This article examines the challenges raised for the social partners and collective bargaining by recent and planned reforms of the welfare state, necessitated by major changes in the labour market and the socio-economic context over the past three decades. The article highlights thesechanges as well as their policy implications. It shows how government policy has been constrained by a broad range of factors: notably, high unemployment, low labour force activity rates, growing female participation in the labour market, changes in family structures, demographic ageing, the shift to a post-industrial economy, thespread of economic liberalism and the European Growth and Stability Pact. Whilethere is no unique formula to address the complex issues involved in welfare reform, a comprehensive policy mix is required and seems feasible only through patient consensus building among all stakeholders, particularly the social partners. This is the lesson of successful reforms and appears to be the major challenge for preserving social cohesion and reviving collective bargaining.
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