National ‘Social Pacts’: A Case of ‘Re-nationalization’ and ‘Europeanization’?

Developments within national systems have also been integral to the emergence of a multi-level system. Most EU countries are characterized by an inclusive structure of multi-employer bargaining at cross-sector and/or sector level. In the face of growing international competition in general and EMU in particular there are two seemingly contradictory developments. The first, which is the focus of Chapter 6, is a widespread trend towards more decentralized arrangements giving management greater scope to negotiate at company level. In most cases, however, decentralization has seen ‘a controlled and co-ordinated devolution of functions from higher to lower levels of the system’ (Ferner and Hyman, 1998: xvi–xvii). Or in Traxler’s (1995) terms, decentralization in Western Europe has predominantly been ‘organized’ rather than ‘disorganized’; the company bargaining occurs within the framework of higher-level agreements. Only in the UK, reflecting the different form and status of multi-employer agreements referred to in Chapter 2, has decentralization been ‘disorganized’, with sector agreements disintegrating and being displaced by company-level arrangements. Second, ‘organized decentralization’ has also involved a strengthening of the national level in many countries. Governments have sought national-level agreements with the social partners — so-called ‘social pacts’ — on wage moderation, greater labour market flexibility and reform of social protection systems.