European wage-setting mechanisms under pressure: negotiated and unilateral change and the EU’s economic governance regime

Abstract

Since the onset of the crisis in 2008, collective wage-setting mechanisms across the EU have faced pressure to become more ‘marketized’. Surveying developments across EU Member States, this article finds profound changes in wage-setting mechanisms in some countries, alongside less far-reaching ones in some others and little, if any change, in yet others. Pressure for further marketization has particularly focused on multi-employer bargaining arrangements, which constitute a fundamental feature of wage setting in western Europe. In particular, state supports underpinning such arrangements in the six countries subject to international financial assistance have been curtailed or removed. More profound changes are shown to have been driven by government imposition rather than negotiation between employers and unions. European and international institutions have exercised considerable influence, through requirements from the ‘troika’ but also through the EU’s new regime of economic governance. For the Member States subject to international financial assistance, an alternative to current EU policy prescriptions is to promote mechanisms facilitating company-level negotiations within, and to reinstate state supports for, multi-employer bargaining frameworks.