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The effects of the EU’s assault on collective bargaining: less governance capacity and more inequality

Until recently, EU economic and social policy included the aim of ensuring a strong role for trade unions and employers’ organizations in the Member States. The EU incessantly underlined the importance of social dialogue and autonomous collective bargaining as a core element of the European social model, stressing their contribution to democracy, good governance, economic efficiency, innovation and social cohesion (European Commission, 2002, 2004). It did so, among other things, to lessen the dominance of economic integration and to strengthen the social face of the EU. The commitment of the EU to social dialogue and collective bargaining was demonstrated by the development and financing of social dialogue structures – both inter-sectoral and sectoral – at the EU level, by the creation of European Works Councils as workers’ participation bodies in European multinationals and by the frequent consultation of EU-level trade unions and employers’ organizations in the making of EU economic and social policy over the past 20 years. In addition, the right of workers and employers, or their respective organizations, to negotiate and conclude collective agreements is included in the Charter of Fundamental Rights of the European Union. Indeed, the freedom to bargain collectively, at the levels chosen by the bargaining actors themselves, was considered a basic right within the EU. As a result, the Commission played a leading role in establishing a system of multi-level industrial relations in Europe (Keune and Marginson, 2013) in which unions and employers have influential voices and bargain autonomously on wages and working conditions. Since the start of the crisis, however, the position of the EU has changed dramatically. Its traditional discourse is increasingly being trumped by a counter-discourse originating largely in DG Economic and Financial Affairs, as well as in the European Central Bank (ECB). It depicts collective labour relations, and in particular trade unions, as obstacles to market coordination and hence to economic and employment growth. For example, DG Economic and Financial Affair’s 2012 Labour Market Developments Report (European Commission, 2012: 104) argues that the coverage of collective agreements should be decreased, collective bargaining should be decentralized, minimum wages should be reduced and the wage-setting power of trade unions should be diminished. Far from being only a discursive shift, this view has also found its way into the policy-making process. For example, the 2011 Euro Plus Pact, signed by the heads of state of the euro countries