A supranational regime that nationalizes social conflict: Explaining European trade unions' difficulties in politicizing European economic governance

Abstract

Until very recently, European employers and political leaders denied the need for any coordination in industrial relations at EU level. In 2011, however, the European Parliament and the Council adopted a new European economic governance regime that makes EU member states' labor policies subject to multilateral surveillance procedures. This paper analyzes this ‘silent revolution’ from above and assesses organized labor's responses to this challenge. It shows that the EU's new governance regime does not follow the classical model of a federal state, but rather the governance structures of multinational corporations that control their local subsidiaries through the use of whipsawing tactics and coercive comparisons. European trade unions' and social movements' difficulties in politicizing European economic governance are thus best explained by the ability of the new supranational EU regime to nationalize social conflicts.

Keywords::

• Euro crisis
• European economic governance
• Six-Pack
• bargaining coordination
• wage bargaining
• trade unions
• collective action
• politicization

Acknowledgements

I thank Sabina Stan, Tobias Theiler and Christian Welz for their critical comments and suggestions, and the Centre for Advanced Study at the Norwegian Academy of Sciences and Letters in Oslo for the funding of the research group Globalization and the Possibility of Transnational Actors – The Case of Trade Unions.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

^1.Leonard et al., New Structures, Forms and Processes and Erne, European Unions, 81.

^2. Incidentally, French and German bankers predicted as far back as 1997 that trade unions would lose their role in wage negotiations following the creation of the European Economic and Monetary Union (EMU). Erne, European Unions, 54.

^3.Bauer and Becker, “Unexpected Winner of the Crisis”; Blankenburg et al., “Prospects for the Eurozone”; Erne, “European Industrial Relations”; Degryse, New European Economic Governance; and Pochet and Degryse, “Monetary Union and the Stakes.”

^4.Erne, European Unions, 189.

^5.Greer and Hauptmeier, “Identity Work”; Pulignano, “Case of Trade Union Cooperation?” and Meardi, “Union Immobility?”

^6. ANSA, “Barroso, Stiamo facendo rivoluzione silenziosa.” Agenzia Nazionale Stampa Associata. News Wire. Fiesole (Firenze), June 18, 2010 and L. Phillips, “EU Ushers in ‘Silent Revolution’ in Control of National Economic Policies.” EUobserver, March 16, 2011. http://euobserver.com/institutional/31993

^7. The six new EU laws that constitute the Six-Pack are published in the Official Journal of the European Union, November 23, 2011, OJ L 306.

^8. Croatia did not ratify the Fiscal Treaty either when it joined the EU in 2013.

^9. Although no member state has thus far been penalized, Commission President Juncker noted that the French government, for example, understands very well that sanctions are possible. J.C. Juncker, “Tsipras aún tiene que contar a los griegos que va a incumplir promesas.” El País, March 5, 2015. http://internacional.elpais.com/internacional/2015/03/03/actualidad/1425417195_457874.html.

^10.Degryse, Jepsen, and Pochet, Euro Crisis and its Impact, 29 and de la Porte and Heins, “Game Change in EU Social Policy.”

^11.Habermas, “Die Konstruktionsfehler.”

^12.De la Porte and Pochet, “Boundaries of Welfare”; Dufresne and Pernot, “Les syndicats”; Dufresne, “Euro-Unionism Face”; Marginson and Welz, “Changes to Wage-Setting Mechanisms”; and Schulten and Müller, “European Economic Governance.”

^13. The EPC comprises two officials from the Commission, two officials from each member state (e.g., from the finance ministry or even its central bank), and two officials from the ECB. The proceedings of the EPC are confidential. See: http://europa.eu/epc/about/index_en.htm

^14. The scoreboard stipulates two different ULC thresholds; a 3 years percentage change in nominal unit labor cost, with thresholds of +9% for Eurozone countries and+12% for non-Eurozone countries.

^15. H. Carnegy, “Manuel Valls Warns French Left against Blocking Reform.” Financial Times, June 16, 2014. http://www.ft.com/intl/cms/s/0/c0305738-f53b-11e3-91a8-00144feabdc0.html#axzz34sScp3ak

^16.European Commission, Macroeconomic Imbalances.

^17.European Commission, Recommendation for a COUNCIL RECOMMENDATION.

^18. S. Laurent, Travail du dimanche, pouvoir d'achat … ce que prévoit (ou pas) la future loi Macron, Le Monde.fr, February 18, 2015. http://www.lemonde.fr/les-decodeurs/article/2014/12/08/travail-du-dimanche-autocars-professions-reglementees-qu-y-a-t-il-dans-la-loi-macron_4536498_4355770.html#jvtQP7EAfggS38bl.99

^19. A.-S. Chassany, “French Government Overrides Parliament to Ram Through Reforms.” Financial Times, online edition, February 17, 2015. http://on.ft.com/1DBbHkW

^20. J.C. Juncker, “Tsipras aún tiene que contar a los griegos que va a incumplir promesas.” El País, March 5, 2015. http://internacional.elpais.com/internacional/2015/03/03/actualidad/1425417195_457874.html

^21.Didry and Mias, Le moment Delors; Degryse, Jepsen, and Pochet, Euro Crisis and its Impact; Nakano, “Maastricht Social Protocol,” 1066; Smismans, Law, Legitimacy, and European Governance; and Welz, European Social Dialogue.

^22.European Commission, “Labour Market Developments,” 104.

^23.Crouch, “Privatised Keynesianism,” 398.

^24.Erne, European Unions, Chap. 3.

^25.Webb and Webb, Industrial Democracy, Part II, Chap. 2.

^26.Erne, European Unions, 186–202.

^27.Ayres, “Transnational Political Processes”; Crespy, Qui a peur de Bolkestein?; Dufour-Poirier, Construction d'une communauté syndicale internationale; Dobrusin, “Transnational Labor”; Gajewska, Transnational Labour Solidarity; Kay, NAFTA and the Politics; Kay, “New Challenges, New Alliances”; Meardi, “Union Immobility?” and Turnbull, “War on Europe's Waterfront.”

^28.Erne, European Unions, 23.

^29.Kohler-Koch and Quittkat, De-Mystification of Participatory Democracy.

^30.Hancké, Unions, Central Banks, and EMU; Molina and Rhodes, “Corporatism”; and Erne, “Interest Groups.”

^31.Teague and Donaghey, Why Has Irish, 55.

^32.Erne, “Let's Accept a Smaller Slice,” 425.

^33.Martin and Ross, Euros and Europeans.

^34. J. Stieglitz, “Banking Crisis: Expert Views: After a Week of Turmoil, Has the World Changed?” The Guardian, September 20, 2008.

^35.Goetschy, “Lisbon Strategy, Industrial Relations and Social Europe.”

^36.Erne, European Unions, 86–90.

^37. O. Lafontaine and D. Strauss-Kahn “Europa-sozial und stark. Märkte brauchen die ordnende Hand des Staates,” Die Zeit, December 31, 1899 (sic!). http://www.zeit.de/1999/03/199903.lafontaine_strau.xml and Schulten, Solidarische Lohnpolitik in Europa.

^38.Dufresne, Le salaire; Erne, European Unions; Schulten, Solidarische Lohnpolitik in Europa; and Wagner, Vers une Europe syndicale.

^39.Dufresne, “Euro-Unionism Face”; Erne, European Unions; and Lehndorff, “Crisis Losers.”

^40.Erne, European Unions, 116.

^41.Keller, “Buchbes prechung.”

^42. Since 2003, Emmanuel Mermet has been advising the CFDT's General Secretary on European economic matters. Formerly, he was one of the architects of ETUC's wage bargaining coordination policy at the European Trade Union Institute (ETUI) in Brussels. Erne, European Unions, 57–61.

^43.Delors, Fernandes, and Mermet, “European Semester.”

^44.Collignon, Democratic Requirements.

^45.Busch and Hirschel, Europe at the Crossroads. On the Euro crisis and internal conflicts within the German union movement see also Bieler and Erne, “Transnational Solidarity?”

^46.Collignon, “Macroeconomic Imbalances and Competitiveness” and CollignonMacroeconomic Imbalances and Comparative Advantages.

^47.ETUC, European Economic Governance, 1; L. Phillips, “Trade Unions ‘Dare’ EU to Hold Referendum on Economic Pact.” EUobserver, March 2, 2011. http://euobserver.com/economic/3191.

^48.ETUC, Treaty on Stability, Coordination and Governance.

^49.Degryse, New European Economic Governance.

^50.ETUC, New Path for Europe and Rieger, “Umkämpftes Projekt Europa.”

^51.Degryse, New European Economic Governance, 80.

^52.Beck, German Europe, 34.

^53. Ibid., 26–27.

^54.Zeibig, “Gefahren.”

^55.Béroud and Yon, “Face à la crise”; Gumbrell-McCormick and Hyman, “International Trade Union Solidarity”; and Gumbrell-McCormickTrade Unions in Western Europe.

^56.Urban, “Between Crisis Corporatism and Revitalisation,” 275.

^57. On 11 January 2013, for example, French employer and union confederations signed an agreement that inter alia paved the way for the mandatory incorporation of worker directors on private sector company boards. Béthoux and Jobert, “Négocier”; and Conchon, Les administrateurs.

^58. Incidentally, the most important European Parliament report on the Six-Pack – namely, the one dealing with financial penalties for non-compliant states – was drafted by the British Conservative Party MEP and former JP Morgan banker Vicky Ford; this questions the popular portrayal of the EU's economic governance regime as the result of “German” supremacy. Ford, REPORT on the Proposal.

^59.Degryse, New European Economic Governance, 22, 60.

^60. My translation. CFDT, “Le traité budgétaire.”

^61.ICTU, Congress Briefing Paper, 7.

^62.European Commission, Alert Mechanism Report 2013, 24.

^63.Bieler and Erne, “Transnational Solidarity?” 33.

^64.CFDT, “Le traité budgétaire.”

^65.Bieler and Erne, “Transnational Solidarity?” and Clauwaert, Country-Specific Recommendations.

^66.ETUC, European Economic Governance.

^67.ETUC, Review of European Economic Governance.

^68. In 2011, the Irish economist and current DG ECFIN director Declan Costello identified the requirement “of considerable country specific knowledge” as a challenge in the implementation of the excessive imbalance procedure. Yet, the relevant DG ECFIN officials were clearly aware of the exemplary Irish and German cases. Costello, “Excessive Imbalances Procedure,” 9.

^69.European Commission, “Surveillance,” 3.

^70.Schulten and Müller, “European Economic Governance” and Marginson and Welz, “Changes to Wage-Setting Mechanisms.”

^71.da Paz Campos Lima, “Portugal” and Marginson and Welz “European Wage-Setting Mechanisms”.

^72.Bieler and Erne, “Transnational Solidarity?”

^73.de la Porte and Natali, “Altered Europeanisation.”

^74.Schulten and Müller, “European Economic Governance”; Marginson and Welz, “Changes to Wage-Setting Mechanisms”; and Vogiatzoglou, “Workers' Transnational Networks.”

^75.Dufresne, “Euro-Unionism Face.”

^76.Business Europe, UEAPME, CEEP, and ETUC, Social Partner Involvement.

^77.Hürtgen, “Labour as a Transnational Actor” and Dribbusch, “Where is the European General Strike?”

^78.Lehndorff, “Crisis Losers.” and Bieler and Erne, “Transnational Solidarity?”

^79.Bieler and Erne, “Transnational Solidarity?”; ETUC, New Path for Europe; Party of European Socialists, Towards a New Europe; and Rieger, “Umkämpftes Projekt Europa.”

^80.Dräger, “Sado-Monetarism.”

^81.Bieler and Erne, “Transnational Solidarity?” and Bieler, “Sic Vos Non Vobis.”

^82.Erne, European Unions, 91f; Kay, “New Challenges, New Alliances”; and Dierckx, “European Unions and the Re-politicization.”

^83.Bernaciak, “East-West European Transnationalism(s)”; Crespy, Qui a peur de Bolkestein?; and Dribbusch, “Where is the European General Strike?”

^84. The 14 November 2012 European day of action was a success in Southern Europe, especially on the Iberian Peninsula, also because students, precarious workers, and the unemployed joined and, at times, even led the protests. In Northern and Eastern Europe, however, the day passed almost unnoticed, with the notable exception of Belgium. Dufresne and Gobin, “La grève européenne”; Helle, “A New Proletariat”; Hofmann, “Grenzüberschreitende gewerkschaftliche Antworten”; and Vogiatzoglou, “Workers' Transnational Networks.”

^85.European Commission, Future of the Economic and Monetary Union.

^86.Business Europe, UEAPME, CEEP, and ETUC, Social Partner Involvement.

^87.European Commission, Tripartite Social Summit.

^88.Janssen, “Trojan Horse for Social Europe.” Janssen is a Belgian trade union economist and – like Mermet – an active promoter of the ETUC's European wage coordination policy. Janssen and Mermet, “Wage Policy under EMU.”

^89.Peruzzi, “Contradictions and Misalignments.”

^90.ETUC, Review of European Economic Governance.

^91. Business interests do not have to be organized collectively in order to exercise political power, as each individual investment decision has a political impact. Erne, “Interest Groups.”

^92.Costello, “Excessive Imbalances Procedure,” 9.

^93.Business Europe, UEAPME, CEEP, and ETUC, Social Partner Involvement.

^94.Vanhercke and Zeitlin, “Socializing the European Semester?” 32.

^95. Ibid., 33.

^96. Vanhercke and Zeitlin, “Socializing the European Semester”; Bekker, EU Economic Governance; Dufresne and Pernot, “Les syndicats”; Jolivet, “Recommandations”; Jolivet, Lerais, and Sauviat, “La dimension sociale”; and Marginson and Welz “European Wage-Setting Mechanisms”.

^97.Bekker, EU Economic Governance, 14.

^98.Vanhercke and Zeitlin, “Socializing the European Semester?” 33.

^99.Vote Watch, Enforcement Measures.

^100.Erne, “European Industrial Relations” and Mercille, “Role of the Media.”

^101.Schimmelfennig, “European Integration,” 331.

^102.Haas, Uniting of Europe and Nakano, “Maastricht Social Protocol.”

^103.Stan, Helle, and Erne, “European Collective Action.”

^104.Crespy, Qui a peur de Bolkestein? and Erne, European Unions, 128–156.

^105.Greer and Hauptmeier, “Identity Work” and Pulignano, “Case of Trade Union Cooperation?”

^106.Anner et al., “Industrial Determinants,” 24.

^107.Mezzadra and Negri, “Breaking the Neoliberal Spell.”

^108.Gill, “European Governance and New Constitutionalism” and Hayek, “Economic Conditions of Interstate.”

^109.Lesage and Vermeiren, “Neo-Liberalism at a Time of Crisis,” 43.

^110.ETUC, Review of Economic Governance.

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Roland Erne

Roland Erne teaches international and comparative employment relations at University College Dublin. His work centers on European Union governance, transnational democracy, and labor relations. His publications include European Unions. Labor's Quest for a Transnational Democracy (Cornell University Press, 2008).