in December 1998 EMF adopted a so-called "European coordination rule," according to which "the wage policy of trade unions in all countries must be to offset the rate of inflation and to ensure that workers' incomes retain a balanced participation in productivity gains" (DE9812283F). In addition, EMF concluded a working time charter in July 1998, according to which working time in Europe should not exceed an annual maximum of 1,750 hours. This was the first time that European trade unions had been able to agree on a self-defined European minimum standard. |
| Private services | In March 1998, the European Regional Organisation of the International Federation of Commercial, Clerical, Professional and Technical Employees (Euro-FIET) adopted a strategy paper on Economic and Monetary Union: the impact on employment and collective bargaining, which emphasises the need for European-level coordination of national sectoral and enterprise bargaining (EU9809128F). In June 1999, the Euro-FIET position was further concretised by the adoption of an Action plan for a new euro bargaining network which foresees the promotion of a coordinated bargaining strategy at the level of Euro-FIET's trade sections, which cover commerce, banking and insurance, cleaning etc. The aim, according to the plan, is to define common bargaining targets "which should come out of existing best practices and, while aiming to provide European coordination ... should also take account of national circumstances. For example pay targets could offset the rate of inflation and ensure participation in productivity gains." |
| Textiles | A special committee on collective bargaining was established about two years ago within the European Trade Union Federation - Textiles, Clothing and Leather (ETUF-TCL) with the objective of reaching an agreement with the relevant sectoral European employers' organisation on working time and minimum workers' rights by 2000-2001 and of concluding an industry-wide European collective agreement for the period 2005-2008. |
| Printing and paper | As an initiative for closer cooperation on bargaining policy, the European Graphical Federation (EGF) has tried to develop common criteria for the analysis of professional skills associated with particular job positions. |
| Building and woodworking | The European Federation of Building and Woodworkers (EFBWW) is currently discussing a joint platform for better coordination of collective bargaining among its affiliates, though it takes a slightly different approach. According to the general secretary of EFBWW, Jan Cremers (in an article in Transfer Vol. 4, No. 2, 1998), the "cooperation must take place at the level of the actual bargaining and employment conditions. This means in many cases that we must drop the idea that European bargaining is the future ... for shaping our cooperation on collective bargaining, the bilateral route would increasingly take preference." |
To sum up, there have been a number of initiatives taken by the European trade union industry federations, specially since 1997, aimed at more explicit European coordination of national bargaining. Following the overall policy strategy of ETUC, the sectoral level seems to be the most important level for a Europeanisation of collective bargaining. As was stated in the resolution, Towards a European system of industrial relations adopted at the July 1999 ETUC Congress: "The European industry federations have the primary responsibility for coordination in the field of collective bargaining at the European level. It is therefore, in the first instance, up to the respective federations to create the structures and instruments needed to achieve this in an effective way." However, according to information provided by the European Trade Union Institute, so far only four or five of the 14 ETUC-affiliated European industry federations have established a European collective bargaining committee or a similar body which could guarantee a regular exchange on collective bargaining policy.
Initiatives for bi- or multilateral cooperation on bargaining at sectoral level
In addition to trade union initiatives aimed at coordination of collective bargaining at European level, there exist various union initiatives for bi- or multilateral cross-border cooperation. Probably the most advanced form is the cross-border interregional collective bargaining networks initiated by Germany's IG Metall metalworkers' union (DE9904298F). Within the framework of EMF's coordination approach, IG Metall has proposed that every regional IG Metall bargaining district should establish a "collective bargaining partnership" with its counterpart unions in neighbouring countries. The aims of these partnerships are to:
- organise an exchange of trade union observers during collective bargaining rounds;
- hold a regular exchange of information of all data relevant to collective bargaining;
- organise joint seminars on current collective bargaining topics;
- bring a "European dimension" to local bargaining; and
- (in a medium-term perspective) provide new institutions for a real transnational coordination of collective bargaining.
In the meantime, all IG Metall district organisations have started to establish transitional collective bargaining partnerships, as shown by table 4. In some districts - for example, Northrhine-Westfalia or North Germany- observers from foreign metalworkers' unions participated in the 1999 collective bargaining round in German metalworking and have already sat at the negotiating table.
| IG Metall district | Partner unions |
|---|---|
| Düsseldorf (Northrhine-Westfalia) | FNV Bondgenoten and CNV BedrijvenBond (Netherlands); CCMB and CMB (Belgium) |
| Hamburg (North Germany) | CO-Industri (Denmark); Svenska Metall (Sweden) |
| Stuttgart (Baden-Würtemberg) | SMUV (Switzerland); Fiom-Cgil (Italy) |
| Berlin-Brandenburg/Saxony | NSZZ Solidarnosc (Poland); KOWO (Czech Republic) |
| Munich (Bavaria) | GMBE (Austria); KOWO (Czech Republic); KOWO (Slovakia); SKEI (Slovenia); VASA (Hungary) |
| Under construction | |
| Hanover (Lower-Saxony, Saxony-Anhalt) | AEEU (United Kingdom) |
| Frankfurt (Hesse, Rhineland-Palatinate, Saar-Region) | CGT, CFDT, CGT-FO (France) |
Source:"Grenzüberschreitende Tarifpartnerschaften in Europa,"Jochen Gollbach and Thorsten Schulten, in: WSI-Mitteilungen Vol. 52, No.7 (July 1999).
First attempts at cross-border interregional bargaining partnerships and exchanges of trade union observers during the bargaining round also exist in a few other sectors. For instance, in March 1999 Austrian, Swiss and German construction workers' trade unions signed an agreement aimed at more intensive coordination of bargaining policy. Other bilateral initiatives exist involving construction workers' unions from Belgium, Finland, France, Italy, Germany, the Netherlands and Sweden. Most of these initiatives aim particularly at cross-border coordination of collectively agreed welfare and holiday funds in the industry.
Examples of other forms of bargaining-related bi- or multilateral cross-border cooperation among European trade unions include the following:
- Scandinavian metalworkers' unions have established joint working groups on wage policy within the framework of Nordic Metal;
- with a relatively high degree of interpenetration between Portuguese and Spanish banks, there exists close cooperation on collective bargaining issues among the bank workers' unions of both countries; and
- in April 1999, the German Mining, Chemical and Energy Union (IG Bergbau Chemie Energie, IG BCE) and the Chemical and Energy Workers' Federation affiliated to the French CFDT confederation (Fédération Chimie-Énergie-CFDT, FCE-CFDT) signed a comprehensive cooperation agreement including the "coordination of the unions' collective bargaining policy" (DE9905201N)
There is no information available that employers' associations are engaged in similar bi- or multilateral initiatives aimed at explicit coordination of collective bargaining. On the contrary, many employers' associations (especially in countries such as Germany and Sweden) are arguing for a further decentralisation of bargaining towards the company level. Nevertheless, there exist some more or less formalised bi- and multilateral contacts among sectoral employers' associations, for example:
- there are regular bilateral contacts between the French, Italian, Portuguese and Spanish metalworking employers' associations; and
- in 1998, the French and the Italian metalworking employers' associations invited representatives from their German counterpart to report about its experiences with the 35-hour working week.
Finally, there are also a very few cross-border initiatives which have been taken jointly by trade unions and employers' associations, for example:
- Swedish and Danish metalworking trade unions and employers' associations have set up a cooperative working group studying the terms of agreements and the various hindrances to future agreements for the countries of the Baltic Sea region (including other countries such as Germany etc); and
- the chemicals sector trade unions of France, Italy and Spain, together with the national sectoral employers' associations, started, about two years ago, a "trilateral" common initiative on training, working time and health and safety issues, though the actual scope for bargaining on wage issues is considered particularly narrow, due to the very different structures of pay across Europe.
Developments at multinational enterprise level
At company level, collective agreements which make explicit reference to economic conditions in other European countries exist, but are as yet few and far between. Probably the most explicit case of pay being linked to the movement of economic indicators in other European countries in a company-level agreement is the 1998 three-year "package deal" covering pay, employment security and working practices at Vauxhall, the UK subsidiary of the US-based motor manufacturing group, General Motors. Reflecting management concern at the impact on production costs of the pound sterling continuing to trade at a high rate of exchange, part of the pay rise in the third year is contingent on sterling falling below a specified level against the Deutsche Mark (and therefore now the euro). Reflecting trends discussed below, the agreement also provides for new, more flexible working arrangements aimed at reducing costs and enhancing productivity (UK9805127N).
Otherwise, the emergence of a European dimension to collective bargaining is most evident in the form of "concession bargaining" amongst the more internationally-integrated multinational companies (MNC s). Here, although the negotiations are at local or national enterprise level, the reference points utilised by management in negotiations are explicitly European (or wider). At present there is little sign of similar developments amongst the large number of enterprises which are national, rather than international or European, in the scope of their operations. The use by management of cross-border comparisons of performance in enterprise-level negotiations on working practices and working conditions appears to be widespread amongst the larger MNCs in certain sectors. However, the deployment of comparative data on pay in enterprise-level negotiations, where pay is determined at this level, is less common. Trade unions and works councils currently appear to make less extensive use of comparative data than management in enterprise-level negotiations. Forms of management coordination across countries within larger MNCs appear to be well developed, although information is slight in a number of countries. On the employee side, European Works Councils (EWC s) are a valuable source of information exchange on bargaining matters. Whilst their potential in coordinating bargaining across national borders is recognised, this has yet to be realised in practice.
Management's use of performance and best-practice comparisons
The collection of data on labour-related aspects of performance by the international corporate or business headquarters of MNCs appears to be widespread. The performance indicators concerned include overall labour costs, headcount, labour productivity, labour turnover and absenteeism, pay settlements and incidence of industrial disputes. Of these, data on overall labour costs are the most likely to be collected. Collection of such data is most common amongst MNCs which have internationally integrated production systems or which network services across borders. These data are utilised by management in decisions on the location of investment, on relocating production and more generally in drawing performance comparisons between sites. Moreover, the evidence also suggests that such data are deployed in bargaining at local and national enterprise level over working and employment practices in the context of ongoing (actual and potential) decisions on investment, relocation or reallocation of production and divestment or closure. The outcomes of such "concession bargaining", under which changes in working practices and conditions are traded against securing either future investment or current production for the site concerned have, of course, a direct bearing on overall labour costs. The use of such comparative data in bargaining over pay as such appears, however, to be rather less developed (even where pay determination is largely enterprise-based).
The other side of the cross-country comparative coin is initiatives by MNCs to diffuse "best practices" in production and working and employment practice from one site to others across Europe and beyond. This is particularly the case in relation to work organisation (eg forms of group- and team-working), quality assurance (eg systems under which operational workers are responsible for quality), working time arrangements and job and task flexibilities. It is not uncommon for "coercive comparisons" of labour performance to be utilised to achieve the diffusion of one or more "best practices" at a given site.
Where production is organised on an internationally integrated basis, for example in the automotive, electrical consumer goods and food manufacturing industries, the operations of MNCs in any given EEA country are engaged in internal competition for both current production and future investment with operations in other EEA countries (and increasingly also in central Europe). Inter-plant comparisons of data on labour costs and productivity are used by international management to exert pressure on local management and the workforce at the different plants. In local negotiations with workforces, "best" practices are implemented, or concessions in working and employment practices agreed to, as the price for securing current allocations of production and future investment. There is little evidence that such processes are yet prominent within the banking and finance sectors. Table 5 provides a number of examples of the management use of cross-border comparisons in such situations.
| Company/sector | Use of comparisons |
|---|---|
| Automotive | Press reports and research studies suggest that "coercive comparisons" are regularly used by the large automotive manufacturing MNCs operating in two or more EEA countries - including BMW/Rover, Ford, General Motors, Peugeot, Renault and Volkswagen - in local negotiations aimed at securing productivity-enhancing concessions in working and employment practices in return for commitment to future investment in local operations. |
| Electrolux | Local negotiations in Italy over restructuring within the Swedish-based Electrolux group, resulted in an agreement at its Zanussi subsidiary in which a commitment to employment security was undertaken in exchange for productivity-enhancing changes in work organisation and working practices over a two-year period (IT9712141N). |
| Finnish forest products | The forest product (paper, pulp etc) MNCs headquartered in Finland make frequent reference to the performance of their business units in other European countries - in terms of headcount, productivity and working time - in plant-level negotiations around production reorganisation. |
| Food industry | A study of the Greek, Spanish and UK operations of the European food business of a leading multinational found that a key dimension of the competition between plants in different countries for allocations of production for particular lines was in terms of measures introduced via local negotiations to increase the flexibility of employment and working practices ("Transnational management influence over changing employment practice; a case from the food industry'", X Coller and P Marginson, Industrial Relations Journal, Vol. 29, No. 1 (1998)). The same multinational employed an internal team of consultants which identified "best" production, working and employment practices, which were compiled into a manual available to all business units. Such "best practices" were implemented as local solutions in the face of unfavourable performance comparisons. |
| General Motors | Following an international "benchmarking" study involving all of General Motors' European production sites, and in the context of the company's announcement of a sharp reduction in the size of its global workforce over the coming five years, the works council at its Opel subsidiary in Germany concluded an agreement with management in 1998, under which a promise of future investment was secured in exchange for radical changes in working practices and reductions in additional company payments (DE9802247F). In the light of this agreement, parallel agreements were subsequently concluded at the company's subsidiaries in Belgium and the UK (Vauxhall) involving productivity-enhancing measures being exchanged against commitments to future production and investment at the plants concerned. |
| Novo Nordisk | At the Danish-based pharmaceuticals MNC, Novo Nordisk, a team of internal consultants travels around the subsidiary companies identifying "best practices" in terms of production, work organisation and so on, which are recorded in a database available to all local managements. In some instances, implementation of such "best practices" is through local agreements between management and representatives of the workforce. |
| Swatch, Toyota, Hoover | In recent years, decisions by Swatch to locate in Lorraine and Toyota in the north of France, and by Hoover to relocate part of its production from France to Scotland, have been supported by extensively publicised international comparative data on productivity levels, wage levels and flexibility. |
| UK engineering, printing and retail | Findings from a panel survey over five years of (national and multinational) companies in the UK engineering, printing and retail sectors, indicate that international "benchmarking" of employee performance is reasonably common in engineering, but unusual in printing and rare in retail ("Pay and working time: Exploring the significance of the international dimension", J Arrowsmith and K Sisson, Unpublished paper. IRRU, University of Warwick (1999)). Even in engineering, such benchmarking tends to be confined to MNCs with internationally-integrated production systems. International comparisons of pay and working time in engineering, the most internationalised of the three sectors, are relatively marginal influences on pay settlements amongst companies in the sector. Of considerably greater significance is the use of international comparisons of overall labour costs, in the context of negotiations over both pay and working time. The authors suggest that changes in numbers employed and in work organisation, secured through parallel negotiations over working and employment practices, are the means by which management bring overall labour costs into line with those of international competitors in the sector. |
| Volkswagen | In current negotiations at VW's Brussels-Forest plant, international comparisons focusing on productivity, wage costs and the organisation of working time with the main German operation, but also the company's Bratislava plant (Slovakia), are being utilised by management. |
Use of comparisons by trade unions and works councils
The deployment by trade unions and/or works councils of comparisons of working conditions and wage levels at a company's operations in other countries in support of claims in company and site negotiations in a given country appears to be less extensive than that of management. However, there is evidence of this occurring amongst the more internationally integrated MNCs in sectors, such as the automotive industry, which are well organised by unions. Again, there is less evidence of parallel developments in banking and finance. In engineering, EMF's working time charter (see above) has been a particular focus for claims based on international comparisons. For example, union claims for shorter working time at the UK operations of Ford and GM have been based on explicit comparisons with company practice in other European countries. The same is the case at Dutch-based steel manufacturer Hoogovens (which has recently merged with British Steel). Union claims at the SEAT subsidiary of VW in Spain have referred to data on working hours, wages and the use of temporary employment in the company's operations in other European countries.
Management coordination across countries
Regular international meetings of personnel and/or industrial relations managers occur in many of the more internationally integrated MNCs. Laying down guidelines for local management on personnel and industrial relations policy matters and sharing policy initiatives between sites are among the more important functions of such meetings. There is little evidence available, however, on the role of such transnational management meetings in coordinating the positions taken by management in national and local level enterprise negotiations on pay, where this is relevant, and working conditions. Where pay is negotiated at enterprise level, the indication is that formal cross-border coordination of the process may be important. Two-thirds of the UK-based MNCs participating in a survey reported that headquarters was involved in establishing the parameters of local pay settlements and/or in approving (or vetoing) proposed pay settlements in their overseas subsidiaries (both European and non-European) ("Managing beyond borders", P Marginson, P Armstrong, P Edwards and J Purcell, International Journal of Human Resource Management, Vol. 6, No. 3 (1995)).
EWCs and trade union coordination across countries
Contact, liaison and cooperation between trade unions organising in the operations of given MNCs within different European countries is developing around European Works Councils (EWCs). As such, EWCs are becoming an important, although not exclusive focus, for trade union contact and cooperation at European level within the enterprise. Direct contacts between unions are also an important source of comparative information to support local and national-level bargaining within MNCs.
In formal terms, the remit of the great majority of EWCs is confined to information and consultation, and the scope of only a handful extends to some form of negotiating role. In addition, under the agreements which established them, nearly a half of EWCs are precluded from considering issues which are the subject of consultation or negotiation at either national or local levels within the enterprise, and one in five agreements expressly state that matters concerning pay and remuneration are outside the EWC's competence (EU9803191F). This has not prevented a small, but growing, number of EWCs from concluding framework agreements or joint opinions on aspects of employment practice such as training, equal opportunities and health and safety, which are not traditionally regarded as being at the core of collective bargaining. Instances include Accor, Danone, ENI, Générale des Eaux, Nestlé and Sara Lee (personal products division). In some cases such texts are intended to instigate negotiations at local and national levels.
The potential role of EWCs in initiatives by trade unions to coordinate bargaining agendas and demands across countries on matters relating to working conditions, if not pay, is widely acknowledged. Already some four years ago, a survey of international meetings between trade union (and other) employee representatives in over 300 MNCs, primarily convened to stimulate and progress negotiations to establish EWCs, found that comparisons on pay, pensions, working conditions and employment practice were a prominent feature of the exchanges at these meetings ("Meetings on European multinationals", L Fulton, Transfer, Vol. 1, No. 2 (1995)). At present, EWCs appear to be providing the basis for an exchange of information on working conditions, working hours and employment practice between employee representatives from different European countries - information which is relevant to local and national level negotiations within the enterprise. In some instances, this extends to an exchange of information on developments in pay. As yet, however, movement towards the coordination of the bargaining agenda across borders that has been anticipated remains an aspiration on the trade union and employee side, rather than having become a reality. Thus, at the Belgian-based Générale de Banque, for instance, trade union representatives meet regularly to exchange information and make comparisons with the longer-term aim of drawing-up a common platform of demands.
Importantly, trade unions do not as yet appear to have been successful in utilising EWCs to generate a common position, and thereby constrain competition between local plants, in the face of coordinated initiatives by management to secure concessions in working practices and conditions in certain MNCs. For example, at General Motors Europe, the trade union and employee representatives on the EWC proved unable to forge a coordinated response in a context where agreement to changed working practices at GM's Opel subsidiary in Germany was followed by similar management demands in negotiations with its workforces in Belgium and the UK. Indeed, a recent study of the role of EWCs in the restructuring of work organisation, working practices and payment systems in the European car industry suggests that employee representatives are tending to use EWCs to further local interests within the regime of internal competition which characterises the major MNCs concerned. By contrast, the study concludes that management, by orienting EWCs towards discussion of strategic business issues and the business logic of the restructuring that flows from these, have been able to utilise the EWCs concerned to facilitate the restructuring process ("European Works Councils and industrial restructuring in the European motor industry", B Hancké, Unpublished paper, Wissenschaftszentrum Berlin (1999)).
Finally, in some countries where the grip of sector-level bargaining arrangements has been under threat in recent years, such as Germany, trade unions have expressed concerns that the development of forms of bargaining coordination through EWCs could contribute to the erosion of the established sector-level arrangements.
Views of the social partners
Below, on the basis of reports from the EIRO national centres, we examine the perspectives of the central social partner organisations at national level, and also those of employers' organisations and trade unions in the engineering and financial services sectors, on the possible impact of growing European integration, including the launch of the euro single currency, in opening-up national systems of collective bargaining to cross-border influences.
National-level perspectives
Amongst employers' confederations, perceptions of the impact of ever-deeper European integration on collective bargaining vary noticeably. At one end of the spectrum are those countries, namely Belgium and Italy, where a central agreement or social pact governing wage developments already makes reference to movements in economic indicators in neighbouring countries, as in the case of Belgium, or the European average, as in Italy. The employers' confederation in Spain acknowledges the growing importance of European parameters in national negotiations. At the other end of the spectrum are countries, including all four Nordic countries, where employers' confederations insist that, at least in the short-term, national and local collective bargaining structures are not likely to be affected by cross-border influences.
Such different assessments notwithstanding, employers' confederations are almost unanimous in the view that there is no need for coordination of bargaining across European borders at the intersectoral, sector or enterprise levels. Indeed the appropriate response to intensified "regime competition" within Europe is seen by several confederations to be further decentralisation of existing national systems. Collective bargaining has to be able to reflect the different economic circumstances at national level, and increasingly at local level too. Amongst the employers' confederations arguing that there is a need for more decentralisation, those in Germany and Sweden are particularly prominent. Even in Belgium, the evident Europeanisation of wage policy embodied in the current central agreement is seen as being imposed by economic developments, rather than desired.
Trade union confederations too differ in their assessment of the extent to which deepening European integration will, or will not, open up collective bargaining systems to cross-border influences. Confederations in Belgium, Germany, Spain, France, Italy, the Netherlands and Portugal all argue that European reference points are already, or will become, increasingly influential in national collective bargaining at intersectoral, sectoral and/or enterprise levels. Union confederations in Ireland and the UK acknowledge the potential of such cross-border influences, but see them as having a less immediate impact. For their part, union confederations in Denmark, Finland, Norway and Sweden, and also in Greece, see no immediate prospect of cross-border influences having any great impact on domestic collective bargaining.
Reflecting these differing assessments, union confederations differ also in the importance they attach to developing forms of bargaining coordination across borders. The need for coordination is particularly stressed by confederations in Austria, Belgium, Germany, Spain, France, Italy and the Netherlands, underpinned by concerns to avoid competition in working conditions, labour standards and labour market regulation. Coordination should extend to wages policy as well, where the need for wage developments to reflect movements in productivity is underlined. Conversely, confederations in Denmark, Finland, Sweden and Norway see only a limited need for forms of bargaining coordination at present. The difficulty presented by the contrasting nature of the collective bargaining systems across countries in realising effective forms of bargaining coordination is acknowledged by several confederations, and reflected in the relative stress that confederations put on the importance of coordination at the respective levels. Thus, confederations in Ireland, Spain, Portugal and the UK emphasise the potential benefits of coordination at the level of multinational enterprises, whereas those in Belgium, Germany, Italy, France, the Netherlands and Spain (again) underline those of coordination at the sector level. Confederations in Austria, and also Belgium and Italy, underline the role of coordination at the intersectoral level and in the case of the latter two, of an effective articulation between levels. Amongst those confederations which view the development of coordination as being less pressing, principally the Nordic countries, the difficulty of sustaining national solidarity across sectors in the face of European-level coordination of sector-level bargaining is highlighted.
Perspectives in metalworking
The European Metalworker's Federation's proposed bargaining coordination rule has led to European-level discussions amongst metalworking employers' associations convened by the Western European Metal Trades Employers' Organisation (WEM). The general view is that although there is concern about the prospective coordination of wage policy by EMF, the effect on collective bargaining in the different countries is likely to be indirect and as yet it is too early to evaluate its potential impact. Differences of position on the prospect of cross-country bargaining coordination within the sector are, however, evident amongst metalworking employers' associations. Three groups can be identified:
- employers' associations in countries where there are no sector-level bargaining arrangements, or where bargaining is confined to a limited agenda, such as the negotiation of minimum wage levels. Here the impact of EMF's proposed bargaining coordination rule is likely to be diffuse, and evident only insofar as it is adopted on a widespread basis in company-level negotiations. This group includes Ireland, the UK, France and Portugal;
- employers' associations which engage in sector-level negotiations with metalworking trade unions, but which are either strongly opposed to any coordination of bargaining and/or see it as a distant possibility. This group includes associations from the four Nordic countries and from Greece and Spain; and
- employers' associations which are involved in sector-level bargaining, and which acknowledge that in the face of EMF's bargaining coordination rule, some future response may be necessary. This group includes associations from Austria, Germany and the Netherlands.
Amongst this third group, the Dutch employers' association considers that EMF's bargaining coordination rule is already an established fact, but stresses that national circumstances will continue to be the most important influence on settlements in the foreseeable future.
On the trade union side, differences in perspective on the definition and implementation of the EMF's coordination rule are evident. To some extent, these overlap with those among employers' associations. In particular, differences are evident over the objectives, means and enforcement of bargaining coordination. The difficulty of meshing sectorally- and regionally-based bargaining structures with enterprise-based ones is also seen as a major challenge by unions. Four groups can be identified:
- unions in several countries, including those where there are no sector-level bargaining arrangements or where the impact of sector-level negotiations is confined to a single issue, such as negotiating a minimum wage, support the EMF rule in principle, but report that few steps have yet been taken to establish it in practice. This group includes Italy, Spain, Greece, Ireland and the UK. In France too, one of EMF's two affiliated federations supports the broad principle of the bargaining coordination rule (but the other abstained from voting for it);
- in some other countries, unions support the concept of the EMF rule, but are arguing for a wider interpretation of common bargaining goals and enforcement which is less binding on affiliates. This group includes unions in Denmark, Finland and Sweden, which already practice forms of bargaining coordination within the Nordic area;
- in a further group of countries, including Austria, Belgium, Germany and the Netherlands, unions support the proposed EMF rule, and are engaged in practical steps to implement it (see above); and
- the Norwegian metalworkers' union has yet to decide its position and the main metalworkers' union in Portugal is not affiliated to EMF (as is the case with the third main federation in France).
Perspectives in financial services
Euro-FIET's call at its March 1998 conference for a coordinated bargaining strategy by affiliates, focusing on wages, working time and education and training, does not appear to have elicited a strong response from employers' associations in financial services. It is as yet too early to assess the impact of the adoption at Euro-FIET's June 1999 conference in Berlin of a follow-up action plan. Employers' associations in a majority of EEA countries view the organisation of the banking sector as remaining nationally distinctive, hence it is argued that sector-level collective bargaining is unlikely to be influenced by cross-country considerations in the foreseeable future. The employers' associations in Denmark and Sweden, however, refer to the usefulness of informal meetings and exchanges of information between banking employers' organisations in different European countries. Employers' associations in the Nordic countries also meet on a yearly basis to discuss bargaining developments. Elsewhere, in some other countries, including France and the UK, employers' associations have abrogated their collective agreement within the banking sector. Here any impact of Euro-FIET initiatives aimed at coordination would be felt in collective bargaining within the large, and increasingly internationalised, banks based in these countries.
Amongst trade unions, there is widespread support for the general objective of Euro-FIET's initiative to achieve a greater coordination of bargaining. However, there is less evidence of practical steps being taken in this direction. As in metalworking, unions in several countries underline the practical difficulties involved in securing agreement around specific means and objectives of coordination. However, in the context of long-standing arrangements for cooperation at a policy level between banking unions in the Nordic countries, unions in Finland and Sweden are working towards a more practical coordination of collective bargaining in the countries around the Baltic Sea. Particularly amongst those countries where there is no longer a collective agreement at sector level, the potential offered by EWCs in establishing a network of contacts across Europe, and therefore information exchange relevant to local and national enterprise-level bargaining, is underlined by unions.
Commentary
The development of any pan-European collective bargaining structures to determine pay and major conditions at intersectoral, sectoral and/or multinational company levels remains a distant prospect. More probable is growing deployment of cross-country comparisons of pay, working conditions and employment practice in established bargaining arrangements at sector and enterprise levels within each country, and the development of forms of bargaining coordination across European borders. Such developments are already underway, but so far the emphasis has been on implicit forms of coordination - that is the use by employers and trade unions of international comparisons, or developments in other countries, as benchmarks in sector and enterprise-level collective bargaining. Whereas implicit forms of coordination appear to be reasonably widespread, there are as yet relatively few instances of explicit coordination. Explicit coordination includes formal coordination of the bargaining agenda across borders and/or collective agreements whose terms are expressly contingent on developments in other countries. Reflecting this distinction, bargaining cooperation in the shape of exchange of information between, respectively, employers' associations and trade unions is rather more widespread than bargaining coordination as such.
Differing perspectives on coordination
A clear asymmetry exists between the focal points for coordination amongst, respectively, employers and trade unions. Amongst employers, coordination is most strongly developed at the enterprise level, where internationally-integrated MNCs routinely deploy the results of international performance comparisons across sites, together with the benchmarking and diffusion of best practices, to secure the implementation of productivity-enhancing changes in working conditions and practices in largely local, but also national, company negotiations. Employers' associations are for the most part hostile to, or reluctant to engage in, coordination of bargaining agendas and outcomes at sector level. In contrast, on the trade union side, initiatives aimed at bargaining coordination are most developed at sector level. In a number of sectors, of which metalworking is one, the European industry federation and national unions are engaged in practical steps to coordinate claims made in national negotiations, and if possible the outcomes also. At enterprise level, whilst the potential of EWCs as a platform from which coordinated enterprise bargaining across countries could be realised is readily acknowledged, present activity by trade unions and/or works councils appears to be largely confined to bargaining cooperation, involving the exchange of information on matters which are the subject of local bargaining.
Employer preference for coordination at the enterprise level might be seen as part of wider employer pressure towards more decentralised bargaining arrangements. Increasingly, management has been looking to develop organisation-based employment systems, in which remuneration, working hours and working and employment practices are determined according to the business and production requirements of the organisation. One result is increased differentiation of such industrial relations arrangements within sectors. However, where local sites form part of a nationally or internationally integrated production system or networked business, the organisations concerned may seek to implement similar industrial relations solutions. Since, therefore, the logic of coordination is increasingly enterprise- rather than sector-based, at European level MNCs are the focal point for coordination by employers. Employer preference for avoiding any sector-level coordination of the bargaining agenda and outcomes might stem from a desire on the part of MNCs to be able to continue to secure the advantage that mobility of capital across the EEA provides in terms of "regime shopping". This has two potential dimensions: the first is the ability to exercise downward pressure on terms and conditions in some countries by threats to relocate production to countries where the benchmark is lower; the second is the ability to locate different kinds of production in different kinds of regime, according to the varying combinations of skill requirement, and wage and productivity levels.
Trade union interest, on the other hand, in developing bargaining coordination at sector level stems from concerns to prevent scope for "regime shopping" of the first kind by employers, in which employees could find themselves subject to a downward spiral in terms and conditions. Initiatives to develop bargaining coordination at multinational enterprise level, through EWCs, are also driven by the same interest. In putting into operation specific initiatives aimed at bargaining coordination, trade unions find themselves confronted by several practical difficulties, including what the objectives of coordination should be and the means of enforcement. The first question potentially raises difficult distributional issues, for the scope for regime shopping by employers will be eliminated only when wage, productivity and training indicators across countries are brought into line with each other. The second question involves the issue of how far objectives under a coordinated bargaining arrangement should be binding on individual national unions, and therefore the relative authority of European trade union bodies over national affiliates. A further challenge to trade unions is how to achieve bargaining coordination which embraces both those collective bargaining systems in which sector-level bargaining remains predominant and those where enterprise-bargaining increasingly prevails. An enterprise-level approach, focusing on MNCs, has the disadvantage of providing only for partial coordination within any sector, as the large number of medium and small-sized enterprises will be excluded.
Sectoral differences
The extent to which collective bargaining is being "Europeanised" through implicit and explicit processes of bargaining coordination varies markedly between sectors. A sharp contrast is evident between the two sectors, metalworking and banking/finance, which are a particular focus of this study. The differences between the two sectors extend to both the employer and trade union sides. In metalworking, while many employers' associations are opposed to the development of bargaining coordination at sector level, EMF's bargaining coordination rule has been the subject of European-level discussion between employers' associations. Moreover, employers' associations in those countries where the practice of bargaining coordination by metalworking trade unions is most developed recognise that some future response may be required. On the trade union side, as well as there being broad support for the principles underpinning EMF's bargaining coordination rule, unions across many European countries are taking active steps to promote information exchange and, in Austria, Belgium, Germany and the Netherlands in particular, to develop explicit forms of coordination. In banking and finance, employers' associations are mostly hostile to the idea of bargaining coordination, and as yet find themselves under little pressure from any trade union initiative. Whilst Euro-FIET's bargaining coordination initiative is widely supported, the practice of coordination by national unions remains at the level of information exchange. There is, however, some indication that information exchange at the multinational enterprise level is more prominent in banking and finance than in metalworking. Developments in some other sectors, such as construction, would appear to lie somewhere in between the two cases examined here.
Differences are evident between enterprises too, with Europeanisation primarily occurring amongst MNCs. There are differences too between MNCs, with management coordination of local bargaining around working conditions and practices being both more intensive and more widespread amongst internationally-integrated companies in certain sectors. These include automotive, electrical consumer goods, food manufacturing and forest products. Information exchange, and other forms of bargaining cooperation, by trade unions and/or works councils within particular MNCs also appears to be more evident in such sectors.
A multi-speed Europe
Looking across countries, the impression is one of a multi-speed Europe, in which implicit and explicit forms of bargaining coordination are developing at differing degrees of intensity involving different groups of countries. This is especially so at sectoral (and intersectoral) level, whereas Europeanisation is progressing at a broadly similar speed comparing one country with another within any given MNC. Whilst in policy terms the initiatives of both EMF and Euro-FIET are supported by affiliates across Europe, the emergence of practice is uneven. At enterprise level, however, management coordination of local negotiations within MNCs frequently encompasses all of a company's operations within the EEA (and beyond).
Bargaining coordination is currently most developed amongst the countries comprising the former "Deutsche Mark zone", namely Austria, Belgium, Germany and the Netherlands. This applies to employers' organisations as well as trade unions. Indeed, the current central agreement in Belgium is the main instance of explicit coordination of bargaining. Elsewhere, bargaining cooperation in the form of information exchange and mutual discussion of bargaining developments at sector level is well developed amongst the Nordic countries, and particularly amongst the trade unions concerned. There are signs too of bargaining coordination developing around the Baltic Sea, embracing Germany as well as the three Nordic countries concerned. By contrast, bargaining coordination would appear to be less well- developed amongst the southern countries of the EEA, save for the bargaining cooperation which exists between Spain and Portugal in banking and finance. The lack of prominence of Ireland and the UK in coordination developments at sector level can be largely attributed to the demise of sector-level agreements in these two countries.
Insofar as the industrial relations actors in one particular country appear to be pivotal to the implicit and explicit processes of bargaining coordination which are emerging at sectoral (and intersectoral) level, it is those in Germany - and particularly the trade unions. This reflects the importance of the German economy, and especially its manufacturing sector, within an increasingly integrated European economy in general. However, it also reflects its weight within the 11-country "euro zone", in which the pressure for labour market adjustments - and therefore the potential for damaging competition in wages and conditions between countries - within a common monetary policy has grown more acute.
Prospects
Despite the above, it cannot be said that intensified European economic integration will automatically lead to a Europeanisation of collective bargaining. Since economic integration creates new pressures to improve competitiveness there are also tendencies which indicate the somewhat paradoxical development of a "renationalisation" of collective bargaining. The most obvious expression of such a tendency is the emergence of national social pacts which usually include a commitment for collective bargaining to follow a policy of wage restraint on the grounds of improving competitiveness. For the trade unions at least this might create a somewhat contradictory situation: on the one hand, the unions aim for a solidaristic collective bargaining policy in Europe through better European coordination, which is able to limit "regime competition"; but on the other hand they are incorporated in national competitive alliances which tend to reinforce such European regime competition.
Finally, the emergence of a stronger "European dimension" to collective bargaining will also depend on further European political integration in the fields of macroeconomic, social and employment policies. In particular, the new "European employment pact", which was adopted at the European Council summit in Cologne in June 1999, might gain a certain influence on collective bargaining at national and sectoral level. The new European "macroeconomic dialogue" between representatives from social partners' organisations, Member States, and European institutions including the European Central Bank, established by the pact, aims to create," to the greatest possible extent, a mutually supportive interaction within EMU between wage developments, fiscal policy and monetary policy". Although it is stated that this new "macroeconomic dialogue" will not be "questioning the autonomy of the social partners in collective bargaining", it can be assumed that more intensified debates on, for example, wage policy at European level, will have their influence on national collective bargaining. (Paul Marginson, IRRU, and Thorsten Schulten, WSI)