Bosses put dampener on pan-EU pay deals

Date: 24/09/1998

By Myles Neligan

ATTEMPTS by the European Trade Union Confederation to set up a system for Europe-wide bargaining on pay and conditions are unlikely to succeed, according to employers' groups and labour market experts.

Their unenthusiastic reaction is an early setback for the ETUC's initiative, which is designed to ensure that workers' rights are not eroded after the euro's introduction in January next year. It was launched earlier this month in response to fears that the ease of comparing euro-denominated wage costs across the EU would encourage employers to get around existing wage agreements by moving business to 'cheaper' neighbouring countries.

Under the plan, national trade unions within the 11-member euro zone would coordinate their wage bargaining policies, and adopt similar negotiating objectives to guard against cross-border 'wage dumping'.

"The idea is to strengthen the bargaining position of workers," said ETUC spokesman Wim Bergans. "We feel that this is absolutely necessary in order to counterbalance the effects of the euro zone, which will be largely to the advantage of employers."

EU employers' federation UNICE is currently discussing the ETUC's plan. President Georges Jacobs said this week that while he was in favour of close dialogue on the subject with trade unions, pan-European negotiations between workers and employers remained a distant prospect. "The principle of subsidiarity must remain the guideline of our approach," he said.

The emerging consensus amongst industrial relations experts is also less than encouraging. "The likelihood of this proposal getting off the ground is very limited," said Peter Robinson of the Institute for Public Policy Research, a London-based think-tank. "It will not gain the backing of any EU government and employers are quite strongly opposed. History shows that trade union initiatives rarely work without the support of both."

Critics of the plan also argue that the EU's high unemployment rates and the decline of large manufacturing industries make the current economic climate unsuited to Europe-wide collective bargaining. They also predict that employers are more likely to insist on greater pay flexibility after the introduction of the euro.

Moreover, national trade unions' willingness to cooperate is far from certain. Last week, Klaus Zwickel, head of Germany's giant IG Metall union, which boasts 2.7 million members, said: "IG Metall will continue to make national pay agreements. Europe-wide sector pay deals will not come for a long time yet."

The return to power of Socialist governments in several EU countries has done little to restore the fortunes of the trade union movement. Last week, UK Trade and Industry Minister Peter Mandelson told British trade unionists that the Blair government would continue to resist key elements of the Maastricht Treaty's social chapter.